Boris Birshtein and the Kyrgyz Gold Scandal
Recently unveiled outside the parliament in Bishkek, a new monument to those that died during the Second Kyrgyz Revolution portrays youthful figures pushing away a dark mass to leave only the light, but in Kyrgyz politics, nothing is as simple as black and white. The Kyrgyz flag, scarlet with a sunburst yellow tunduk, flutters outside the parliament, but with many arguing it is too redolent of both Soviet times and recent conflicts, even the flag is a source of contention.
It is reasonably common knowledge that Kyrgyzstan has little money, but not as widely understood why this is the case. The first President of the independent Kyrgyz Republic was Askar Akaev, a bald, obscure scientist. Commonly referred to by the American press during the Clinton years as the ‘Kennedy of Central Asia,’ he proved less popular with Russian President Yeltsin, who famously once played out a tune on his skull with a set of wooden spoons. An unlikely candidate propelled to power as a figurehead, Akaev’s ascension masked an elaborate game of realpolitik which he navigated astutely, refusing to align himself with any particular party or ideology.
The removal of Soviet subsidies and the dissolution of the social safety net hitting the country hard, Akaev managed to steer a relatively calm path through troubled times. A programme of denationalisation created high hopes in the West that Kyrgyzstan could become an ‘island of democracy,’ a leading light for reform in the region. The fact that many of these mass privatisations turned out to be appropriations, ensuring those who supported the President were rewarded with ex-Communist properties and businesses was largely glossed over.
Akaev’s downfall began with the arrival of Boris Birshtein. Originally a Lithuanian Jew, Birshtein’s long criminal record meant that he changed his citizenship frequently. Arriving in the newly independent, opportunity-rich country, the by now Canadian financier persuaded Akaev he could help him make Kyrgyzstan the ‘Switzerland of Central Asia.’ Appointed Chair of the Presidential Committee for Reconstruction and Development, his office faced the President’s, affording him unfettered access.
There were sixteen tonnes of gold in the Kyrgyz Republic’s vaults when the Soviet Union collapsed, Birshtein’s role to attract investors by using these reserves as collateral. Wooing Akaev with a lavish, all-expenses-paid trip to meet his shady cronies in the Canadian Government, Birshtein soon had a contract brokered by Skadden Arps for the Cameco Corporation to run the Kumtor gold mine. The head of the Trade Representative Office of Kyrgyzstan in Moscow later recollected a conversation with the former Minister of Metallurgy of the USSR, V. Durasov warning him that ‘those are people without scruples.’ Deeming the agreement ‘not in the nation’s interests,’ the Kyrgyz Parliament has been fighting to annul it ever since.
In November 1991, Birshtein flew out to the remote mine with Canadian Trade Minister Monte Kwinter and the first Prime Minister of independent Kyrgyzstan, Nasirdin Isanov, a vocal opponent of Birshtein and his scheming. Their flight back to Bishkek purportedly grounded by fog, they set out to return with a police escort via the Jalalabad-Osh road, but were involved in a collision still shrouded in mystery. With Birshtein and Kwinter emerging unscathed, Isanov ‘moaning and groaning and holding his head’ was taken to a nearby hospital where he died, much to the surprise of Kwinter.
‘A strong, robust man in his early forties,’ the Canadian Trade Minister latterly recalled, ‘his injuries definitely did not appear to be life-threatening.’
Shortly after the “accident,” fourteen of Kyrgyzstan’s sixteen tonnes of gold “disappeared” on private jets belonging to Birshtein and a supporter, who just so happened to have been appointed the new Prime Minister. Only escaping impeachment through the dissolution of parliament, Akaev’s days were numbered.
Russian newspaper Izvestiya subsequently exposed Birshtein as a secret agent working for both the KGB and Mossad and a gangster involved in economic scandals in Russia and Ukraine. The FBI reported that he’d once hosted an organised crime summit in Tel Aviv attended by top mafioso including Semyon Mogilevich, ‘the brainy don,’ described as ‘the most dangerous mobster in the world.’ The case of the gold scandal is still open at the Kyrgyz Prosecutor’s Office. Only a single banker has ever been indicted.
The Kyrgyz Parliament in Bishkek
Ala-Too Square, Bishkek
A new monument to those that died during the Second Kyrgyz Revolution portrays youthful figures pushing away a dark mass to leave only the light