The Khrapunov files: one flew over the cuckoo’s nest

Switzerland is known as the land of cuckoo clocks. It is not for nothing that this remarkable bird is known for laying its eggs in other birds’ nests. One example is former Almaty mayor Viktor Khrapunov, who together with his relatives funneled hundreds of millions in euro from funds created by revenue from real estate scams in the former Kazakh capital with the aim to whitewash it in Switzerland. At least a quarter billion has been identified as such. But considerable amounts have already left Switzerland’s territory. Part of it popped up in Luxemburg and California. While authorities in other European countries involved remain passive, the USA has honoured a criminal case against the Khrapunov family which is now pending. Back in Switzerland, Krapunov and consorts are continuing a smear campaign against diplomats and (lately) members of Parliament for “passing on secret information” and “lobbying” by vilified Kazakh authorities. A hoax altogether, the campaign is nevertheless finding alarming response in Swiss public opinion makers.

BY CHARLES VAN DER LEEUW, WRITER, NEWS ANALYST

The Khrapunov files: one flew over the cuckoo’s nestThomas Borer, former ambassador of Switzerland to Kazakhstan, is no spy. As reported by the Aargauer Zeitung [http://www.aargauerzeitung.ch/schweiz/ex-botschafter-thomas-borer-ist-kein-kasachstan-spion-129171718] prosecutors investigating a complaint filed by Viktor Khrapunov, former mayor of Almaty who has embezzled hundreds of millions in euro through fraudulent real estate deals while in office,  as confirmed by prosecution spokesman André Marty who was quoted by the paper as having told the local Sunday paper Schweiz am Sonntag, all accusations filed by the ex-mayor, now hiding out in Geneva with ongoing investigations for having whitewashed his ill-gotten gains in Switzerland have been found groundless.Lhrapunov claims that Borer has passed on „confidential information on his person“ to the authorities of Kazakhstan. Federal prosecutors are still looking into accusations, also filed by Khrapunov, for slaunder.

“Last January several media outlets reported that a former Swiss ambassador, Thomas Borer, had tried to help his client, Nursultan Nazarbayev, in his fight against his main opponent, Viktor Khrapunov, who is now living on the shores of Lake Geneva,” the English-language newsreel Swiss-Info wrote in a report posted in late May  [http://www.swissinfo.ch/eng/parliamentary-scandal_-kazakh-lobbying-in-switzerland-is-now-dead-/41446908] under the header “Kazakh lobbying in Switzerland is now dead”. “In particular, Borer was reported to have written a Kazakhstan-friendly question for Christian Miesch from the conservative right Swiss People’s Party. The questions submitted by Markwalder and Miesch both mention Viktor Khrapunov, who is accused of corruption and embezzlement and whose extradition Kazakhstan has so far not obtained from the Swiss courts.”

But Khrapunov has more arrows on his bow and now members of the Swiss Parliament are targeted by the culprit in his continuing attempts to divert public attention from his crimes and elaborating on a false image depicting himself as “opposition” and “victim of political persecution”. “Christa Markwalder of the centre-right Radical Party is one of the most prominent women politicians in the Swiss parliament. She was in line to become president of the House of Representatives in 2016 but could well see her political ambitions dashed by an unfortunate ‘Kazakh affair’,” the article quoted above reads elsewhere. “The story so far: in June 2013, Markwalder tabled parliamentary questions on relations between Switzerland and Kazakhstan, the content of which was in itself rather harmless. However, according to the Neue Zürcher Zeitung, Markwalder did not write these questions herself – they came from Burson-Marsteller, a public relations firm active in Switzerland and mandated by the Kazakh political party Ak Zhol. While Ak Zhol describes itself as being part of the opposition, it is in fact reportedly close to the government. Markwalder, who pleads “naivety”, is also accused of having breached the rules of confidentiality by transmitting information to Burson-Marsteller.”

