On 4 September, an investigation by the Organised Crime and Corruption Reporting Project (OCCRP) uncovered a secret set of accounts tied to the Azerbaijani government. The funds are suspected of being used to launder over US$3 billion via four UK-based shell companies, money which was used to bribe European officials for investment, loans, and to turn a blind eye to Azerbaijan’s record on human rights.
When investigations began into the series of the so-called “Laundromat” slush funds, its machinations were believed to be complex, but recent revelations have proven just how subversive they were. The OCCRP’s findings suggest that US$1.4 billion of the US$3 billion total originated from a company named Baktelekom MMC between 2012 and 2014.
The organisation is falsely registered in the name of Muharram Ahmadou, who is in fact a taxi driver who lives on the outskirts of the capital, Baku. It is unknown where the main source of Baktelekom’s funds originated from, but the company is alleged to be linked to President Ilam Aliyev and his wife Mehriban Aliyeva.
The report also alleges that President Aliyev has direct connections to the contributions being made into the slush fund. That the Heydar Aliyev Foundation contributed US$3.2 million to the fund corroborates this. The release of financial records from the Estonian branch of Danske Bank shows that the money was then transferred to the UK via Estonia.
The international effects:
Aside from being used as a means for domestic elites to move money out of the country, the international community has also been targeted by the fund. It has been used to bolster the image of the nation abroad. More than 90 journalists have been imprisoned in Azerbaijan on politically-motivated charges in recent times, and portions of the fund were reserved for journalists who wrote stories friendly to the regime.
Football clubs such as Atletico Madrid and RC Lens have played with the tourism sponsorship of Azerbaijan emblazoned across their kits for the better part of the last five years and it is suspected that these clubs were unwitting recipients of payments through this scheme.
The money was also used to curry favour with European politicians. Bulgaria has already launched an investigation into Kalin Mitrev, the country’s representative to the European Bank of Reconstruction and Development (EBRD). Mitrev received over €425,000 from Azerbaijan at a critical time, as the EBRD is deciding whether to give €500 million to Azerbaijan for its part in building the Southern Gas Corridor, a gas pipeline from Azerbaijan to Italy.
On September 6 in Slovenia, Smago Jelencic dropped out of the race for the country’s presidency after one of his companies was implicated in the scheme.
Other European politicians to benefit from the scheme include Luca Volonte, one of Italy’s representative on the Parliamentary Assembly of the Council of Europe (PACE), which oversees the European Court of Human Rights (ECHR). Azerbaijan has long been accused of attempting to bribe members of the ECHR in order to ensure that they turn a blind eye to its human rights record.
The future implications of this story are as diverse and complex as the circumstances leading to its discovery in the first place. Though unsurprising, the idea that a nation would use state funds to work toward the reparation of its image will still come as a shock to those who have denied the attempted influence of oligarchs and money on European politics over the last decade. The allegations will also focus minds in the UK, a country that has been criticised for the ease with which money has been laundered in its economy.
Azerbaijan is one of a handful of nations which faces extreme criticism over its treatment of journalists, and it ranks alongside Chechnya and other areas of the Caucasus in terms of persistent human rights violations. Indeed, the OCCRP’s website was banned in Azerbaijan the day after these revelations. The investigation by the OCCRP may have uncovered the largest amounts of money yet flowing into Europe’s political elite, but what could not definitively be proved was a direct link to either President Aliyev or anyone at the top of the Azerbaijani power structure.