Catering to Kazakhstan’s Kleptocracy

It has plenty of oil, mucho corruption, longtime connections to Washington deal-makers, and an ex-commie dictator with delusions of grandeur: in short, Kazakhstan has all the earmarks of a typical U.S. ally in Central Asia. Now that Uzbekistan is on the outs with an increasingly embarrassed Washington on account of the recent massacre at Andijan, and the BTC oil pipeline is chugging busily away, pumping Kazakh crude for the benefit of U.S. oil companies, it looks like the Kazakhs may soon take the place of the Uzbeks in the affections of U.S. policymakers.

That, at any rate, is what Stephen Schwartz, formerly the Uzbek government’s one-man public relations firm in the U.S., proposes. Before the slaughter at Andijan, where the forces of Uzbek dictator Islam Karimov cut down as many as 1,000-plus civilian protesters, Schwartz tirelessly promoted Uzbekistan as a veritable utopia, a “model,” as he put it, of how an “aspiring democracy” ought to develop. One memorable article in the Weekly Standard even held up Uzbekistan’s legal system, which ruthlessly punishes any expression of dissent in the name of preemptively “fighting terrorism,” as a template for the U.S. However, not even Schwartz could weasel out of the ugly reality of over 1,000 corpses staring the international community in the face, so he and his buddy Bill Kristol, Weekly Standard editor and neocon grand strategist, announced that they were having second thoughts about Uzbekistan – without, of course, ever acknowledging that they had acted as shameless apologists for a singularly brutal regime.

Those fickle neocons, they’ll dump you in a minute if they think it’s to their advantage, but Schwartz can’t seem to kick the habit of flacking for some Central Asian tyrant. Now he’s taken up with the Kazakhs, as reported in the lead paragraphs of this Radio Free Europe/Radio Liberty story:

“Some analysts see President Nursultan Nazarbayev as governing a fairly open Kazakh society, despite his authoritarian style. And one even suggests that U.S. President George W. Bush should do more to court Nazarbayev, at the expense of Uzbekistan.

“Stephen Schwartz is the Washington-based author of several books and many articles dealing with the Arab and Muslim worlds. He tells RFE/RL that it is important for the United States to have influence in Central Asia – but not if it means continuing close ties with Uzbekistan under President Islam Karimov.

“Nazarbayev, he says, is far more democratic.

“‘I would prefer that we develop a better relationship with Kazakhstan,’ Schwartz says. ‘We don’t have a bad relationship with them, but we should designate them as the people that we’re talking to more [in Central Asia]. Because they also have a dictatorship, but they do have a thriving free press, and their attitudes about these things [being responsive to the public] are much less Soviet and post-Soviet.'”

It’s typical of Schwartz that he would tout the relative freedom supposedly existing in Kazakhstan just as Nazarbayev has closed a major newspaper for telling the truth about his scandal-ridden government and as opposition meetings are being attacked by government thugs. Only a Stephen Schwartz would single out for praise a regime that framed a prominent journalist – who just happened to be investigating charges of massive corruption in the Kazakh government, and was about to leave on a lecture tour of America – on rape charges, and doesn’t even spare the reporters of its own state-run television station.

The Kazakh government isn’t too keen on freedom of religion, either: Protestant ministers face outright closure of their churches (even before the law requiring registration is passed), and teachers in the state-run schools are telling their young charges that prayer can be fatal. The Uzbek government takes a similarly jaundiced view of organized religion, and perhaps this is part of the attraction for former Karimov groupies like Schwartz.

However, there’s a lot more to recommend Kazakhstan as Uzbekistan’s replacement in the role of regional gendarme. To begin with, there is Nazarbayev’s stated willingness to try out for the part. As the Jamestown Foundation reported in 2002, on the occasion of Donald Rumsfeld’s visit to Kazakhstan and environs:

“Nazarbayev had, within days of September 11, granted overflight rights, and offered to host American forces; he did so at the same time as Uzbek President Islam Karimov, and in spite of Russia’s objections. At that stage and thereafter, Washington credited Nazarbayev politically, but declined the offer of bases because of Kazakhstan’s remoteness from Afghanistan and vicinity to Russia. Meanwhile, American and allied air forces were granted overflight rights. Subsequently, Kazakhstan offered its airports for at least ‘backup’ use by American and allied forces. This has now been approved.”

