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<!DOCTYPE html><html xmlns:og="http://opengraphprotocol.org/schema/" lang="en-US"><head> <meta http-equiv="Content-Type" content="text/html; charset=UTF-8"> <meta name="HandheldFriendly" content="True"> <meta name="viewport" content="initial-scale=1, maximum-scale=1, user-scalable=no, width=device-width"> <meta name="format-detection" content="telephone=no"> <meta property="og:title" content="Paul Manafort and the Kyrgyz Connection"><meta property="twitter:title" content="Paul Manafort and the Kyrgyz Connection"><meta name="description" content="Who says a corruption scandal is ever really over? An old Kyrgyz banking scandal shows up in Manafort’s Ukraine dealings."><meta property="og:description" content="Who says a corruption scandal is ever really over? An old Kyrgyz banking scandal shows up in Manafort’s Ukraine dealings."><meta property="twitter:description" content="Who says a corruption scandal is ever really over? An old Kyrgyz banking scandal shows up in Manafort’s Ukraine dealings."><meta property="og:image"" content="https://thediplomat.com/wp-content/uploads/2017/03/sizes/td-story-s-2/thediplomat_2017-03-21_15-11-37.jpg"><meta property="twitter:image"" content="https://thediplomat.com/wp-content/uploads/2017/03/sizes/td-story-s-2/thediplomat_2017-03-21_15-11-37.jpg"><meta name="author" content="Catherine Putz"<meta name="url" itemprop="url" content="https://thediplomat.com/2017/03/paul-manafort-and-the-kyrgyz-connection/"><meta property="og:url" content="https://thediplomat.com/2017/03/paul-manafort-and-the-kyrgyz-connection/"><meta property="twitter:url" content="https://thediplomat.com/2017/03/paul-manafort-and-the-kyrgyz-connection/"><meta name="keywords" content="Kyrgyzstan,Money laundering,Paul Manafort,Ukraine"/><meta name="news_keywords" content="Kyrgyzstan,Money laundering,Paul Manafort,Ukraine"/><meta property="article:tag" content="Kyrgyzstan"/><meta property="article:tag" content="Money laundering"/><meta property="article:tag" content="Paul Manafort"/><meta property="article:tag" content="Ukraine"/><meta property="og:type" content="article"><meta property="twitter:card" content="summary_large_image"> <script type="application/ld+json">{"@context": "https://schema.org","@type": "NewsArticle","headline": "Paul Manafort and the Kyrgyz Connection","description": "Who says a corruption scandal is ever really over? An old Kyrgyz banking scandal shows up in Manafort's Ukraine dealings.","image": [{"@context": "https://schema.org/","@type": "ImageObject","contentUrl":"https://thediplomat.com/wp-content/uploads/2017/03/sizes/td-story-s-2/thediplomat_2017-03-21_15-11-37.jpg","creditText": "Peretz Partensky / Flickr","copyrightNotice": "Flickr, Inc","license": "https://www.flickr.com/photos/ifl/3968065717/in/photolist-bYZNuw-bYZULL-73DnGa-7fuaru","acquireLicensePage": "https://www.flickr.com/photos/ifl/3968065717/in/photolist-bYZNuw-bYZULL-73DnGa-7fuaru","representativeOfPage": "True" }], "datePublished": "2017-03-22T00:01:00Z","dateModified": "2017-03-22T00:26:51Z","copyrightYear": "2017","author": [{ "@type": "Person", "name": "Catherine Putz"}],"publisher": {"@id": "https://thediplomat.com/#publisher","name": "The Diplomat","legalName": "Diplomat Media Inc.","description": "Asia-Pacific’s leading current affairs magazine.","url": "https://thediplomat.com","email": "support@thediplomat.com","logo": { "@type": "ImageObject", "url": "https://thediplomat.com/wp-content/themes/td_theme_v3/assets/logo/diplomat_logo_amp.jpg", "width": 600, "height": 60 },"sameAs": [ "https://www.facebook.com/diplomatmagazine", "https://twitter.com/Diplomat_APAC", "https://www.linkedin.com/company/the-diplomat" ]},"isAccessibleForFree": "False","hasPart": { "@type": "WebPageElement", "isAccessibleForFree": "False", "cssSelector" : ".jsonld-markup-paywall-content" },"articleBody": "Recent allegations involving former Trump campaign manager Paul Manafort and payments a “secret ledger” said he had received from a pro-Russian Ukrainian political party now appear to have been laundered via a bank in Kyrgyzstan. The continuously unfolding Manafort scandal underscores three larger points: first, that corruption scandals never die, they just slip from the headlines; second, that Central Asia is not nearly as isolated from global matters as is assumed; and third, that Western countries have more of a hand in regional unrest than they’d like to admit (though not in the “color revolution” formulation, as some regional autocrats phrase it.) Before tackling these three points, an overview of the latest developments regarding Manafort