This essay is part of a series by American diplomats sharing their impressions of the dramatic early years of Central Asia's independence from the Soviet Union. These memoirs were written at the invitation of the Davis Center for Russian and Eurasian Studies at Harvard University. We publish these with special thanks to Nargis Kassenova, director of Davis's Program on Central Asia.

The conclusion of a 2-part series. Click here to see Part 1

U.S.-Kazakhstan relations were severely strained by the gap between Washington and Astana on democracy and human rights. In March 2002, Galymzhan Zhakiyanov, a former governor of Pavlodar Oblast (province) and Nazarbayev protégé, broke with the President and joined with other opposition figures to form a new political party, Democratic Choice of Kazakhstan, to press for free and fair elections and an array of democratic reforms. Nazarbayev directed an indictment of Zhakiyanov on corruption charges arising from his governorship of Pavlodar and launched a manhunt for him. On March 29, Zhakiyanov was visiting the French Ambassador in the building that jointly housed the embassies of France, the UK, and Germany in downtown Almaty. Kazakhstan’s security forces and police surrounded the building and demanded that the French Ambassador turn over Zhakiyanov. My French colleague telephoned me to request that I come to the chancery to confer with the three ambassadors. 

American leaders had often pressed Nazarbayev to permit loyal opposition and allow free and fair elections for regional governors and members of Parliament. I had met with Zhakiyanov and other opposition leaders as part of the normal embassy efforts to maintain contacts with a wide range of political forces in Kazakhstan. I concluded that consultation with the allied ambassadors was consistent with the Bush Administration’s “freedom agenda” and so decided to visit my embattled European colleagues. As my car arrived at the joint chancery, I had to fly the American flag to navigate through the siege that was growing more ominous by the minute. The GOK made it clear that Zhakiyanov had no chance to exit the building except into custody of the security forces. The three ambassadors and I discussed their predicament and the pressure they were under from their governments to resolve the standoff before it could damage relations with the GOK. I suggested that the three ambassadors contact the Ministry of Foreign Affairs to see if an agreement could be reached to ensure Zhakiyanov’s safety and his right to a fair trial. 

Signaling that the GOK might also be looking for a way to peacefully resolve the standoff, Foreign Minister Idrissov agreed to negotiations. While I did not participate directly, I advised the three ambassadors as they worked out a confidential memorandum with Idrissov containing the following provisions:

• Zhakiyanov would depart the chancery voluntarily and the GOK would guarantee that he would not be harmed.
• Zhakiyanov would enter house arrest at his residence in Almaty and his family and attorneys would have free access to him in the run-up to an open and transparent trial that would take place in Almaty, not Pavlodar.
• Officers of the French, British, and German embassies would have access to Zhakiyanov in house arrest and during the trial.

With the memorandum signed by Idrissov and the three ambassadors on April 3, my colleagues asked that I talk with Zhakiyanov. While he clearly did not want to depart the embassy, Zhakiyanov and I agreed that the chancery was surrounded by hundreds of security officers in an increasingly confrontational mood. There was clearly no option for physical escape, and the three ambassadors were already far out on a limb with their own governments and the GOK. I assured Zhakiyanov that the ambassadors had done their best to secure an agreement that would protect him from immediate injury or death and buy time for additional diplomacy to help secure him a fair trial. Zhakiyanov agreed to leave the embassy, and the security forces allowed him to depart the chancery safely for his residence in Almaty. 

While the three European ambassadors and I had no illusions that Nazarbayev would necessarily stand by the agreement, we were pleased that Zhakiyanov safely transitioned to house arrest. The GOK did initially allow visits by his family and officers of the three embassies. But in the early hours of April 10, 2002, the GOK without warning moved Zhakiyanov from house arrest in Almaty to Pavlodar to stand trial after interrogation using abusive tactics. I flew immediately to Astana and tracked down Idrissov in the hallway of the Presidential Administration building. We had it out in a heated confrontation that had Presidential staffers poking their heads out of offices like prairie dogs. Idrissov claimed that I had no grounds for outrage since the U.S. was not a party to the agreement. I replied that there would be serious and enduring consequences if the GOK reneged on an agreement negotiated in good faith. If the GOK did not return to compliance, I would ensure that the American side raised the Zhakiyanov case forcefully at the outset of every diplomatic encounter between the U.S. and GOK with serious complications for the relationship. Idrissov stepped down as Foreign Minister in June, and Nazarbayev replaced him with a long-time associate, Kassym-Jomart Tokayev, who had served as Prime Minister until early 2002. 