“Gaukhar Beiseyeva from Kazakhstan’s embassy in Bern says her government is not involved in lobbying the Swiss parliament,” the article by SwissInfo reads in conclusion. “She says Christian Miesch tabled his question in parliament based on discussions that were completely as part of the Swiss-Kazakhstan inter-parliamentary cooperation group. There was also no attempt to influence or pressure Christa Markwalder, who intervened after meeting representatives of Ak Jol, which, according to Beiseyeva, is an authentic opposition party – contrary to allegations by the Swiss media. Beiseyeva also claims that the real lobbying in parliament is done by Viktor Khrapunov with the help of money he stole from Kazakhstan. She admits that recent Swiss media coverage could affect parliamentary cooperation between the two countries but insists that it will not hamper economic relations.”

But it remains to be seen, even in case Swiss authorities do show some results of the investigations underway – or rather dragging on – whether anything can be recovered indeed. According to a report dated April 25 2013 and published by Tengrinews (referring to a local newsreel known as Nomad) [http://tengrinews.kz/kazakhstan_news/smi-hrapunovyi-hranili-sberejeniya-v-bankah-kipra-233005/], Viktor Khrapunov and his spouse Leyla have deposits on Cyprus with “savings for a rainy day”. The article also suggests that revenue from the sale of the family’s main asset in Switzerland, known as Swiss Development Group to a Swiss tycoon are supposed to have ended up in Cypriot bank accounts. Preliminary results of an ongoing judicial investigation into the wheelings and dealings of the Khrapunovs have revealed a number of business connections through strings of both domestic and offshore companies in the style of his son’s spouse’s father Mukhtar Ablyazov. Some of them had already been identified in media reports. But names and locations of mailbox and camouflage companies also point at Switzerland as Khrapunov’s main haven to stack his embezzled funds and collected “commissions” years before he ended up on the bank of Lake Geneva himself: a well prepared network to cache assets’ and funds’ ownership and keep them out of reach for Kazakh authorities trying to recuperate lost paper and cash. A recent global request for Khrapunov’s arrest and subsequent extradition to Kazakhstan was issued in late February last year. Switzerland is unlikely to honour such a bid, since “economic offences” are excluded from its list of reasons to extradite any foreign citizen, and on top of that Khrapunov’s application for Swiss citizenship dates from earlier times and therefore the extradition request cannot be taken into consideration in the decision whether or not to grant it to him.

For more than two years, Swiss authorities are believed to be investigating the laundering case against Khrapunov and family. Investigations were initiated on request of the Kazakh government within the framework of an international convention granting UN member states the right to apply for cooperation to other states in cases of transnational criminal cases. Not that this was really necessary: well-known facts and figures amply demonstrate that money obtained illegally was “invested” in Switzerland up to considerable amounts – which is an offence under Swiss law and committed on Swiss territory. Confirmed information that has been known for some time reveals that the shopping list of the Khrapunovs in Switzerland and elsewhere appears to be long. Upon arrival of the parents in 2007, Elvira Kudryashova bought a luxury chalet, 49 chemin de Ruth, Cologny, for 32 million Swiss francs. Following this, the family purchased two uppity apartments downtown Geneva, 10 rue Rodolphe Toepffer and 28B chemin du Petit Sacconex, for 16 million each, followed by the purchase, for an undisclosed sum, of a seven-storey building, 3 rue du Mont Blanc. But the list of corporate interests is a lot longer. According to Kazakh prosecutors, Elvira is in control of at least three corporate entities: Phoenix International Holding, Dragon Financial Company and Unic Life Style Sarl. The latter firm in turn controls Phoenix Jewelry SA. Chairperson of the board of both Phoenix International and Dragon is said to be a certain Nicolas Garnier.

The Khrapunovs’ main financial transaction and reinvestment instrument seems to have been, and possibly still is, a Swiss company called Helvetica Capital SA, rue du Mont Blanc 3, Geneva. With a share capital of 100,000 Swiss francs, divided in 1,000 shares, the enterprise’s goal is being described as prise et administration de participations dans toutes societes ou enterprises a l’exclusion de prise de participations dans les societes immobilieres en Suisse. In other words: a nominee interest holder in all kinds of enterprises with little other aim than hiding the identity of the true owner. As of January 19 2010, Helvetic Capital had two authorised directors, being Leyla Khrapunova and  Swiss national by the name of Marc Gillieron. A note dated April 4 2011 was to report Leyla’s retreat from her post, leaving the entire job to her Swiss peer. The Swiss company Helvetica Capital, for all it mattered, had, and assumedly still has, a Dutch subsidiary called Helvetic Capital BV, based at Schiphol Airport near Amsterdam. “Dutch” Helvetic Capital in turn controls a company, also based in The Netherlands according to information from Kazakh investigators, called Toepffer Investment. The boards of all the three companies are chaired by Leyla Khrapunova.