and the millions he was allegedly paid by the party of former Ukrainian President Viktor F. Yanukovych. As the New York Times reported Monday, a member of Ukraine’s parliament released documents “that he said showed that Mr. Manafort took steps to hide the payment... The documents included an invoice that appeared to show $750,000 funneled through an offshore account and disguised as payment for computers.” The alleged invoice supporting the accusation was apparently found in a safe in the office Manafort used in Kiev by a subsequent occupant. The invoice, as the Times reports, “seems to corroborate one of the 22 entries” in a ledger from 2009 that came to light last August, leading to Manafort’s ouster from the Trump campaign. The invoice, which bills Neocom Systems Limited for 501 computers, specifies that “Payment under the contract is performed by means of bank transfer to the account of the seller.” According to the Times: This was not the first time Neocom Systems had surfaced in a corruption probe. In a 2012 money laundering and stock fraud case in Kyrgyzstan, the Central Bank listed it as a shell company used for payments by AsiaUniversalBank, a lender seized by Kyrgyzstan’s Central Bank amid money laundering allegations The money laundering taking place at AsiaUniversalBank was exposed after the bank was nationalized following the 2010 revolution. A 2012 Global Witness report delved into the bank’s centrality to a network of shell companies registered in a number of locations that enabled the owners to conceal their identities -- including a company registered under the name of a dead man. The investigation “found significant indicators that suggest money laundering: hundreds of millions of dollars seemed to be moving through their accounts while they were not engaged in any real business activity.” The Global Witness report focused largely on U.K.-based companies and does not mention Neocom Systems or Ukraine. The key point here is that such corrupt operations are so devilishly complex and secretive that concerted investigative efforts can only hone in on one portion of the tangled web. Corruption scandals are never truly over; they just fade from the news until an errant strand emerges amid current events. This is one worth tugging. Furthermore, this is just another case that supports the line of argument offered, quite strongly, by Alexander Cooley and John Heathershaw and in their new book Dictators Without Borders: Power and Money in Central Asia. Central Asia’s elites, rather than being isolated from the world, have instead become intricately linked with international financial flows, often illicitly; and in turn, distant Western states are not uninvolved in seemingly local conflicts rooted in anger directed at corrupt elites. “Our country was a laundry machine,” Edil Baisalov, interim President Roza Otunbayeva’s former chief of staff, told the New York Times with regard to Ukrainian money laundering through AsiaUniversalBank (AUB). AUB’s prestige, and legitimacy, was elevated by the presence of prominent figures on the bank’s board, including three former U.S. senators (Bob Dole, Donald Riegle Jr., and J. Bennett Johnston). Ahead of mentioning AUB in their book, Cooley and Heathershaw note that the 2010 revolution in Kyrgyzstan “was no mere distant local conflict driven by ‘ancient ethnic hatreds’ and supposedly traditional patterns of nepotism and corruption”: The underlying factors were and are global, political and financial. Rather than looking on helplessly as bystanders to a far-off story of corruption and conflict, Western authorities and businesses effectively fueled this scandal through the weakly regulated global financial system and the ranks of bankers willing to deal with foreign kleptocrats. “A bewildering array of companies and service providers became entwined in Kyrgyzstan’s offshore banking experiment under the Bakiyevs, led by the upstart Asia Universal Bank (AUB),” they write. Now it seems one company among that “bewildering array” has surfaced in relation to the explosive allegations directed at Manafort and even further, at the overall Trump campaign team. As the Manafort news broke, Federal Bureau of Investigation director, James Comey, was facing down the U.S. House Intelligence Committee, confirming that the FBI was investigating whether the Trump campaign colluded with Russia. A number of Trump campaign and administration staff have alleged and confirmed ties to Russia, including Manafort and Michael Flynn, who was very briefly national security advisor.","inLanguage": "en"}</script> <script