Azeri Rulers Accused of $3 Billion Money-Laundering Scheme

Azerbaijan was accused of running a 2.5 billion euro ($3 billion) scheme to pay off European politicians, launder money and buy luxury goods, allegations that prompted the government to block an investigative-reporting project’s website.

The so-called “Azerbaijani Laundromat” was uncovered in a joint investigation by 17 European media organizations including the Guardianand Le Monde and was published by the Organized Crime and Corruption Reporting Project, known as OCCRP. Azeri authorities blocked access to the OCCRP’s website after the report was published.

Banking records of transactions via four U.K.-registered shell companies showed that “members of the country’s ruling elite were using a secret slush fund” to make the payments and purchases as well as “launder money, and otherwise benefit themselves,” the OCCRP said. The records were leaked to the Danish newspaper Berlingske, which shared them with other media and the OCCRP, according to the report.

“Among other things, the money bought silence,” the OCCRP said. During this period, the government “threw more than 90 human rights activists, opposition politicians, and journalists such as OCCRP journalist Khadija Ismayilova into prison on politically motivated charges.”

At least three European politicians and a journalist who wrote stories friendly to the Azeri government were among recipients of the money, it said. While the precise origin of the funds was hidden behind a series of secretive shell companies, there’s “ample evidence” of its connection to the Aliyev family, according to the report.

‘Shell Company’

Almost half of the 2.5 billion euros came from an account held in the state-owned International Bank of Azerbaijan by a “mysterious shell company linked to the Aliyevs,” the OCCRP reported. Two offshore companies with “direct connections to a regime insider” were the second and third biggest contributors, according to its report.

Neither the president nor members of his family have anything to do with the alleged scheme, Aliyev’s office said in a statement carried by the state news agency Azartac. The accusations are “totally groundless, biased and provocative,” according to the statement.

The IBA last week completed restructuring of $3.3 billion of foreign debt after defaulting in May. The bank’s former director, Jahangir Haciyev, was sentenced to 15 years in prison last year for embezzlement and abuse of office, charges he denied.

 

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