"I will make it all", Bulat said
To save President Nazarbaev’s reputation his assistants have chosen to recede.

Central Asian Bulletin, March 13, 2000


According to credible sources in President Administration, Bulat Utemuratov, Assistant to President of Kazakhstan, is to be appointed to a position at RK Embassy to one of European countries. Earlier Mr.Utemuratov headed the RK Embassy to Switzerland so the new appointment would obviously mean abasement for him. The reasons for such career down-drop are scandal stories around him, his lobbying foreign companies as well as his involving foreign media into the process of property redistribution.

The same source reports that Utermuratov has been the main author of the so-called "Kazakhgate" – a big scandal around the Tractebel Company (Belgium) and Kazakhstan Mineral Resources metallurgy firm (Alexander Mashkevich, Fatakh Shodiev and Almaz Ibragimov). On Utermuratov’s initiative, information was wised up to media that Tractebel had paid about $55 m for its guaranteed victory in the tender for the control of Kazakhstan gas transportation networks. This bribe was given not directly to Kazakhstan public officials but to the representatives of Kazakhstan Mineral Resources company as a payment for consulting services.

To understand why the payment has caused such a reaction one should figure to oneself the atmosphere in Switzerland and Belgium’s law enforcement agencies. The very fact of the bribe has not been proved and is unlikely to be proved due to the fact that, as a rule, corruption phenomenon deals and closes at public officers and in our case there were just two privately owned companies. However in their publications the media have been in various ways discussing the act of tampering of Kazakhstan highest officials. The group of Alexander Mashkevich has found itself to be framed up. The Group manages a set of large metallurgy enterprises in the Republic of Kazakhstan (Sokolovsko-Sarbaisky Ore Mining and Smelting Concentration Plant, Aksusky Plant of Ferro-alloys, Aktyubinsk Ferroalloy Plant, Donskoy Ore Mining and Smelting Concentration Plant, Pavlodar Aluminum Plant and a number of power objects).

Opposition media often calls Mashkevich "President Nazarbaev’s personal cashier", for his closeness to Kazakhstan leader family and his eternal emphatic loyalty to the President. However the facts prove that both his closeness and loyalty could not guarantee absolute security in Kazakhstan to Mashkevich and his partners. Rakhat Aliev, the President’s son-in-law, and his close friend Bulat Utemuratov have been putting in for highly profitable metallurgy production. A number of figures with dingy reputation - and in particular, Grigory Luchansky -acts as their allies. Some sources claim that in doing so, Luchansky represent GASPROM Company, "the giant of Russian industry".

One should say a few words on the dramatis personae of this reprehensible story. "Le Soir" reported that Grigory Luchansky had been suspected in illegal arms and drugs smuggling and in his affiliations with Solntsevo (Moscow Oblast, Russia) criminal group. His dossier says: "Luchansky Grigory Emmanuilovich, born in 1945, Jew, hold leading positions in the Central Committee of Latvian Young Communist League, worked as a provost at Riga University, Candidate of Sciences. Captured on October 14, 1982 on the charge of group stealage in the period from 1978 through 1982". That time Luchansky had to stay in prison for almost two years. Soon after his discharge he made a fabulous fortune. "Kommersant-daily" excerpted: "The most artful uncoped criminal in the world", as The Time magazine has called Grigory Luchansky, the head of Austrian Nordex GmbH. According to Guinness’s Book of Records Luchansky is "the person gaining his money in the most rapid manner in Europe".

"In 1991 the turnover of the newborn Nordex Company was already $900 m", -"Kommersant-daily wrote. – "Such pace had perplexed both western competitors and journalists. In 1992 Austrian Wirtschaft Woche journal published the article entitled "The Vienna Russians from Riga" in which it accused Nordex company of money laundering and its affiliations with organized criminal groups. Since that time Luchansky has been forever tagged as a person laundering dirty money or the CPSU money".

The interest of Luchansky towards Kazakhstan industrial objects is well known since long ago. In 1995 together with American United Steel Company he took charge of Karaganda Metallurgy Plant. Luchansky’s people had prepared the draft business-project however Eximbank refused to grant the credit for capitalization. Luchansky insisted it were the US Department of State officials who prohibited Eximbank to make a decision on the credit. In this way the US administration "paid" the businessman suspected in the most dreadful, from Washington’s viewpoint, crime – the supply of missilery to Iran.

