Bribery case hinges on national security

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ASTANA, Kazakhstan -- Newly declassified documents in a New York court suggest that the most high-profile prosecution of an American businessman accused of bribing a foreign official could be dropped next year on national security grounds.

James Giffen, a 64-year-old American adviser to Kazakhstan's longtime President Nursultan Nazarbayev, is awaiting trial in New York federal court on charges of funneling to Mr. Nazarbayev $60 million in bribes given by oil companies and $20 million more to two other Kazakh officials during the 1990s. He is also accused of keeping millions of dollars for himself and failing to pay taxes on it.

The case involved the biggest bribes paid to the highest-ranking official since the Foreign Corrupt Practices Act was passed in 1977.

The companies which negotiated these deals are Mobil Oil Corp., now a unit of Exxon Mobil; Chevron Corp., now ChevronTexaco; Total; Royal Dutch Shell; British Gas, now BG Group; Amoco, now BP, and Philips Petroleum, now ConocoPhilips.

Mr. Giffen is said to have created a web of Swiss accounts though which fees charged to the oil companies by his company hopscotched from one account to another until they settled into accounts controlled by Mr. Nazarbayev, his family, his oil minister and his prime minister.

According to the newly declassified court documents, Mr. Giffen has presented 41 documents that his lawyers say prove he cannot be prosecuted because he was telling U.S. intelligence officials about the bribes all along, and the officials never told him to stop.

"He disclosed to the officials the very facts that are at the core of the indictment," his lawyer, William Schwartz, wrote in an affidavit to the court, so he is entitled to what is known as a "public authority defense."

Nonsense, replied the prosecutor, Peter Neiman, in another motion.

Mr. Giffen, he said, was like "a bank robber who seeks a public authority defense based on a claim that the government had authorized him to open an account at the bank he robbed."

He said the documents prove only that Mr. Giffen told the intelligence officials that Mr. Nazarbayev was keeping double books in order to fund reforms and spend the money "as he saw fit" and do not prove that Mr. Giffen, who is known to be close to Mr. Nazarbayev, had snitched on his boss and benefactor.

Mr. Neiman added: "Giffen no doubt hopes that the government will prefer maintaining the secrecy of many of the incidents described in the documents to pursuing the prosecution."

The documents that Mr. Giffen's lawyers submitted to the court are mostly still classified and detail a relationship with U.S. intelligence that goes back to 1984.

Kazakhstan, which has sent a de-mining unit of some two dozen men to Iraq, is the most pro-Western of the Central Asian states, and American companies are its largest investors.

Scott Horton, a New York lawyer specializing in Central Asia who has been closely tracking the case, said that so far, it has been free from political interference, despite multiple attempts by Mr. Nazarbayev to have it dropped.

But the national security concern could "open a crack that would let political input affect prosecutorial discretion legitimately," he said.

Lawyers representing the government of Kazakhstan have argued that the Swiss bank accounts at the heart of the case were used for legitimate government business.

On Tuesday in Astana, the capital, an aide to Mr. Nazarbayev, Karim Massimov, said the president had no comment on Mr. Giffen's defense.

The prosecutor has filed a motion, which is now before the 2nd U.S. Circuit Court of Appeals, in New York, asking that the court throw out Mr. Giffen's defense and its sensitive documents.

Oral arguments are scheduled for Jan. 25. If the court accepts Mr. Giffen's defense, the prosecution will have to decide whether the possible damage to national security outweighs the benefits of the prosecution.