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Kazakh charity named for former leader sues investigative reporting non-profit

A Kazakhstan charity named for that country’s former president sued an investigative journalism nonprofit for libel, saying its story tracing the assets that make up Nursultan Nazarbayev’s multibillion-dollar fortune defamed it.

BALTIMORE (CN) — A Kazakhstan charity named for that county’s former president sued a Maryland-based investigative journalism non-profit for libel, saying its story tracing the assets that make up Nursultan Nazarbayev’s multi-billion dollar fortune defamed it.

“The Plaintiff was founded to financially support NU [Nazarbayev University] and NIS [Nazarbayev Intellectual Schools] and help provide a bridge to the west by bringing Western style higher education to Central Asia,” the lawsuit, filed on behalf of “Nazarbayev Fund Private Fund” by Matthew L. Schwartz of the Washington, D.C. firm Boies Schiller Flexner, says. 

The defendant, Journalism Development Network, Inc. of Baltimore, operates the Organized Crime and Corruption Reporting Project, a decade-old online news service tracking political and government corruption around the world.

“We believe this suit has no merit and OCCRP stands by its story,” Drew Sullivan, the Journalism Development Network’s executive director told Courthouse News in an email. 

At issue is a story published on Jan. 19 which examined four separate though similarly-named charities associated with Kazakhstan’s former president.

None of the other three charities responded to the reporter’s queries, only the Nazarbeyev Fund’s spokesman did, basically saying the former president could not use any of the fund’s assets because it would be against the law.

“The headline, subtitle and key findings of the story are false and defamatory,” the suit alleges. “Defendant knew — because Plaintiff told its reporter prior to publication — that the Charter and Kazakhstani law barred the misuse of funds that Defendant speculated in its story could occur.”

Nazarbayev, who led Kazakhstan as its “first president” after it split from the Soviet Union in 1990, privatized state-owned industries and amassed a vast fortune for himself and a circle of oligarchs. He is reported to have stashed $1 billion in Swiss accounts, with much more unaccounted for. After he stepped down in 2019, he was granted full immunity from prosecution or even investigation, while journalists who reported critically about him and his businesses were firebombed.

The OCCRP’s reporting valued the former strongman’s four foundation’s assets, including stakes in two banks, a mobile phone company and an Airbus ACJ320neo jet fitted out “like a flying penthouse,” at $7.8 billion.

Accounting is murky.

“Some of the assets were transferred to Nazarbayev’s foundations, or are still co-owned, by oligarchs who owe their riches to the crony capitalism that flourished during his rule. In other cases, the government of Kazakhstan poured money into private companies which were then acquired by the charitable foundations. The result is that Nazarbayev’s non-profit organizations actually own larger business portfolios than many multinational conglomerates,” the OCCRP’s story says. “Since the foundations are non-profits, Nazarbayev does not formally own their vast assets himself. However, legal experts contacted by OCCRP explained that, under Kazakhstani law, the founder of a private foundation has ultimate control over its assets.”

The story matched the jet’s movements with those of the former president, concluding that “though it’s unknown whether the foundation formally owns the plane, there is compelling evidence that it is used by Nazarbayev.”

The lawsuit takes issue with the story’s main thrust, saying it “conveys the false and defamatory gist that Plaintiff is a legal fiction through which Mr. Nazarbayev absolutely controls billions of dollars in wealth that is supposed to be earmarked for funding education.”

The lawsuit demands unspecified punitive damages.

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