Borat, Chuck Hagel, and an Oil Company Walk into a Bar

Defense nominee Chuck Hagel’s ties to Kazakhstan, Chevron, Atlantic Council under fire

February 11, 2013

When Kazakhstan’s riot police slaughtered dozens of striking oil field workers last year, Atlantic Council affiliate Joshua Foust rushed to discredit the reports.

Foust, a member of the Atlantic Council’s Young Atlanticist Working Group, attacked critics of the government-backed crackdown, claiming they were relying on a "completely invented body count" to "politicize" the incident.

Foust’s efforts were just one piece of a broader effort by the Atlantic Council to burnish the reputation of the Kazakh government, recently revealed as a donor to the think tank.

Defense Secretary nominee Chuck Hagel has his own Kazakh connections. Hagel, in addition to serving as the Atlantic Council’s chairman, sits on the board of oil conglomerate Chevron. Chevron, with its subsidiaries, invested as much as $10 billion in Kazakhstan’s oil sector.

Hagel’s ties to the Atlantic Council, Chevron, and the Kazakh government have raised concerns among sources close to the Senate Armed Services Committee (SASC), which is scheduled to vote Tuesday on Hagel’s nomination.

The vote stalled last week over concerns the nominee has been less than forthright about his financial entanglements with foreign governments.

Hagel had planned to travel to Kazakhstan on behalf of the Atlantic Council as the lead author of a report that pushed for greater U.S. government ties to the oppressive Central Asian nation, which the organization Freedom House has rated "not free."

It remains unclear if Hagel ultimately led the Atlantic Council delegation.

Hagel also offered kind words for Kazakh leaders who attended a February 2010 Atlantic Council event.

"We are particularly pleased that our friends from Kazakhstan are here," Hagel said during the event. "And as I introduce our special guest, my dear friend, the foreign minister and state minister—although he says he has two jobs but only one paycheck. That is selfless public service and we appreciate it."

Such high-profile relationships have helped Kazakhstan make itself appealing to U.S. companies.

One such company is Chevron, where Hagel has sat on the board since 2010.

Chevron also has provided financial support to the Atlantic Council, contributing to the organization’s 2012 Energy and Economic Summit.

Chevron works as "Kazakhstan's largest private oil producer, holding important stakes in the nation's two biggest oil-producing projects—the Tengiz and Karachaganak fields," according to the company’s website.

Chevron is Kazakhstan’s largest foreign investor.

The oil conglomerate has faced fierce criticism for its involvement in Kazakhstan’s oil fields, which critics say are operated with little regard for the environment or workers’ rights, according to multiple watchdog groups.

Watchdog groups have cited Chevron for failing to pressure the Kazakh government to improve human rights for workers in addition to the 2011 oil field massacre that the Atlantic Council’s Foust downplayed.

The Kazakh government owns the oil field where the violence occurred. Foust referred to allegations that Chevron was tied to the oil field massacre as "mendacious."

The oil fields have contributed to "water, soil, and air pollution, sinkholes opening up in the ground at random, and inhuman working conditions," according to the Rainforest Action Network, which accused Chevron of "wash[ing] their hands of the whole thing."

One Hagel supporter who is familiar with the Atlantic Council’s work defended its relationship with Kazakhstan, and maintained that the government’s money did not influence council reports.

"The Council has a strict policy of intellectual ownership of its events and content, and this is made clear to—and agreed upon by—all its donors," said the Hagel supporter. "Neither Chevron nor the government of Kazakhstan have influence on the conclusions of the Council experts’ work on the region."

Chevron is "a natural consumer of and partner with the Council on its Eurasia work," the source said.

"Chevron has been a funder of some of the Council’s Central Asian work, as has the government of Kazakhstan, in addition to other donors," the source said, who noted that former Secretary of State Condoleezza Rice also has worked to increase outreach to Kazakstan in her capacity as director of the Atlantic Council

The Atlantic Council’s friendly coverage of Kazakhstan has caused concern among several sources close to Hagel’s confirmation process who maintain Hagel’s murky financial involvement with the Atlantic Council and Chevron requires investigation.

"The nexus between Chuck Hagel, the government of Kazakhstan, the Atlantic Council, and Chevron is apparent," said one Senate aide involved in the confirmation process.

"The Atlantic Council’s disclosure of its foreign donors makes the circle complete," said the source.

"He’s clearly delivered political cover from a prominent think tank and used his board position at Chevron to encourage investments in Kazakhstan," the source said. "It’s classic quid pro quo—only for a foreign dictatorship that’s pretty cozy with Iran right now."

Other sources close to SASC indicated that Hagel’s lack of financial transparency continues to pose a problem.

"The new information regarding Sen. Hagel's financial disclosure is certainly troubling," said Brian Phillips, communications director for Sen. Mike Lee (R., Utah), a SASC member who has come out against Hagel’s nomination. "The American people deserve to know more about the nature of these relationships."

The chances of a Senate filibuster of Hagel's nomination may be increasing, sources said.

"Sen. Levin has a decision to make: Does he want to preserve the integrity of the committee, the confirmation process, and the Senate's proper oversight role, or does he want to be seen as capitulating to pressure from the White House?" said another source close to SASC. "If he pushes the vote through, then forcing a 60-vote threshold is well within the bounds of an adequate and sufficient response from Republicans."