The Next Big Scandal


Know Much about Kazakhstan? Just Wait.

Everyone’s waiting for Thursday’s official release in D.C. of the 9/11 Commission’s “final report.” But the Next Big Scandal is getting ready to gush from a federal courtroom in Manhattan: a crude but monumental spy/oil/big-time-pol case of alleged bribery and fraud in Kazakhstan.

Starting from square one (consultant James Giffen, known as the oil industry’s “Mr. Kazakhstan”), this case connects some of the biggest dolts in U.S. bidness and government—stretching from the Reagan and Clinton years through to the current Bush Error. It’s scheduled for trial in October.

Giffen is charged with bribing the president of Kazakhstan and others with $78 million from big oil companies. At the same time, the oil companies were financing a public-relations and lobbying campaign, involving former top U.S. officials, in an effort to paint the despotic regime as an emerging democracy.

Yes, conspiracy theorists, we’re talking about some of the top U.S. government officials of the past 25 years, along with Mobil and other oil giants. All the parties, including an ex–Mobil exec sentenced to prison in a related case, deny doing anything improper. Of course, sleaziness is not a crime. But who knows?

This scandal’s spillage will eventually show up on the radar of the U.S. electronic media and ooze onto the teletypes of America’s rip-and-run journalists. When it does, you may become plenty sick of reading and hearing about the “P-Group” of powerful U.S. officials who sucked up to the likes of Kazakhstan’s tinpot dictator and notorious human-rights abuser Nursultan Nazarbayev—or you won’t be able to get enough of the story.

Alec Appelbaum wondered aloud in a EurasiaNet piece in April 2003 about the case: “Will Giffen Name Names in Kazakhstan Corruption Case?” If that happens, this saga will jump off the page at you. Don’t bet against high-level pressure exerted in favor of a plea deal, which would keep a lid on this mess. But while you’re waiting to see what happens, check out this hilarious puff piece on Nazarbayev that ran in The Washington Times as an advertorial. On a serious note, see last month’s “The Undeclared Oil War” by The Washington Post‘s Paul Roberts for a scary global view.

Concerning 9/11, the recent Senate Intelligence Committee Report socked the CIA hard, and the 9/11 Commission report will no doubt blacken the agency’s other eye.

Meanwhile, though, this Kazakhstan thing also has a CIA angle to it—bubbling crude that is sure to catch fire and may scorch some powerful “corporate citizens” and their lackeys. Later this year, Kazakhstan, an oil-rich country four times the size of Texas, may replace Afghanistan as that there “-stan” country in Asia that becomes a household name.

It’s not that this tale has gone untold. Notably, Ken Silverstein, in his stirring series “The Politics of Petroleum” in the Los Angeles Times, dived into the U.S.-Kazakh sludge last May and emerged dripping with fascinating gunk.

The latest development, however, came during pretrial maneuverings a few weeks ago and hasn’t received much coverage. But it’s a humdinger. In a key ruling, federal judge William H. Pauley III, of the Southern District of New York, decided that Giffen’s lawyers can review CIA and State Department records in preparing his defense. That’s courtesy of Daniel Wise of New York Law Journal, one of the first to break this news.

There’s more. Marlena Telvick, who is covering the case for Assandi Times, a newspaper run by Kazakh dissidents, covered the same hearing and reported that Giffen’s defense lawyers claim that what they called “his actions” were “taken with the knowledge and support of senior officials of the U.S. intelligence and national security agencies.”

Telvick’s story added that this “included the CIA, the National Security Council, the State Department, and the White House, which could effectively ‘immunize Giffen,’ as the judge phrased it.”

It’s all still pretty murky. But let me throw some names at you of people who, according to the L.A. Times, helped Giffen et al. put smiley public faces on the Kazakh ruler and on other corrupt Central Asian regimes:

  • Ex–Reagan operative Michael Deaver
  • U.S. Attorney General Dick Thornburgh (for Reagan and Bush Senior), who was hired by Nazarbayev’s regime
  • Secretary of State (for Bush Senior) Lawrence Eagleburger, whom Deaver recruited to write an op-ed piece praising Nazarbayev for “rigorously” pursuing “policies to transition the country to democracy”
  • D.C. attorney and Bush Junior fundraiser James Langdon, whose firm did lobbying and legal work for Kazakhstan.
  • National Security Adviser (for Bush Senior) Brent Scowcroft

Silverstein wrote in his May 12 story that his probe “identified dozens of ex-officials from the Reagan, Clinton, and two Bush administrations who have worked for the oil industry or for foreign governments with extensive energy reserves—and, almost invariably, poor human rights records.”

You mean, foreign governments like Saddam Hussein‘s Iraq?