POGO letter to Attorney General Eric Holder Requesting an Investigation of Possible Unlawful Foreign Funding of Members of Congress
[Revised and re-sent on August 5, 2011]
Attorney General Eric Holder
United States Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Attorney General Holder:
The Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO’s investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government. As such, POGO has a strong interest in determining whether foreign money is being used unlawfully to influence members of Congress.
A letter filed in an ongoing civil case in U.S. District Court raises serious concerns that the Republic of Kazakhstan may have unlawfully financed sitting members of Congress. Purportedly a letter from the Kazakh ambassador in Washington, DC, to the President of Kazakhstan, the document asserts that the Kazakh Embassy has established a caucus of U.S. lawmakers and is encouraging them to act on behalf of the Republic of Kazakhstan by financing the lawmakers through a “special foreign currency fund.” (Attachment 1)
The authenticity of the letter has been contested by the defendants in subsequent court filings. The defendants have filed an analysis by a forensic document examiner and statements from officials from the government of Kazakhstan in support of their position. But documents separately filed under the Foreign Agents Registration Act (FARA) and records of campaign contributions from employees of various firms hired by the Republic of Kazakhstan give considerable credence to some of the letter’s underlying claims. (Attachments 2, 3)
Rakhat Aliyev, the ex-son-in-law of Kazakh president Nursultan Nazarbayev and former senior security official, obtained the contested letter, according to an affidavit submitted along with the lawsuit. Aliyev, who is hiding in self-imposed exile, is currently engaged in a bitter dispute with President Nazarbayev and has launched a lobbying campaign of his own in Washington, DC, which was intended in part to embarrass Nazarbayev. Aliyev’s status as a former member of the Kazakh first family and senior official of the Kazakh security service make it plausible that he could have obtained such a document. But his current dispute with the President raises legitimate questions about his motives and credibility.
Although serious questions have been raised about the authenticity of the letter and the credibility and motives of the person who obtained it, we believe there is sufficient circumstantial evidence to warrant an independent and official investigation, and we urge you to conduct such an investigation.
The letter at issue was filed in a civil case being brought by two brothers, Devincci and Issam Hourani, who are represented by two former Assistant United States Attorneys at Crowell & Moring LLP. The lawsuit seeks damages from a group of Washington, DC-based consultants who allegedly “supported and orchestrated Kazakh President Nursultan Nazarbayev in a politically-motivated campaign to expropriate the Hourani brothers’ investments in Kazakhstan and destroy their reputations internationally.”
The defendants—Alexander Mirtchev, his firm Krull Corporation, the international security firm GlobalOptions, Inc., and GlobalOptions Management, Inc., a joint venture of Krull and GlobalOptions—have been the subject of a number of recent investigative stories involving the murky services they have reportedly provided to dictators and oligarchs from the post-Soviet states, including the Kazakh first family.
According to the lawsuit, one of the defendants, Alexander Mirtchev, “is a secretive consultant and strategist who works on behalf of the dictator President Nazarbayev to achieve various aims, not the least of which is to influence the corridors of power in Washington and alter the perception amongst Washington insiders that his boss is a despot.” Another of the defendants, GlobalOptions, Inc., claims to have been conceived “as a private CIA, Defense Department, Justice Department, and FBI, all rolled into one.”
The plaintiffs have filed documents that appear to be official correspondence among high-level Kazakh government officials. The documents identify the consultants as being affiliated with the Republic of Kazakhstan and help to support the plaintiffs’ contention that the consultants had a role in expropriating their assets. One of the documents is the letter between the Kazakh Ambassador and the President of Kazakhstan in which the Ambassador discusses funding members of Congress. The defendants have called these documents forgeries.
The lawsuit in which the contested documents were filed is reportedly an extension of an unusual battle between Aliyev and the Republic of Kazakhstan that is taking place in the U.S. Congress. That battle is a continuation of a long-running and high-stakes feud between the Kazakh government and Aliyev, which began in 2007 amid allegations that Aliyev was planning to overthrow the Kazakh government.
In 2008, Aliyev used a lobbying firm called RJI Government Strategies through a company he controls called Speedy Funk Film, according to documents filed under the Lobbying Disclosure Act (LDA). The New York Times recently reported that RJI Strategies was retained in part to embarrass the Republic of Kazakhstan by having members of Congress place statements in the Congressional Record critical of the Republic of Kazakhstan’s human rights record. The critical statements, at least five of which were placed on the Record at the request of RJI according to The New York Times, were intended to embarrass the Kazakhstan government and serve as leverage in a business dispute involving Devincci Hourani, a relative of Aliyev.
