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Story Publication logo May 3, 2010

Kyrgyzstan: Following the Money



In early April, a violent uprising forced Kyrgyzstan’s beleaguered president to flee the capital...


Philip Shishkin, for the Pulitzer Center
Bishkek, Kyrgyzstan

Chairman of the Financial Police Erkin Bulekbayev; photo by Philip Shishkin

Late at night on April 7, Erkin Bulekbayev walked out of prison and into one of the toughest jobs in Kyrgyzstan: looking for evidence of financial crimes allegedly committed by the ousted regime.

Earlier that day, a violent uprising swept President Kurmanbek Bakiyev out of power. A group of opposition leaders grabbed the reins and accused Bakiyev and his associates of essentially running a vast criminal enterprise called the government of Kyrgyzstan. Now, the search for evidence is on. It's far more than a criminal investigation.

The interim government justifies its unconventional assent to power by casting its predecessor as dictatorial and corrupt. So anything that furnishes solid proof of that corruption helps cement the legitimacy of the new government. A fine line separates a necessary investigation from a witch-hunt. In the neat good-replaces-evil narrative of the revolution, there's a huge emphasis on finding guilt, not so much on exoneration.

In the post-revolution scramble for government jobs, the newly liberated Bulekbayev was named chairman of the financial police. He'd been in jail for almost a year. In April of 2009, Bulekbayev, a longtime opposition leader and founder of the Green Party, attended a village rally. An ethnic Kurd had been accused of raping a 4-year-old girl, and protesters were demanding the man give himself up. The rally was spinning out of control, and police detained some of the protesters. Bulekbayev, who says he wanted to help resolve the tensions, was arrested too, and accused of inciting violence. He considered himself a political prisoner. But prison authorities put him in detention with common criminals, and Bulekbayev had to fend for himself.

On the day of the revolution, the same judge who'd sent him to jail now signed his acquittal, an about-face that speaks volumes about a judicial system beholden to whoever is in power. "With such ease, with pleasure, he acquitted me," Bulekbayev recalled.

A few days later, Bulekbayev attended a civil-society forum held in the overheated basement of the History Museum, a downtown structure devoted almost exclusively to the 1917 Russian revolution. From the podium, the financial-police chief told the assembled guests he'd already found millions of dollars siphoned off illegally, and that a host of criminal inquiries were underway. "Bakiyev spliced together criminality and official power," Bulekbayev said. Later in his speech, he warned the audience not to beg him for jobs. He said he was forging ahead with the search for missing money and hoped to "report back within 10-15 days with a nice big sum of money." Then he dropped a bombshell: he wanted to nationalize 49% of a major Kyrgyzstan cell-phone service provider. The company's director and accountants were all enlisted in helping investigators answers the big question: "Where's the money?" he said.

A few days later, I went to see Bulekbayev in his spacious office at the financial police headquarters and asked him about the investigation into Megacom. Bulekbayev said the 49% in question was "the share of the ruling family that was brazenly passed on from one family to the next." In 2005, another Kyrgyzstan government was overthrown and tagged with the same accusations of graft and nepotism that later plagued its successor. Bulekbayev said his task was to "return this money to the state" and valued the stake at "$150-200 million."

Megacom itself appeared at pains to explain itself. In a series of statements, the company said that at one point last year its director informed its main shareholder and creditors that Megacom had been "de-facto transferred under the control of the Bakiyev business-group." The company also said it has "documentary proof" that the executive in question "was not party to any fraudulent activities concerning the diversion of shares to the structures controlled by Maxim Bakiyev", the former president's son and the alleged mastermind of the family's business empire.

Without referring to Megacom, one political analyst told me the revolution upset the delicate relationship between big business and its government patrons, and that now there were "big pools of money looking for a new suzerain."

Tracking other money trails is Temir Sariyev, the new government's finance minister. In his office one afternoon, he showed me a schematic printout of the path of a single multi-million dollar money transfer that he said took place on the eve of the revolution. The money left from a government-affiliated bank, split itself into batches, dribbled through dozens of countries and off-shore companies and finally landed somewhere. The classified printout I was shown had a lot of lines, circles and squares. Sariyev said more than $270 million left the country this way between April 1 and 8, apparently as the regime smelled trouble. In the waning days and hours of the previous government, he said, financial whizzes used a mobile server to send money abroad.


teal halftone illustration of two hands shaking and a scale holding dollar bills


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