The Rakhat Aliyev files: the culprit and his friends in high places/II

After weeks of feet-dragging, the draft charges against one of Kazakhstan’s most notorious criminals Rakhat Aliyev in Austria are now in the hands of a special committee of “wise men” (these ones do not come from the east though the culprit himself does) under the minister of justice (who used to be the culprit’s lawyer and loyal helper for all it matters) in order to decide whether or not charges will be brought in front of the court. It is a weird-looking procedure, since normally it is the court which decides whether or not to accept charges brought by prosecutors. By introducing yet another bottleneck within the proceedings, Rakhat Aliyev is likely to remain behind bars into the new year, but it also leaves time to look into the affairs of those who initially helped him to escape justice and to whitewash hundreds of millions in euro consisting of stolen and extorted funds during Aliyev’s heydays back in Kazakhstan. Looking at the list of such “friends”, the circles in which Aliyev carried out his schemes are colourful to put it at its mildest.

The Rakhat Aliyev files: the culprit and his friends in high places/II“The affair concerning the former Kazakh ambassador in Vienna, Rakhat Shoraz, better known under his original name Rakhat Aliyev is crystallising: as the chief state prosecutor’s office of Vienna confirms, the “note of intention” of the state prosecutor has been scrutinised and on Thursday dispatched to the justice ministry,” a report by Die Presse dated November 28  [] read. On that level, minister Wolfgang Brandstetter must now decide in the last resort whether he shares the view of state prosecutor Bettina. She sees a stringent suspicion in the direction of double murder – a view now also adhered to by the supreme regional court of Vienna.”

But the minister himself looks far from suspect, and even though his office dismisses any present-day involvement beyond his ministerial competences concerning the Aliyev files, despite strong evidence in that direction (see previous episode) brought forward by Die Presse’s rival daily Der Standard, the man who used to be Aliyev’s lawyer, man of confidence and protector has a long history in that quality. He even hosted Aliyev and Alnur Mussayev, his former colleague at the helm of Kazakhstan’s National Security Council and co-defendant in the murder case, at the time of both men’s downfall back in 2007 and beyond, in a house in Eggenburg (NÖ, Bezirk Horn). According to Die Presse, the home is the property of an enterprise in which Brandstetter has a stake – according to register data. “As a result of the past, he has called on an advisory body created by himself, the “council of the wise” which must scrutinise the plaintiff’s ‘note of intention’ up-front,” the article reads further down.

In a report published a day earlier [], Der Standard, however, quotes the head of the justice ministry’s department for proceedings concerning charges Christian Pilnacek as saying that the final note concerning the Aliyev case had “not yet reached” the ministry, though its arrival “should be counted on within the next couple of days”. “That slows proceedings down,” the article reads. “In the beginning of November, the justice ministry had firmly counted on the possibility of charges for double murder being brought before the end of this month. Whether a decision can be expected in December is something Pilnacek would not count on anymore. That is hard to predict, said the official – adding that in any case there was an ‘specific acceleration instruction’. The paper also reports that the lately renewed order by the court for Aliyev’s detention pending investigations and other proceedings expires on December 29 – but in case no charges have been filed by then can be prolonged by another two months in order for things to proceed.

The kidnapping and subsequent murders of Nurbank executives and minority shareholders Zholdas Timuraliyev and Aybar.Khassenov took place in early February 2007. The downfall of Aliyev and his associates that followed in the course of 2007, after which he managed to obtain an Austrian “foreigner’s passport” thanks to Brandstetter’s interventions which was only revoked in November last year, took place at a time when Austria was ruled under a weird-looking “red-black” government coalition consisting of the socialist party and the extreme-rightist nationalists. Three years later, the coalition had at least in part successfully tried to cover up the entire affair and a parliamentary inquiry into alleged connections, mingling business with politics, among cabinet ministers, ruling party leaders and prosecutors, seemed to be in a deadlock. The inquiry was only started up in fall 2009. It included 23 persons called upon to declare themselves under oath, and it was supposed to last till well over the new year. Instead, the number of hearings was to be cut down and instead of 23 people only five were to be heard – none of them being either former or present-day cabinet ministers. In the end, stockpiles of evidence were left unstudied, and according to furious opposition leaders, the government was steadily pushing the affair, dubbed Causa Kasachstan, towards a cover-up.

