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Kazakhstan: Corruption Scandal Engulfs Oil-Rich Western Region

How did an oil-rich region in western Kazakhstan end up with a $100-million hole in its budget?

According to investigators from Astana, this giant hole in public funds in Atyrau Region was caused by massive fraud perpetrated by a man who was a member of Kazakhstan’s national parliament and who just happened to be the brother of the regional governor, acting in cahoots with corrupt officials and construction firm bosses. Speculation is rife in Kazakhstan about whether this corruption scandal is the product of political infighting, but the bare facts are as follows.

On October 1 charges were brought against Amanzhan Ryskali, brother of recently fired regional governor Bergey Ryskaliyev, on one count of fraud, but police are investigating a total of 13 corruption cases involving theft to the tune of 16 billion tenge (a little over $100 million). 

Although the scandal had been brewing for weeks, investigators did not manage to charge Amanzhan Ryskali (who uses the Kazakh form of his surname, while his brother uses the Russian form) in person -- He has long since disappeared, along with his brother. (After initial reports that ex-Governor Ryskaliyev was under house arrest, police have confirmed that he is not wanted and has not been questioned over the case.)

The whereabouts of the two are unknown, but they may be living large in London -- Forbes Kazakhstan reported a source spotted them at a swish Japanese restaurant in Knightsbridge last week. 

Bergey Ryskaliyev was fired by President Nursultan Nazarbayev as regional governor on August 16 after six years in the job, purportedly on health grounds. Shortly afterward, round-ups of his former associates began: Those in detention include his former deputy Bolat Daukenov, several former top regional administration officials, and a number of construction company bosses. 

Amanzhan Ryskali, the MP, was a prominent businessman in Atyrau, and sat in Kazakhstan’s rubberstamp parliament as a deputy for the pro-business Ak Zhol party. 

After initially supporting Ryskali, deputies from Ak Zhol -- which positions itself as a constructive opposition party but has never been heard to offer any serious criticism of Nazarbayev or his administration -- booted him out of parliament and expelled him from the party.

The case raises questions about how pervasive corruption could persist in this strategic oil-rich region. For skeptics, it also has a whiff of politics: Media outlets (including the well-informed local newspaper Ak Zhayyk) have identified the Ryskaliyev brothers as associates of Aslan Musin, Nazarbayev’s former chief-of-staff, who was demoted to head a budgetary committee in a recent government reshuffle

Musin has roots in western Kazakhstan and once served as governor of Atyrau Region. His demotion from being Nazarbayev’s right-hand man to shuffling papers on a committee has led observers to speculate that the Atyrau corruption scandal is all part of a wider battle of Kazakhstan’s constantly bickering clans.

Kazakhstan: Corruption Scandal Engulfs Oil-Rich Western Region

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