In legal filings unrelated to the Hourani brothers’ lawsuit, the top former lobbyist at RJI Strategies—Tanya Rahall—has alleged that RJI intentionally masked the identity of its true client—Aliyev—on LDA forms. There is, however, a reference to Aliyev as the owner of Speedy Funk Film on the LDA registration form filed by RJI, which appears to show that RJI's listing of Speedy Funk Film as its client was in compliance with the LDA. Nonetheless, the filings do help to obscure the interested parties on behalf of which RJI was lobbying.
The Hourani brothers’ lawsuit is currently at the pre-trial stage with a number of motions pending before the court. One of the plaintiffs’ motions is a request for jurisdictional discovery, which seeks a variety of documents that may shed light on any financial relationship between the Republic of Kazakhstan, its consultants, and members of Congress. The motion requests, among other materials, a listing of all members of the congressional caucus known as “Friends of Kazakhstan” and all correspondence between those members and the consultants. (Attachment 4) To date, no official membership roster for these organizations has been made public.
If discovery or partial discovery is granted in the case, there is no guarantee that material related to members of Congress will be included. By the same token, because of the potential sensitivity of disclosures in this matter, a substantial grant of discovery raises the strong possibility that defendants will seek a settlement—slamming shut the window into purported activities involving U.S. lawmakers. For this reason, an independent investigation is of the utmost importance.
The Contested Letter
If authentic, the letter filed by the plaintiffs raises serious concerns about the role of foreign money in U.S. politics and the relationship between foreign countries and congressional caucuses dedicated to supporting the interests of that country.
According to a translated version of the letter filed in the lawsuit, the Kazakh Ambassador to the United States informed President Nazarbayev that “[t]he destructive actions of the Hourani brothers along with R. Aliyev in the U.S [sic] are being contained by ‘Friends of Kazakhstan’, a group created by the Embassy, which is comprised of members of Congress and the U.S. Senate and the employees of their offices. The Embassy of the RK [Republic of Kazakhstan] is financing them through contributions into their funds from a special foreign currency fund allocated by You [the President of Kazakhstan].” (Attachment 1)
The defendants have argued that this letter is a forgery and have included substantial evidence in support of their position. That evidence has included an analysis by a well known forensic document examiner and statements from officials from the Republic of Kazakhstan calling the letter an “evident forgery.”
But the plaintiffs responded with circumstantial evidence to demonstrate that Aliyev has the ability to obtain sensitive Kazakh documents through sources in the Kazakh government that remain loyal to him. The documents include a secret chart of the internal operations of the Kazakh security service as well as other memorandums among high-level Kazakh officials. It has also been reported that Aliyev has in recent years intercepted numerous audio recordings of conversations among high-level Kazakh officials.
News reports and documents filed under FARA also add circumstantial evidence in support of the letter’s authenticity. The documents and news reports show that the Republic of Kazakhstan has used lobbying firms to establish two separate congressional caucuses dedicated to supporting its interests. The most recent caucus, according to the filings, is called the Central Asia Caucus. (Attachment 3)
The FARA filings show that Policy Impact Communications was retained by the Republic of Kazakhstan to “[s]uccessfully complete the formation and influential implementation of the Central Asia Caucus.” This caucus was intended to “utilize the potential of the existing Congressional Friends of Kazakhstan Caucus, while preserving and further developing good will and positive attitudes of the Caucus’s co-chairs and members towards Kazakhstan and the Embassy.” Policy Impact Communications informed the Kazakh Embassy that it would use both the Friends of Kazakhstan Caucus and the Central Asia Caucus as “assets” to conduct a “comprehensive public relations campaign” on behalf of the Republic of Kazakhstan. (Attachment 3)
In addition, employees from firms hired by the Republic of Kazakhstan have donated thousands of dollars to members of Congress who have taken leadership roles in the most recent caucus, the Central Asia Caucus. One member of Congress, Delegate Eni Faleomavaega from American Samoa, particularly stands out. In the 2010 election cycle, two of Faleomavaega’s top organizational contributors had been under contract with the Republic of Kazakhstan: Employees and family members from Policy Impact Communications contributed $4,800, making the firm Faleomavaega’s second largest organizational contributor; and the other firm, Steptoe and Johnson, which is the Republic of Kazakhstan’s outside counsel, contributed $2,000 through its Political Action Committee. (Attachment 2)
In addition, employees from Policy Impact Communications contributed $2,000 to one of the original co-chairs of the Central Asia Caucus, Howard “Buck” McKeon, as well as $1,000 to the current co-chair, Danny “Dan” Lee Burton. (Attachment 2)
These contributions do not prove that money was being funneled from the Embassy to members of Congress. But the donations are nonetheless significant considering that every member of Congress that has served as a co-chair of the Central Asia Caucus has received contributions from a lobbying firm that was hired to establish that caucus. And while the contributions are relatively small, in the case of Faleomavaega they comprise two of the top ten organizational contributors to a non-voting delegate that is a co-chair and driving force behind the creation of the caucus. We have detailed these contributions, as well as contributions to other Kazakh-connected lawmakers, in Attachment 2.
