09ASTANA286, KAZAKHSTAN: OPPOSITION LEADER KOZLOV SEES

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Reference ID Created Released Classification Origin
09ASTANA286 2009-02-18 10:25 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO5347
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHTA #0286/01 0491025
ZNY CCCCC ZZH
P 181025Z FEB 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 4653
INFO RUCNCIS/CIS COLLECTIVE 1216
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0599
RUEHLM/AMEMBASSY COLOMBO 0047
RUEHKA/AMEMBASSY DHAKA 0055
RUEHIL/AMEMBASSY ISLAMABAD 2155
RUEHBUL/AMEMBASSY KABUL 0439
RUEHKT/AMEMBASSY KATHMANDU 0012
RUEHNE/AMEMBASSY NEW DELHI 0537
RUEHUL/AMEMBASSY SEOUL 0302
RUEHKO/AMEMBASSY TOKYO 1305
RUEKJCS/JOINT STAFF WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RUEKJCS/SECDEF WASHDC 0694
RHEHNSC/NSC WASHDC 0778
RHMFISS/CDR USCENTCOM MACDILL AFB FL

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 000286 
 
SIPDIS 
 
STATE FOR SCA/CEN, DRL 
 
E.O. 12958: DECL: 02/18/2019 
TAGS: PGOV PHUM PREL EFIN KDEM KZ
SUBJECT: KAZAKHSTAN:  OPPOSITION LEADER KOZLOV SEES 
POLITICS BEHIND BTA TAKE-OVER 
 
REF: A. (A) ASTANA 0250 
     B. (B) ASTANA 0204 
 
Classified By: Ambassador Richard E. Hoagland, 1.4 (b)/(d) 
 
1.  (C) SUMMARY:  In a February 4 meeting, Vladimir Kozlov, 
the head of unregistered opposition party Alga, claimed that 
ex-BTA bank chairman Mukhtar Ablyazov was ousted from his 
position for reasons not connected to the bank's financial 
health.  As Kozlov put it, Ablyazov had either grown "too 
powerful," or President Nazarbayev's son-in-law Timur 
Kulibayev wanted to consolidate control over the bank. 
Kozlov alleged that the government broke a tacit agreement it 
had with Ablyazov -- namely, that the state would not 
interfere in his business activities if he steered clear of 
overt involvement in politics -- and asserted that Ablyazov 
is now free to go into "open opposition."  Kozlov claimed 
that despite its lack of registration, Alga has been 
successfully building up its support in regional capitals and 
rural areas.  He argued that Alga must become a strong 
political force before it is taken seriously by the 
international community.  END SUMMARY. 
 
ABLYAZOV WAS "TOO POWERFUL" 
 
2.  (C) On February 4, we met in Almaty with Vladimir Kozlov, 
head of the unregistered opposition party Alga.  The party is 
reportedly secretly backed by financier Mukhtar Ablyazov, who 
was recently ousted as chairman of BTA, Kazakhstan's largest 
bank, when the government took over a majority stake in it. 
(NOTE:  Ablyazov's support for Alga is essentially an "open 
secret," but he has never publicly acknowledged that he is 
financing the party.  END NOTE.)  Kozlov told us that the 
government's takeover of BTA "was not entirely surprising, 
but its timing was baffling."  Ablyazov expected such a move 
sometime in the future, said Kozlov, but the government's 
swiftness was a surprise. 
 
3. (C) Kozlov ventured two possible motivations behind the 
government's move.  One was that Ablyazov "has grown too 
powerful" -- "he is a respected leader in the business 
community, and there was a danger that others (i.e., business 
leaders) would follow him."  The second explanation, 
according to Kozlov, is "simple raiding and consolidation" 
for the benefit of President Nazarbayev's son-in-law Timur 
Kulibayev, who remains a contender to one day succeed 
Nazarbayev.  Kozlov maintained that a similar "raid" took 
place in 2001, when "then favored" son-in-law Rakhat Aliyev 
took over several banks.  He dismissed outright the official 
explanation that the state had to step in because of BTA's 
financial vulnerability. "The bank was sound," Kozlov argued. 
 (NOTE: Political analyst Dosym Satpayev told the Ambassador 
on February 5 that while an "intra-elite struggle," won by 
Prime Minister Masimov and Samruk-Kazyna head Kairat 
Kelimbetov, was the main reason behind Ablyazov's ousting, 
BTA's financial vulnerability also played a significant role 
(ref A).  On February 5, AmCham Board Member and Citigroup 
CEO Daniel Connelly told the Ambassador BTA was the most 
heavily indebted and possessor of the most toxic assets of 
all of Kazakhstan's banks.  Further, he explained that the 
"rapid" take-over of BTA and Allliance had to be done before 
the devaluation of the tenge.  END NOTE.) 
 
