Akin Gumpsters complicit v. Press Freedom again...

FOR ONE MILLION DOLLARS!

From the Washington Post, January 25, 2001

"The money went for high-priced Washington lawyers, public relations
firms and lobbyists; some of it was channeled through Liechtenstein-
based foundations and offshore companies in the Caribbean, U.S.
federal records show.

"The spending peaked in 1999 during the run-up to presidential and
parliamentary elections in Kazakhstan. Prominent recipients of Kazakh
government largess during this period included the law firm of Akin,
Gump, Strauss, Hauer & Feld ($1 million), the Carmen Group public
relations company ($700,000), and Mark A. Siegel & Associates, a
Washington-based political consulting firm, ($470,000), according to
records filed with the Justice Department under the Foreign Agents
Registration Act."

Full Story:

From the Washington Post
Thursday, January 25, 2001

Investment in Freedom Is Flush With Peril

From Kazakhstan, A Cautionary Tale

By Michael Dobbs
Washington Post Foreign Service

Thursday, January 25, 2001; Page A01

Second of three articles

ALMATY, Kazakhstan -- When the Franklin Printing Co. was founded here
with $3 million of American taxpayer money in 1995, U.S. officials
pledged it would help promote freedom of the press in Kazakhstan, an
oil-rich Central Asian country that the State Department was hailing
as "an emerging democracy."

Fast forward five years, to the summer of 2000. A corruption scandal
has erupted at the highest levels of the Kazakh government, linking
the country's authoritarian president to multimillion-dollar deposits
by international oil companies in Swiss bank accounts. The scandal is
covered widely in the press in the United States and Europe, but it
is barely mentioned in Kazakhstan's leading newspapers, including
those printed by the U.S.-funded publishing house.

The printing company -- named for Benjamin Franklin -- is now owned
by a firm linked to the president's daughter. Its co-founder, a
Russian businessman who also ran Kazakhstan's most successful
independent newspaper, says he felt obliged to leave town after
receiving what he describes as "an offer I could not refuse" from a
senior member of the regime.

Such are the perils of promoting democracy in a part of the world
that is more accustomed to the rule of khans, commissars and
presidents-for-life. What happened to the Franklin printing house
could be a parable of the way in which U.S. foreign aid programs
launched with the best of intentions can be undermined by
authoritarian leaders determined to protect power and privileges.

In the decade since the end of the Cold War, democracy assistance has
become an American growth industry, providing jobs for a small army
of political advisers, media consultants and election observers. The
U.S. Agency for International Development (USAID) spent $649 million
on democracy programs in 2000, up from $165 million in 1991.

In such countries as Yugoslavia, Slovakia and Peru, democracy-
building campaigns appear to have helped show the door to
authoritarian governments with free elections. In other parts of the
world -- Central Asia is an obvious example -- the programs have
drawn criticism as being little more than constitutional window-
dressing for corrupt autocracies.

American democracy-builders plead for patience, saying the aid
programs are laying the foundations for long-term change. "We are
helping political parties, NGOs [nongovernmental organizations] and
political activists build a political base," said Eric Kessler,
Central Asia representative for the National Democratic Institute
(NDI), which is affiliated with the U.S. Democratic Party. "We
shouldn't turn our backs on the political activists of these
countries just because the regimes will not let them be effective for
many years."

NDI activities in Central Asia include working with student activists
to improve conditions in universities and combat endemic campus
corruption, which includes bribing professors for better grades and
paying for textbooks that should be free. Other American
organizations hand out grants to Kazakh political activists, train
journalists and provide legal advice to the Kazakh parliament.

Democracy-building can be dangerous work. In 1994, as Kazakhstan's
president, Nursultan Nazarbayev, was beginning to crack down on
opponents, the Almaty representative of the International Republican
Institute (IRI), which is identified with the U.S. Republican Party,
was brutally assaulted; the attack on Eric Rudenshiold had the
hallmarks of secret police intimidation. Mystery continues to
surround the November 2000 murder of the IRI's representative in
Azerbaijan, John Alvis, shortly after Western monitoring groups
sharply criticized the Caspian republic's election procedures.

Limits of Tolerance

Kazakhstan, the largest and most prosperous of the five newly
independent Central Asian republics born from the Soviet Union, has
been a favorite of the democracy-building lobby for years. Despite
his communist past, Nazarbayev has been viewed in Washington as a
pragmatic, modernizing leader who placed a high priority on relations
with the West. A country four times the size of Texas, Kazakhstan
also has the good fortune to be sitting on huge oil reserves in the
Caspian Sea, giving it the resources to make rapid economic progress.

