Home -> Law Blog Directory -> International Law Blogs -> The FCPA Blog

International Law

: The FCPA Blog

An Insider's Tale About Kazakhstan's Corruption

The Wall Street Journal's July 22 Page One story on public corruption in Kazakhstan involving the ruling family is extraordinary. Reporters Glenn Simpson and Susan Schmidt have dug deep, with help from the former son-in-law of Kazakh President Nursultan Nazarbayev.

We watch for Simpson's stories -- he follows the money for the Journal, often writing about financial crimes that intersect with the Foreign Corrupt Practices Act. Slate said about him, "His sophisticated dispatches from the banking / terrorism / money-laundering / organized crime nexus routinely advance well-covered subjects."

Here's part of the lead from "Kazakhstan Corruption: Exile Alleges New Details." You'll want to read the extensive report (nearly 1,900 words) for yourself. What's clear from it is that Kazakhstan presents enormous and perhaps insurmountable risks and challenges for compliance-minded companies.

A former member of the first family of oil-rich Kazakhstan is accusing its authoritarian ruler of extensive corruption, potentially complicating U.S. efforts to improve relations with the strategically important Central Asian state.

From a hiding place in Europe, the former son-in-law of Kazakh President Nursultan Nazarbayev asserted in interviews with The Wall Street Journal that Mr. Nazarbayev has diverted billions of dollars in state assets and long taken commissions from companies doing business in his mineral-rich land. . .

While by no means making the first claims of corruption in Kazakhstan, Mr. Aliyev alleged that its president personally profits from his country's economic riches to a much greater extent than previously documented. He painted a picture of a Kazakh economy in which the president not only routinely takes illicit commissions but also holds hidden stakes in the copper, uranium and hydrocarbon industries, and maintains a network of offshore bank accounts.

Although it wasn't possible to corroborate all of his assertions, Mr. Aliyev backed up some of them with bank statements from Lebanon and copies of checks drawn on banks in Indonesia and Liechtenstein. . . .

The story can be found here. Access to the Journal online still requires a subscription.

.

Full post as published by The FCPA Blog on July 23, 2008 (boomark / email).