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PP RUEHIK
DE RUEHTA #1915/01 2950911
ZNR UUUUU ZZH
P 220911Z OCT 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 6696
INFO RUCNCIS/CIS COLLECTIVE 2075
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1446
RUEHKO/AMEMBASSY TOKYO 2146
RUEHUL/AMEMBASSY SEOUL 1081
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1635
RUEKJCS/SECDEF WASHDC 1495
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1954
RUEAWJL/DEPT OF JUSTICE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMCSUU/FBI WASHINGTON DC
RUEABND/DEA HQS WASHINGTON DC
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC 0032
RUEANQT/FINCEN VIENNA VA

UNCLAS SECTION 01 OF 04 ASTANA 001915 
 
SENSITIVE 
SIPDIS 
 
STATE FOR INL/AAE, SCA/CEN 
 
E.O. 12958: N/A 
TAGS: PGOV PINR SOCI KCRM KCOR KZ
SUBJECT:  KAZAKHSTAN:  SIX MONTHS AFTER THE ANTI-CORRUPTION DECREE 
 
ASTANA 00001915  001.3 OF 004 
 
 
REFTEL:  ASTANA 1773 
 
¶1. (U) Sensitive but unclassified.  Not for public internet. 
 
¶2. (SBU) SUMMARY:  The anti-corruption decree signed by President 
Nazarbayev six months ago tasked the government with drafting 
legislation to improve anti-corruption measures.  A series of 
high-profile corruption investigations may show the government's 
commitment to fighting corruption, but has also caused concerns in 
some quarters about law enforcement's ability to conduct effective 
investigations, while staying politically neutral and respectful of 
the rule of law.  Nevertheless, Kazakhstan used the International 
Anti-Corruption Conference in Astana September 16-18 as a platform 
to declare its commitment to fighting corruption.  END SUMMARY. 
 
PRESIDENTIAL ANTI-CORRUPTION DECREE 
 
¶3. (SBU) President Nazarbayev issued a decree on April 22 directing 
the government to pursue a broad range of anti-corruption measures. 
The decree is meant to give both government officials and those 
working for state-controlled companies personal responsibility for 
preventing corruption.  The decree also foresees disciplinary action 
against those who do not report corruption.  The decree also directs 
the government to encourage citizens to report corruption. 
 
¶4. (SBU) As part of corruption-prevention measures, officials will 
be required to report their property holdings while employed by the 
government and for a period following their service if the value of 
the property exceeds their official income.  Law-enforcement 
agencies will conduct undercover operations within ministries to 
root out corruption at all levels.  All government agencies will 
have to maintain databases of personal and professional information 
on all employees, including any investigations and disciplinary 
actions.  In an effort to curb corporate corruption, government 
agencies will be required to identify positions with a high 
corruption risk and to develop special applicant requirements. 
 
¶5. (U) One of the most important aspects of the decree is an initial 
attempt to eliminate conflicts of interests within the government. 
Kazakhstani law previously had no prohibition on conflicts of 
interest, and government procurement procedures had no built-in 
protections.  The decree establishes a period of time that 
government officials cannot work for commercial companies over which 
their ministries or agencies had oversight.  The Presidential 
Commission on Corruption must now analyze and monitor corruption, as 
well as develop anti-corruption measures.  Legislation to implement 
the decree remains in draft at the Ministry of Justice. 
 
¶6. (U) This decree is not the only anti-corruption initiative.  A 
working group in the Parliament is studying legislation drafted by 
the Financial Police to increase its ability to fight corruption. 
The legislation would require confiscation of property -- in 
addition to imprisonment -- of government officials convicted of 
embezzlement, operation of shell companies, or other abuses of 
power.  The legislation would also add fraud committed by state 
officials to the list of corrupt practices due to corrupt officials' 
claims in some cases that they committed fraud when accepting 
bribes, because they could not deliver on promises made in exchange 
for the bribe.  The legislation will also provide criminal liability 
for legal entities. 
 
¶7. (U) Furthermore, the decree addresses the need to strengthen 
anti-corruption measures within law enforcement.  Unified selection 
criteria for law-enforcement job applicants will be developed 
similar to the eligibility requirements for other government 
positions.  Newly hired officers will be required to serve a 
probationary period.  In recognition of the need for higher salaries 
to prevent law enforcement corruption, officers will receive raises 
across the board. 
 