The GOK put Zhakiyanov on trial on July 15 after he suffered a heart attack under interrogation. On August 2, 2002, the court in Pavlodar convicted Zhakiyanov in an unfair and non-transparent trial and sentenced him to seven years in a labor camp. The Zhakiyanov case headed the American agenda for every diplomatic encounter with the GOK, including at Ministerial level and in several head-butting private conversations in Russian between Nazarbayev and me. I also successfully pressed the GOK to allow a visit by an embassy officer to Zhakiyanov at the prison camp, one of the few instances of access allowed during his incarceration. On April 11, 2004, Zhakiyanov was released from labor camp into house arrest, and on January 14, 2006, he was released from detention. The GOK allowed Zhakiyanov to leave Kazakhstan for resettlement in the U.S., reportedly after his agreement to stay out of politics. 

The Zhakiyanov case was neither the first nor the last dispute over democracy and human rights. In the spring of 2004, the embassy’s Regional Security Officer (RSO) asked me to pay a call on the GOK’s Minister for Emergency Situations (rough equivalent of FEMA) Zamanbek Nurkadilov, who had asked the RSO to convey an invitation to visit his operations center in Almaty. The RSO oversaw a modest program of anti-terrorism assistance for Nurkadilov’s ministry, so I reluctantly agreed. Nurkadilov, formerly mayor of Almaty, who had a reputation as one of Nazarbayev’s closest cronies, met me alone and took me to his operations center full of TV monitors, computer stations, and (I was sure) recording devices. Nurkadilov launched a scathing, hour-long diatribe against Nazarbayev, accusing him of corruption and abuse of power. Assuming that recording devices were spinning, I heard Nurkadilov out and took my leave. Nazarbayev later fired Nurkadilov and their rift became public before my tour as ambassador concluded in the summer of 2004. On November 12, 2005, Nurkadilov was found dead in his private office shot twice in the chest and once in the head. The GOK investigation ruled the death a suicide without explaining how Nurkadilov managed all three fatal shots.

During roughly the same timeframe, Kazakhstan’s former ambassador to Russia and Minister of Information, Altynbek Sarsenbayev, asked to see me at a restaurant with his wife and two children. Sarsenbayev told me that he intended to break publicly with Nazarbayev to organize an opposition political party. He clearly knew the risks he was running, and we agreed to stay in close touch. I last saw him at a British Embassy reception for the Queen’s birthday in June 2004, just before my departure from Kazakhstan. I wished him well and assured him that my successor would want to meet with him. On February 13, 2006, the bodies of Sarsenbayev, his bodyguard, and driver were found in the hills above Almaty, shot with their hands tied behind their backs in a mafia-style execution. Nazarbayev announced an investigation which rounded up alleged rogue agents from the security forces and one low-level GOK official. They were convicted in a hasty trial, concluding the GOK investigation, but a retrial reduced the sentence without providing any genuine transparency. Despite the U.S. embassy’s efforts to show solidarity with courageous figures like Sarsenbayev, crossing Nazarbayev was a very risky business. 

Keeping expansion of the Tenghiz oil field on track

A vital underpinning of the emerging U.S.-Kazakhstan relationship since the 1990s was investment in Kazakhstan’s energy sector. Kazakhstan is among world leaders in oil and gas reserves, but the Soviet-era energy industry was in a state of collapse as the Soviet Union itself lurched toward dissolution in December 1991. Nazarbayev realized that Kazakhstan needed investment and technical expertise to develop oil fields, especially the onshore supergiant Tenghiz field, and a way to get Kazakh oil to international markets that would not be dominated by the Soviet-era pipeline system controlled by Russia. His solution was to put out the welcome mat for international oil companies that could help him achieve both objectives. The result was a wild scramble for access, influence, and power in the energy sector around the Caspian Sea, including in Kazakhstan. As one astute analyst of the period puts it: “In the early 1990s, one could not identify the new players flooding into the oil industry: there was no scorecard, no track record, no credit ratings, no better business bureau.” In Kazakhstan, all the players knew you had to deal with Nursultan Nazarbayev.