Prevented from making business in western countries, Luchansky has kept his friendly contacts with Russian elite. In particular, with Victor Chernomyrdin and Rem Vyakhirev. He has been allowed to Kazakhstan elite too. It was owing to Syzdyk Abishev, then the Administrator of the RK Government, that in 1995 he got charge of Karaganda Plant. It is curious that after Luchansky’s failure with metallurgy, Abishev was promptly removed from his position and appointed the General Consul of the RK at Frankfurt-am-Main (the position more than moderate for a former minister for foreign trade).

Thus Luchansky was a close friend of the late Abishev and, at the same time, of GASPROM administration. Taking into account all these facts of his biography, the process of binding of Luchansky and Bulat Utemuratov (who was splendidly launched into business by the said Syzdyk Abishev).

In principle, Utemuratov did not stand out with any talents however Abishev, a professional son of the Soviet trade system with its deficit and "special trading depots". In the fullness of time Abishev headed city departments for trade, depots and stores. At initial stage Utemuratov followed the same way – in late 80ies he was the director of "Yubileiny", the largest food store in Almaty. It was then when they made an acquaintance. Soon after that Utemuratov moved to the Ministry for Foreign Economic Relations of Kazakhstan – the ministry the observers consider to be the most criminal among other Kazakhstan governing institutions.

But the true May of the 35-year trade expert started in 1992 when he became the General Director of Kazakhstan Trade House in Austria. Rakhat Aliev (2), the future "man number two" in Kazakhstan and President Nazarbaev’s older son-in-law was Utemuratov’s right-hand man. Together they were going through very expedient deals.

For example, in 1992 Kazakhstan obtained $3.5m within the framework of the Austrian credit line. This money was received to Kazakhstan Trade House bank accounts and used to purchase commodities and medicines. However subsequently an inspection elicited the fact that procurement prices significantly exceeded market prices. The system of trade houses abroad enabled Abishev and through his agency, to Nazarbaev himself, to concentrate abroad "free" financial resources that could be later used, when necessary, for various purposes – elite resorts, paying western lobbyists and advertising in western periodicals, for Kazakhstan elite genteel pleasures, purchase of mortgage abroad, etc.

Accounts at Switzerland banks became the main destination of Abishev’s and his team’s money. It was not random that Bulat Utemuratov, a person who had nothing in common with foreign service and speaking no foreign languages, was appointed the RK Ambassador to Switzerland in 1996. An agent rather polyglot was needed there. Utemuratov coped with his tasks and in January 1999 was further promoted to the position of the Adviser to the President on foreign trade issues.

In half a year his status has slightly changed and his official position has become "Assistant to President". This insignificant, on the face of it, change is, however, of great significance in the context of Kazakhstan bureaucratic slang – "assistant" would mean too much intimate, taken to the very bosom person, much more close than a "adviser". An adviser can meet no President for months and limits himself to regular memos, though an assistant gets together with President almost daily and executes his most delicate tasks.

In the same period Utemuratov has becoming closer with Rakhat Aliev again though they now live in different cities: Utemuratov like the country leader live in Astana and Aliev – in Almaty. However nothing prevents the powerful President’s Assistant to visit again and again the old capital where venturous and pleasure establishments have been flourishing under Aliev’s wing. Aliev heads Republican tax police. At one of their meetings they might have discussed the plan of transfer of Kazakhstan gas transportation networks affiliated with GASPROM. For this purpose gas pipelines were to be reived away from their today’s masters – the Belgium Tractebel and related Mashkevich group. That is the pre-history of clamorous "Kazakhgate" (3).

What has Utemuratov got, and what has he lost? He has got a big scandal from which Kazakhstan leaders’ image and, in particular, that of President Nazarbaev has been undermined. Mashkevich image has been damaged too. Mashkevich gave as good as he got and undertook information attack too. Mashkevich had to secure his group interests as Kazakhstan Mineral Resources had invested about $120m into metallurgy industry in Kazakhstan and was not enthusiastic about leaving the Republic under the pressure of the "young aboriginal wolf-cubs" - businessmen.

The recent events prove that Rakhat Aliev –the hope and the stay of Utemuratov – is ready to frame up his friend, so much impatient and impetuous. Utemuratov has found himself involved in a dirty story and he has become to be avoided now. However Nazarbaev is hardly to leave his proxy in need, as Utemuratov knows too much and is too loyal. The only way out is to send Bulat away and temporarily to forget about his adventures – if he is fortunate. And if not, to make him solely responsible for the scandals related to Nazarbaev’s Swiss accounts (4). In troublous times like ours, everything is possible and there is one step from the Residence of the President of Kazakhstan to Geneva prosecutor’s office.


Central Asian Bulletin, March 13, 2000.