Now that Uzbek dictator Karimov has become a liability for the U.S. – at least in the eyes of John McCain, Lindsay Graham, and John Sununu – and may be about to be dumped (or even regime-changed out of a job by U.S. government-sponsored “human rights” campaigners), Nazarbayev’s value as a “backup” despot for the U.S. to support in return for military bases and over-flight rights is skyrocketing. Also taking off is the valuation [.pdf] of Kazakhstan’s oil reserves as a percentage of the Caspian energy bonanza unleashed by the BTC pipeline, which opened recently.

While Azerbaijan’s share of the relative oil wealth appears to have been overestimated – due to sales hype of lobbyists eager for U.S subsidies – Kazakhstan’s projected 150 million tons yearly by 2015 should keep the pipeline busy and incredibly profitable for Chevron/Texaco, Mobil/Exxon, and other Western energy companies, which are heavily invested in the area. Nazarbayev’s decision to sign on to the BTC pipeline project was a particularly cruel blow to Russia, which is being encircled not only militarily but economically as well, as oil suppliers bypass Russia’s Eurasian corridor and do an end-run around the Kremlin.

Nazarbayev is a Karimov endowed with oil wealth: their regimes are so similar, ideologically, as to be almost interchangeable, and this is due in large part to their very similar biographies. Like Karimov, Nazarbayev rose up through the ranks of the Communist Party of the Soviet Union: he became head of the Kazakhstan Communist Party, and was “elected” – with 99 percent of the vote – as the nation’s president after the Soviet collapse. This enabled him and his cronies to boogie with the president of the World Bank, collect untold millions in the form of kickbacks from Western oil companies, and kick his subjects around with impunity.

The Byzantine tale of corruption that is the recent history of Kazakhstan was ably detailed by Seymour Hersh in The New Yorker, and it is a subset, in many ways, of what happened in the former Soviet Union during the Yeltsin era, when the oligarchs – using their political connections – looted the nation’s wealth and grabbed entire industries for pennies on the dollar in the Great Soviet Fire Sale of the 1990s. Describing the scandal that subsequently became known as “Kazakh-gate,” involving Mobil Oil, former Russian Prime Minister Viktor Chernomyrdin, the Russian Mafia, Nazarbayev, and other top Kazakh government officials, Hersh wrote:

“More than a billion dollars of Mobil’s cash was paid to Russian companies in unorthodox transactions; questionable accounting practices were followed: and multimillion-dollar transfers were made that, as a Patton Boggs report put it in one case, ‘did not have any apparent valid business purpose.’ The investigators’ working papers and summary reports, many of which were obtained for this article, suggest that Mobil’s activities’ in Russia and Kazakhstan were not driven entirely by a desire for quick profit. The company also had a strategic goal: access to Kazakhstan’s rich Tengiz oil field. … Internal Mobil documents gathered for this account provide an unparalleled view of a major American oil company’s dealings in the former Soviet Union. They raise questions about the company’s decisions to enter deals that ultimately benefited powerful figures in the region, including President Nursultan Nazarbayev, of Kazakhstan, and former Prime Minister Viktor Chernomyrdin, of Russia.”

The scandal revolves around the enigmatic figure of James H. Giffen, a New York merchant banker and adviser to Nazarbayev; Friedhelm Eronat, an oil trader often associated with Mobil’s overseas operations, and top Mobil executive J. Bryan Williams III. Giffen, now facing charges of bribing Nazarbayev and other members of the ruling clique to the tune of over $78 million funneled into Swiss banks accounts in order to get Mobil cut in on the Caspian oil franchise, maintains that he acted with the full knowledge and encouragement of U.S. government officials. Here former Kazakh Prime Minister Akezhan Kazhegeldin speculates on the question of whether Giffen was working for (or with) the CIA. Giffen’s defense, at any rate, is that he was “acting as a government agent,” who had to do “whatever he had to” – in the words of his lawyer – to win over Nazarbayev and his government. As Eurasianet reports:

“Giffen’s team said they would seek to show that Giffen, starting in 1992, had worked closely with the Central Intelligence Agency, National Security Council, and Department of State. The lawyers went on to suggest that Giffen, in his dealings with Kazakhstani officials, took actions based on his belief that he was an agent of the US government, which supposedly wanted him to promote national interests by maintaining a cordial relationship with Kazakhstani officials.”

Giffen was one of the first Americans to be welcomed by Mikhail Gorbachev during the initial stages of the Soviet breakup: he got in on the ground floor of the phony “privatization” of the Russian economy, retailing his connections with former Communist bosses as the stock-in-trade of a thriving business in how to make big profits in the ex-USSR.

