Wisdom of Selling a Piece of Westinghouse to Kazakhstan

We truly know little about the future of Kazakhstan, a country that has not seen a democratic transition of power, and we should not risk a mistake.
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Suppose you were told of a country where an opposition leader was found shot twice in the chest and once in the head, through a pillow to silence the shots, and the police ruled it a suicide. Suppose a few months later, another opposition leader was found shot, with his body guard and driver, with his hands tied behind his back, and the police initially reported that he was killed "while hunting." Suppose that journalists who were critical of the government were run over by buses, or put in prison on trumped up charges. Suppose there had never been a fair election in the country, ever, and the laws were recently changed to allow the incumbent to serve as "president for life." Suppose that the head of state's family controlled the news media, key economic and government sectors, and even tax collections. Suppose the country was located in an unstable region of the world, and companies in the country had already been investigated for a role in the black market sale of Pakistan nuclear technology to North Korea, Libya and Iran.

Would this seem like a government that should own part of Westinghouse, a leading U.S. supplier of nuclear technologies?

According to reports in the Japanese press, the proposed sale of 10 percent of Westinghouse to KazAtomProm, a nuclear energy company owned by the government of Kazakhstan, will allow KazAtomProm to receive Westinghouse nuclear technology, including technology that will be used to process nuclear fuels. The Japanese press reports said U.S. government officials "have indicated that the deal poses no problems."

The argument in favor of the sale is that the current ruler of Kazakhstan, President Nursultan Nazarbayev, is a friend of the United States. Probably more important, he is a friend of Dick Cheney. According to this March 1998 story in BusinessWeek, "Together with the heads of Chevron Corp. and Texaco Inc., Cheney is one of just a dozen members of Kazakhstan's Oil Advisory Board, created by the country's president as a sounding board." Today Halliburton does a lot of business in Kazakhstan. So, too, does Rudy Giuliani's firm Bracewell & Giuliani, which has offices in Kazakhstan. The firm was quoted in the Pittsburgh press in support of the transaction.

However, this does not seem to be a done deal. It appears as though the Treasury Department's Committee on Foreign Investment in the United States ("CFIUS") will have an opportunity to approve or reject the Kazakhstan investment.

In looking at the Kazakhstan Westinghouse proposal, the CFIUS might want to look back on an earlier time, when Cheney and Paul Wolfowitz had pushed for deals between Iran and Westinghouse and GE. This was back in the days when Iran was run by our friend, the Shah of Iran. As reported in 2005 by Dafna Linzer of the Washington Post,

Ford's team endorsed Iranian plans to build a massive nuclear energy industry, but also worked hard to complete a multibillion-dollar deal that would have given Tehran control of large quantities of plutonium and enriched uranium -- the two pathways to a nuclear bomb. Either can be shaped into the core of a nuclear warhead, and obtaining one or the other is generally considered the most significant obstacle to would-be weapons builders. . .

Nuclear experts believe the Ford strategy was a mistake. As Iran went from friend to foe, it became clear to subsequent administrations that Tehran should be prevented from obtaining the technologies for building weapons. But that is not the argument the Bush administration is making. Such an argument would be unpopular among parties to the Nuclear Nonproliferation Treaty, which guarantees members access to nuclear power regardless of their political systems.

There is zero chance that the Kazakhstan/Westinghouse purchase is a surprise to the Bush/Cheney Administration, which has close ties to the Nazarbayev regime. In June 2007, the Kazakhstan government hosted a meeting of the "Global Initiative to Combat Nuclear Terrorism" in Astana, Kazakhstan. According to various reports in the foreign press, the Bush/Cheney administration is asking India to break off its energy agreements with Iran, in return for stronger trade links with Kazakhstan and Turkmenistan.

We truly know little about the future of Kazakhstan, a country that has not seen a democratic transition of power, and we should not risk a mistake leading to nuclear proliferation by transferring U.S. nuclear technology to any country that is ruled this way.

These are only a few news stories and NGO and government reports about the problems in Kazakhstan.

1. 2007 July 6. C.J. Chivers, "Former Son-in-Law of Kazakh Leader Says He Was Framed," New York Times. "Mr. Aliyev, 44 and until recently the Kazakh ambassador to Austria, is at the center of a palace feud and kidnapping scandal that has become a political sensation in Kazakhstan, the oil- and gas-rich state on the Central Asian steppe that he says Mr. Nazarbayev runs like a family business empire. The case has raised fresh questions about the politics and management of a country that by post-Soviet Central Asian standards has been a success, but is still dogged by election-rigging, centralization and corruption in its governing class.

