The FBI is investigating whether a U.S. businessman illegally funnelled $35 million from three oil companies to high-ranking Kazakhstan officials, including President Nursultan Nazarbayev, Newsweek reported on Sunday.
The investigation comes as the United States, Russia and Iran vie to win Kazakh approval for competing oil export routes for the former Soviet republic's potentially vast oil reserves.
The race has heated up as a mammoth oil drilling effort off the Kazakh Caspian Sea may have hit success.
If the site yields oil, Kazakhstan is likely to become one of the world's major energy producers, and the United States would like to ensure the oil bypasses Iran and Russia.
In its July 10 issue, which was released on Sunday, Newsweek reported the U.S. Justice Department was looking into whether American businessman and official counsellor to Nazarbayev, James Giffen, may have violated the Foreign Corrupt Practices Act as well as racketeering statutes.
A Justice Department document dated June 12 and obtained by Newsweek detailed alleged payments by ExxonMobil Corp., BP Amoco and affiliates of Phillips Petroleum Co. of more than $65 million to offshore shell companies and accounts that investigators believe Giffen controlled, the magazine reported.
Of the $65 million, according to the document, about $35 million allegedly went to three current or former Kazakh officials, "or their families," including Nazarbayev, Newsweek reported.
Giffen runs a private New York merchant bank called Mercator Corp. The magazine quoted his lawyer, Mark MacDougall, as saying Giffen's company has a long and official relationship with the Republic of Kazakhstan and that while the "transactions are complicated ... we are confident that Mercator will be shown to have acted lawfully."
The Justice Department declined to say whether the oil companies themselves were also possible targets of the investigation. The magazine said ExxonMobil officials were cooperating with the probe.
Representatives from ExxonMobil, Phillips and BP Amoco could not be reached for immediate comment. FBI spokesman Bill Carter said he could not confirm or deny the report.
The Giffen case originated in Switzerland, where prosecutors are investigating money laundering allegedly involving high-ranking officials in the former Soviet republics, the magazine said. The June 12 Justice Department document was a formal request to the Swiss government seeking more information.
The probe may raise questions about whether the Clinton administration ignored corruption in the former Soviet Union so as not to hamper its political agenda in the region, Newsweek said.
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