On January 30, 100 German investigators searched the homes and offices of MP Karin Strenz and former MP Eduard Lintner. Searches were also conducted at the house of former Senator Alain Destexhe in Belgium. The prosecutor’s office had accused them of receiving at least 500,000 euros from the Azerbaijani government. How and why did Baku bribe European politicians? Now we’ll explain.
All those under investigation are current or former members of the Parliamentary Assembly of the Council of Europe. According to the OCCRP, the Azeri authorities paid foreign politicians bribes amounting to millions of dollars. Why did Baku require Western sympathies?
Ilham Aliyev has been in charge of Azerbaijan since 2003. Before that, his father had ruled the country for 10 years. Three years ago, Ilham appointed his wife Mehribanas vice-president. She will take over if the president leaves or retires prematurely.
Freedom House has ranked Azerbaijan 195th in the world, in terms of civil liberties. In the post-Soviet region, only Turkmenistan and Tajikistan are less free. At the end of last year, there were 119 prisoners of conscience in Azeri prisons, including journalists, bloggers, and political and religious activists. In recent parliamentary elections, the authorities only allowed a single opposition activist to win a seat. According to the OSCE, none of the Aliyev-era presidential elections have been either free or democratic.
The presidential family has great power as well as great wealth. Journalists from the Organised Crime and Corruption Reporting Project revealed that the Aliyevs own eight of the country’s largest banks, with related assets amounting to 3 billion dollars.
The presidential family owns seven 5-star hotels in Baku and two mountain resorts, worth a total of 10 billion dollars. A night in the cheapest hotel room there costs between 80 and 125 dollars – one-quarter of the average salary in Azerbaijan (420 dollars).
The Aliyevs own six gold mines in their country, and the presidential family also owns two of the three Azeri mobile operators – Azercell and Nar.
But you won’t find Ilham or Mehriban Aliyev’s names on the list of owners. At the centre of this family business empire are the holding companies Pasha and Ata. The first is owned by the president’s daughters Leila and Arzu Aliyeva, and the president’s father-in-law Arif Pashayev. The second company is owned by the president’s daughters and his son Heydar.
The Aliyevs own hundreds of millions of dollars in property at home, as well as abroad. Twenty-six companies registered in Panama and the British Virgin Islands help keep it safe from prying eyes.
The first lady’s father, Arif Pashayev, owns villas and a hotel in Karlovy Vary, Czechia. The presidential children have a mansion and apartments in London, two mansions in Barvikha near Moscow, plus a hotel and up to 36 residences on Palm Jumeirah – an artificial island off the coast of Dubai.
Khadija Ismayilova was one of the first journalists to expose the president’s family business – but she spent a year and a half in prison for it, and still cannot travel abroad.
“They just love to be in the European club. That’s why they support this image. It’s also important for internal stability. Inside the country, the political message is ‘Europe supports Aliyev’s regime’,” she says.
The West is vital
Another reason for maintaining good relations with Europe is that trade with the West is vital to Azerbaijan. The country’s exports are as follows: Baku receives 90% of the dollar revenue from oil and gas sales. The next-most-important export goods (fruits, nuts and vegetables) are much less significant.
Baku sees the Parliamentary Assembly of the Council of Europe as an ideal springboard to gain the sympathies of Western politicians. The Assembly comprises MPs from 47 countries. This advisory body monitors human rights observance in Council of Europe member-states. Parliamentarians come to Strasbourg for a one-week session every quarter. According to an investigation by the ESI Centre, it was there that Azeri MPs started working actively with them:
Quote from an Azeri official in Strasbourg:
“30 to 40 MPs would be invited every year – some repeatedly – to conferences and events, and sometimes for summer holidays. They received many costly gifts – mostly expensive silk carpets, gold and silver items, alcohol, caviar and money. In Baku, 2kg of caviar is a common gift”.
One kilo of black caviar costs 1,300 euros. A silk carpet is worth 8,000. PACE members are not allowed to accept gifts exceeding 200 euros. France, Germany, Italy, the UK, Spain, Malta, Georgia, Bulgaria, Romania, Greece, Hungary, Poland and Czechia – according to an investigation by the Civic Solidarity community, dozens of deputies from these countries visited Azerbaijan repeatedly.
After such visits, many PACE members voted against resolutions condemning electoral fraud and political repression in Azerbaijan. Some established business contacts with Azerbaijan, and later went there as electoral observers, then declared those elections open and democratic.
This lasted up until 2016, when prosecutors in Milan launched an investigation against Italian MP Luca Volonte. Formerly head of the European People’s Party faction in PACE, he was accused of receiving a bribe of 2.4 million euros. According to the prosecutors, Baku paid Volonte to convince his fellow party-members to reject a report on Azeri political prisoners.
The Azerbaijani laundromat
Almost 3 billion dollars – this is how much money passed through secret channels the Azeri authorities were using to lobby interests abroad from 2012 to 2014. Back then, this figure was a quarter of the country’s annual budget.
Four British firms facilitated this money-laundering by concealing the source. Their founders were anonymous companies in the British Virgin Islands, Seychelles and Belize.
One and a half billion dollars discovered in these companies’ accounts originated from firms that investigative journalists link to the Aliyev family. Nine million dollars were paid by the Azeri security forces. Twenty-nine million came from the Russian arms exporter RosOboronExport. 30 more offshore companies sending money through the ‘Azerbaijani laundromat’ are under investigation for siphoning money out of Russia.
Many millions of laundered funds landed in the accounts of senior Azeri officials and Western politicians. Part of that money was spent on luxury cars, French perfumes, and Italian clothes, but for whom? That remains a mystery.
What is the result?
Scandals surrounding the ‘Azerbaijani mega-laundry’ and ‘caviar diplomacy’ led to an anti-corruption investigation by the Council of Europe, which concluded in early 2018. 14 parliamentarians from Azerbaijan, Germany, Belgium, Sweden, Spain and Poland were banned from ever entering the Council’s headquarters again. The investigation data was handed over to national prosecutors’ offices.
These corruption scandals demonstrated the sheer scale and effectiveness of this lobbying machine created by a relatively small authoritarian regime.