2. 2007 June 15 June 2007. Christopher Walker, "Muzzling the Media: The Return of Censorship in the Commonwealth of Independent States," Freedom House. In Kazakhstan, a steady monopolization of media was implemented. Dariga Nazarbayeva, the influential daughter of the president and one-time head of the state news agency, played a pivotal role in the effort to take control of that country's news media infrastructure. In Kazakhstan, as in a number of the former Soviet states, broadcast media has been taken into the hands of members of the presidential family or those with close ties to it. Meanwhile, the screws were tightened on journalists who took an independent line. A campaign to silence critics who reported on official corruption caught in its web journalists such as Sergei Duvanov and Nuri Muftakh. Muftakh died at a time he was following allegations that Kazakhstan's president had secretly transferred large amounts of money to foreign banks. In November 2002, he was run over by a bus in what authorities regarded as an accident but what many speculate was a politically motivated assassination. Duvanov, who also wrote on political corruption and was following the "Kazakhgate" scandal, was found guilty of what many believed to be trumped up rape charges and sentenced to several years in prison in January 2003.

3. 2007 May 29. Yuri Zarakhovich. "Kazakhstan's Family Feud," Time magazine. Details the ongoing dispute between President Nursultan Nazarbayev and his son-in-law Rakhat Aliyev, characterizes Nazarbayev as an autocrat and states that "the lack of political maturity [in Kazakhstan] bodes ill for an increasingly critical section of the world."

4. 2007 May 25. "U.S. criticizes Kazakhstan over media shutdown," Reuters Webpage. Reports the United States' criticism of Kazakhstan for shutting down a TV station and newspaper owned by the son-in-law of President Nursultan Nazarbayev following a dispute between the two men.

5. 2007 May 24. "Kazakhbashi: One step forward, two back," The Economist.
"Kazakhstan has never held votes judged free or fair by international observers. This amendment is a mandate for Mr Nazarbayev to rule for life."

6. 2007 May 19. Raushan Nurshayeva, "Kazakhstan's President voted in for life term," Daily Telegraph. Kazakhstan's veteran leader Nursultan Nazarbayev has been in effect declared President-for-life in a move condemned by the nation's opposition as undemocratic.

7. 2007 March 6. United States Bureau of Democracy, Human Rights, and Labor, Country Reports on Human Rights Practices, 2006 - Kazakhstan. "The following human rights problems were reported: severe limits on citizens' rights to change their government; an incident of unlawful deprivation of life; military hazing that led to deaths; detainee and prisoner abuse; unhealthy prison conditions; arbitrary arrest and detention, particularly of government opponents; lack of an independent judiciary; increased restrictions on freedom of speech, the press, assembly, and association; pervasive corruption, especially in law enforcement and the judicial system; restrictions on the activities of nongovernmental organizations (NGOs); discrimination and violence against women; trafficking in persons; and societal discrimination."

8. 2007 January 22. "Kazakh blogger found guilty," AlJazeera.net. "Kazis Toguzbayev, who published articles on www.kub.kz, was found guilty of insulting Nazarbayev in two articles by alleging that he bore some responsibility for the murder of an opposition politician. . . Altynbek Sarsenbaiuly, co-chairman of the Nagyz Ak Zhol opposition party, was found shot dead in his car last February, alongside his driver and bodyguard. . . Sarsenbaiuly was not the first critic of Nazarbayev, who has held power since 1989, to be found dead. Three months previously, Zamanbek Nurkadilov, a former mayor of Almaty, the Kazakh capital, and a critic of Nazarbayev, had been found dead at his home. Nurkadilov was found with two bullet wounds to the chest and one to his head. An official investigation concluded that his death was suicide."

9. 2006 August 15. "Kazakhstan murder trial 'a farce': Altynbek Sarsenbaiuly was found shot dead on a roadside. Relatives and colleagues of a murdered Kazakh opposition leader say they have lost faith in the judicial process," BBC.

11. 2006 July 6. Ted Rall. "U.S. Plants Seeds of Disaster in Kazakhstan," Common Dreams. Kazakh opposition leader Galymzhan Zhakiyanov was scheduled to meet with Cheney in Astana. "I wanted to tell him about the problems we've faced building freedom and democracy here in Kazakhstan," he said, "and I wanted to remind Cheney of what President Bush said in his second inauguration speech--that the freedom and prosperity of citizens in the U.S. depends on the freedom and democracy of other countries in the world." But he never got to deliver that message, having been arrested by Kazakhstan's notorious militsia military police. . . .