ASTANA 00001915  002.3 OF 004 
 
 
 
¶8. (U) The Financial Police will have concurrent jurisdiction with 
the Committee for National Security (KNB) for corruption and abuse 
of power cases against political appointees.  However, the Financial 
Police will have sole jurisdiction in all cases against other 
governmental employees. 
 
RESPONSES TO THE DECREE 
 
¶9. (U) Soon after the decree, the Prosecutor General's Office (PGO) 
chaired a Coordination Council meeting of all law-enforcement 
agencies.  Participants decided to create a Secretariat with a 
representative from each law-enforcement agency and to ensure that 
the Coordination Council takes an active role in coordinating 
high-profile corruption investigations.  The PGO announced that the 
decree not only addresses the current problems of frequent 
corruption cases, but also will allow for a systematic approach to 
combat corruption.  The PGO also stressed the need for civil 
society, the government, and mass media to unite in their efforts. 
Additionally, the PGO stated that it is increasing its role in 
protecting the rights of citizens by reviewing all recent court 
decisions to ensure fair treatment of defendants and appropriate 
sentencing. 
 
¶10. (U) The Chairman of the Financial Police expressed his pleasure 
with the decree, highlighting the fact that his agency will now have 
more work.  This development marks a sharp change from November 2008 
when President Nazarbayev attacked the anti-corruption work of law 
enforcement and proposed the creation of a new anti-corruption force 
in a speech at a seminar.  Despite the subsequent rumors about the 
future of the Financial Police, the expansion of its jurisdiction 
and the reported satisfaction of the President with the intensity of 
its recent anti-corruption efforts indicate that the Financial 
Police has little to worry about. 
 
STATISTICS AND ONGOING CORRUPTION CASES 
 
¶11. (SBU) During the first nine months of 2009, the Financial Police 
investigated 1,303 cases, which is a 4.8% increase over the same 
period last year.  Of those investigations, 356 were bribery cases, 
a 39.5% increase (from 255 to 356).  The Financial Police's 
corruption investigations of high profile public officials include 
two Vice-Ministers and the Minister of Environmental Protection, two 
Deputy Chairmen of the Statistics Agency, the Chairman of the Water 
Resources Committee of the Ministry of Agriculture, and a 
Vice-Minister of Emergency Situations. 
 
¶12. (SBU) At the opening of an INL-funded FBI training course at the 
Financial Police Academy on October 12 (septel), Deputy Chairman of 
the Financial Police Andrey Lukin shed light on the most recent 
corruption investigations.  On October 2, Vice-Minister of Emergency 
Situations Ablai Sabdalin was arrested for conspiracy to provide a 
bribe.  During the investigation, the Financial Police used video 
surveillance for three months and gained the cooperation of the 
Ministry's Director of the Technical and Material Support 
Department, who was asked by the Vice-Minister to pay the bribes on 
his behalf.   The Director was placed in witness protection after 
the Vice-Minister's arrest. 
 
¶13. (U) Anatoliy Ryabtsev, Chairman of the Ministry of Agriculture's 
Water Resources Committee, is currently on trial for abuse of power, 
embezzlement, and bribery.  The investigation into Ryabtsev was 
jointly conducted by the Financial Police and KNB.  Ryabtsev pled 
guilty to only some of the KNB charges and not guilty to the 
Financial Police charges.  The Financial Police filed the bribery 
case after Ryabtsev attempted to pay officers $40,000 to close an 
embezzlement investigation. 
 
¶14. (U) On October 16, former Minister of Environmental Protection 
 
ASTANA 00001915  003.3 OF 004 
 
 
Nurlan Iskakov was sentenced to four years imprisonment for abuse of 
power.  He was found not guilty on charges of leading an organized 
criminal group, which made it impossible to prove related charges 
against two Vice-Ministers.  The Vice-Ministers were found guilty on 
charges of neglect of duty. 
 
RESULTS, BUT AT WHAT COST? 
 
