Azerbaijan has blasted claims that its ruling elite ran a secret 2.5 billion-euro slush fund to pay off politicians and promote a positive image of its leadership, amid accusations of human rights abuse and rigged elections.
The secret fund operated for two years until 2014 and was used by the government to win favour among international peers, according to the report published this week by the Organized Crime and Corruption Reporting Project (OCCRP).
“The Azerbaijani laundromat is a massive money laundering operation worth about $2.9 billion, money that was siphoned out of Azerbaijan in an illegal way,” OCCRP Executive Director Paul Radu told Euronews.
“Some of the money was used to buy public relations services from European politicians, from European Union politicians.”
OCCRP (@OCCRP) September 4, 2017
Among the alleged recipients of the cash are at least two ex-members of the Council of Europe, a top human rights body that’s currently probing allegations of corruption.
“Among other things, the money bought silence,” the OCCRP said. 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 OCCRP worked on the investigation with a dozen newspapers including The Guardian, which wrote extensively about how the alleged slush fund was used to run lobbying operations and launder money via opaque British companies.
Everything you need to know about the Azerbaijani Laundromat..most beneficiaries are from Baku, Azerbaijan’s capital https://t.co/wMlrRnk4jR— Anabelle (@Tahoesquaw1) September 5, 2017
Leaked records from the Danish bank Danske allegedly showed payments made via four shell companies registered in the UK.
The scheme went unnoticed thanks to an obscure Scottish business structure and lax regulations.
In Denmark, a new report from the Financial Action Task Force) – which evaluates financial safeguards – found non-compliances on 36 out of 40 benchmarks for keeping dirty money out of Europe, said Casey Kelso, advocacy director at Transparency International.
In the UK the situation was quite similar, he added. “There was a gap there for a long time that if you had a company is Scotland, you didn’t have to declare a foreign owner.’
The revelations once again highlight the use of Britain’s lightly regulated corporate landscape to move laundered money around.
In March, the OCCRP reported on a similar scheme run from Moscow, a “$20bn Global Laundromat”.
While the exact origin of the Azerbaijani funds was hidden behind a series of secretive shell companies, there’s “ample evidence of its connection to the family of President Ilham Aliyev,” according to the report.
Baku has labeled the findings of the report slanderous.
Neither the president nor members of his family have anything to do with the alleged scheme, Aliyev’s office said in a statement released by the state news agency Azartac. The accusations are “totally groundless, biased and provocative,” according to the statement.
Azeri authorities blocked access to the OCCRP’s website after the report was published.
The OCCRP is a non-profit dedicated to investigative reporting on organised crime and corruption around the world.
OCCRP</a> site over allegations of $2.9bn fund to pay Europeans, run lobbying ops and launder money <a href="https://t.co/CTWmtzVJDw">https://t.co/CTWmtzVJDw</a></p>— IPI (globalfreemedia) September 5, 2017