Task number one was to sort out the investment structure at Tenghiz. There ensued a protracted, multi-player negotiation best described as a “battle of wills” involving major international companies, including Chevron, the GOK, several colorful individual middlemen, and Russian oil players like Lukoil. The result was an ownership structure at Tenghiz that was in place when I became ambassador to Kazakhstan in 2001: Chevron/Texaco 50 percent; Exxon/Mobil 25 percent; KazMunayGas (Kazakhstan’s state-owned oil/gas company) 20 percent, and Lukoil 5 percent. Chevron also held an 18% stake in the gas and condensate field at Karachaganak, while Exxon/Mobil later in 2008 secured a 16.8% stake in Kashagan, the massive shallow-water field discovered off Kazakhstan’s Caspian Sea coast. Together these investments totaled more than $6 billion, representing a substantial American stake in the future of Kazakhstan.

The most straight-forward approach to getting Kazakh energy exports to international markets was a trans-Caspian pipeline system linking Kazakhstan and Turkmenistan, with their massive oil and gas reserves, to the Baku-Tbilisi-Ceyhan pipeline across the Caspian Sea in Azerbaijan, and then on to markets in Turkey and Europe. This was the option favored by Washington as well as Kazakhstan. But the trans-Caspian pipeline was blocked by Russia and Iran, so Kazakhstan and its partners turned to an alternative pipeline project from northern Kazakhstan across southern Russia to the port of Novorossiysk on the Black Sea, from which tankers could move the oil through the Turkish straits to the Mediterranean. The Caspian Pipeline Consortium (CPC), which built and operates the pipeline, has a complex management structure giving the Russian pipeline monopoly Transneft a 24% stake while Chevron holds 15%, Mobil 7.5% and KazMunayGas 19%. Chevron, Mobil, and KazMunayGas relied on their stakes in CPC to give them a better break than the Soviet-era pipeline system, with its rigged pricing, aging infrastructure, and Russian monopoly control.

By 2001, planning was well underway for a $3.5 billion expansion at Tenghiz. When completed, the expansion would raise daily production to 600,000 barrels of crude oil and 22 million cubic meters of natural gas. The expansion was clearly in the interest of both the GOK and its international partners, but, by the fall of 2002, negotiations reached an impasse over disagreements on financing the project and taxes. In meetings with me following rounds of negotiations with the GOK, executives of Chevon/Texaco and Exxon/Mobil complained that they were unable to get direct access to Nazarbayev who had delegated negotiations on the GOK side to the Ministry of Energy and Natural Resources (MENR) and KazMunayGas. The American executives insisted that their positions on financing and taxes were consistent with the original contract governing Tenghiz signed in 1993, but they did not believe that GOK negotiators were able or willing to close the deal without Nazarbayev’s direct involvement. The deadlock escalated further when the principal sub-contractor for the project, Parker Drilling, announced that it was suspending its operations until the impasse was resolved. By November 2002, it appeared that the expansion at Tenghiz could collapse. 

The companies did not want direct U.S. government involvement in the negotiations, nor did I believe this was an appropriate role for either Washington or the embassy. But I did undertake to ensure that the GOK, including Nazarbayev personally, understood the stakes of a breakdown in negotiations. The impasse took place against a backdrop of rising economic nationalism as the GOK increasingly sought to put the squeeze on foreign investors in major projects like Tenghiz. Still, I did not believe that Nazarbayev would risk failure of the project, if we could find a way to engage him directly. The next step was not an easy call. On the one hand, Nazarbayev’s inclination to move away from micro-managing energy deals was promising. But in this case, we were on the verge of losing a major project that could create an estimated 7,000 jobs for Kazakhstanis, and substantial economic benefits for both the American investors and the GOK.

