Monday, December 6, 2010

Kazakh leaders' life styles paid for by U. S. Big Oil

DECEMBER , 2010 -- Kazakh leaders' life styles paid for by U. S. Big Oil

On September 12, 2005, WMR reported: "Another Bush end-run. Kazakh groups are trying to recover for their country the millions paid in bribes by U.S. oil companies to Kazakh leaders. If the Bush Justice Department gets its way, those funds will be returned to Bush crime family coffers. See letter to Swiss government from Kazakh groups."

Also see this article from August 26, 2005.

The following leaked State Department cable explains how U.S. oil companies' bribe money was used by Kazakh officials -- and one or more of the CIA/Wikileaks pass-though "gatekeepers" decided it was important to redact some names:

Thursday, 17 April 2008, 10:35
C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 000760
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1. (C) Kazakhstan's political elites appear to enjoy typical hobbies -- such as travel, horseback riding, and skiing. Not surprisingly, however, they are able to indulge in their hobbies on a grand scale, whether flying Elton John to Kazakhstan for a concert or trading domestic property for a palace in the United Arab Emirates. This cable recounts several instances in which Embassy officers have learned of, or witnessed, the recreational habits of Kazakhstan's leaders. End Summary.


Sun and Horses


2. (C) President Nazarbayev, like many of his countrymen, has a strong affinity for horses. In 2007, emboff visited the presidential horse farm XXXXXXXXXXX. The farm is located on the outskirts of Astana in a residential area, but is surrounded by a high-fence and security guards. Inside the gates are a large stable, indoor and outdoor riding arenas, and a clubhouse with a pool table, sauna, and exercise room. Emboff toured the stable and saw approximately forty horses from various parts of the world. XXXXXXXXXXXX told him that Nazarbayev visits the horse farm on occasion, though not too frequently. XXXXXXXXXXXX said that Nazarbayev's wife -- Sara Nazarbayeva -- never accompanies him, XXXXXXXXXXXX Taszhargan, an opposition newspaper, printed a sympathetic article about Sara Nazarbayeva XXXXXXXXXXXX

3. (C) Nazarbayev is also fond of traveling to warmer climes in the region. The UAE Ambassador told emboff that Nazarbayev had traded property in Borovoe -- a mountainous resort area of Kazakhstan north of Astana and sometimes likened to Switzerland -- for a "palace" in the Emirates. He did not make clear whether the transaction was a permanent arrangement or only a temporary one. The head of Turkey's liaison office in Astana, Orhan Isik, told emboff that Nazarbayev has a mansion in Antaliya, which he visits 4-5 times a year. Isik claimed that Nazarbayev received the property as a gift in the early 1990's and now plans to use part of the land for the construction of a luxury hotel.


Dancing at the Nightclub


4. (C) On March 7, two days after his trip to the U.S. was cancelled, Prime Minister Masimov was spotted by emboff at Chocolat, one of Astana's trendiest nightclubs. Masimov entered at approximately 11:30 pm, accompanied by Presidential Administration head Kairat Kelimbetov, Astana mayor Askar Mamin, three middle-aged Kazakh women (presumably their wives), and a security detail. Although the club offers a VIP area, Masimov chose to sit at a table in full view of all of the club's patrons. Emboff lingered close to Masimov's group XXXXXXXXXXXX Masimov led his companions on to Chocolate's dance floor soon after their arrival. The dance floor holds approximately 100 people, and at the time perhaps 50 patrons were dancing. However, Masimov himself chose to dance on an empty stage above the dance floor. His companions quickly tired but Masimov remained, dancing alone and animatedly on the stage for another 15-20 minutes. At approximately 1:00 am, Masimov and his retinue left the club.


Skiing with the Oligarchs


5. (C) In September 2007, Kazakhstani oligarch Aleksandr Mashkevich -- the co-founder of metals and mining giant Eurasian Natural Resources Corporation and, according to

ASTANA 00000760 002.4 OF 003


Forbes magazine, the 334th wealthiest man in the world -- hosted a dinner at his house in Almaty for two visiting U.S. congressmen. Only two Kazakhstanis attended the event, State Secretary Kanat Saudabayev and his assistant. Judging from

SIPDIS the friendly banter between Saudabayev and Mashkevich, the two have a quite cordial personal relationship. Mashkevich told a lengthy anecdote about a ski vacation that he and Saudabayev had taken together in Europe.