The ongoing dispute between Aliyev and the Republic of Kazakhstan has brought to light allegations of questionable activities involving efforts to influence U.S. policy by parties on both sides, including an allegation that the Kazakh government is funneling money to members of the U.S. Congress. And while the defendants as well as officials from the Republic of Kazakhstan have strongly challenged the authenticity of the letter that underpins that charge, other facts present sufficient evidence to warrant an independent investigation. If anything, the contested nature of the letter makes an independent inquiry all the more necessary.
Please contact me, Jake Wiens, and/or Adam Zagorin at (202) 347-1122 if you have any questions or need further information or evidence to aid your efforts. Thank you for your consideration of this very important matter.
cc: Jack Smith, Chief, Public Integrity Section, Department of Justice
House Committee on Standards of Official Conduct
House Office of Congressional Ethics
 Second Declaration of Rakhat Mukhtarovich Aliyev, United States District Court for the District of Columbia, Civil Action No. 10-1618-TFH, Document 35-1, Filed on January 21, 2011. (hereinafter “Second Declaration of Rakhat Aliyev”)
 Eric Lipton, “Feud in Kazakh President’s Family Spills Into U.S.,” The New York Times, May 29, 2011. (Downloaded May 31, 2011) (hereinafter “Feud in Kazakh President’s Family Spills Into U.S.”); David L. Stern, “Kazakhstan: Court Sentences President’s Former Son-in-Law,” The New York Times, March 27, 2008.
 Crowell & Moring LLP, “American And British Investors Sue Kazakhstan’s Washington Consultants For Roles In Stealing Assets And Defaming Business Owners,” September 23, 2010. (Downloaded May 31, 2011)
 Glenn R. Simpson and Mary Jacoby, “How Lobbyists Help Ex-Soviets Woo Washington— Scrubbed Images Open Doors, Assure Investors; A ‘Most Wanted’ Client,” The Wall Street Journal, April 17, 2007. Glenn R. Simpson, Susan Schmidt and Mary Jacoby, “Kazakh Leader’s Daughter Monitored U.S. Bribe Case—Washington Firms Were Used to Gather Information on Probe,” The Wall Street Journal, May 12, 2008. ; Glenn R. Simpson and Susan Schmidt, “Kazakhstan Corruption: Exile Alleges New Details,” The Wall Street Journal, July 22, 2008. ; Glenn R. Simpson and Susan Schmidt, “World News: Russia’s Deripaska Faces Western Investigations—U.S., U.K. Probes of Industrialist Focus on Transfer ofFunds; He Also Has Business Setback, Ceding Stake in German Firm,” The Wall Street Journal, October 10, 2008. Susan Schmidt and Glenn R. Simpson, “Ex-Pentagon official linked to Kurdishoil— Perle denies having role in a consortium seeking rights to drill,” The Wall Street Journal, July 30, 2008. (All downloaded June 1, 2011)
 Devincci Salah Hourani and Issam Salah Hourani v. Alexander V. Mirtchev, Krull Corporation, GlobalOptions, Inc., and GlobalOptions Management, Inc., Complaint for Compensatory and Punitive Damages, United States District Court for the District of Columbia, Civil Action No. 10-1618-TFH, Document 1, Filed on September 23, 2010, p. 2. (hereinafter Devincci Salah Hourani, et al., v. Alexander V. Mirtchev, et al.)
