What it Takes in the Former Soviet Union: Assassination, Theft, Corruption

I've seen multiple references in recent weeks to Richard Ben Cramer's classic account of the 1988 presidential campaign, What It Takes. Inveterate footnote-and-index readers such as myself miss having neither, yet it is a wonderful read, all 1,051 pages of it, narrating in colorful detail what campaign shenanigans were required to win that year. Cramer's descriptions of George H.W. Bush are particularly unforgettable.

Cramer comes to mind because of the latest news out of the former Soviet Union: Another apparent assassination plot, this time between presidential campaigns in Georgia; another stolen election by Islam Karimov in Uzbekistan; and a report that the good times attributed to Russian President Vladimir Putin may in fact not be as advertised.

Georgia: In a story published yesterday by The Sunday Times in the U.K., David Leppard, Anna Mikhailova and Mark Franchetti report on a possible assassination plot against Boris Berezovsky's former business partner, Badri Patarkatsishvili. The news peg is a 14-minute audio tape that's surfaced in which a Georgian Interior Ministry official apparently attempts to hire a Chechen killer to off Patarkatsishvili. The killer, according to the paper, is Uvais Akhmadov, "a member of a notorious gang of Chechen brothers who specialised in kidnapping and murder," as the writers put it. There's a snap presidential campaign under way at the moment, and Patarkatsishvili is challenging former president Mikheil Saakashvili. Only, Patarkatsishvili is doing so from London, where he says he fears for his life if he goes home. The thing is, we need not sympathize with Patarkatsishvili as a sort of Goldilocks -- he is a tough businessman with a long career of dealing with some of the former Soviet Union's most unsavory sorts. The important point here is what the report might imply about Saakashvili, Georgia's Columbia University-trained former leader. What has his campaign got up to in order to win election Jan. 5th?

Uzbekistan: My former Baku roommate David Stern at The New York Times reports that Karimov won yesterday's election with a reported 88.1% of the vote. Some people are calling it fraudulent since Karimov shouldn't be running -- he was constitutionally forbidden to seek a new term -- and he allowed no real opponents. In addition, there are the usual forebodings that Uzbekistan is headed for instability either during Karimov's continued rule or after he dies (the only way these fellows leave). I personally have sympathy for the stolen election crowd, but have my doubts on the instability part. Equally undemocratic Turkmenistan, for instance, just went through a transition after a presidential death without a hiccup. There's an argument that Uzbekistan isn't Turkmenistan, meaning that it already has produced a home-grown rebellion based in the Fergana Valley. I personally adhere to the muddle-along theory, meaning that even the apparently least likely states tend to muddle along.

Russia: My former Washington Post colleague Fred Hiatt weighs in today with a tart salvo at Time magazine's selection of Putin as its Person of the Year. Against Putin's unwillingness to face serious electoral competition, Hiatt writes: "Why would a leader of such steely confidence, heroic achievement and massive popularity be so afraid of political competition? Perhaps he will explain at Time's awards banquet." Hahaha, Fred. But Hiatt's central argument is serious, based on paraphrases from a must-read report in the new Foreign Affairs by my former colleagues at Stanford University's Institute for International Studies, Michael McFaul and Kathryn Stoner-Weiss. This report challenges the prevailing wisdom that, under Putin, crime has fallen, economic activity has improved and corruption lessened. McFaul and Stoner-Weiss detail at length how in fact the opposite is true in all three cases and that, specifically, Russia's economic growth is near the bottom of the 15 former Soviet states. "Whatever the apparent gains of Russia under Putin, they gains would have been greater if democracy had survived," they write.

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Newsbits for the Weekend

James Giffen foreign bribery case - There will be no immediate selection of a trial date for former Kazakhstan oil gatekeeper Giffen. Today's federal court hearing in New York was postponed for six weeks -- until Dec. 13th. This is the second straight postponement in the already three-and-a-half-year-long case. Giffen is accused of passing along some $80 million in payments to Kazakhstan President Nursultan Nazarbayev from American oil companies. With the way things are going, some are starting to think that this will be another touchy item passed along from the George Bush administration to his successor. Could a trial really wait until 2009? It's hard to believe, but considering Giffen's defense -- that he was an effective asset for the CIA during his entire time in Kazakhstan -- it could indeed take many, many months to disgorge top-secret documents from the government. And, as for the prosecutors, it's not clear that they are as eager as they earlier seemed to go fast.

The Vladimir Putin show - Can the Russian president go anywhere abroad without getting into a schoolyard scrap? In Lisbon today, Putin lashed out at European concerns regarding Russia's rising dominance in Europe's energy market. Russia has established a post-Soviet record of using its enormous petro-power as a blunt instrument for political and economic gain. But Putin said that it "makes me laugh" when he hears Europeans worry about Russians buying up European energy properties. Putin will have to do something more than be combative in order to calm European nerves.

Godfather-in-Law - Rakhat Aliyev, who until recently was the powerful son-in-law of Kazakhstan President Nursultan Nazarbayev, is writing what appears to be a tell-all memoir of life inside the first family. Its working title, he says, is Godfather in Law. Aliyev's saga is a window into the sordid post-Soviet ruling class that's emerged in Central Asia and the Caucasus, many of whose states resemble sultanates rather than elective republics. The difference is that in Kazakhstan -- primarily because of the documentation that's been disclosed in the James Giffen case -- the mess is being played out in public. Aliyev was tossed out of the Kazakh ruling family earlier this year after a series of rows with the country's business elite, and the disappearance of two executives from his Almaty bank. Among the allegations he will make in his book is that Nazarbayev himself ordered the murder of Altynbek Sarsenbayev, a former Kazakh ambassador to Russia who joined the political opposition, then was murdered in February 2006. Critics have accused Aliyev himself of the murder. Aliyev has lived in exile in Austria since Nazarbayev ordered him arrested. RFE-RL has a good interview with Aliyev.