I decided to ask for a letter from Commerce Secretary Don Evans to Nazarbayev underscoring Washington’s interest in the success of the expansion at Tenghiz. The letter did not make proposals on financing or tax issues, but stressed the sanctity of the contract. I delivered the letter to Nazarbayev through his personal energy advisor and separately his scheduler to guard against spin from MERN and KazMunayGas. I reasoned that the letter stood a chance of moving Nazarbayev given his respect for Secretary Evans. The precise impact of any intervention in a negotiation of this complexity is unknowable, but Nazarbayev did reengage personally. The GOK and the American investors resolved their dispute in January 2003. The expansion was completed in 2008 and remains the basis of operations at Tenghiz more than two decades later.

Dethroning the “King of Kazakhstan”

On March 31, 2003, the FBI arrested an American businessman and energy advisor to Nazarbayev, James Henry (Jim) Giffen, as he tried to board a flight to Paris and on to Kazakhstan. The arrest and subsequent issuance of a 55-count federal indictment of Giffen under the U.S. Foreign Corrupt Practices Act (FCPA) touched off a crisis that threatened to undermine U.S-Kazakhstan relations. The indictment accused Giffen of illicit payments to Swiss bank accounts held by leading GOK figures, including Nazarbayev, to grease the skids of deals between major international oil companies and the GOK involving Kazakhstan’s most important oil fields, including Tenghiz and the offshore giant Kashagan.

Giffen had long been a swash-buckling player in Kazakhstan’s energy sector, forging personal ties with Nazarbayev and his officials before the break-up of the Soviet Union. With lavish residences in New York and Almaty and a reputation for high-living and unparalleled access to Nazarbayev, Giffen became widely known as the “King of Kazakhstan”. While both international energy executives and Kazakhstan’s elite looked for ways to cut Giffen down to size, he successfully made himself indispensable as the gate keeper to Nazarbayev on energy deals. Giffen also protected his position by meeting regularly with USG officials in Washington, Moscow, and Kazakhstan, ostensibly to keep them informed of developments in Kazakhstan, but also to burnish his reputation as a backchannel to Nazarbayev.

While the indictment did not directly target Nazarbayev, it was clear that Nazarbayev and former Prime Minister Nurlan Balgimbayev were the recipients of Giffen’s alleged bribes involving $84 million and lavish gifts. Foreign Minister Tokayev assured me that the GOK had no interest in the fate of Giffen, but did not want to see the President of Kazakhstan accused of accepting bribes during proceedings in a U.S. federal court. I replied that neither the White House nor any other executive branch office would influence the handling of the Giffen case in federal court. Tokayev took this on board, but made clear privately that Nazarbayev expected President Bush to make the case go away. After all, that is what Nazarbayev would have done in similar circumstances. I stressed to Tokayev that this request was a total non-starter and that the Giffen case would have to run its course in a fair and transparent trial that would allow Giffen a full and robust defense. I stressed that we needed to work together to keep U.S.-Kazakhstan relations on track whatever occurred in the Giffen case. Tokayev made clear that this would be a tall order with the President of Kazakhstan accused of taking bribes in a U.S. federal court. 

The standoff deepened further as the U.S. Department of Justice obtained an order from the Swiss Government freezing bank accounts held by Nazarbayev and Balgimbayev pending the outcome of the Giffen case. This raised the possibility that the $84 million in the accounts might be confiscated if Giffen were convicted. Tokayev expressed outrage that sovereign assets of the GOK had been frozen at U.S. request. I replied that freezing of the accounts was perfectly legal under the FCPA, but that confiscation would not come into play unless Giffen were convicted. I suggested to Tokayev that we begin to explore how we might negotiate a transparent and jointly managed mechanism to use the $84 million for programs of direct benefit to the most disadvantaged people of Kazakhstan. It took until 2007, but the USG and GOK reached an agreement that released the money for use by a foundation funding NGOs to support programs for mothers and children in Kazakhstan.