12. 2006 February 13. Gulnoza Saidazimova, "Kazakhstan: Opposition Figure Found Shot Dead Near Almaty," RFE/RL. The bodies of Altynbek Sarsenbaev, a co-chairman of the Naghyz Ak Zhol opposition party, his bodyguard, and his driver were found in the Almaty outskirts early today. The three were reportedly shot dead. A former information minister and a former ambassador to Russia, Sarsenbaev was a fierce critic of Kazakhstan's current regime. "He was murdered," said Aydos Sarymov, an aide to Sarsenbaev, in an interview with RFE/RL. "His hands were tied behind his back. They shot him first in front and then in the back of his head. There is no doubt it is a murder." The Kazinform state agency reports that Sarsenbaev was killed while hunting. The leader of Kazakhstan's opposition group For a Just Kazakhstan, Zharmakhan Tuyakbai, who was also a presidential candidate in the December presidential election, confirmed Sarsenbaev's death to RFE/RL but refused to elaborate on possible motives. "Yes, it's true that he was found dead along with the bodies of his bodyguard and driver," Tuyakbai said. . . . Sarsenbaev, who was a government official and served as Kazakh ambassador to Russia, joined the opposition in 2003, and declared his intention to run for president.

13. 2005 December 5. "Fraud claims as Kazakh polls close," AlJazeera.net. Reports that, following 2005 presidential election, opposition members claimed to have evidence of duplicate voter lists that allowed for multiple voting.

14. 2005 November 29. "Kazakh Opposition Figure's Death Ruled Suicide," RFE/RL. The official investigation into the shooting death of Kazakh opposition figure and former Emergency Situations Agency head Zamanbek Nurkadilov has concluded that he committed suicide. The investigative team found that Nurkadilov first shot himself twice in the chest before putting the gun to his head and firing a bullet into his brain.

15. 2005 November 14. Andrew E. Kramer, "Kazakhstan opposition member slain," The New York Times. A former minister in the government of President Nursultan Nazarbayev who had said he would speak publicly about high-level corruption has been found shot to death, according to the police and an opposition leader. The killing Saturday night comes three weeks before a presidential election in this oil-rich former Soviet state. Zamanbek Nurkadilov, 61, was a member of the leading opposition group, For a Fair Kazakhstan. He was fired from his post as minister of emergency situations in 2004 after saying that Nazarbayev should answer allegations that Kazakh officials had accepted millions of dollars in bribes from an intermediary for American oil companies during contract talks in the 1990s. The leading opposition candidate in the presidential race, Zharmakhan Tuyakbai, said in an interview Sunday that Nurkadilov had recently said he would go public with information about corruption in Nazarbayev's government. . . Nurkadilov was shot twice in the chest and once in the head, Musin said, adding that the police had recovered a pillow pierced by bullets that may have been used as a silencer.

16. 2004 February 2004. Bagila Bukharb, "Kazakhstan Probes Nuclear Black Market" Associated Press story published in The Washington Post. "Kazakhstan has opened an investigation into the nuclear black market that helped Iran, Libya and North Korea, exploring suspected ties in the country that housed much of the Soviet Union's atomic arsenal, officials told The Associated Press. The black market's potential connection to Kazakhstan - which served as a nuclear testing ground until it disarmed after its 1991 independence - has raised concern about the proliferation of remnants of the Soviet weapons program. Kazakh officials strongly deny any highly enriched uranium - the form used in weapons - has leaked out of the country. Bush accused Sri Lankan businessman Bukhary Syed Abu Tahir of brokering black-market deals for nuclear technology using his Dubai-based company SMB Computers as a front. That firm also has an office in the Kazakh commercial capital, Almaty. The Kazakh intelligence agency, the National Security Committee, is investigating allegations that SMB Computers' affiliate was dealing with highly enriched uranium, spokesman Kenzhebulat Beknazarov said Thursday. A Europe-based Western diplomat working on issues of nuclear proliferation questioned the reliability of Kazakh safeguards for its nuclear assets.

17. 2003 June 7. S. Janomohamed, "Kazakhstan and the Nazarbayev Kleptocracy," Islamic Human Rights Commission Website. "Kazakhstan is being systematically plundered, its resources viewed as a blank cheque by its self-edifying plutocracy. This institutionalised kleptocracy is ossified in the hands of the Nazarbayev family. A network of cronyism and nepotism presides. Kazakhstan should read 'Nazarbayev and Sons Ltd'. The Nazarbayev family and key associates control key economic and government sectors. An examination reveals that Dorigo, Nazarbayev's daughter, controls huge sways of Kazakhstan's print and broadcast media. Running Khabar TV, she also chairs the Congress of Kazakhstan's Journalists. Whilst Rakhat Aliev, Nazarbayev's son-in-law controls vital areas such as special services, tax and customs. And Timur Kulibayev, another son-in-law, predominates in the banking, oil and gas sectors. The financial activities of the Nazarbayev family have been declared a state secret. . . Harassment of opposition is routine. The government monitors the movements and communications of opposition activists. Political opponents have been jailed and prominent opposition leaders have fled into exile."

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