The American editorial “The Atlantic” published an article which talks about the latest acquisition of the Aliyev clan in Azerbaijan. According to the article they control a parent company that owns, through an offshore subsidiary, almost half of Russian mega-bank VTB’s Azerbaijani subsidiary.
“There are only two problems. The first is that VTB, which is the second-largest bank in Russia and is 75 percent-owned by the Russian government, is also one of the fastest-growing financial institutions on the planet, with retail, commercial and investment arms in 19 countries, including the United States,” Michael Weiss writes.
According to the article this bank has been, and continues to be, dogged by civil lawsuits filed in multiple jurisdictions because of its issuance of loans that have led High Court justices to wonder “what, if any, due diligence” was carried out beforehand. VTB, as the author notices, has been accused to being little more than a vehicle for the enrichment of its executives and for the Kremlin’s “economic diplomacy.”
“The second problem is that in May of this year, Azerbaijan’s sovereign wealth fund invested $500 million in VTB’s secondary public offering (SPO). It was joined by Qatar’s and Norway’s sovereign wealth funds and, collectively, all three gobbled up 55 percent of the SPO,” the author writes.
According to the article, on November 9, 2009, Ataholding, an open joint-stock company that manages AtaBank, one of the biggest commercial banks in Azerbaijan, purchased 48.99 percent of VTB’s Azerbaijani subsidiary. The remaining 51 percent is owned by VTB and thus mostly owned by the Russian government. As of December 31, 2009, AtaBank’s investment was valued at 10,887,310 Azerbaijani manats, which at today’s exchange rate is around $13.8 million.
Ataholding is 51 percent-owned by a Panama-registered shell company called Hughson Management, Inc., of which, Aliyev clan has the controlling interest. Curiously, and perhaps owing to the diligent spadework of Andrew Higgins, the Ataholding statement currently hosted on the company’s website does not include the notes section of the earlier copy, which says that “the Group’s immediate parent is Hughson Management Inc. tax resident of Republic of Panama.” Hughson Management is still currently listed as the majority owner of AtaBank.
The author also touches to Aliyev clan story, noting that Heydar Aliyev was KGB chief who turned Communist ruler and was the kind of Stalinoid satrap-cum-mafia kingpin, who could bribe Leonid Brezhnev, if he found it necessary, in order to remain in power. Gorbachev’s rise in Moscow coincided with this Heydar’s eclipse in Baku. He subsequently became first the de facto head of the republic, as the USSR was falling apart, and then the first president of post-Soviet Azerbaijan in 1993. Heydar ruled until 2003, which is the year he died.
The elder Heydar was immediately succeeded by his son Ilham, whose own “election” in 2003 Human Rights Watch characterized as the rotten fruit of “bureaucratic interference and political intimidation against the opposition [which made] a free and fair pre-election campaign environment impossible.” Terms limits for presidents were abolished in 2009, the same year the regime clamped down on domestic press freedoms and took the BBC, Radio Free Europe/Radio Liberty, and Voice of America off the air.
Here’s how the U.S. embassy in Baku described Ilham Aliyev in 2009: “Azerbaijan’s President Ilham Aliyev utilizes distinctly different approaches to foreign and domestic policies. He typically devises the former with pragmatism, restraint and a helpful bias toward integration with the West, yet at home his policies have become increasingly authoritarian and hostile to diversity of political views. This divergence of approaches, combined with his father’s continuing omnipresence, has led some observers to compare the Aliyevs with the fictional ‘Corleones’ of Godfather fame, with the current president described alternately as a mix of ‘Michael’ and ‘Sonny.’ Either way, this Michael/Sonny dichotomy complicates our approach to Baku and has the unfortunate effect of framing what should be a strategically valuable relationship as a choice between U.S. interests and U.S. values.”
Talking about the suspicious relations with the offshore companies the author notes that the Aliyev clan doesn’t wish to see explored by muckraking journalists. And Ismayilova, the journalist who was making her own investigation in this sphere, was targeted by a particularly nasty campaign of state harassment, which included her being sent an envelope filled with “pictures of a personal nature” and a message reading: “whore, behave, or you will be defamed,” the article says.
It also says that these images were later published in Azerbaijani newspapers associated with the ruling New Azerbaijan Party. Ismayilova later discovered and documented surveillance wires that had been installed in the walls and ceilings of her home kitchen, bathroom and bedroom. The government’s “investigation” of the tapping of Ismayilova’s residence was a whitewash.