type="application/ld+json"> { "@context": "http://schema.org", "@type": "Organization", "@id": "https://thediplomat.com/#publisher", "name": "The Diplomat", "legalName": "Diplomat Media Inc.", "description": "Asia-Pacific’s leading current affairs magazine.", "url": "https://thediplomat.com", "email": "support@thediplomat.com", "logo": { "@type": "ImageObject", "url": "https://thediplomat.com/wp-content/themes/td_theme_v3/assets/logo/diplomat_logo_amp.jpg", "width": 600, "height": 60 }, "sameAs": [ "https://www.facebook.com/diplomatmagazine", "https://twitter.com/Diplomat_APAC", "https://www.linkedin.com/company/the-diplomat" ] } </script> <title>Paul Manafort and the Kyrgyz Connection – The Diplomat</title> <link rel='preconnect' href='https://fonts.gstatic.com' 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title="Africa-India Ties: The Continent’s Next Big Relationship or Over-Hyped?" sizes="58px" data-srcset="https://thediplomat.com/wp-content/uploads/2024/11/sizes/td-list-xs-1/thediplomat_2024-11-08-185434.jpg 58w, https://thediplomat.com/wp-content/uploads/2024/11/sizes/td-list-xs-2/thediplomat_2024-11-08-185434.jpg 116w" data-src="https://thediplomat.com/wp-content/uploads/2024/11/sizes/td-list-xs-1/thediplomat_2024-11-08-185434.jpg" src="https://thediplomat.com/wp-content/themes/td_theme_v3/assets/img-paceholder_square.gif"></figure><h5>Diplomacy</h5><h4>Africa-India Ties: The Continent’s Next Big Relationship or Over-Hyped?</h4></a></div></div><div class="td-swiper-button td-swiper-button--prev swiper-button-disabled"><svg height="24" viewBox="0 0 24 24" width="24" xmlns="http://www.w3.org/2000/svg"> <path d="M0 0h24v24H0z" fill="none"/> <path d="M20 11H7.83l5.59-5.59L12 4l-8 8 8 8 1.41-1.41L7.83 13H20v-2z"/> </svg></div><div class="td-swiper-button td-swiper-button--next" > <svg height="24" viewBox="0 0 24 24" width="24" xmlns="http://www.w3.org/2000/svg"> <path d="M0 0h24v24H0z" fill="none"/> <path d="M12 4l-1.41 1.41L16.17 11H4v2h12.17l-5.58 5.59L12 20l8-8z"/> </svg></div ><div class="td-swiper-pagination"></div></div></section><aside id="ad-publift-article-header" class="td-ad-container--labeled"> <div data-actirise-slot="top-page" class="device-mobile device-tablet device-desktop ads"></div> <a href="/subscriptions/" class="td-no-ad-link tda-link tda-nowrap">Subscribe for ads-free reading</a> </aside> <div id="td-23-body" class="td-viewport"> <div id="td-23-story-main"> <main id="td-23-story--center"> <header id="td-story-head"> <h3 id="td-kicker"> <a href="https://thediplomat.com/category/crossroads-asia/"><span>Crossroads Asia</span></a> </h3> <h1 id="td-headline"> Paul Manafort and the Kyrgyz Connection </h1> <div id="td-lead"><p>Who says a corruption scandal is ever really over? An old Kyrgyz banking scandal shows up in Manafort’s Ukraine dealings.</p> </div> <div id="td-meta"> <aside class="td-story-meta__img"> <figure class="td-img"><img alt="Catherine Putz" title="Catherine Putz" sizes="58px" srcset="https://thediplomat.com/wp-content/uploads/2015/04/sizes/td-list-xs-1/thediplomat-2020-04-09.jpg 58w, https://thediplomat.com/wp-content/uploads/2015/04/sizes/td-list-xs-2/thediplomat-2020-04-09.jpg 116w" src="https://thediplomat.com/wp-content/uploads/2015/04/sizes/td-list-xs-1/thediplomat-2020-04-09.jpg"></figure> </aside> <div class="td-story-meta__main"> <div class="td-author">By <a href="https://thediplomat.com/authors/catherine-putz/"><span>Catherine Putz</span></a></div> <div class="td-date">March 22, 2017</div> </div> <aside class="td-share"> <div class="td-share__btn td-share__btn--facebook" data-text="Paul Manafort and the Kyrgyz Connection" data-url="https://thediplomat.com/2017/03/paul-manafort-and-the-kyrgyz-connection/"> <svg xmlns="http://www.w3.org/2000/svg" width="48" height="48" viewBox="0 0 48 48"><path d="M19.33 46V25.93h-6.755v-7.822h6.754v-5.77C19.33 5.646 23.417 2 29.39 2c2.86 0 5.318.213 6.035.308v6.996l-4.142.002c-3.248 0-3.876 1.543-3.876 3.808v4.994h7.745l-1.008 7.822h-6.737V46H19.33z"/></svg> </div> <div class="td-share__btn td-share__btn--twitter" data-text="Paul Manafort and the Kyrgyz Connection @Diplomat_APAC" data-url="https://thediplomat.com/2017/03/paul-manafort-and-the-kyrgyz-connection/"> <svg height="48" viewBox="0 0 48 48" width="48" xmlns="http://www.w3.org/2000/svg"><path d="M44,11.5c-1.4,0.7-3.1,1.1-4.8,1.3c1.7-1,3-2.6,3.6-4.6c-1.6,0.9-3.3,1.6-5.2,2c-1.4-1.6-3.7-2.6-6-2.6c-4.5,0-8.1,3.7-8.1,8.2c0,0.7,0.1,1.2,0.2,1.9c-6.8-0.3-12.9-3.6-16.9-8.6c-0.7,1.2-1.1,2.6-1.1,4.1c0,2.9,1.4,5.3,3.7,6.8c-1.3-0.1-2.6-0.4-3.8-1v0.1c0,4,2.9,7.4,6.6,8.1c-0.7,0.2-1.4,0.2-2.1,0.2c-0.6,0-1.1-0.1-1.6-0.2c1.1,3.2,4.1,5.7,7.7,5.7c-2.9,2.1-6.4,3.6-10.1,3.6c-0.7,0-1.3,0-1.9-0.1c3.7,2.3,7.9,3.7,12.6,3.7C31.8,40.3,40,27.7,40,16.9v-1.1C41.6,14.6,42.9,13.2,44,11.5z"/></svg> </div> <div