Cyprus and The Netherlands are not the only “third phase refuge” in Khrapunov’s career. Following exposure in Switzerland, a new “corporate vehicle” to funnel the Khrapunovs’ fortune was initiated over summer in 2012 with the Luxemburg-based Swiss Development Group Real Estate Investment SICAV-SIF SCA, the new fund was meant to have a life-span of seven years, with the option to prolong it with another three years. The fund claims to have accumulated half a billon Swiss francs so far from unnamed “investors” – leaving the tangible origin of the money hard to guess, but not its kind of origin. The fund’s “target equity” stands at 250 million Swiss francs Assets under the fund include luxury tourist and residence resorts in Switzerland and Greece. According to local media in Kazakhstan at the time,Ilyas Khrapunov had already been spotted on surprise visits in the “Democratic Republic” of Congo – meaning former Zaïre, Gabon and Macaõ. The alleged purpose of his tour: seeking “opportunities” for the Swiss Development Group Real Estate Investment SICAV-SIF SCA, the new fund is meant to have a life-span of seven years, with the option to prolong it with another three years, according to a recent official announcement by the SDG. According to the communiqué, its “target equity” stand at 250 million Swiss francs. Today, it appears that attempts to funnel income from the sales of Swiss assets to the Mediterranean and from there into Africa and the Far East must have failed. Instead, the bulk of the funds are now believed to have ended up in California. Investigations are supposed to deliver enough evidence in America’s court to sustain their illegal origins in an upcoming trial. That could, in theory, open opportunities to get part of the stolen funds back. So-called lobbying notwithstanding, public attention for such cases must be upheld in countries involved in order to avoid cover-ups.

But the attempts in Switzerland to twist matters in a way that puts the victims, namely Kazakh taxpayers, into the position of accused by Khrapunov and consorts are continuing. “Concerns are growing about foreign influence in parliament, amid media reports showing a widening circle of power brokers received financial perks from lobbyists for Kazakh special interests, an earlier report on the issue [http://www.swissinfo.ch/eng/transparency-in-lobbying_questions-swirl-on-outside-influence-in-swiss-parliament/41419862] posted on May 8 by the same newsreel read. “A report on Friday in the Swiss newspaper Neue Zürcher Zeitung said it obtained e-mails showing two politicians took part in a mostly paid trip to Kazakhstan organized by public relations firm Burson-Marsteller. The free travel, while not illegal, does not conform to parliament’s own anti-corruption guidelines. A day earlier, Christa Markwalder, former speaker of the House of Representatives’ Foreign Affairs Committee, apologised publicly in Bern for filing parliamentary questions in 2013 prepared by a lobbyist for Burson-Marsteller on behalf of its client, Kazakhstan’s Ak Zhol political party.”

“Though lobbying is a legitimate effort to influence the legislative process, the recent disclosures have raised questions about whether more transparency is needed in government to protect against hidden special interests,” the article reads further down. “The lobbyist who wrote the parliamentary motion, Marie-Louise Baumann, was well-connected from her previous work for the Federal Chancellery and the centre-right Radical Party. The Swiss Lobbyists’ Association (SSPA) said on Thursday that it intended to investigate the Markwalder case to find out if one of its members violated its working guidelines. These procedures, which came into force in January this year, include transparency over who is behind specific lobbying work. In March, the questions of lobbying influence had seemed isolated to one case, that of a former Swiss ambassador lobbying for Kazakhstan President Nursultan Nazarbayev’s interests. The former ambassador, Thomas Borer, is one of 400 Swiss parliament ‘guests’ with a permanent entry pass. He told swissinfo.ch he was hired to advise the Kazakh justice ministry in its dealings with Swiss authorities over Kazakh regime critic Viktor Khrapunov, who allegedly found refuge on Lake Geneva.”

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