Vicken Cheterian

Azerbaijan’s Corruption without Borders

Azerbaijan’s corruption was legendary even before the eruption of the latest “Azerbaijani Laundromat” scandal. Yet, the most recent scandal has revealed that money from Baku is corrupting major European political institutions that are supposed to protect our democracy and culture. 

On September 4 a new scandal has hit the ruling dynasty in Baku, revealing the depth of its corruption, and how contagious Azerbaijani corruption could be. Known as the “Azerbaijani Laundromat”, a team of investigative reports published a series of articles published in major European newspapers revealing money laundry of $3 billion between the years 2012 and 2014. Through a network of shell companies and hidden bank accounts, and through 16’000 bank transfers, the $3 billion was transferred from Azerbaijani banks through the Estonian branch of Danske Bank, a major Danish financial institution, to four shell companies based in the United Kingdom. Large sums also transited banks in Turkey and the United Arab Emirates.

Part of this money seems to have illegally enriched Azeri politicians. But other parts served to buy influence by paying European politicians to carry out “Public Relations” services in favour of the Azerbaijani regime. 

Azerbaijani Laundromat followed an earlier scandal, which surfaced in August this year, revealing that under diplomatic cover, Azerbaijani “Silk Way Airlines” which is a state-owned cargo company, made 350 flights transporting weapons and ammunition from Bulgaria to non-governmental armed groups in the Middle East. The fact that the flights were made under diplomatic cover reveals high-level state participation in this arms traffic. Only a year earlier, in April 2016, the “Panama Papers” scandal revealed how Ilham Aliev, his wife Mehriban, and other influential politicians created a network of companies and holdings, to transfer hundreds of millions to offshore account belonging to them and a few influential Azeri families. 

The “Azerbaijani Laundromat” reveals how massive corruption in Azerbaijan has become. Next to the ruling families of the President Ilham Aliev and his wife Mehriban Pashaeva, who is equally vice-president of Azerbaijan, names of high-ranking ministers equally appeared in the “Laundromat” investigation, including Yaqub Eyyubov, Azerbaijan’s First Deputy Prime Minister, and even the Azeri states’ anti-corruption man Ali Nagiyev. Corruption on such level comes with a price: most of the $3billion seem to have originated from the state-owned International Bank of Azerbaijan (IBA), the largest bank in Azerbaijan. IBA was close to bankruptcy in the summer of 2017, threatening to bring down the entire banking system of Azerbaijan. For a decade, Azerbaijan received huge amounts of cash for its oil exports, yet in recent years income decreased because of double fall in production and oil prices. Yet, the rulers in Baku maintain a fiction through their tight control of the media at home, and by European politicians making their PR abroad. One Azeri journalist likened the situation with the Shah of Iran before the revolution. 

What is new in the “Azerbaijani Laundromat” is the scale of European politicians being corrupted by this scheme. German papers revealed that Karin Strenz, a parliamentarian from Angela Merkel’s Christian Democrat Party, received payments form the Laundromat. Luca Volontè, member of the parliamentary assembly of the Council of Europe (PACE) has been accused of receiving $2.39 million to close their eyes on election fraud. Eduard Lintner, a German CSU ex-parliamentarian from the Christian Social Union has continuously praised elections in Azerbaijan, has reportedly received 819’000 EURs between 2012 and 2014. Kalin Mitrev, a representative of the European Bank for Reconstruction and Development (EBRD), and husband of Irina Bukova the director general of UNESCO, is under investigation for receiving $458’000 through Bulgarian and Swiss accounts. Irina Bukova is a personal friend of the Azeri first lady (and vice-president). In 2013 Azerbaijan donated $5 million to UNESCO, and the two ladies opened an exhibition titled “Azerbaijan – Land of Tolerance” at UNESCO’s headquarters in Paris. Irina Bukova has also insistently blocked any investigation of the destruction of the ancient Armenian cemetery in Julfa by the Azerbaijani Army in 2005, although she likes to profile as defender of ancient archaeological sites from deliberate destruction. 

Azerbaijani presidential press service not only denied the charges raised against the top political leadership of the country: “The efforts to involve the President and his family in this issue are totally groundless, prejudiced and provocative in nature.” Yet, the presidential press service also counter attacked by using racist slurs: “We know that it is George Soros and his sidekicks – who have an international reputation of cheaters, tricksters, frauds and liars in relation to Azerbaijan and its leadership – that are behind this campaign” without forgetting to add “The Armenian lobby” and that “these dirty accusations are at the same time another disgusting action of the world Armenianism.” Could such racist expressions be yet another proof of state-sponsored culture of tolerance in Azerbaijan? 

The European Parliament has announced that it was going to start a “comprehensive investigation” into “Azerbaijan and other autocratic regimes in third countries to influence European decision-makers through illicit means.” European political institutions knew the degree of corruption in Baku; they also knew that European politicians were being paid to lobby for the Aliev dynasty. Yet, they chose to do nothing about it. By closing their eyes on corrupt practices European institutions not only betrayed their mandates of defending democracy and culture, but also have become accomplices in plundering Azerbaijani public wealth, and falsifying elections. Now, corruption has come to the heart of Europe, as one Azerbaijani journalist summarizes well: “As European politicians choose to look the other way, Azerbaijan is bringing its corruption onto their turf, undermining the very basis of their commitments to democracy.”