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Azerbaijani Government Rejects Slush Fund, Corruption Charges

AZERBAIJAN -- Azerbaijani President Ilham Aliyev leaves after a medal ceremony during the boxing events at the Baku 2015 European Games in Baku, June 25, 2017


An investigative report says Azerbaijan's ruling elite used a secret $2.9 billion slush fund for years to pay off European politicians and make luxury purchases -- an accusation immediately rejected by President Ilham Aliyev's government.

According to the report published yesterday by the Organized Crime and Corruption Reporting Project (OCCRP), thousands of payments were channeled through four shell companies in Britain between 2012 and 2014 to buy “silence.”

Aliyev's government on September 5 rejected the findings.

“Neither the president, nor members of his family have any relation to the charges contained in the report by the Organized Crime and Corruption Reporting Project,” said a presidential press statement issued in Baku on September 5.

The report, The Azerbaijani Laundromat, found millions of dollars from the slush fund ended up in the accounts of companies and individuals across the globe.

Infographic - What Is The Azeri Laundromat?
Infographic - What Is The Azeri Laundromat?

A collaborative effort between the OCCRP and several media outlets in Europe, Russia, and the United States, the report said the origin of the fund was unclear “but there is ample evidence of its connection to the family of President Ilham Aliyev.”

The presidential press office, however, said the project was the work of George Soros and those working for the billionaire American philanthropist.

“The dirty deeds of George Soros need to be investigated,” the press statement said.

Soros has been accused by some authoritarian leaders of allegedly using his money and influence to organize antigovernment protests and anticorruption campaigns in some eastern European countries in order to undermine elected officials.

His Open Society Foundations (OSF) are active in 100 countries, and have supported civil groups in Eastern Europe and the Balkans since the mid-1980s.

The OCCRP says on its webpage that it is funded by grants, some of which come from the Soros' Open Society Foundations. The OCCRP also receives funding from Google and the National Endowment for Democracy -- a U.S.-based nonprofit foundation as well as the U.S. and Swiss governments.

Government opponents and rights groups have accused the government of the oil-producing Caspian Sea country of systematic corruption, vote-rigging, and the politically motivated persecution of opposition politicians, activists, and journalists.

The report said some of the money went to pay off at least three European politicians, one journalist, and businessmen in a lobbying effort aimed at deflecting criticism of Baku over its human rights record.

"This intensive lobbying operation was so successful that Council of Europe members voted against a 2013 report critical of Azerbaijan," The Guardian newspaper said.

The fund operated during a period, according to OCCRP, when the Azerbaijani government “threw more than 90 human rights activists, opposition politicians, and journalists into prison,” including Khadija Ismayilova, an investigative journalist with RFE/RL’s Azerbaijani Service.

"Azerbaijan's corruption turned out to be contagious and it has tainted international organizations,"
Khadija Ismayilova

Ismayilova told Current Time, a Russian-language television network run jointly by RFE/RL and Voice of America.

"International organizations -- I hope -- will stand up for their standards and will launch investigations into politicians who have been bribed by Azerbaijan's government through such money laundering mechanisms," she said.

Banking records leaked to the Danish newspaper Berlingske, which sparked the investigation, show multiple payments to several former members of the Council of Europe's parliamentary assembly (PACE), The Guardian reported.

The Council of Europe, Europe's top rights watchdog, is investigating alleged corruption over the vote, the BBC has reported.

The report said at least half of the $2.9 billion came from an account held in the International Bank of Azerbaijan (IBA) by a shady shell company allegedly linked to the Aliyevs.

The next two biggest contributors to the fund, according to the report, were two offshore companies with direct connections to a “regime insider.”

Those close to, or part of, the regime not only handed out slush-fund cash, according to the report, but pocketed money for themselves, including Yaqub Eyyubov, Azerbaijan’s first deputy prime minister.

Ali Nagiyev and his family were all “major users of the system,” said the report. Nagiyev is th official in charge of battling corruption in Azerbaijan.

Aliyev swept into power in 2003 following the death of his father, Heydar Aliyev, a former KGB officer and communist-era leader who had ruled Azerbaijan with an iron fist since 1993.

With material from RFE/RL's Azerbaijani Service