The Giffen affair continued to roil U.S.-Kazakhstan relations, including during a February 2004 visit by U.S. Secretary of Defense Donald Rumsfeld. I counseled Tokayev and other contacts throughout the GOK not to raise the Giffen case with Rumsfeld. He would not intervene in the case, and raising the issue would be an unwelcome distraction. I was somewhat reassured that Nazarbayev would be on one of his periodic trips to Europe during Rumsfeld’s visit. In the car on the way to the Prime Minister’s office, I warned the secretary of defense that the Giffen case could come up. The welcoming pleasantries had hardly been concluded when Prime Minister Daniyal Akhmetov raised the Giffen case urging that Rumsfeld and President Bush remove this threat to U.S.-Kazakhstan relations. To his credit, Rumsfeld pivoted immediately to his own efforts to deal with corruption in the DOD’s contracts with the defense industry and argued that the best solution for the Giffen affair was complete transparency from the GOK. The meeting quickly moved on to a good discussion of cooperation on counterterrorism and security issues.

Rumsfeld held a successful follow-up meeting with Minister of Defense Mukhtar Altynbayev. The meeting concluded with the ceremonial gift of a traditional knee length Kazakh coat and hat which the Secretary tried on to the delight of his hosts. It appeared that Rumsfeld’s visit might conclude as an unqualified success. However, as we departed the ministry, I noticed that the right trouser leg of the secretary’s suit had unraveled alarmingly, especially problematic since we would have to negotiate a hotel lobby full of media and Kazakh and American admirers to reach the secretary’s suite. I immediately thought of the ceremonial Kazakh coat in the truck of my car. Rumsfeld donned the coat admirably covering the “wardrobe malfunction” and setting up a triumphant entry to the hotel to the delight of the crowd and my profound relief. 

The Giffen case dragged on for seven years. A Mobil Oil executive indicted along with Giffen served half of his 46-month sentence for tax evasion. Giffen’s attorneys alleged that the State Department and CIA had known of and approved his activities. Giffen’s defense demanded access to State Department and CIA files, but both agencies refused. In 2010, a frustrated federal judge dismissed the FCPA charges and Giffen pled guilty to one charge of tax evasion with a small fine. The Giffen case thus ended with a whimper rather than a bang. But it was clear that the reign of the “King of Kazakhstan” had come to an end to the benefit of both countries. 

Diplomacy on the Silk Road: No miracles, but substantial achievements

The United States and Kazakhstan navigated the new geopolitical landscape after 9/11 with diplomatic skill and a substantial dose of luck. Neither side got everything it wanted, but each got enough to weather challenges that might have led to a messy divorce, as happened in the U.S.-Uzbekistan relationship. The fundamentals of the U.S.-Kazakhstan agenda – security and counterterrorism, non-proliferation of WMD; energy and economics; and democracy and human rights – have proven remarkably durable over the ensuing 20 years. Kazakhstan weathered the 2008 financial crisis and the COVID-19 pandemic battered, but with its independence, sovereignty, and territorial integrity intact. Nazarbayev stepped down from the presidency on March 19, 2019, while trying to retain at least some of his once unchecked power as chairman of the National Security Council. His successor as president and old comrade, Kassym-Jomart Tokayev, with whom I had negotiated as foreign minister, proclaimed a reformist agenda, but also adopted many of the troubling tactics of his mentor, including manipulation of elections and jailing of political opponents. 

The violent unrest that engulfed Kazakhstan in January 2022 cast a dark shadow over the country’s future, as security forces committed widespread abuses, hundreds of Kazakhstanis lost their lives, and Tokayev invited the brief deployment of a Russian-led security detachment ostensibly representing the Collective Security Treaty Organization (CSTO). The unrest began in the western city of Zhanaozen in Kazakhstan’s Caspian oil patch as protests against the removal of a government subsidy on fuel, but quickly morphed into nation-wide demonstrations, including in Almaty and Astana. Demonstrators protested corruption, income inequality, and ossified leadership, especially Nazarbayev. On January 6, 2022, President Tokayev removed Nazarbayev from the National Security Council ending his 30-year dominance of political life in Kazakhstan. On January 8, Tokayev ordered the arrest of former Prime Minster Karim Massimov, who headed Kazakhstan’s security service, the KNB, during the January turmoil. Massimov was sentenced to 18 years in prison on charges of treason and attempting to seize power. His pardon request was denied, despite international appeals for Massimov’s release due to his deteriorating health. 