class="td-share__btn td-share__btn--linkedin" data-text="Paul Manafort and the Kyrgyz Connection" data-url="https://thediplomat.com/2017/03/paul-manafort-and-the-kyrgyz-connection/"> <svg height="48" viewBox="0 0 48 48" width="48" xmlns="http://www.w3.org/2000/svg"><path d="M14.2,38.9H7.1V16h7.1V38.9z M10.7,12.9c-2.3,0-4.1-1.8-4.1-4.1s1.8-4.1,4.1-4.1s4.1,1.8,4.1,4.1C14.8,11,13,12.9,10.7,12.9z M40.9,38.9h-7.1V27.8c0-2.7,0-6.1-3.7-6.1s-4.3,2.9-4.3,5.9v11.3h-7.1V16h6.8v3.1h0.1c0.9-1.8,3.3-3.7,6.7-3.7c7.2,0,8.5,4.7,8.5,10.9L40.9,38.9z"/></svg> </div> <div class="td-share__btn td-share__btn--print"> <svg xmlns="http://www.w3.org/2000/svg" width="24" height="24" viewBox="0 0 24 24"> <path d="M19 8H5c-1.66 0-3 1.34-3 3v6h4v4h12v-4h4v-6c0-1.66-1.34-3-3-3zm-3 11H8v-5h8v5zm3-7c-.55 0-1-.45-1-1s.45-1 1-1 1 .45 1 1-.45 1-1 1zm-1-9H6v4h12V3z"/> <path d="M0 0h24v24H0z" fill="none"/> </svg> </div> </aside> </div> </header><div id="td-story-body"></div><figure id="td-story-image" class="td-media td-media--story"><div class="td-img"><img alt="Paul Manafort and the Kyrgyz Connection" title="Paul Manafort and the Kyrgyz Connection" sizes="calc(100vw - 48px)" srcset="https://thediplomat.com/wp-content/uploads/2017/03/sizes/td-story-s-1/thediplomat_2017-03-21_15-11-37.jpg 300w, https://thediplomat.com/wp-content/uploads/2017/03/sizes/td-story-s-1/thediplomat_2017-03-21_15-11-37.jpg 300w" src="https://thediplomat.com/wp-content/uploads/2017/03/sizes/td-story-s-1/thediplomat_2017-03-21_15-11-37.jpg"></div><figcaption class="td-caption"><span>Credit: <a href="https://www.flickr.com/photos/ifl/3968065717/in/photolist-bYZNuw-bYZULL-73DnGa-7fuaru" target="_blank">Peretz Partensky / Flickr</a></span></figcaption></figure> <aside id="ad-publift-body-before" class="td-ad-container--labeled"> <a href="/subscriptions/" class="td-no-ad-link tda-link tda-nowrap">Subscribe for ads-free reading</a> </aside> <section id="tda-gated-body" class="td-23-story-body td-prose tda-gated tda-gated--locked" data-pid="p107180"> <p><span style="font-weight: 400;">Recent allegations involving former Trump campaign manager Paul Manafort and payments a “secret ledger” said he had received from a pro-Russian Ukrainian political party now appear to have been laundered via a bank in Kyrgyzstan.</span></p> <p><span style="font-weight: 400;">The continuously unfolding Manafort scandal underscores three larger points: first, that corruption scandals never die, they just slip from the headlines; second, that Central Asia is not nearly as isolated from global matters as is assumed; and third, that Western countries have more of a hand in regional unrest than they’d like to admit (though not in the “color revolution” formulation, as some regional autocrats phrase it.)</span></p> <p><span style="font-weight: 400;">Before tackling these three points, an overview of the latest developments regarding Manafort and the millions he was allegedly paid by the party of former Ukrainian President Viktor F. Yanukovych. As the </span><a href="https://www.nytimes.com/2017/03/20/world/europe/paul-manafort-ukraine-allegations-trump.html?_r=0"><i><span style="font-weight: 400;">New York Times</span></i></a><span style="font-weight: 400;"> reported Monday, a member of Ukraine’s parliament released documents “that he said showed that Mr. Manafort took steps to hide the payment… The documents included an invoice that appeared to show $750,000 funneled through an offshore account and disguised as payment for computers.” </span></p> <p><span style="font-weight: 400;">The alleged invoice supporting the accusation was apparently found in a safe in the office Manafort used in Kiev by a subsequent occupant. The invoice, as the </span><i><span style="font-weight: 400;">Times </span></i><span style="font-weight: 400;">reports, “seems to corroborate one of the 22 entries” in a ledger from 2009 </span><a href="https://www.nytimes.com/2016/08/15/us/politics/paul-manafort-ukraine-donald-trump.html"><span style="font-weight: 400;">that came to light last August</span></a><span style="font-weight: 400;">, leading to Manafort’s ouster from the Trump campaign.</span></p> <p><span style="font-weight: 400;">The invoice, which bills Neocom Systems Limited for 501 computers, specifies that “Payment under the contract is performed by means of bank transfer to the account of the seller.”