BROKEN "GENTLEMEN'S AGREEMENT" 
 
4.  (C) Kozlov alleged that by removing Ablyazov, the 
government "broke a gentlemen's agreement" that existed 
between the financier and the government.  The crux of the 
agreement, in Kozlov's words, was that Ablyazov would steer 
clear of overt involvement in politics while the state would 
not interfere with his bank.  (NOTE:  Ablyazov was at one 
point openly active in opposition circles, specifically in 
 
ASTANA 00000286  002 OF 002 
 
 
the Democratic Choice of Kazakhstan (DVK) movement, but after 
being convicted on corruption charges in 2002, he curtailed 
his political activities, reportedly in exchange for a pardon 
from President Nazarbayev.  END NOTE.)   Kozlov maintained 
that the government has now "untied Ablyazov's hands," 
allowing him to move into "open opposition."  He hinted that 
Alga has several mass-media resources, including an 
independent printing press and a streaming-video website, 
which have been dormant until now and stand ready to come 
on-line "with the first order."  He admitted, however, that 
battling against the sheer mass of the pro-government media 
in Kazakhstan would be a challenge. 
 
WINNING HEARTS AND MINDS IN THE REGIONS..
. 
 
5.  (C) Kozlov does not foresee any major fallout from 
Ablyazov's removal for Alga itself.  The organization is 
financially sound, he said.  Alga is still awaiting official 
registration as a political party from the Ministry of 
Justice, but it has used the time to build up support in 
regional capitals and rural areas, Kozlov claimed.  The 
organization has local representatives in every oblast 
(region), whose primary mission is to assist the residents in 
engaging local governments to resolve a wide range of 
problems -- everything from replacing fire hydrants to fixing 
potholes and street lighting.  "By working with the people, 
and not in place of them," stressed Kozlov, "we gain 
followers and strengthen civic consciousness."  He believes 
the strategy is working.  According to Kozlov, Alga's local 
representatives have helped resolve over 125 cases in the 
past six months, and local residents are increasingly turning 
to Alga as a mediator. 
 
... AND IN THE INTERNATIONAL COMMUNITY 
 
6.  (C) Kozlov said he does not agree with "some in the 
opposition circles" who lament the "inaction" of Western 
countries and "blame the West" for failing to bring democracy 
to Kazakhstan.  "I have a grip on reality," he quipped.  Alga 
must become a serious political contender, explained Kozlov, 
before it can hope to be taken seriously by the international 
community. Until then, "party slogans are just simple words," 
he argued. 
 
7. (SBU) NOTE:  Presidential advisor -- and former Minister 
of Culture and Information -- Yermukhamet Yertsybayev, who 
has a reputation for speaking frankly, told the press on 
February 10 that "no political motive" was behind" BTA's 
takeover and Ablyazov's ousting.  "The only motive behind the 
nationalization was the protection of BTA's clients from 
losing their savings," he claimed.  However, he somewhat 
ominously added that "bankers and oligarchs should stay away 
from politics.  Russian oligarchs learned that lesson long 
ago.... Unfortunately, some of our businessmen still don't 
get that."  END NOTE. 
 
8.  (SBU) COMMENT: We don't doubt there was a political 
element in ousting Ablyazov as BTA chairman, just as we don't 
doubt other politico-oligarchs will profit.  However, most 
financial experts believe the government taking over BTA was 
a necessary step in Kazakhstan's relatively responsible 
response to the global financial crisis.  END COMMENT. 
HOAGLAND

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