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Kazakhstan: Soros Foundation Says Tax Evasion Case Is Politically Motivated

  • Gulnoza Saidazimova

http://gdb.rferl.org/D99FD5D8-9376-421B-A4F7-63DB301E9805_w203.jpg --> http://gdb.rferl.org/D99FD5D8-9376-421B-A4F7-63DB301E9805_mw800_mh600.jpg Authorities in Kazakhstan have launched a criminal case against the Soros-Kazakhstan Foundation, a U.S. humanitarian organization, for tax evasion. Kazakh officials said the foundation faces possible fines or a suspension of its activities in the country. The foundation maintains it has been operating in full compliance with Kazakh law. The foundation itself, as well as independent experts, believe the action is purely political.

Prague, 30 December 2004 (RFE/RL) -- U.S. billionaire and philanthropist George Soros is widely credited with having aided the successful opposition movements in both Georgia and Ukraine through the work of his Open Society Institute (OSI), which promotes civil society and democratic institutions.

It is a fact that appears not to have been lost on post-Soviet leaders in Central Asia.

On 27 December, one day after Ukrainian opposition leader Viktor Yushchenko's victory in the presidential runoff, authorities in Almaty launched a criminal case against the Soros Foundation-Kazakhstan for tax evasion.

Kazakh officials said the reasons behind the criminal case are simply financial and legal. The foundation described the move as a deliberate attempt to force it out of the country.

"A criminal case against this humanitarian organization has been initiated for tax evasion," said Ruslan Tleulin, a spokesman for Kazakhstan's financial police. "They have to pay all taxes [since 2002]. The foundation could face financial penalties or its activities could be suspended. But this is for the court to decide."

The foundation released a statement saying it has been operating in full compliance with Kazakh law, including tax laws.

The Soros Foundation-Kazakhstan seeks to promote democratic reforms in Kazakhstan. It provides grants to nongovernmental projects in the areas of policymaking, arts and culture, education, and health care.

Oleg Katsiev of the Soros Foundation-Kazakhstan charged that the criminal case is politically motivated.

"They want to control [the Soros Foundation-Kazakhstan] -- control it through this way, at least," Katsiev said.

Yevgeniy Zhovtis, the head of Kazakhstan's International Bureau on Human Rights and the Rule of Law, agreed: "I believe that for the last six months, there has been politicization. [It started] after well-known events in Georgia that were connected with Soros and after Mr. Soros's statements that Central Asia should also change and follow the path of Georgia and Ukraine, where the old system was destroyed and the regimes changed."

Zhovtis said the Kazakh government has grown impatient with what it sees as the foundation's interference in the political affairs of post-Soviet countries. He said he believes the fate of the Soros Foundation-Kazakhstan might follow that of Soros's Open Society Institute (OSI) in Uzbekistan.

Shortly after the so-called Rose Revolution brought opposition leader Mikheil Saakashvili to power in Georgia in late 2003 and early 2004, Uzbek authorities amended the law and required all nongovernmental organizations to re-register. Subsequently, the Uzbek branch of the OSI was forced to close. The Uzbek Justice Ministry alleged that the OSI was funding educational materials that sought to "discredit" government policies.

In a parliamentary session in the spring, Uzbek President Islam Karimov accused Soros of being behind the Rose Revolution in Georgia and said he had similar plans to change the regime in Uzbekistan.

"The main goal [of the OSI] was to select from among the young talented Uzbek intelligentsia those who could become a supportive force for them, to fool and brainwash them against the constitutional order," Karimov said.

Karimov also spoke about Soros himself: "I don't want to say anything about Soros. Maybe he is a respected person. I've never met him -- unlike [Kyrgyz President Askar] Akaev, who meets Soros once every three months. Akaev and I are not alike at all. We have different opinions."

Despite Karimov's sarcastic remarks, Akaev seems no less critical of what he has called "foreign-funded" revolutions. On 25 December, he vowed that Kyrgyzstan would not follow the path of Georgia and Ukraine.

"Is it really possible that we would sacrifice all these achievements in the economy, the achievements of our nation, in order to fulfill the interests of the 'international Internationalism' [presumably a reference to Western political groups] -- of those who want to carry out 'a tulip revolution" in Kyrgyzstan? I think we have to strive for a consensus in the country," Akaev said.

Kyrgyzstan, as well as Tajikistan, are set to hold parliamentary polls on 27 February. Uzbekistan held parliamentary polls on 26 December.

In Tajikistan, state-controlled media have campaigned against OSI-Tajikistan, accusing it of corruption and nepotism.

The Soros Foundation does not operate in Turkmenistan, but assists local NGOs with grants. Civil society is still in an embryonic state there. Ashgabad officials allow the activity of only a few civic groups, who have nothing to do with politics.

In the fall, the Uzbek Justice Ministry shut down Internews, an international media organization, saying it had failed to register its logo and to fully inform the ministry about its activities.

Jeremy Druker is the executive editor of "Transitions Online," an Internet publication based in Prague that covers nations in transition and which is partly funded by the OSI.

"These organizations have successfully pushed for more open societies. And the authorities still prefer closed societies and prefer to have control over virtually all parts of society," Druker said. "So, it's very hard to see any kind of accommodation, because the two goals are diametrically opposite."

Druker said he believes Washington's largely passive reaction to the closure of the OSI in Uzbekistan caused a "domino effect" in other Central Asian countries.

"The authorities in one country have seen that authorities in another country have succeeded and have, unfortunately, learned the lesson that you can get away with it. Also in Uzbekistan, you can see that -- the NGOs were closed, the U.S. cut some funding, but a lot of funding was still going there, and Uzbekistan is still seen as being a strategic ally in the war on terror. So I'm sure that kind of mentality spreads across the region," Druker said. "And there is also the fear that something eventually -- it's not going to happen this year or next year but something eventually could happen as what happened in Georgia or Ukraine. [The authorities] know that [Soros] has had a role there, as did other NGOs like Freedom House and Internews."

Druker said he fears Freedom House -- a U.S.-based organization that tracks the progress of political rights and civil liberties across the world -- might become the next to face closure in Uzbekistan.

A Freedom House representative in Tashkent who spoke on condition of anonymity conceded that the danger exists and said the organization is trying to keep a low profile.
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