31 January 2019

Organized Crime and Corruption Reporting Project (OCCRP), a network of investigative journalists, along with Denmark’s Berlinske newspaper and others alleged that Danske’s Estonian branch handled the accounts of four UK-registered firms that were used by the Azerbaijani elite to pay European politicians, buy luxury goods and launder money. The “Azerbaijani Laundromat” is a term coined by the OCCRP.

Danske said its Estonian branch helped funnel suspicious transfers from countries such as Russia from 2007 to at least 2015 – and that some “non-resident” clients used corporate vehicles such as UK Limited Liability Partnerships (LLPs) and Danish shell companies. Danske’s Estonian branch handled the accounts of four UK-registered firms to launder the money. The four companies, which had the same ultimate beneficial owner from Azerbaijan made 3.0 billion euros of transactions. The four companies were Hilux Services, Polux Management, Metastar Invest and LCM Alliance. British investigators have frozen a bank account linked to the four companies. Reuters reported.

It is possible in Britain and in its tax havens, it is possible to own a company or property anonymously without disclosing the real owner. This enables the world’s corrupt elite to hide their illegal activities with impunity. They use these illegal assets to buy political influence. Transparency International’s Corruption Perception index shows that European countries are the least corrupt lot. Yet Azerbaijan managed to bribe even European Union Council members to its advantage.

OCCRP revealed that 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. The recipients also included prominent Azerbaijanis such as the family of Yaqub Eyyubov, Azerbaijan’s first deputy prime minister, who is one of the country’s most powerful politicians. Another $138 million likely went to AvroMed, a major drug company co-founded by Javashir Feyziyev, a member of the Azerbaijani parliament who specializes in building relationships with EU politicians.

Provably all this money come from a source which has connection to the family of President Ilham Aliyev. Mysteriously, another portion came from Rosoboronexport, a state-owned Russian arms exporter.  OCCRP reported.

OCCRP identified several delegates of the Parliamentary Assembly of the Council (PACE), among the ultimate recipients of the laundered money – most notably from Belgium, Germany, Italy and Spain. PACE Committee on Rules of Procedure banned 14 former members from the Council of Europe premises for their alleged involvement in the Laundromat scheme. The investigation also uncovered facts and allegations implicating eight further countries: Armenia, Kazakhstan, Macedonia, Monaco, Montenegro, Russia, Turkey, and Ukraine. Due to limited time and resources, however, there was no proper investigation into these new allegations. Transparency International reported.

Several prominent Europeans were beneficiaries of this dirty money. One of them is Luca Volontè, the Italian former chair of the centre-right European People’s party group in the parliamentary assembly of the Council of Europe (Pace). Volontè was among Pace delegates who voted against a 2013 report criticising Azerbaijan’s human rights record. The leaked data shows he received more than €2m (£1.8m). He has been indicted in Italy for money laundering and corruption amid an investigation of what has been dubbed “caviar diplomacy”.

Another beneficiary was Eduard Lintner, a former German MP with the Christian Social Union, the Bavarian sister party to Angela Merkel’s ruling Christian Democrats. Between 2012 and 2014, when he was no longer an MP, his foundation received €819,500. The cash included a €61,000 payment made two weeks after Lintner visited Azerbaijan as an election observer. He praised the poll as up to “German standards”, though official observers found “significant problems” with President Aliyev’s victory. An investigation published in a number of European newspapers showed that another Lintner-owned concern, the Berlin-based lobby group Society for Promoting German-Azerbaijani Relations (GEFDAB), received a total of 819,500 euros between 2012 to 2014 from offshore companies run by Azerbaijan’s ruling Aliyev family(in the picture above).

An anonymous source leaked the data to the Danish newspaper Berlingske in Copenhagen. The paper shared it with the OCCRP and other media partners. There are details of more than 16,000 transactions, including names of beneficiaries, bank payment details, and amounts in various currencies. The Guardian reported.

Angela Merkel’s Christian Democratic Union (CDU) MP Karin Strenz has been accused of doing paid lobbying work for the Azerbaijani dictatorship. In 2014 and 2015 She received between 7,500 euros and 15,000 euros in both years from Line M-Trade, owned by Eduard Lintner, a former parliamentarian for the Christian Social Union (CSU), the CDU’s Bavarian sister-party. Eduard Lintner has been a lobbyist for Azerbaijan since his retirement as an MP in 2009. Strenz ‘s personal website features a photograph of her standing alongside President Ilham Aliyev.

Transparency International ranks Azerbaijan as 123 from 176 in its corruption perception index, and adding in its country profile: “As with many authoritarian regimes, Azerbaijan is characterized by the large concentration of power in the hands of the ruling elite, which blurs the line between business and politics.”