¶15. (SBU) There has been, however, a public backlash against the 
Financial Police, who have been criticized for the poor quality of 
their investigations, use of weak evidence, and violations of legal 
procedures.  When pressured to enhance their results early on, the 
Financial Police only increased their operational tempo, without 
improving investigative methods.  In a recent high-profile case, the 
publisher of the opposition newspaper "Respublica" has accused the 
Financial Police of searching its offices and seizing property 
without a warrant during a libel case. 
 
¶16. (SBU) The KNB has also been criticized for its actions in the 
arrest of Kazatomprom Director Mukhtar Djakishev.  Djakishev's 
attorney and family have publicly accused the KNB of denying him his 
right to have an attorney and to communicate with his family. 
Independent mass media representatives have also complained of 
pressure from law-enforcement agencies, including the KNB. 
 
¶17. (SBU) The passage of the anti-corruption decree also increased 
the competition among law-enforcement agencies and has led to the 
arrest of law-enforcement officers, such as the KNB's arrest of the 
Chief of the Financial Police of the North Kazakshtan Oblast for 
soliciting a $120,000 bribe for not investigating a case.  Other 
negative consequences from increased competition include a 
disagreement between Financial Police and traffic police officers 
that led to a brawl in a restroom at the Department of Interior.  In 
order to resolve the issue, the Minister of Interior and Chairman of 
the Financial Police had to agree on the creation of a special 
interagency group.  The increased tempo has also caused some 
consternation throughout the government and public statements from 
all quarters.  Yerlan Karin, the Executive Secretary of the 
President's Nur Otan Party, complained about a plan to send KNB 
officers to KazAgro to oversee the use of $1 billion in state aid. 
Minister of Health Zhaksylyk Doskaliyev responded to complaints 
about doctors accepting "gratuities" by proposing to legalize the 
practice and provide separate cashiers in hospitals to collect 
gratuities from patients. 
 
ANTI-CORRUPTION CONFERENCE 
 
¶18. (SBU) An international anti-corruption conference was held in 
Astana September 16-18, 2009.  The conference was extremely 
important for the Financial Police to demonstrate its progress and 
lead role in the fight against corruption.  The Financial Police 
noted that the Government of Kazakhstan's plans to ratify the "Civil 
Law Convention on Corruption," "Criminal Law Convention on 
Corruption," and the Council of Europe's "Convention on Laundering, 
Search, Seizure and Confiscation of the Proceeds from Crime and on 
the Financing of Terrorism."  Chairman of the Financial Police 
Kairat Kozhamzharov bragged about the 100% conviction rate of the 
many high-level government officials arrested.  (NOTE:  The event 
was political in nature with all participants confirming their 
commitments to good governance and fighting corruption and no 
agreement on effective measures against corruption. END NOTE.) 
 
A CAUTIONARY TALE 
 
¶19.  (SBU) Transitioning from a post-Soviet culture of corruption to 
institutionalized equality under rule of law will be an uphill 
battle.  Things did not work out well for Alpamys Bekturganov, one 
of the first whistle-blowers, who was in prison two months after 
accusing his boss, Akim (governor) of the Western Kazakhstan Oblast 
 
ASTANA 00001915  004.3 OF 004 
 
 
Baktykozha Izmukhambetov.  Bekturganov, an advisor the Akim, 
referred to the anti-corruption decree when he publicly accused 
Izmukhambetov of nepotism and corruption crimes.  Law-enforcement 
agencies, including the Committee for National Security (KNB), 
accepted evidence but did not file charges.  Bekturganov was fired, 
taken to court by Izmukhambetov for slander, and sentenced to one 
year in prison.  He was also sentenced to an additional three years 
for embezzlement of $800 used to publish a book. 
 
¶20. (SBU) COMMENT:  Competing theories exist about the recent 
increase in anti-corruption activities.  From one side, it appears 
that the Financial Police reacted to the President's criticism and 
are attempting to prove their value.  However, many theorize that 
some in the government are using the Financial Police and KNB as a 
weapon in an internal political battle.  At the same time, they note 
the efficacy of this weapon due to the alleged pervasiveness of 
corrupt practices (reftel).  In truth, there might be "a little from 
column A, and a little from column B."  Despite these problems, INL 
has established a good working relationship with both the Financial 
Police and its Academy and is providing technical assistance to 
increase its professionalism and improve its ability to fight money 
laundering and terrorism financing while respecting the rule of law. 
 END COMMENT. 
 
HOAGLAND