As William Courtney, who served as our first ambassador to Kazakhstan, put it, Giffen became Nazarbayev’s Western “consigliere,” brokering the promise of Kazakhstan’s vast oil wealth: the Mafia reference is literally accurate, according to former Prime Minister Kazhegeldin, who avers that Giffen embarked on a campaign to drive his business rivals out of the country:

“He corrupted scores of officials among the Nazarbayev entourage, engaged force departments to fight international advisers to the government. In 1997-98, tax police with personal participation of Rakhat Aliev together with the investigative committee conducted searches and arrests in the offices of western legal firms in Almaty. As a result, they all withdrew from there. Giffen was the only left and enjoyed broad powers. To find support with the President administration, General Prosecutor’s Office and other government bodies was exceptionally easy for him.”

Consigliere Giffen reportedly raked in around $67 million in fees. Mobil got its place at the table, alongside Chevron. Bryan Williams pled guilty in June 2003 to tax evasion and admitted in 2003 that “I knew what I was doing was wrong and unlawful.” Giffen’s case has been delayed, and is scheduled to finally go to trial in January 2006.

Glutted with petro-dollars and eager to buy influence wherever it can, the “post-Communist” regime of Nursultan Nazarbayev is bound to attract more than just the “strange and outlandish figure” of Stephen Schwartz, with his penchant for valorizing indefensible figures such as Uzbek mass murderer Islam Karimov and Red Army founder Leon Trotsky. The U.S. government is cozying up to Kazakhstan, even as that country’s authoritarian ruler and his family continue to rule with an iron hand. The U.S. State Department recently announced it would exercise a waiver in the case of Kazakhstan that would permit continued military aid to the regime: U.S. law requires governments receiving such aid to pass a “human rights” test, but the State Department can waive this on “national security” grounds. Aid will therefore probably be increased, despite “numerous steps backward” on human rights, as spokeswoman Julie M. Reside put it – echoing “Freedom House” – because, after all, subsidizing the repressive apparatus of the Kazakh state “enhances democracy.” The U.S., as Ms. Reside avers, must stay “fully engaged” (i.e., fully complicit) in keeping Nazarbayev’s boot on the collective neck of the Kazakh people.

The United States, with its declared policy of leading what George W. Bush has called a “global democratic revolution,” is engaged in a project of breathtaking hypocrisy, one that puts all previous practitioners of this art – including the Soviets – to shame as mere amateurs. After all, the Commies never pretended to be spreading liberty – except a nonexistent freedom from the laws of supply and demand – and conspicuously avoided all mention of free and fair elections as a hallmark of legitimacy. The Busheviks promise all that, and more – and wind up actively supporting and subsidizing Kazakhstan’s kleptocracy.

And it’s not just the Republicans. As Mark Siegal, a former vice chairman of the Democratic party – who worked with Giffen as a paid consultant to the government of Kazakhstan – said in Giffen’s defense:

He really believes in the idea of proselytizing Western political values in the former Soviet Union. It is almost a religion for him.”

Giffen’s religion, if it can be called that, is nothing less than the almighty dollar – and “democracy” be damned. It’s typical of this new breed of thieves to clothe their grand-scale larcenies in the language of “liberation.”

The Soviets never made any bones about their globalist ambitions: it was encoded in the maxims of Marx and Lenin, their founding ideologists, and the Kremlin repeated these ritual invocations almost to the very end, even as their empire imploded around them. They, too, spoke of the “liberation” of the world’s nations as their ordained mission, and chastised skeptics who weren’t reporting the “good news” as the Red Army built socialism in Afghanistan. They were particularly proud of building schoolhouses, where the education of women was a priority.

We are doing precisely the same thing, with precisely the same objective in mind. The final phrase of the Communist Manifesto, “we have a world to win!,” encapsulates the real objective of Bush’s “global democratic revolution”: global military domination by the United States. Ours is a policy of permanent “engagement”: we must either be subsidizing and supporting kleptocrats of Nazarbayev’s ilk, or else plotting “regime change.” There is no option to simply stay out of Kazakhstan’s affairs. Yet that is the best course we could possibly take, for the sake of the Kazakhstani people as well as our own interests.

Author: Justin Raimondo

Justin Raimondo passed away on June 27, 2019. He was the co-founder and editorial director of, and was a senior fellow at the Randolph Bourne Institute. He was a contributing editor at The American Conservative, and wrote a monthly column for Chronicles. He was the author of Reclaiming the American Right: The Lost Legacy of the Conservative Movement [Center for Libertarian Studies, 1993; Intercollegiate Studies Institute, 2000], and An Enemy of the State: The Life of Murray N. Rothbard [Prometheus Books, 2000].