</span></p> <p><span style="font-weight: 400;">According to the </span><i><span style="font-weight: 400;">Times</span></i><span style="font-weight: 400;">:</span></p> <blockquote><p><i><span style="font-weight: 400;">This was not the first time Neocom Systems had surfaced in a corruption probe. In a 2012 money laundering and stock fraud case in Kyrgyzstan, the Central Bank listed it as a shell company used for payments by AsiaUniversalBank, a lender seized by Kyrgyzstan’s Central Bank amid money laundering allegations</span></i></p></blockquote> <p><span style="font-weight: 400;">The money laundering taking place at AsiaUniversalBank was exposed after the bank was nationalized following the 2010 revolution. A </span><a href="https://www.globalwitness.org/en/campaigns/corruption-and-money-laundering/anonymous-company-owners/grave-secrecy/"><span style="font-weight: 400;">2012 Global Witness report</span></a><span style="font-weight: 400;"> delved into the bank’s centrality to a network of shell companies registered in a number of locations that enabled the owners to conceal their identities — including a company registered under the name of a dead man. The investigation “found significant indicators that suggest money laundering: hundreds of millions of dollars seemed to be moving through their accounts while they were not engaged in any real business activity.” The Global Witness report focused largely on U.K.-based companies and does not mention Neocom Systems or Ukraine. </span></p> <p><span style="font-weight: 400;">The key point here is that such corrupt operations are so devilishly complex and secretive that concerted investigative efforts can only hone in on one portion of the tangled web. Corruption scandals are never truly over; they just fade from the news until an errant strand emerges amid current events. This is one worth tugging.</span></p> <p><span style="font-weight: 400;">Furthermore, this is just another case that supports the line of argument offered, quite strongly, by Alexander Cooley and John Heathershaw and in their new book <a href="https://www.amazon.com/Dictators-Without-Borders-Power-Central/dp/0300208448"><em>Dictators Without Borders: Power and Money in Central Asia</em></a>. Central Asia’s elites, rather than being isolated from the world, have instead become intricately linked with international financial flows, often illicitly; and in turn, distant Western states are not uninvolved in seemingly local conflicts rooted in anger directed at corrupt elites.</span></p> <p><span style="font-weight: 400;">“Our country was a laundry machine,” Edil Baisalov, interim President Roza Otunbayeva’s former chief of staff, told the <em>New York Times</em> with regard to Ukrainian money laundering through AsiaUniversalBank (AUB). AUB’s prestige, and legitimacy, was elevated by the presence of prominent figures on the bank’s board, including three former U.S. senators (Bob Dole, Donald Riegle Jr., and J. Bennett Johnston). </span></p> <p><span style="font-weight: 400;">Ahead of mentioning AUB in their book, Cooley and Heathershaw note that the 2010 revolution in Kyrgyzstan “was no mere distant local conflict driven by ‘ancient ethnic hatreds’ and supposedly traditional patterns of nepotism and corruption”:</span></p> <blockquote><p><i><span style="font-weight: 400;">The underlying factors were and are global, political and financial. Rather than looking on helplessly as bystanders to a far-off story of corruption and conflict, Western authorities and businesses effectively fueled this scandal through the weakly regulated global financial system and the ranks of bankers willing to deal with foreign kleptocrats.</span></i></p></blockquote> <p><span style="font-weight: 400;">“A bewildering array of companies and service providers became entwined in Kyrgyzstan’s offshore banking experiment under the Bakiyevs, led by the upstart Asia Universal Bank (AUB),” they write. </span></p> <p><span style="font-weight: 400;">Now it seems one company among that “bewildering array” has surfaced in relation to the explosive allegations directed at Manafort and even further, at the overall Trump campaign team. As the Manafort news broke, Federal Bureau of Investigation director, James Comey, was </span><a href="https://www.nytimes.com/2017/03/20/us/politics/fbi-investigation-trump-russia-comey.html"><span style="font-weight: 400;">facing down the U.S. House Intelligence Committee</span></a><span style="font-weight: 400;">, confirming that the FBI was investigating whether the Trump campaign colluded with Russia. </span><span style="font-weight: 400;">A number of Trump campaign and administration staff have alleged and confirmed ties to Russia, </span><a href="http://www.politico.com/magazine/story/2017/03/connections-trump-putin-russia-ties-chart-flynn-page-manafort-sessions-214868"><span style="font-weight: 400;">including Manafort and Michael Flynn</span></a><span style="font-weight: 400;">, who was very briefly national security advisor. </span></p> </section> <aside id="tda-gated-appendix" class="tda-gated-appendix"> <div class="tda-gated-login"><b>Already have an account? <label for="td-account-modal_trigger" class="tda-link tda-nowrap">Log in</label>.