Energy issues remain at the center of the economy and politics. Kazakhstan continues to struggle with the complex issues that beset developing economies dependent upon energy exports: the boom and bust cycle of international energy prices; exchange rate instability of the tenge (Kazakhstan’s currency); dramatic and growing income disparities between the few with access to energy rents and the left-out majority; official corruption at all levels of the GOK; and a grandiose and wasteful building boom, especially in Astana. On the plus side, per capita income is rising and the percentage of the population living in extreme poverty is down. The GOK and Kazakhstan’s national bank have implemented some market-based reforms including establishment of a national rainy-day fund to soak up some of the GOK’s oil revenues. The climate for foreign investment remains a complex mix of openness tempered with growing economic nationalism insisting on a bigger slice of the pie for the GOK in deals with international investors. 

Yet another major expansion at Tenghiz is in the works. After a rocky start, oil production at the supergiant offshore field at Kashagan is beginning to ramp up. Tensions between the GOK and foreign investors continue to simmer as Astana has initiated arbitration proceedings against investors over production delays at Kashagan. 

Following Russia’s full-scale invasion of Ukraine in 2022, unexplained disruptions of oil loading at Novorossiysk cut into exports of oil via the CPC, but exports are projected to rebound in 2024. Critics of CPC have pointed out that Russian firms under U.S. and EU sanctions continue their vital role in financing and operating the pipeline. Kazakhstan has begun modest oil exports to China via a direct pipeline linking Kazakhstan’s Caspian oil fields to refineries in Xinjiang, but the China pipeline currently functions at 50% capacity, leaving the GOK dependent on CPC to get its oil to international markets. Kazakhstan also exports relatively modest amounts of natural gas to China via the Turkmenistan-China pipeline system that transits Uzbekistan and Kazakhstan. There is also renewed regional interest in trans-Caspian energy pipelines despite ongoing opposition from Russia and Iran.

The U.S. withdrawal from Afghanistan, China’s increasing economic dominance of Central Asia and Putin’s brutal full-scale invasion of Ukraine have created profound challenges for Kazakhstan’s statecraft. The U.S. and Kazakhstan have every reason to coordinate their policies toward the Taliban regime, to share insight and intelligence, and to do what they can to ameliorate the worst excesses of Taliban rule. On Ukraine, Kazakhstan has not forthrightly condemned Putin’s assault, abstaining from UN General Assembly resolutions critical of the invasion. Tokayev continues to meet with Putin, but, with an eye on its own ethnic Russian minority concentrated in five oblasts along the Russian border, Kazakhstan has withheld recognition of Russian annexation of Ukrainian territory, including the 2014 seizure of Crimea and the 2023 illegal annexation of four oblasts in eastern and southern Ukraine. Involvement of Kazakhstani firms in laundering transfers of dual-use technology from China to Russia led to U.S. sanctions against commercial firms in Kazakhstan and prompted tough diplomatic exchanges. It remains to be seen whether the GOK will have the will and the capacity to curb this trade before it does serious damage to relations with Washington.

In his book, The Art of Diplomacy, the American scholar and practitioner Stuart Eizenstat rightly observes: “Diplomacy can achieve great things…but it cannot work miracles.” Eizenstat’s insight certainly applies to the relationship between the U.S. and Kazakhstan. For Kazakhstan, the United States is an essential partner in its “multi-vector” statecraft, but diplomacy cannot overcome the geostrategic reality of long borders with a rising China and revanchist Russia. 

For the United States, Kazakhstan’s democratic deficit, human rights abuses and official corruption will continue to be sources of frustration. But both the U.S. and Kazakhstan have avenues for productive diplomacy. The last three American administrations have pursued multilateral discussions with leaders of the five Central Asian countries in the C5+1 format. On September 19, 2023, the C5+1 elevated their dialogue to summit level when President Biden hosted the five Central Asian Presidents in New York on the margins of the UNGA. On May 31, 2024, the U.S. hosted the 6th annual session of the United States-Kazakhstan Enhanced Strategic Partnership Dialogue in Washington at Deputy Foreign Minister level. Patient, sustained, and comprehensive diplomacy, from summit to working level, cannot work miracles, but it can and should aspire to substantial achievements. The United States and Kazakhstan should make this the shared objective of their diplomacy in the 21st century.