Azerbaijan elite ran $2.9bn slush fund
Azerbaijan’s ruling elite ran a secret 2.5 billion euro slush fund to pay off European politicians and launder money, according to an investigation by a group of European newspapers published yesterday. The fund operated for two years from 2012 to 2014 through bank accounts of four shell companies registered in Britain, according to the investigation by papers including The Guardian and France’s Le Monde and published by the Organized Crime and Corruption Reporting Project.
Nicknamed the “Azerbaijan Laundromat”, the origin of the fund is unclear “but there is ample evidence of its connection to the family of President Ilham Aliyev”, the report said. Authorities in the energy-rich country dismissed claims that the funds were linked to the first family and said the reports were “biased, unfounded and provocative”. “They are part of a campaign to smear Azerbaijan,” presidential advisor Ali Hasanov said, pointing the finger at arch-foe Armenia and the “global Armenian lobby.”
The Guardian said some of the money went to politicians and journalists as part of a “caviar diplomacy” lobbying effort to deflect criticism at a time when the former Soviet state was being accused of arresting rights activists and journalists and of voterigging. “This intensive lobbying operation was so successful that Council of Europe members voted against a 2013 report criti- cal of Azerbaijan,” the British newspaper said. Banking records leaked to Danish newspaper Berlingske which sparked the investigation show multiple payments to several former members of the Council’s parliamentary assembly, The Guardian said.
Bank systems insufficient
The Council of Europe, Europe’s top rights watchdog, said three independent experts were questioning witnesses as part of a probe into any alleged corruption. Top Azeri official Hasanov insisted that foreign politicians, officials and experts “who have friendly feelings towards Azerbaijan” were “having suspicions cast on their activities without any basis.” One of Europe’s leading banks, Denmark’s Danske Bank, processed the payments via its Estonia office.
“At the time our systems and procedures in Estonia were insufficient to ensure that we could not be used for money laundering. We have taken the measures necessary to remedy this,” Danske Bank said in March following reports of possible money laundering involving transactions by its Estonian branch in 2011-14, according to The Guardian. It said it had terminated relationships with a number of customers. “We do not want in any way to be used for money laundering or other criminal activity.” The four British-registered firms used in the operation have been dissolved, The Guardian said.