</b></div> <div class="tda-gated-box"> <div class="tda-gated-box__ribbon">You have reached the limit of <b>4 free articles</b> this month.</div> <div class="tda-gated-box__main"> <h2>Get to the bottom of the story</h2> <p>Understand the Asia-Pacific's biggest issues with a <i class="tda-nowrap">The Diplomat</i> subscription.</p> </div> <div class="tda-gated-box__footer"> <a href="/subscriptions" class="tda-button tda-width--full">Subscribe Now</a> <a href="/subscriptions" class="tda-button tda-button--ghost tda-width--full">View <span class="td-hide--m">Subscription </span>Options</a> <p class="tda-gated-login">Already have an account? <label for="td-account-modal_trigger" class="tda-link tda-nowrap">Log in</label>.</p> </div> </div> </aside> <aside id="tda-gated-counter"></aside> <aside hidden> <div data-type="text/html" id="app_story_content" class="jsonld-markup-paywall-content" style="display: none;"><p><span style="font-weight: 400;">Recent allegations involving former Trump campaign manager Paul Manafort and payments a “secret ledger” said he had received from a pro-Russian Ukrainian political party now appear to have been laundered via a bank in Kyrgyzstan.</span></p> <p><span style="font-weight: 400;">The continuously unfolding Manafort scandal underscores three larger points: first, that corruption scandals never die, they just slip from the headlines; second, that Central Asia is not nearly as isolated from global matters as is assumed; and third, that Western countries have more of a hand in regional unrest than they’d like to admit (though not in the “color revolution” formulation, as some regional autocrats phrase it.)</span></p> <p><span style="font-weight: 400;">Before tackling these three points, an overview of the latest developments regarding Manafort and the millions he was allegedly paid by the party of former Ukrainian President Viktor F. Yanukovych. As the </span><a href="https://www.nytimes.com/2017/03/20/world/europe/paul-manafort-ukraine-allegations-trump.html?_r=0"><i><span style="font-weight: 400;">New York Times</span></i></a><span style="font-weight: 400;"> reported Monday, a member of Ukraine’s parliament released documents “that he said showed that Mr. Manafort took steps to hide the payment… The documents included an invoice that appeared to show $750,000 funneled through an offshore account and disguised as payment for computers.” </span></p> <p><span style="font-weight: 400;">The alleged invoice supporting the accusation was apparently found in a safe in the office Manafort used in Kiev by a subsequent occupant. The invoice, as the </span><i><span style="font-weight: 400;">Times </span></i><span style="font-weight: 400;">reports, “seems to corroborate one of the 22 entries” in a ledger from 2009 </span><a href="https://www.nytimes.com/2016/08/15/us/politics/paul-manafort-ukraine-donald-trump.html"><span style="font-weight: 400;">that came to light last August</span></a><span style="font-weight: 400;">, leading to Manafort’s ouster from the Trump campaign.</span></p> <p><span style="font-weight: 400;">The invoice, which bills Neocom Systems Limited for 501 computers, specifies that “Payment under the contract is performed by means of bank transfer to the account of the seller.”</span></p> <p><span style="font-weight: 400;">According to the </span><i><span style="font-weight: 400;">Times</span></i><span style="font-weight: 400;">:</span></p> <blockquote><p><i><span style="font-weight: 400;">This was not the first time Neocom Systems had surfaced in a corruption probe. In a 2012 money laundering and stock fraud case in Kyrgyzstan, the Central Bank listed it as a shell company used for payments by AsiaUniversalBank, a lender seized by Kyrgyzstan’s Central Bank amid money laundering allegations</span></i></p></blockquote> <p><span style="font-weight: 400;">The money laundering taking place at AsiaUniversalBank was exposed after the bank was nationalized following the 2010 revolution. A </span><a href="https://www.globalwitness.org/en/campaigns/corruption-and-money-laundering/anonymous-company-owners/grave-secrecy/"><span style="font-weight: 400;">2012 Global Witness report</span></a><span style="font-weight: 400;"> delved into the bank’s centrality to a network of shell companies registered in a number of locations that enabled the owners to conceal their identities — including a company registered under the name of a dead man. The investigation “found significant indicators that suggest money laundering: hundreds of millions of dollars seemed to be moving through their accounts while they were not engaged in any real business activity.” The Global Witness report focused largely on U.K.