Thursday, October 15, 2020

The Azerbaijani Laundromat

 

Azerbaijan corruption bribery finance crime nepotism influence

From 2012 to 2014, even as the Azerbaijani government arrested activists and journalists wholesale, members of the country’s ruling elite were using a secret slush fund to pay off European politicians, buy luxury goods, launder money, and otherwise benefit themselves.

Banking records revealing some 2.5 billion euro (US$ 2.9 billion) in transactions were leaked to the Danish newspaper Berlingske, which shared them with OCCRP. The two outlets then organized a collaborative investigation to track down where the money went.

The result is the Azerbaijani Laundromat — so called because the vast sums that passed through it were laundered through a series of shell companies to disguise their origin. The project reveals the many uses to which the country’s kleptocratic ruling clique puts some of its billions.

Among other things, the money bought silence. During this period, the Azerbaijani government threw more than 90 human rights activists, opposition politicians, and journalists (such as OCCRP journalist Khadija Ismayilova) into prison on politically motivated charges. The human rights crackdown was roundly condemned by international human rights groups.

Meanwhile, at least three European politicians, a journalist who wrote stories friendly to the regime, and businessmen who praised the government were among the recipients of Azerbaijani Laundromat money. In some cases, these prominent individuals were able to mobilize important international organizations, such as UNESCO and the Parliamentary Assembly of the Council of Europe, to score PR victories for the regime.

Nor do major Western financial institutions escape responsibility. The banking records in the leak — over 16,000 transactions in all — reveal that the core of the Azerbaijani Laundromat was formed by four shell companies registered in the United Kingdom. The country’s lax regulations allowed these companies to file registration paperwork that listed proxy or non-existent shareholders and disguise their true origins.

Moreover, the records show that Danske Bank, a major European financial institution, turned a blind eye to transactions that should have raised red flags. The bank’s Estonian branch handled the accounts of all four Azerbaijani Laundromat companies, allowing the billions to pass through it without investigating their propriety.

A majority of the payments went to other secretive shell companies similarly registered in the UK, indicating that the full extent of the scheme may be much larger than is currently known. Large amounts also went to companies in the UAE and Turkey.  (more...)

The Azerbaijani Laundromat



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