Kazakhstan: The Plot Thickens in Nuclear Industry Probe
Kazakhstan's anti-corruption campaign made some progress in 2009, underscored by Astana's ability to move up 25 places on Transparency International's Corruption Perceptions Index of corrupt states to 120th this year. However, some observers are questioning whether there is more to efforts aimed at curbing graft than meets the eye.
One murky case that has been in the headlines of late involves Kazakhstan's nuclear industry, and the appearance of a mysterious footage on the YouTube video sharing site. The video features the chief suspect in an ongoing investigation into possible financial misdeeds at the Kazatomprom, the state nuclear company. Its posting sparked a war of words over its provenance, resulting eventually in the abrupt removal of Kazakhstan's security chief.
The chief suspect starring in the video is Mukhtar Dzhakishev, Kazatomprom's former head who was arrested almost seven months ago on suspicion of engaging in corrupt practices.
Dzhakishev -- who denies any wrongdoing -- remains behind bars in a high security National Security Committee (KNB) detention center. However, strict controls over access did not prevent six clips of him discussing the case being posted on YouTube on November 4, an astonishing breach of security that remains under investigation by the KNB.
In the videos, Dzhakishev sets out his vision for Kazakhstan's nuclear industry, which he pursued over a decade at Kazatomprom's helm. He positioned the company to become the world's top uranium producer this year with a projected annual output of 13,800 tons. Kazatomprom produced 9,535 tons of uranium in the first three quarters of 2009 and expects to make a $329 million in profit this year.
Looking relaxed, occasionally smiling wryly and sitting in what looks more like an office than an interrogation room, Dzhakishev explains how his ambition was to transform Kazakhstan's nuclear industry into a world leader. He dwells on relations with Uranium One, a Canada-based company with extensive operations in Kazakhstan, saying he wanted to stop Russian investors gaining a controlling stake in it -- a development that he believed would impede Kazakhstan's nuclear ambitions.
Following his arrest, a spin-off company of Russia's state nuclear giant, Rosatom, made gains: in June the ARMZ Uranium Holding Company clinched a deal to acquire up to a 19.95 percent share in Uranium One in exchange for ARMZ's 50 percent stake in Kazakhstan's Karatau Uranium Mine. On November 16, Kazakhstan's Energy and Mineral Resources Ministry confirmed the agreement, which has raised questions about a potential conflict of interest: the son of Kazatomprom's new head, Vladimir Shkolnik, is married to the daughter of ARMZ director Vadim Zhivov.
Dzhakishev knew of that deal when the video was recorded. "I started to analyze who this [investigation] was advantageous to, and I came to the conclusion that it is advantageous to the Russians," he says.
Such statements prompted independent media outlets in Kazakhstan to speculate that the Kazatomprom case is linked to a re-division of assets in the uranium industry, highlighting suspicions that some corruption investigations are more about fighting for lucrative spoils than combating graft.
Amid speculation about how the video wound up on YouTube, on December 2 Dzhakishev's wife made the sensational claim that the recording in question were given to her in September -- by then-KNB Chairman Amangeldy Shabdarbayev. Zhamilya Dzhakisheva -- who insists she did not post the video on YouTube -- claimed that Shabdarbayev said that he wished the recording to reach the ears of President Nursultan Nazarbayev, but could not arrange this himself.
Shabdarbayev immediately denied doing or saying anything to that effect. But five days later after issuing the denial, he was removed from his KNB post, and appointed to a less-influential position as a "presidential advisor." His former deputy, Adil Shayakhmetov, was confirmed as the new KNB chief on December 9.
The provenance of the video remains the subject of speculation. Dzhakishev's lawyer, Nurlan Beysekeyev, said December 1 that his client knew the video had been made in July at the "request of some [unidentified] figures to explain the situation surrounding Kazatomprom." Nevertheless, Dzhakishev was supposedly "surprised" by the YouTube posting.
On December 10 the prosecutor's office announced that Dzhakishev would be charged with theft through the embezzlement of company property and bribe taking. An allegation that Dzhakishev misappropriated uranium reserves worth billions of dollars remains under investigation. Prosecutors also gave the case a new twist by drawing an explicit link with Nazarbayev's fugitive former son-in-law Rakhat Aliyev, sentenced in 2008 to 40 years in prison in absentia on charges including plotting the overthrow of the government, theft and kidnapping. He denies all the charges and now lives abroad. [For background see the Eurasia Insight archive].
Authorities are now looking into an allegation that Dzhakishev embezzled roughly $670,000 via Kazatomprom's office in Vienna, where Aliyev was once ambassador. Prosecutors said this office was headed at different times by the wife of Aliyev's associate Vladimir Koshlyak, and by the mother of former embassy employee Elnara Shorazova. Unconfirmed press reports in Kazakhstan earlier this year said Aliyev -- who was divorced by Nazarbayev's daughter, Dariga Nazarbayeva, in 2007 -- had married Elnara Shorazova.
Prosecutors have made no mention recently of previous allegations that Mukhtar Ablyazov, an associate of Dzhakishev's who now lives in London, was implicated in the Kazatomprom case. Ablyazov is also under investigation in Kazakhstan concerning a separate case of alleged fraud at BTA Bank, which he formerly ran. He denies all accusations and alleges that these cases are more about politics than corruption, telling EurasiaNet in a recent interview in London that they were sparked by his "political ambitions" in the form of his "desire to change the country so that it would become a normal European state with the same civilized laws." Administration officials strongly deny political or economic motivations to any corruption cases.
In Kazakhstan, though, many believe the anti-corruption drive, however well intentioned, has become a political and economic tool. "The KNB has today simply become a truncheon in the hands of the state to settle scores with inconvenient highly-placed officials and with business," co-leader of the opposition OSDP Azat party Bolat Abilov told a November 21 news conference on the Kazatomprom case.