//Oil, Cash and Corruption : RON STODGHILL

Oil, Cash and Corruption : RON STODGHILL

 Amherst Times , RON STODGHILL

ON a warm afternoon in late September, Nursultan A. Nazarbayev strode across the tarmac at Andrews Air Force Base to board his private 767. Surrounded by an entourage of security guards and political advisers, Mr. Nazarbayev, the president of Kazakhstan, was heading home after an eventful visit that included a meeting with President Bush in the White House and a boating jaunt in Maine with the president’s father, George H. W. Bush. He also attended a swank fete at the Capital Hilton Hotel where his hosts, the business mogul Ted Turner and former Senator Sam Nunn, praised him for closing a major nuclear test site.

Warm welcomes aside, human rights groups frequently characterize Mr. Nazarbayev as a dictator who, during 15 years of rule, established a hammerlock on his country’s oil riches and amassed a fortune at the expense of an impoverished citizenry. Supporters say he has wedded a draconian political order to clear-eyed economic policies, making his country hospitable to foreign investment. But his White House visit came at a tender moment. About a month earlier, the Bush administration introduced its National Strategy to Internationalize Efforts Against Kleptocracy, an initiative aimed at preventing public graft worldwide by, among other things, denying corrupt leaders access to the United States financial system.

“Kleptocracy is an obstacle to democratic progress, undermines faith in government institutions and steals prosperity from the people,” President Bush said. “Promoting transparent, accountable governance is a critical component of our freedom agenda.”

Mr. Nazarbayev’s visit, coming on the heels of those sentiments, sparked renewed criticism of his leadership and questions about the White House’s dedication to battling corruption overseas — possibly explaining why the administration decided against holding a state dinner in the Kazakh leader’s honor. But behind the scenes, a legal drama has been playing out that analysts say may more fully explain why Mr. Nazarbayev and the White House are engaged in such an elaborate form of political kabuki.

In February, the United States attorney’s office in Manhattan is scheduled to go to trial in the largest foreign bribery case brought against an American citizen. It involves a labyrinthine trail of international financial transfers, suspected money laundering and a dizzying array of domestic and overseas shell corporations. The criminal case names Mr. Nazarbayev as an unindicted co-conspirator. The defendant, James H. Giffen, a wealthy American merchant banker and a consultant to the Kazakh government, is accused of channeling more than $78 million in bribes to Mr. Nazarbayev and the head of the country’s oil ministry. The money, doled out by American companies seeking access to Kazakhstan’s vast oil reserves, went toward the Kazakh leadership’s personal use, including the purchase of expensive jewelry, speedboats, snowmobiles and fur coats, federal prosecutors say.

Beyond the large amounts of cash involved and the top-flight access such sums often secure, the case against Mr. Giffen has opened a window onto the high-stakes, transcontinental maneuvering that occurs when Big Oil and political access overlap — a juncture marked by intense and expensive lobbying, overseas deal-making and the intersection of money, business and geopolitics. It is a shadow world of nebulous boundaries that people like Mr. Giffen establish and define, often on the fly. The case also illustrates the government’s struggle to reconcile its short-term energy interests with its longer-term political goal of encouraging democracy in countries the international community has deemed corrupt.

To be sure, many an American president has entertained a foreign leader under a cloud of suspicion, but Mr. Nazarbayev’s role in a federal criminal investigation makes him an unusual entry into that company. Bush administration officials have acknowledged that the Kazakh government falls short in its democracy-building efforts. But some foreign policy specialists see Kazakhstan as an important ally in the administration’s campaign against terrorism and a bountiful alternative to oil reserves in the volatile Persian Gulf — all of which promise to make the opening of the Giffen trial more than just hit-and-run bribery fare.

“The administration is naturally reticent about Giffen’s case,” said Raymond W. Baker, an energy policy analyst on loan to the Brookings Institution, a liberal research group. “It would probably be a lot easier on everyone if he had gotten away with it.”

IN a world long accustomed to outsize public corruption, some analysts say Mr. Nazarbayev is in a class by himself. “I can’t think of a leader in the free world as notoriously corrupt as Nazarbayev,” said Jonathan Winer, a former deputy assistant secretary of state during the Clinton administration. “We’ve known about his corruption for at least 15 years because our own intelligence agencies have told us.”

Mr. Nazarbayev is certainly a mixed bag of goods, others said, but that is the way the world works. As Jerry Taylor, a senior fellow at the Cato Institute, a libertarian research group, put it, “Kazakhstan’s human rights record may be checkered, but if the United States were to disengage from those countries with checkered human rights and other bad actors, we’d be history.”

The Clinton administration itself embraced Kazakhstan in the 1990s and praised Mr. Nazarbayev for leading his country toward economic and democratic reform. Administration officials, including the former Secretary of State Madeleine K. Albright, also met with Mr. Nazarbayev in Kazakhstan.

“The Clinton administration certainly had enough information about Nazarbayev’s corruption,” Mr. Winer said. “The information on him was open, notorious and present.”

The work of defending the curious financial and diplomatic portfolio of Mr. Giffen is the job of William J. Schwartz and Steven M. Cohen, of Cooley Godward Kronish in Manhattan. The firm’s 48th-floor conference room offers some of the standard accoutrements of the white-collar defense bar — handsome wood paneling, a flat-screen television, a skyline view facing south toward Wall Street and a long oval table surrounded by leather chairs and punctuated at its center by a bouquet of sharpened white pencils.