In February 2007, only weeks after the two bankers’ disappearance (murder at the time was only vaguely suspected by their relatives), Aliyev was appointed Kazakh Ambassador to Austria and Permanent Representative to the OSCE. But in the course of spring, the truth came out piece by piece – first on the kidnapping and murder affair, then a much larger and more dangerous scheme with no other aim than to bring the Kazakh government down by violent means. In August 2007, a Vienna court rejected a request from Kazakhstan to extradite Mr Aliyev on grounds he would not be given a fair trial in his home country. In January 2008, Mr Aliyev was sentenced in absentia to 20 years’ imprisonment in a high security prison for the abduction of the bank managers. Two months later, he was convicted for preparing a coup d’etat and sentenced to another 20 years’ imprisonment. During the second trial, it was Nurali Mussayev who gave stockpiles of evidence that Aliyev had been scheming against the regime from as early as 2001 on.

How could Aliyev escape that easily – and still stands a chance where it comes to being charged and convicted or not? It all comes down to the existence of so-called parallel powers, consisting of shadow circles that remind one of Franz Kafka’s novels and illustrate how far a well-established democracy can get astray from its constitutional principles. In Austria, the man behind the organisation through membership of which Rakhat Aliyev could successfully challenge the very principles and practice of law was, and probably still is, a certain Adolf Krchov, according to an article [] published by a periodical called Falter back in October 2007 – not long after Aliyev’s exposure and escape. At the time of writing, a place downtown Vienna known as the Bristol Club used to be the regular venue of the Verein der Freunde der Wiener Polizei (VFWP) – or Society of Friends of the Viennese Police.

“Could, through this benevolent society, red light barons, arms lobbyists, bank managers and billionaires, with gifts obtain access to the highest echelons of executive decision makers?” the article asks rhetorically. It seems indeed that they did – including Rakhat Aliyev. The article happened to coincide with a pending trial against the suspended former police chief Roland Horngacher for an impressive list of kickbacks and other abuses of office. Investigations on his case brought the formerly “top-secret” list of over 200 members of the Society to light. First and foremost, there was Krchov, the Society’s cashier but also “personal assistant for criminal cases” of four subsequent heads of the Viennese police. Next to him figured Adolf Wala, whose profound connections with Aliyev, for which he is now himself under criminal investigation with charges on the horizon, and happened to be the Society’s chairman. Other prominent figureheads within the Society included billionaire Martin Schlaff, Rudolfine Steindling, nicknamed “Rote (Red) Fini” since her main occupation consisted of trade skimming between west-European countries and the former Eastern Block, former head of the troubled BAWAG bank Helmut Elsner and of course Rakhat Aliyev.

BAWAG has a turbulent history. It dated from 1922, was closed in the run-up of the Second World War and reopened after the war. “BAWAG (German language: Bank für Arbeit und Wirtschaft) is a bank in Austria. On October 1, 2005, it merged with the separate Österreichische Postsparkasse (P.S.K.) to form the “Bank für Arbeit und Wirtschaft und Österreichische Postsparkasse AG”, shortened as BAWAG P.S.K.. The Austrian company BAWAG is owned by the American company Cerberus Capital Management.,” the bank’s description in the Free Encyclopedia [] reads. “[…]Since the Refco scandal in October 2005, which involved bad loans in the sum of 425 million euros, the bank almost defaulted on its obligations and had to be bailed out by the conservative government of Wolfgang Schüssel. This has cast doubts about the future of links between the socialist-led unions and the bank. The losses came from a series of failed bets using risky derivative investments held in off-balance-sheet vehicles. Though the bets go back as far as 1998, they surfaced only in 2006 during U.S. investigations into the bankruptcy of Refco. Also, Bawag lent Phillip Bennett, the former chief executive of Refco, hundreds of millions of dollars just before the brokerage filed for bankruptcy protection in October 2005. As a result of the losses and subsequent investigations, criminal charges were filed against a number of BAWAG executives. Several people were found guilty and convicted. Helmut Elsner, former chief executive of Bawag, was found guilty of breach of trust, fraud and false accounting and was sentenced to nine and a half years in prison. The judge also ordered him to repay Bawag €6.8 million in pension benefits. The defendants also included the Bawag executive Johann Zwettler and the investment banker Wolfgang Flöttl, who was based in the United States. Zwettler was given a five-year sentence. Flöttl was sentenced to 10 months. Six others were given various sentences.”

