Oil Giants Caught Up in Graft and Sanction-Busting Claims
HE US government is intensifying its scrutiny of American and British oil companies in the oil-rich but politically immature new republics of central Asia.
Two separate investigations have been launched into the whereabouts of millions of dollars paid by Exxon Mobil, BP Amoco and Phillips Petroleum to the
Kazakh government and whether Mobil could have breached tough US trade sanctions against Iran.
The US government is attempting to keep the inquiry secret by refusing to admit its existence, but there is growing evidence of its scope and the emergence of at least one key figure in both inquiries.
James Giffen, a personal adviser to the president of Kazakhstan, is reportedly the focus of the justice department investigation into the whereabouts of $35m in fees and commissions paid by Mobil, BP and Phillips Petroleum.
The American is also reported to be under investigation for any role he might have played in an oil deal done by Mobil that could have broken the US trade embargo against Iran.
Giffen is the chairman and principal shareholder of Mercator, a consultancy with offices in Manhattan and Kazakhstan. For the past eight years he has served as an adviser to the Kazakh government and a personal adviser to its president, Nursultan Nazarbayev.
Giffen's Washington-based lawyer, Mark MacDougall, said he had always acted lawfully and under the direction of the Kazakhstan leadership.
While the oil companies are not the focus of the bribery investigation, the justice department wants to know whether executives had any knowledge that payments for oil deals were being diverted into the accounts of senior Kazakh officials.
The US inquiries have been boosted by a Swiss investigation, headed by Geneva-based Judge Daniel Devaud, that tracked millions of dollars flowing out of Kazakhstan into US, European and Caribbean bank accounts.
In September 1998, Phillips Petroleum paid an undisclosed sum for a 7% stake in OKIOC - the Offshore Kazakhstan International Operational Company - into an account designated by the Kazakh government. OKIOC was a state-controlled company involved in oil exploration and mining.
Rich Johnson, a spokesman for Phillips, said it had no control or knowledge of what happened to the money after it was paid to the company. …