KAZAKHSTAN: INFORMATION ON BAKER HUGHES' FCPA CASE

C O N F I D E N T I A L ASTANA 001143

SIPDIS

NOFORN
SIPDIS

DEPT FOR SCA/CEN (M. O'MARA)

E.O. 12958: DECL: 04/29/2017
TAGS: ENRG EINV KZ
SUBJECT: KAZAKHSTAN: INFORMATION ON BAKER HUGHES' FCPA CASE
SHARED WITH GOVERNMENT

REF: STATE 54102

Classified By: Ambassador John Ordway; reasons 1.4 (b) and (d).


1. (C) Following receipt of reftel, Ambassador telephoned
Prime Minister Masimov to inform him of the impending final
court action and to ask how best to provide the GOK with the
relevant court documents when they came available. Masimov
told the Ambassador to deliver them directly to him.


2. (C) On April 26, after a larger meeting on a different
issue, Ambassador had a brief one-on-one chat with the Prime
Minister. The Ambassador told Masimov that there was a
question of how the USG would refer to the Kazakhstani
persons who received the illegal payments. Masimov said that
he had no objection to the USG naming the principal official
involved, and added that this approach would be far better
than simply saying "Kazakhstani officials." He said that
noting that the illegal payments went to officials of
specific state-owned enterprises would also be preferable to
simply saying "Kazakhstani officials" which could provoke
unwarranted speculation about the involvement of officials of
the government itself.


3. (C) On April 27, Ambassador delivered to Prime Minister
Masimov copies of the SEC and DOJ press releases, along with
a number of court documents provided to post by e-mail from
SCA/CEN. In the one-on-one meeting, Masimov expressed
gratitude for the specificity in the two press releases, and
for the information that had been provided. Ambassador said
that he was confident that the USG would cooperate with the
GOK if the GOK wished to follow-up with its own investigation
of the alleged Kazakhstani recipients of the illegal
payments. Masimov expressed his gratitude for the offer, but
did not venture an opinion as to whether the GOK would in
fact pursue the case.


4. (C) Comment: We understand that the principal figure in
the case, Zhakyr Marabayev, has left his last job at
KazMunaiGaz, the state-owned oil and gas company, and has
essentially disappeared from the local scene. Masimov, who
knew exactly who Marabayev is, was totally dismissive about
any negative consequences to his being named -- which
strongly suggests that the GOK has no particular interest in
defending him or his conduct. There is some press
speculation already that the GOK may in fact conduct an
investigation, but we have no basis to confirm that at this
stage. End comment.
ORDWAY