6. (C) Saudabayev had hosted a codel at that same Almaty residence in 2005, without Mashkevich in attendance. At that time, when the Ambassador asked Saudabayev whose house it was, he would only say that it belonged to "a friend." Saudabayev has twice hosted visiting USG officials for a meal at Mashkevich's Astana residence -- both times without Mashkevich. It is not clear what Mashkevich is spending his billions on, but it is certainly not culinary talent. On all four occasions the Ambassador has eaten at one of his houses, the menu has been similar and focused on beshparmak (boiled meat and noodles) and plov. The wait staff appeared to be graduates of a Soviet cafeteria training academy. The wine, at least, was somewhat upscale with reasonably good French vintage bottles uncorked for the guests. The Astana residence has wooden plaques on the doors that would fit in nicely in a Wyoming hunting lodge but are somewhat out of touch with the upscale "Euro-remont" that is so popular among the Kazakhstani elite.


Private Concerts with the Stars


7. (C) In 2007, President Nazarbayev's son-in-law, Timur Kulibayev, celebrated his 41st birthday in grand style. At a small venue in Almaty, he hosted a private concert with some of Russia's biggest pop-stars. The headliner, however, was Elton John, to whom he reportedly paid one million pounds for this one-time appearance. (Note: The British Ambassador relayed a slightly different story, with an unknown but obviously well-heeled friend arranging and paying for Sir Elton's gig. End Comment.) There have been separate reports that Nelly Furtado performed at the August 2007 birthday bash for Kulibayev's wife, Dinara Nazarbayeva. Kulibayev also appears willing to spend his fortune on others. According to Turkish diplomat Isik, when the Kempinski group recently built luxury villas in Bodrum, Turkey, Kulibayev bought up a number of them -- at a cost of 4-5 million dollars each -- and doled them out as gifts to friends and family.


Sports and Politics Mix


8. (C) Sports and politics mixed seamlessly in Almaty on April 2, when some of Kazakhstan's most prominent political figures participated in the Beijing Olympics torch relay. Torchbearers included President Nazarbayev, Presidential Administration business affairs head Bolat Utemuratov, Nur Otan party first deputy chairman Adilbek Dzhaksybekov, and Agency for the Regulation of Natural Monopolies head Mazhit Yesenbayev. All of these bigwigs, except Nazarbayev himself, could justify their participation in the relay based not on their high-ranking political offices, but rather on their prominent official positions in the Kazakhstani sports world. Utemeratov just happens to head Kazakhstan's Tennis Federation, while Dzhakysbekov chairs the Football Federation -- a position previously held by ex-Nazarbayev son-in-law Rakhat Aliyev. Yesenbayev heads the Judo Federation. KazMunayGaz chairman Uzakbay Karabalin, who heads the Boxing Federation, and Nazarbayev son-in-law Timur Kulibayev, who heads the Golf Federation, also shared in the glory of carrying the Olympic torch. One prominent sport federation president who missed the torch call was Defense Minister Daniyal Akhmetov. He is head of the scandal-ridden Cycling Federation XXXXXXXXXXXX


Relaxation the Good, Old Soviet Way


9. (C) Kazakhstan's political elites also have recreational tastes that are not so exotic. Some, in fact, prefer to relax the old-fashioned way. Defense Minister Akhmetov, a self-proclaimed workaholic, appears to enjoy loosening up in the tried and true "homo sovieticus" style -- i.e., drinking oneself into a stupor. While most of our accounts of Akhmetov's indulgences with the bottle are hearsay, we do have "eyes on" for one episode which supports the rumors. In June 2007, Akhmetov showed up in grand form for a meeting with a visiting senior U.S. Defense Department official. Making no attempt to conceal his condition -- slouching back in his chair and slurring all kinds of Russian participles -- Akhmetov explained to this very senior guest that he had just been at a cadet graduation reception "toasting Kazakhstan's newly-commissioned officers." Who was toasted more -- the Defense Minister or the cadets -- is a matter of pure speculation. Akhmetov's excesses do not solely extend to the bottle. An insider at Astana's Radisson Hotel recently told us about preparations for the unbelievably lavish and expensive wedding of Akhmetov's son. In the Kazakh tradition, the parents of the groom are responsible for the wedding -- so it would seem that Akhmetov must have footed the bill. ORDWAY.

Medvedev, Nazarbaev fail to heal fault lines
By Sergei Blagov

The leaders of Russia and Kazakhstan have announced plans to further develop their energy partnership. However, the two former Soviet allies remain slow to finalize some of their energy
projects. Meanwhile, bilateral trade and Russia's trade surplus has increased.