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The Pirate of Prague's Newly Restored Grin

Incredible as it seems, Viktor Kozeny could indeed ride again.

Accused of bribing Azerbaijan leaders, the Harvard-educated, lavish-living Kozeny has sat for almost two years in a Bahamas jail fighting extradition to the U.S. But now a U.S. prosecutor says the government may have to drop most charges against him. The reason -- the statute of limitations.

If it does, and Kozeny is freed or lightly sentenced, it will put a bow around the charmed life that he has led the last 17 or so years, in which he masterminded two of the most controversial investment schemes of the Gorbachev and post-Soviet era.

This story actually broke last month, but appears to have been largely overlooked. Tip to Paul Sampson for pointing it out to me. Here is the first paragraph of an AP story: NEW YORK — The government is seeking to resurrect its case against three men accused of offering hundreds of millions of dollars to top officials in the former Soviet republic of Azerbaijan to get favorable treatment in oil deals. Read story

Steve's comment: The 43-year-old Kozeny is famous for investment schemes in which lots of people lose most of their money.

He first attracted attention in the early 1990s when he swooped into his native Prague and persuaded hundreds of thousands of Czechs to invest their state-issued privatization vouchers with him, and become fabulously wealthy. Almost all lost most or all of their money, but Kozeny left the country worth tens of millions of dollars and never returned. For that Fortune magazine dubbed him "The Pirate of Prague."

Kozeny bought lavish homes in London, the Bahamas and elsewhere with the money.

Next, he turned up on the Caspian Sea. He decided that there were even greater earnings to be had, particularly in Baku. In 1997, he threw a now-famous party in Aspen, Colorado, where he persuaded some of America's most savvy investors and their friends that they could own, then flip, the state oil company of Azerbaijan, or Socar.

Those who tossed in a bundle totalling more than $200 million included Wall Street hedge fund doyen Lee Cooperman, former Senate Majority leader George Mitchell and Frederic Bourke of the Dooney & Bourke luxury handbag company.

The problem, as (almost) anyone who has set foot in Azerbaijan knows, is that there is no way the Azerbaijan government would part with its cash cow.

In October 2005, U.S. prosecutors charged Kozeny and two of the investors with bribery and money laundering. Specifically, the government said that the defendants provided financial incentives to a "senior Azeri official" (the late President Heydar Aliyev) in order to privatize Socar.

In June of this year, a U.S. district judge said the statute of limitations had passed on charges against Kozeny's two co-defendants, and dismissed most of them. And in an appeal last month, prosecutors said that, if the decision holds, most charges will also have to be dropped against Kozeny.

The appeal hasn't been decided yet. But those who follow the Azerbaijan case always wondered -- why, given Kozeny's history, did so many smart people entrust so many millions with him? To a person, his investors replied that they felt they had done their due diligence.

That rang hollow. The truth was that Kozeny dangled the prospect of an enormous windfall before Aspen's and Wall Street's moneyed crowd -- in addition to great fun and adventure -- and they simply grabbed for it.

Ten years later, there is the prospect of Kozeny going onto his next adventure.

Out of Jail, and Leaving Kazakhstan

A Kazakhstan appeals court has upheld the acquittal of American businessman Mark Seidenfeld, who is now free to leave the country after a year and a half in Russian and Kazakhstan jails.

In an email exchange, Seidenfeld said judges rejected the appeal by his former telecoms partner, Arna Inc., last week. He says he’s leaving the country as soon as possible. “Currently waiting on paperwork to get out of here,” Seidenfeld writes.

Seidenfeld was imprisoned in December 2005 in Russia on a warrant from Kazakhstan after getting into a business dispute with his telecoms partner, Murat Zhunussov, who claimed that the American stole $40,000 from the telecoms company, Arna Inc.

In April, Seidenfeld was shifted to Kazakhstan on a prison train for trial, and last month an Almaty court acquitted him of all charges, saying the money was accounted for and reprimanding law enforcement agencies for bringing the prosecution. Here is Arna’s statement (in Russian) criticizing the acquittal. Basically, Arna asserted that the court ignored the facts, a claim the appeals judges rejected.

While the ruling is a relief for Seidenfeld, the case as a whole may not be a badge of honor for the country. It appears that Zhunussov managed to get the charges filed because of bad blood between himself and Seidenfeld. The fair part of the process began after U.S. political leaders including Senate majority leader Harry Reid lobbied Kazakh officials on Seidenfeld’s behalf. In a letter, Congresswoman Shelley Berkley of Nevada called the charges “extortion pure and simple.” They appear to have gotten the attention of Kazakhstan leaders, who stepped in to make sure the trial was not tampered with.

Similar cases have happened in the past in Kazakhstan and elsewhere in the former Soviet Union. The courts are susceptible to manipulation by businessmen and others wishing to have their way with a given deal, and their less-savvy partners can be left empty handed or, in Seidenfeld's more dramatic case, with a long stint in jail.