-based companies and does not mention Neocom Systems or Ukraine. </span></p> <p><span style="font-weight: 400;">The key point here is that such corrupt operations are so devilishly complex and secretive that concerted investigative efforts can only hone in on one portion of the tangled web. Corruption scandals are never truly over; they just fade from the news until an errant strand emerges amid current events. This is one worth tugging.</span></p> <p><span style="font-weight: 400;">Furthermore, this is just another case that supports the line of argument offered, quite strongly, by Alexander Cooley and John Heathershaw and in their new book <a href="https://www.amazon.com/Dictators-Without-Borders-Power-Central/dp/0300208448"><em>Dictators Without Borders: Power and Money in Central Asia</em></a>. Central Asia’s elites, rather than being isolated from the world, have instead become intricately linked with international financial flows, often illicitly; and in turn, distant Western states are not uninvolved in seemingly local conflicts rooted in anger directed at corrupt elites.</span></p> <p><span style="font-weight: 400;">“Our country was a laundry machine,” Edil Baisalov, interim President Roza Otunbayeva’s former chief of staff, told the <em>New York Times</em> with regard to Ukrainian money laundering through AsiaUniversalBank (AUB). AUB’s prestige, and legitimacy, was elevated by the presence of prominent figures on the bank’s board, including three former U.S. senators (Bob Dole, Donald Riegle Jr., and J. Bennett Johnston). </span></p> <p><span style="font-weight: 400;">Ahead of mentioning AUB in their book, Cooley and Heathershaw note that the 2010 revolution in Kyrgyzstan “was no mere distant local conflict driven by ‘ancient ethnic hatreds’ and supposedly traditional patterns of nepotism and corruption”:</span></p> <blockquote><p><i><span style="font-weight: 400;">The underlying factors were and are global, political and financial. Rather than looking on helplessly as bystanders to a far-off story of corruption and conflict, Western authorities and businesses effectively fueled this scandal through the weakly regulated global financial system and the ranks of bankers willing to deal with foreign kleptocrats.</span></i></p></blockquote> <p><span style="font-weight: 400;">“A bewildering array of companies and service providers became entwined in Kyrgyzstan’s offshore banking experiment under the Bakiyevs, led by the upstart Asia Universal Bank (AUB),” they write. </span></p> <p><span style="font-weight: 400;">Now it seems one company among that “bewildering array” has surfaced in relation to the explosive allegations directed at Manafort and even further, at the overall Trump campaign team. As the Manafort news broke, Federal Bureau of Investigation director, James Comey, was </span><a href="https://www.nytimes.com/2017/03/20/us/politics/fbi-investigation-trump-russia-comey.html"><span style="font-weight: 400;">facing down the U.S. House Intelligence Committee</span></a><span style="font-weight: 400;">, confirming that the FBI was investigating whether the Trump campaign colluded with Russia. </span><span style="font-weight: 400;">A number of Trump campaign and administration staff have alleged and confirmed ties to Russia, </span><a href="http://www.politico.com/magazine/story/2017/03/connections-trump-putin-russia-ties-chart-flynn-page-manafort-sessions-214868"><span style="font-weight: 400;">including Manafort and Michael Flynn</span></a><span style="font-weight: 400;">, who was very briefly national security advisor. </span></p> </div> <script type="text/html" id="app_story_placeholder"><p><span style="font-weight: 400;">Recent allegations involving former Trump campaign manager Paul Manafort and payments a “secret ledger” said he had received from a pro-Russian Ukrainian political party now appear to have been laundered via a bank in Kyrgyzstan.