Just the facts, ma'am: PwC audit in Kazakhstan

Pricewaterhouse report in English (word document) [no longer available]
(I have been contacted by PwC who has asked that this be removed May 23, 2007)

A few days ago, I wrote on Mark Seidenfeld's incarceration and delayed trial in Kazakhstan. In response, I received two lengthy comments and further research references from both commentators. Since both of them seemed quite knowledgeable, I have followed up with them. One of them has been most generous in sharing information, and I have calls in elsewhere for further updates.

For instance, I have a copy of the PwC audit report that is being used as evidence concerning the initial allegations of ‘missing equipment / embezzled funds earmarked for equipment’ that supposedly ended up elsewhere.

Audits and consultant reports are how businesses obtain the evidence that resolves disputes. For instance, if there is a dispute about the quality of an ingredient in a chemical application, an outside, independent expert in the field is called to consult. When a U.S. citizen hires an accountant to do her taxes, she pays to make sure that an accurate and disinterested report goes to the IRS, the better to ensure accuracy. This is the same thing: just the facts within a clearly defined window of operation. Furthermore, with numbers instead of humans as witnesses, the PwC report is devoid of human drama. This kind of verification intrinsically supports no one. In short, an audit is more toneless than Jack Webb on Dragnet.

So this is the deal: The auditors looked at petty cash receipts and petty cash ledgers, for a specific time period: October-December 2002. The report I have is on the contested receipts within that full three-month period. All the receipts/invoices/purchase agreements/acts of acceptance thus highlighted were signed by two or three people–not always Mr. Seidenfeld. The equipment purchased was verified to be in ARNA's Aktau office through correspondence with that office.

PwC then went to the Aktau office to examine the equipment. It was there, with the proper asset ID numbers upon it. Since it was in use, it could not be dismantled to examine parts for serial numbers. This is exactly what the NYT article reported.

Since it doesn't look like the crime was committed, then the accused should not be in jail. However, more witnesses have been called to verify the transactions for ARNA's side of the case. Unfortunately, according to a letter written by Mark Seidenfeld on April 15, 2007 to U.S. Ambassador to Kazakhstan John Ordway, (of which I have a copy, but no link is available) the person called to testify has no knowledge beyond that of his financial records.

Unfortunately his employee, who signed those books and could testify with more authority, is now deceased for two years due to an unfortunate car accident.

Unfortunately, Mark Seidenfeld remains in prison while someone tries to figure out what it is they want to say he did.

Related:
A new blog is going up today that will report on Mark Seidenfeld's case and the efforts to achieve his release. Check it out!

I will also have more to say this week on Mark Seidenfeld's case, and how it brings a. Central Asian diplomacy and b. international law to the forefront of international relations.

Photos: TeslaLikeTelevision; Peterson.co