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Kazakhstan: Former Prime Minister's Arrest May Not Suit Government

Acting on a year-old Interpol "red bulletin" from the Kazakh authorities, Italian police detained former Kazakh prime minister Akezhan Kazhegeldin upon his arrival at Rome's international airport Wednesday night. Kazhegeldin has been living abroad for more than a year and could face embezzlement charges if he is extradited to Kazakhstan. But as NCA correspondent Bruce Pannier reports, Kazhegeldin's arrest comes at a particularly sensitive time for the Kazakh authorities, and they may not want him to face trial at home -- just yet.

Prague, 14 July 2000 (RFE/RL) -- Officially, former Kazakh premier Akezhan Kazhegeldin is wanted by the Kazakh authorities for tax evasion and money laundering. But observers say recent allegations of corruption against Kazakhstan's president and the head of the state oil company -- in which Kazhegeldin may have played a role -- make it unlikely that the Kazakh government is anxious to see Kazhegeldin interrogated now.

Kazhegeldin was Kazakhstan's prime minister from 1995 to 1997. His time as premier was a golden age for foreign business and investment in Kazakhstan. Corporate representatives came continuously to sign new contracts to explore, extract and export oil and natural gas. They also sought controlling shares in the country's major industries such as energy, telecommunications and metallurgical enterprises.

Kazhegeldin's policies encouraging the privatization of state industries with foreign capital were criticized by some. But it was only in the summer of 1997, when articles began to be printed about Kazhegeldin's links to the KGB during the last years of the Soviet Union, that he resigned.

Kazhegeldin planned to run for the presidency in early 1999 but was barred by the courts over a misdemeanor charge. Undaunted, Kazhegeldin formed the Republican People's Party shortly after the presidential elections with the stated goal of placing its own people in parliament when elections were held later that year.

He planned to run himself but never had the chance as the prosecutor-general reopened an investigation of tax evasion and money laundering against him. The former prime minister left the country in the spring of 1999 to promote his new party abroad and, fearing arrest, never returned.

Kazhegeldin, outside the country, and the leadership of the Republican People's Party, still inside the country, have continuously criticized Kazakhstan's government and President Nursultan Nazarbayev. The Kazakh government's criticism of Kazhegeldin similarly continued until last month.

In June, the U.S. magazine "Newsweek" alleged that American financial consultant James Giffen made payments worth millions of dollars to leading Kazakh officials to secure oil deals for Phillips Petroleum, Amoco Corp. and Mobil Oil Corp.

Kazhegeldin was named as one of those involved in the U.S. investigation. President Nazarbayev and the head of Kazakhstan's state oil company, Nurlan Balghimbayev, were not part of the U.S. investigation, but their names often appeared as possibly being involved. Nazarbayev has not said anything publicly on the matter. Balghimbayev denies any part in it.

The authorities in Italy may have their own reasons for detaining Kazhegeldin. Interpol's existing red bulletin from the Kazakh government offered an opportunity to take Kazhegeldin into custody and question him about the business dealings of his son-in-law, who is an Italian businessman. Kazhegeldin's son-in-law apparently had a large sum of money deposited in his bank account and the origin of this money is now under investigation.

If Kazhegeldin admits to taking bribes, he may well implicate Nazarbayev and Balghimbayev also. This was certainly not the Kazakh government's intention when it requested that Interpol pick up Kazhegeldin more than one year ago. Kazhegeldin and his party have done what they could to make life difficult for some in the Kazakh government. Faced with prison time in connection with the bribery scandal, Kazhegeldin may opt to give evidence and take others with him.

(Merhat Sharipzhan of the Kazakh Service contributed to this report.)