</span></p><p><span style="font-weight: 400;">The continuously unfolding Manafort scandal underscores three larger points: first, that corruption scandals never die, they just slip from the headlines; second, that Central Asia is not nearly as isolated from global matters as is assumed; and third, that Western countries have more of a hand in regional unrest than they’d like to admit (though not in the “color revolution” formulation, as some regional autocrats phrase it.)</span></p>[...]</script> <script type="text/html" id="tda-gated-counter__content"> <div class="tda-gated-box"> <div class="tda-gated-box__ribbon"> You have read <b>{{count}}</b> of your <b>{{max}} free articles</b> this month. </div> <div class="tda-gated-box__main"> <h2>Enjoying this article?</h2> <p> Consider supporting <i 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project, the current circumstances will strain its relevance as members suffer the consequences of close ties to the Russian economy.</div></a><p class="td-br td-br--2"></p><a href="/2022/03/kyrgyz-authorities-try-to-head-off-protests-with-restrictions/" class="td-post d-3"><figure class="td-img td-post__img td-post__img--right-s"><img alt="Kyrgyz Authorities Try to Head off Protests With Restrictions" title="Kyrgyz Authorities Try to Head off Protests With Restrictions" sizes="(max-width: 319px) 100vw, (max-width: 752px) 138px, 219px" srcset="https://thediplomat.com/wp-content/uploads/2022/03/sizes/thumbnail/thediplomat_2022-03-31-144724.jpg 138w, https://thediplomat.com/wp-content/uploads/2022/03/sizes/td-list-s-2/thediplomat_2022-03-31-144724.jpg 276w, https://thediplomat.com/wp-content/uploads/2022/03/sizes/td-list-m-1/thediplomat_2022-03-31-144724.jpg 219w, https://thediplomat.com/wp-content/uploads/2022/03/sizes/td-list-m-2/thediplomat_2022-03-31-144724.jpg 438w" src="https://thediplomat.com/wp-content/uploads/2022/03/sizes/thumbnail/thediplomat_2022-03-31-144724.jpg" loading="lazy"></figure><h4>Kyrgyz Authorities Try to Head off Protests With Restrictions</h4><h6>By <span>Colleen Wood</span></h6><div>Kyrgyzstani authorities are restricting protests about Russia’s war in Ukraine, but some public servants are speaking out.</div></a><a href="/2022/03/kyrgyzstan-bans-rallies-near-russian-embassy/" class="td-post d-4"><figure class="td-img td-post__img td-post__img--right-s"><img alt="Kyrgyzstan Bans Rallies Near Russian Embassy" title="Kyrgyzstan Bans Rallies Near Russian Embassy" sizes="(max-width: 319px) 100vw, (max-width: 752px) 138px, 219px" srcset="https://thediplomat.com/wp-content/uploads/2022/03/sizes/thumbnail/thediplomat_2022-03-14-141243.jpg 138w, https://thediplomat.com/wp-content/uploads/2022/03/sizes/td-list-s-2/thediplomat_2022-03-14-141243.jpg 276w, 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alt="Assessing the J-35A: The Chinese Air Force’s New Stealth Fighter" title="Assessing the J-35A: The Chinese Air Force’s New Stealth Fighter" sizes="(max-width: 319px) 100vw, (max-width: 752px) 138px, 219px" srcset="https://thediplomat.com/wp-content/uploads/2024/11/sizes/thumbnail/thediplomat_2024-11-19-195456.jpg 138w, https://thediplomat.com/wp-content/uploads/2024/11/sizes/td-list-s-2/thediplomat_2024-11-19-195456.jpg 276w, https://thediplomat.com/wp-content/uploads/2024/11/sizes/td-list-m-1/thediplomat_2024-11-19-195456.jpg 219w, https://thediplomat.com/wp-content/uploads/2024/11/sizes/td-list-m-2/thediplomat_2024-11-19-195456.jpg 438w" src="https://thediplomat.com/wp-content/uploads/2024/11/sizes/thumbnail/thediplomat_2024-11-19-195456.jpg" loading="lazy"></figure><h4>Assessing the J-35A: The Chinese Air Force’s New Stealth Fighter</h4><h6>By <span>Rick Joe</span></h6><div>After its official reveal at the Zhuhai Airshow, what do we know about China's new fifth-generation fighter?</div></a><a href="/2024/11/myanmar-rebel-leader-has-been-detained-in-china-report-says/" class="td-post d-2"><figure class="td-img td-post__img td-post__img--right-s"><img alt="Myanmar Rebel Leader Has Been Detained in China, Report Says" title="Myanmar Rebel Leader Has Been Detained in China, Report Says" sizes="(max-width: 319px) 100vw, (max-width: 752px) 138px, 219px" srcset="https://thediplomat.com/wp-content/uploads/2024/03/sizes/thumbnail/thediplomat_2024-03-04-010148.jpg 138w, https://thediplomat.com/wp-content/uploads/2024/03/sizes/td-list-s-2/thediplomat_2024-03-04-010148.jpg 276w, https://thediplomat.com/wp-content/uploads/2024/03/sizes/td-list-m-1/thediplomat_2024-03-04-010148.jpg 219w, https://thediplomat.com/wp-content/uploads/2024/03/sizes/td-list-m-2/thediplomat_2024-03-04-010148.jpg 438w" src="https://thediplomat.com/wp-content/uploads/2024/03/sizes/thumbnail/thediplomat_2024-03-04-010148.jpg" loading="lazy"></figure><h4>Myanmar Rebel Leader Has Been Detained 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