Guess what: as Elsner was a prominent member of the Viennese “Society” and must have been close to Aliyev, could it be that the bank was among the instruments through which Aliyev’s stolen funds were laundered in the form of legal-looking investments in lawful investment objects? This would explain, at least in part, Aliyev’s outspoken fears of being kidnapped or even killed. The culprit himself keeps claiming that he should be considered the victim of personal “persecution” by the Kazakh state. But that state wants him to stand trial – and retribution of the stolen funds in so far they have been stolen from public coffers. But most of the money funneled away by Aliyev was extorted from private parties, not all of which have the same scrupulous methods to recuperate them a lawful state has to observe. Worse: money laundering these days is not as risk-free as it used to be. It requires cooperation with parties knowingly operating outside the law. If such parties have been deceived by Aliyev in Europe, he has indeed reason to be a bit worried. And the high profile his case keeps up in Austria is not of much help in that regard.

Business settlements in this kind of style have been notorious in Moscow and other former Soviet cities ever since the break-up of the USSR. But only rarely did they engage people so close to the highest-possible political levels. For Rakhat Aliyev was not just a banker – but also the husband of Dariga Nazarbayeva and thereby the son-in-law of the President of Kazakhstan. Did he really deem himself above the law – as he also happened to be the head of the National Security Service of Kazakhstan? If so, this should lead to the question why he felt that way. This in turn leads to a phenomenon rather uncommon in Soviet history. Joseph Stalin, both in the run-up and in the aftermath of the Second World War, used to give the same consignment every time he had a crackdown in mind: get to the bottom, from there back to the very top, and spare no one up the line on whatever level. Rakhat Aliyev was certainly someone whose background as a product of shifting elites during the waning days of the Soviet Union under Mikhail Gorbatchov would eventually allow him to reach the Olympus where his country’s decisions, for the better and for the worse, were made. The Chicago-style way of life that dominated the weird chimaera of business and public sector in control of Kazakhstan’s assets allowed things to get out of hand.

All this can only add to the image of mythical murderer the former golden boy of Kazakhstan had, wittingly or not, built up for himself during the years of his apogee, to be honoured with it later. According to people who used to work with him, Rakhat Aliyev has all the characteristics of a contemporary Lavrentiy Beria. It should be recalled that the latter also liked to carry out the tortures within his TseKa himself, mostly for the sheer pleasure of it, that he used political ties to settle his personal conflicts with rivals, and that towards the end of Stalin’s period he started conspiring against the system that had made him what he was. Should he have succeeded, the Soviet Union would have utterly perished, but luckily for the USSR and the rest of the world Stalin’s peers Molotov, Zhukov and Khrushchev put a premature end to what could have become a Soviet Caligula. It remains a chilling thought that the same scenario of a horror-regime reminding one of the USSR’s darkest days could have become reality in Kazakhstan into the New Millennium should Rakhat Aliyev have succeeded in his putsch using Beria’s attempt as an example. Both men, in all, appeared to share a twisted mind, cruel to the level of sheer madness – and deprived of conscience. Perhaps the words of Fyodor Dostoyevsky in his Crime and Punishment describe Aliyev’s character appropriately: “And if only fate would have sent him repentance-burning repentance that would have torn his heart and robbed him of sleep, that repentance, the awful agony of which brings visions of hanging or drowning! Oh, he would have been glad of it! Tears and agonies would at least have been life. But he did not repent of his crime…”