During a meeting in Moscow on March 17, Russia's President Dmitry Medvedev and his Kazakh counterpart, Nursultan Nazarbaev, pledged to develop bilateral economic ties. They discussed a joint action plan for 2011-2012, including
oil and gas transit, development of the Caspian shelf, nuclear energy and transportation cooperation.

Medvedev and Nazarbaev also discussed bilateral "strategic"
projects, including the Western China-Western Europe system of highways, the joint use of Baikonur space center and the construction of the new Baiterek space launch site.

The Kremlin also made no secret that Nazarbaev continues to enjoy Moscow's support. Medvedev reportedly wished his Kazakh counterpart success in the presidential election on April 3, which Nazarbaev went on to win by a landslide.

"I hope everything will be fine and we will continue our interaction during upcoming bilateral and multilateral meetings later this year," Medvedev said, thus reiterating Moscow's support for Nazarbaev.

Moreover, Russia and Kazakhstan pledged joint support for Kyrgyzstan but refrained from making any specific commitments. During the talks between the two presidents, Russia and Kazakhstan reiterated their support for ongoing efforts to stabilize Kyrgyzstan, Medvedev's foreign policy aide, Sergei Prikhodko, announced on March 18. However, Kyrgyzstan's request for a US$200 million
loan from the multilateral fund of the Eurasian Economic Commonwealth depends on the policies of Kyrgyzstan's government, Medvedev said.

In 2010, trade between Russia and Kazakhstan amounted to some $15.3 billion. Last year, Russian exports to Kazakhstan reached $10.82 billion, up 49%, while imports from Kazakhstan were $4.48 billion, up 63%, according to Russian customs statistics. Therefore, Russia continued to enjoy a healthy trade surplus of more than $6 billion last year.

In 2008, trade between Russia and Kazakhstan amounted to $20 billion but fell to about $13 billion in 2009, when Russia's trade surplus with Kazakhstan amounted to $3.68 billion in 2009. According to Kazakh estimates, in the past five years Russia invested $3.5 billion in Kazakhstan, while Kazakh
investments in Russia amounted to $1.5 billion.

However, some of the earlier bilateral pledges to pursue energy projects proved to be unrealistic. In September 2009, Medvedev and Nazarbaev pledged to integrate the power supply systems of both countries, while Nazarbaev promised to increase electricity supplies from Kazakhstan to Russia's Siberian regions to help to tackle power shortages in Siberia in the wake of the Sayano-Shushenskaya hydropower plant disaster in August 2009.

In March 2010, the Russian energy ministry said that the energy companies of Russia and Kazakhstan agreed to finalize and sign an agreement on electricity sales until 2013. The deal has proved to be slow to materialize. Meanwhile, both sides promised to prioritize the Caspian Pipeline Consortium (CPC), which owns the Baku-Novorossiysk pipeline. During a meeting in Moscow on March 17, 2010, Nazarbaev told Prime Minister Vladimir Putin that Kazakhstan would continue exporting oil via Russian territory. Nazarbaev pledged to expand the CPC so as to export up to 67 million tonnes of oil per year.

The CPC has been operated at relatively low rates due to Kazakhstan's failure to commit more oil to the pipeline. In April 2006, Russia and Kazakhstan agreed to more than double oil deliveries via the CPC from 28 million tonnes annually in 2005. In May 2008, Moscow and Astana agreed to increase the capacity of the CPC from 32 million tonnes per year up to 67 million tonnes per year by 2012. Moscow has long urged Nazarbaev to agree to a long-term deal under which Kazakhstan would commit to exporting more oil via Russian pipelines. However, a binding oil transit deal between Russia and Kazakhstan has proved elusive.

During the latest talks in Moscow, both sides avoided discussion of another major bilateral project: the Orenburg gas plant. In March 2005, Russian gas giant Gazprom first indicated its plan to set up a joint venture with Kazakhstan's state-owned KazMunaiGas to process at the Orenburg plant the
natural gas from Karachaganak field, near the Russian border in northwestern Kazakhstan.

In December 2007, KazMunaiGas announced it expected the creation of the Orenburg joint venture in mid-2008. In September 2009, Russian officials insisted that the Orenburg gas processing plant would process 17.6 billion cubic meters (bcm) per year of Kazakh gas by 2012. Yet, despite repeated optimistic pronouncements, the implementation of the Orenburg project apparently lags well behind the original schedule.


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