The epic Kazakhgate bribery scandal has finally come to an end, and – in a breathtaking twist – the man originally accused of funneling millions of dollars in kickbacks to top Kazakh officials has suddenly emerged as a Cold War hero – at least, that’s what the judge who sentenced him on November 19 said, according to the Main Justice website.

Judge William H. Pauley heaped defendant James Giffen with praise, describing him as a “significant source of information to the United States government and a conduit for secret communications with the Soviet Union and its leadership during the Cold War.” 

Pauley said he’d learned this in classified information about Giffen, which also revealed that the defendant had worked tirelessly in the 1980s to help Soviet Jews leave the country – a sort of latter-day Schindler of the Soviet Union.

This is a remarkable turnaround for a man arrested in 2003 on suspicion of channeling $78 million to senior officials in Astana in exchange for energy contracts in the 1990s, when he was adviser to Kazakh President Nursultan Nazarbayev. The amount of the alleged bribes rose to $84 million in a later indictment under the Foreign Corrupt Practices Act (FCPA). Giffen insisted the CIA authorized his dealings in Kazakhstan; the agency denies the charge. In remarks that lend some credence to Giffen’s defense, Judge Pauley hinted that if investigators had had access to classified information, the charges wouldn’t have been filed.

The investigation was a huge embarrassment to Astana, and Kazakh administration officials lobbied Washington furiously to have the case dropped, Steve LeVine, a commentator on energy and geopolitics, writes in a posting on his blog entitled “Was James Giffen telling the truth?”

The State Department and the CIA also had their own concerns. “The State Department didn’t want prosecutors referring to Nazarbayev as a corrupt leader in their opening statement at trial,” Main Justice reports. “The CIA tied up the discovery process by balking at disclosure of their intelligence gathering methods in Kazakhstan. And the government saw no end in sight.”

As the case began to look untenable, the website said, “the government decided to cut its losses – even if it meant, as it ultimately did, an epic about-face.”

The bribery charges were swept under the carpet, and in August Giffen pleaded guilty to one minor tax misdemeanor. On November 19 Judge Pauley sentenced him for that tax dodge to time already served, which amounts to the grand total of the one night Giffen spent in prison on the day he was arrested. The Mercator investment bank, which is run by Giffen’s son and still has operations in Kazakhstan, was fined $32,000 for bribing Kazakh officials with snowmobiles.

So after seven years of glacial progress through the courts, Kazakhgate has fizzled out – and the timing couldn’t be better for Nazarbayev’s administration as it prepares to showcase Kazakhstan to world leaders gathering at next week’s summit of the Organization for Security and Cooperation in Europe (OSCE).