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Investigation reveals secret $3 billion UK-based Azerbaijani slush fund

5 September 2017
Ilham Aliyev and Mehriban Aliyeva (Matthias Hangst/Getty Images)

Azerbaijani authorities laundered almost $3 billion in the UK between 2012–2014, which was used to bribe high level EU and UN figures, an investigation by the the Organised Crime and Corruption Reporting Project (OCCRP) shows.

Following the investigation, the OCCRP’s website was blocked in Azerbaijan. The press service of the President of Azerbaijan has denied the accusations, blaming ‘George Soros and Armenian lobby’ for the investigation.

The Azerbaijani Laundromat, as the investigation calls it, was a complex money-laundering scheme which channeled $2.9 billion between 2012–2014 with the help of four UK-registered shell companies. This means that an average of $3 million was channelled from Azerbaijan every day, The Guardian explains.

The scheme spent money to gain influence by paying lobbyists and prominent European politicians, the investigation by OCCRP, Denmark’s Berlingske, and The Guardian and several others has revealed.

According to the OCCRP, money was used to buy silence, with the transactions completed before Azerbaijani authorities jailed roughly 90 journalists, opposition politicians, and activists after 2104.

For example, one of the beneficiaries of the scheme was Luca Volontè, a senior Italian delegate at the Parliamentary Assembly of the Council of Europe — which includes Azerbaijan. Volontè voted down a report in 2013 criticising Azerbaijan for its human rights record.

After the investigation was published, The Guardian reported that an independent panel has began confidential hearings into the alleged corruption at Council of Europe in Strasbourg.

‘A land of tolerance’

The investigation showed that Kalin Mitrev, a board member of the London-based European Bank for Reconstruction and Development, received €425,000 ($506,000) for private consulting work from an Azerbaijani company, Avuar Co. The investigation stressed that Mitrev’s wife, Irina Bokova, who is director general of the UN cultural agency UNESCO, then awarded Azerbaijan’s vice-president and First Lady Mehriban Aliyeva with one of the organisation’s highest honours, the Mozart Medal. The Guardian also pointed to a photo exhibition hosted by Bokova entitled ‘Azerbaijan — A Land of Tolerance’.

Over 13,000 banking records leaked to the investigation revealed that four UK-registered shell companies — Polux Management, Hilux Services, Metastar Invest, and LCM Alliance — formed the core of the Laundromat. According to the investigation, the companies used anonymous ‘partners’ based in Seychelles, Belize, and the British Virgin Islands.

Although the primary source of the money is not clear in all cases, it reportedly comes from companies connected to Azerbaijani president Ilham Aliyev, state ministries, and IBAZ, Azerbaijan’s largest international bank. The Guardian called the evidence ‘overwhelming’.

The investigation claims that several transactions in the Azerbaijani Laundromat links to another $20 billion money-laundering scheme, the Global Laundromat. According to another investigation by the OCCRP, Novaya Gazeta, and The Guardian, the operation moved billions of dollars out of Russia in 2010–2014, with anonymously owned British companies playing a major role.