At first, Nazarbayev seemed inclined to play along. "Our post-
communist elite wanted to join the world community," said Yevgeny
Zhovtis, who heads an independent human rights group in Almaty, the
former capital. "This meant playing the rules of the game, as laid
down by the U.S."

Under Western pressure, Nazarbayev accepted a degree of press freedom
and political pluralism. But the limits of his tolerance soon became
clear: There could be no infringement on his personal power, or on
the control of the ruling elite over key sectors of the economy,
particularly oil.

According to Zhovtis, American pressure on Nazarbayev to introduce
political reforms began to slacken after 1994. Nazarbayev discovered
that as long as he did nothing outrageous such as throwing an
important opponent into prison, there would be little outcry from
abroad. In Zhovtis's phrase, Kazakh leaders came to understand that
the West is less interested in human rights than geopolitics,
preserving Kazakhstan as a stable buffer between Russia and China and
keeping its oil flowing.

"Without the support of the host government, we could not do very
much," said Barnabas Johnson, an American constitutional scholar who
worked in Kazakhstan in the mid-1990s on a rule-of-law project. "We
dumbed everything down."

In some ways, Johnson added, that project may have done harm. Tens of
thousands of dollars were spent organizing visits by what Johnson
terms "weekend warriors," delegations of American judges who would
visit Central Asia for a few days to talk up the virtues of a fair
judicial system. Then they would go home. "The message was that we
were not all that serious."

William Courtney, a former U.S. ambassador to Kazakhstan, said he
believes the USAID programs helped convince ordinary Kazakhs that the
United States stands "on the side of democracy." At the same time, he
was struck by the disparity between the grandiose American rhetoric
in Central Asia and the relatively modest results.

A good example of the limitations of U.S. assistance is the Franklin
Printing Co.

In March 1995, it began life with $3 million from the Central Asian
American Enterprise Fund, a U.S. taxpayer-funded venture capital
institution. The idea, said Stephen J. Solarz, a former chairman of
the fund, was to encourage private enterprise and the development of
a free press. Before Franklin's creation, all Kazakh newspapers were
published on state-owned presses.

Franklin was founded as a joint venture between the U.S. fund and
Kazakhstan's leading independent newspaper, Caravan, which was owned
by Boris Giller, a Russian businessman. The American contribution
consisted of a 50 percent stake in Franklin for $1 million and a $2
million loan, to be repaid over five years.

At first, Caravan was both profitable and widely read. It published
occasional articles by former prime minister Akezhan Kazhegeldin, who
had emerged as Nazarbayev's leading critic and rival for the
presidency.

As a 1999 election approached, Giller says, he came under increasing
pressure from the authorities to sell his business and move back to
Russia. He will not say exactly who pressured him to sell Caravan or
how, but he compares his predicament to a scene out of the Mafia
film "The Godfather."

"I understood that if very serious people make a very serious offer,
you have to say yes," he said.

By the time Giller left Kazakhstan, in March 1998, he had bought the
entire American stake in Franklin except for a single share, as part
of the U.S. program to put assets in the hands of locals. But there
was still a large loan outstanding. The president of the American
enterprise fund, John Owens, said in an interview that the identity
of the new owners was of "scant interest" to the fund as long as the
loan was repaid on schedule. It was, in May 2000.

Under the new owners, Caravan became a mouthpiece for Nazarbayev. The
Franklin press, meanwhile, refused to publish anything at odds with
the government line. While the ownership structure of Caravan and
Franklin remains obscure, Western diplomats in Almaty say that
control over the publishing house now rests with a company run by the
president's daughter, Dariga, which already has large media holdings
in Kazakhstan.

"It is very frustrating," said Solarz, a former nine-term U.S.
congressman still on the board of the enterprise fund, which was
established under the 1992 Freedom Support Act. "We had no way of
knowing that [Giller] would sell his shares to relatives of the
president. Had we known that, we would never have made the
investment."

Millions for U.S. Firms

At the same time as millions of dollars of American aid money were
spent to preach democracy in Kazakhstan, Nazarbayev and his principal
political opponent, former prime minister Kazhegeldin, spent millions
in the United States trying to influence American public opinion and
policymaking.

The money went for high-priced Washington lawyers, public relations
firms and lobbyists; some of it was channeled through Liechtenstein-
based foundations and offshore companies in the Caribbean, U.S.
federal records show.

The spending peaked in 1999 during the run-up to presidential and
parliamentary elections in Kazakhstan. Prominent recipients of Kazakh
government largess during this period included the law firm of Akin,
Gump, Strauss, Hauer & Feld ($1 million), the Carmen Group public
relations company ($700,000), and Mark A. Siegel & Associates, a
Washington-based political consulting firm, ($470,000), according to
records filed with the Justice Department under the Foreign Agents
Registration Act.