 GlobalOptions, Inc., “Company Profile.” (Downloaded May 31, 2011)
 Devincci Salah Hourani, et al., v. Alexander V. Mirtchev, et al., Plaintiffs Request for Production of Documents, Exhibit 3, United States District Court for the District of Columbia, Civil Action No. 10-1618-TFH, Document 21-5, Filed on December 16, 2010. Devincci Salah Hourani, et al., v. Alexander V. Mirtchev, et al., Plaintiffs Request for Production of Documents, Exhibit 5, United States District Court for the District of Columbia, Civil Action No. 10-1618-TFH, Document 21-7, Filed on December 16, 2010.
 Devincci Salah Hourani, etal., v. Alexander V. Mirtche v, et al., Reply of Defendants Alexander v. Mirtchev and Krull Corp. in Support of Their Motion to Dismiss and Motion to Strike, United States District Court for the District of Columbia, Civil Action No. 10-1618-TFH, Document 44, Filed on February 11, 2011.
 Bruce Pannier, “Kazakhstan: Coup plots alleged as former presidential son-in-law battles authorities,” Radio Free Europe, April 20, 2008. (Downloaded May 31, 2011) (hereinafter “Kazakhstan: Coup plots alleged as former presidential son-in-law battles authorities”)
 RJI Government Strategies, Inc., Lobbying Disclosure Act, Amendment. (Downloaded May 31, 2011)
 RJI Government Strategies, Inc. and RJI Capital Corporation v. Tanya A. Rahall and Hilliard Alan Zola, Defendants’ Motion to Compel Discovery from Plaintiffs, Civil Action No. 2009, CA, 007515 B, Filed on April 28, 2010, pp. 8, 32.
 RJI Government Strategies, Inc., Lobbying Disclosure Act, Amendment. (Downloaded May 31, 2011)
 Devincci Salah Hourani, et al., v. Alexander V. Mirtchev, et al., Memorandum of Law in Support of Plaintiffs’ Motion for Leave to take Jurisdictional Discovery, United States District Court for the District of Columbia, Civil Action No. 10-1618-TFH, Document 21-1, Filed on December 16, 2010; See Attachment 4
 Devincci Salah Hourani, et al., v. Alexander V. Mirtchev, et al., Reply of Defendants Alexander v. Mirtchev and Krull Corp. in Support of Their Motion to Dismiss and Motion to Strike, United States District Court for the District of Columbia, Civil Action No. 10-1618-TFH, Document 44, Filed on February 11, 2011. http://www.pogoarchives.org/m/gc/k/Hourani%20v%20Mirtchev-Document%2044.pdf
 Devincci Salah Hourani, et al., v. Alexander V. Mirtchev, et al., Reply of Defendants Alexander V.Mirtchev and Krull Corp. in Support of Their Motion to Dismiss and Motion to Strike, Exhibit 3, United States District Court for the District of Columbia, Civil Action No. 10-1618-TFH, Document 44, Filed on February 11, 2011.
 Policy Impact Communications, Foreign Agents Registration Act, Exhibit AB for the Republic of Kazakhstan, Filed on May 19, 2009, pp. 18-19 of the .pdf.
 Center for Responsive Politics, “Top Contributors: 2010 Race: American Samoa District 00: Eni F. H. Faleomavaega (D).” (Downloaded May 31, 2011)
 Devincci Salah Hourani, et al., v. Alexander V. Mirtchev, et al., Reply of Defendants Alexander V.Mirtchev and Krull Corp. in Support of Their Motion to Dismiss and Motion to Strike, Exhibit 3, United States District Court for the District of Columbia, Civil Action No. 10-1618-TFH, Document 44, Filed on February 11, 2011. Devincci Salah Hourani, et al., v. Alexander V. Mirtchev, et al., Declaration of Warren Anthony Fitch, United States District Court for the District of Columbia, Civil Action No. 10-1618-TFH, Document 24-1, Filed on January 6, 2011.
 Eurasian Transition Group, “Congress Caucus on Central Asia,” November 30, 2009. (Downloaded May 31, 2011)
 112th Congress, Committee on House Administration, “Congressional Member Organizations—111th Congress.” (Downloaded June 1, 2011)