As the election campaign heated up, American consultants and public
relations experts flooded the country. Some were on the USAID payroll
with the goal of teaching democracy in a nonpartisan way; others
received generous retainers from the Nazarbayev government. Kazakhs
had difficulty distinguishing the democracy promoters from the for-
profit consultants.

At the same time the National Democratic Institute was working with
grass-roots activists, attempting to challenge the authoritarian
power structure, one of its board members, Mark Siegel, was working
for Nazarbayev as a paid political consultant.

Justice department records show that Siegel, a former Democratic
National Committee executive director, was paid $3,000 a day for
public relations activities on behalf of the Kazakh government and
for providing advice on "democratization." As an NDI director, Siegel
is responsible for overseeing its operations in Asia.

While most Western monitors criticized the election process as
seriously flawed, Siegel argued that the elections had been largely
free and fair, according to Western diplomats and aid officials who
heard his briefings. He also helped organize trips to the United
States by Nazarbayev and other Kazakh officials.

In an interview, Siegel said there was no conflict of interest
between his role as an NDI board member and his activities on behalf
of the Kazakh government, as he never claimed to represent NDI while
in Kazakhstan. "If anything came up at an NDI board meeting on
Kazakhstan, I would recuse myself," he said, adding that he no longer
receives a retainer from the Kazakh government.

Siegel scored a public relations coup for Nazarbayev in December 1999
when he arranged for the president to receive a plaque from the
Washington-based International Foundation for Election Systems for
his "outstanding contribution" to civic education and democratic
development in Kazakhstan. The event was filmed by Kazakh television,
and used back home to suggest a Western seal of approval for the
election process.

Foundation officials now say that their praise of Nazarbayev was
limited to his backing the use of a certain civics textbook in Kazakh
secondary schools. "We did not mean to endorse him; we just wanted to
be nice," said Juliana Pilon, the foundation's vice president for
programs.

Siegel is scarcely the only American political activist or public
figure to have gotten close to the Nazarbayev government. In the
middle of the 1999 election campaign, Roger Clinton, brother of the
U.S. president, made two trips to Kazakhstan to give concerts hosted
by the ruling party and had a cordial meeting with Nazarbayev. The
Kazakh official media hailed the younger Clinton as a "goodwill
ambassador" from the United States.

Carmen Group's filings to the Justice Department show that the firm
paid for an October 1999 trip to Kazakhstan by U.S. Rep. Jack Metcalf
(R-Wash.). The filings say that Metcalf, now retired, subsequently
delivered on the House floor an assessment of the state of Kazakh
democracy based on talking points provided by the PR firm. A few
months later, Metcalf's top aide, Christopher Strow, who had
accompanied him to Kazakhstan, got a job with the Carmen Group.

A May 4, 1999, letter from the Carmen Group to the Kazakh foreign
minister, obtained by The Washington Post, promised to generate
favorable press coverage for Kazakhstan in the U.S. media by
organizing all-expenses-paid "orientation tours" for Western
journalists. According to Justice Department filings, journalists who
accepted such invitations included syndicated columnist Georgie Anne
Geyer and the editor-in-chief of the conservative American Spectator,
R. Emmett Tyrrell Jr.

U.S. officials concede there have been mixed results in the democracy-
building efforts: University students, for instance, are standing up
for their rights. But in free elections, Kazakhstan may be less
democratic than it was 10 years ago.

Ivan Sigal, who heads the Almaty office of Internews, a media
watchdog organization funded by USAID, says that in the past decade
the ruling elite has continued to consolidate power. "Our assumption
has been that the harder we press, the more the Kazakhs will move.
But it is now clear that this is a region in transition -- not to
democracy, but to autocracy."

According to Thomas Carothers, a Brookings Institution scholar and
author of "Aiding Democracy Abroad," democracy assistance is most
effective "when a country is clearly moving forward to democracy," or
at a moment of great political ferment, such as in Yugoslavia last
year. There the United States had a very clear idea of what it wanted
to achieve, the removal of President Slobodan Milosevic.

It is much less effective in regions such as Central Asia, where
democratic reform is not a high priority, either for the local
leadership or the U.S. government.

Natalia Chumakova, who heads an independent Kazakh human rights group
called the Center for the Support of Democracy, said she feels that
groups like hers might not have survived without assistance from
abroad. In the end, however, "it is not for USAID to create democracy
here," she said. "Democracy must grow in our hearts. As long as it is
not there, no amount of outside help will create it."

© 2001 The Washington Post Company