The Azerbaijani laundromat - Denis Tanti
The Azerbaijani Laundromat is a term used for the complex money-laundering scheme that operated between 2012 and 2014, where $2.9 billion was siphoned out of Azerbaijan through a secret slush fund by members of the country’s ruling elite.
Part of the money went towards an international lobbying operation to deflect criticism of Azeri President Ilham Aliyev and to promote a positive image of his country, through payments to Azerbaijan lobbyists and apologists, European politicians and journalists. Also benefitting from the scheme were prominent Azerbaijanis with government positions or connections.
This operation was reported last September by 17 European media organisations, following the leakage of confidential banking records to the leading Danish newspaper Berlingske.
The money had been channelled through Danske Bank, the biggest Danish bank. During the time that the scheme was in operation, the Estonian branch of the bank processed thousands of transactions from accounts set up by four anonymous shell companies registered in the United Kingdom, reportedly without investigating their propriety thus violating anti-money laundering regulations.
The UK registration records for these shell companies did not match up with the information provided to Danske Bank about directors’ names and registered addresses. Apparently, these companies disguised the true origins of the funds through false information that they provided to both the UK authorities and the bank.
The UK’s lax regulations allowed the companies to list proxies or non-existent shareholders on file registration paperwork, thus concealing the true identities of the people behind the scheme.
The leaked bank records show that more than 16,000 covert payments were made through this slush fund scheme.
Eduard Lintner, a former German MP and lobbyist for Azerbaijan, was one of several high-profile beneficiaries of the scheme. After leaving politics in 2009, he became the director of a lobbying agency in Germany promoting German-Azerbaijani relations. He reportedly received €819,500 between 2012 and 2014. The cash included a €61,000 payment made two weeks after he visited Azerbaijan as an election observer, praising the polls as up to “German standards”.
A firm owned by Lintner reportedly paid between €7,000 and €15,000 in 2014 and 2015, allegedly received from the Azerbaijan regime, to Karin Strenz, a Christian Democratic Union MP and close ally of German Chancellor Angela Merkel. Strenz was the only German MP who in June 2015 voted against a resolution by the Council of Europe (CoE) to call on Azerbaijan to release its political prisoners.
Strenz was removed from the Parliamentary Assembly of the Council of Europe amid Azerbaijani Laundromat revelations, according to a decision by German officials.
It was further revealed that in February 2012 the Germany-based branch of the state-run Azerbaijani oil and gas company Socar Trading SA had deposited €28,000 in the account of the CDU’s district association in Frankfurt, in contravention of German rules on party donations.
A damning report issued last March by Freedom Files Analytical centre reveals that multiple covert payments were also made to the Italian former chair of the centre-right group in PACE, Luca Volontè, who played a key role in orchestrating the defeat of a draft resolution put to the vote of the assembly on January 23, 2013. This resolution condemned the abuse of political prisoners in Azerbaijan and the use of Azerbaijan’s judicial system to silence or intimidate the critics of President Aliyev’s regime.
The leaked bank records show that more than 16,000 covert payments were made through this slush fund scheme
Volontè stands accused of accepting €2.39 million in bribes from Azerbaijan in exchange for supporting its government. He is currently being investigated by the police and the Milan Public Prosecutor’s Office on charges of corruption and money laundering.
The same FFAC report identifies Maltese former Labour MP Joe Debono Grech, who was PACE’s co-rapporteur on human rights in Azerbaijan, as an active supporter and apologist of Azerbaijan, and exposes that he formed part of the scheme to help build a coalition to defeat the draft resolution condemning abuse in Azerbaijan.
The report also refers to Debono Grech’s election as co-rapporteur in 2009, both in Strasbourg and Paris, through phone calls, receptions and letters. This enabled him to defeat a candidacy for the same post of a member of his own Socialist Group from Norway who had a critical view of the human rights situation in Azerbaijan.
Debono Grech visited Azerbaijan as a PACE observer during the parliamentary elections held on November 7, 2010. Despite serious violations that were reported to have taken place during these elections, he stated that he considered them to be in line with CoE standards.
On December 26, 2016, Debono Grech was accused by Spanish digital newspaper eldiaro.es of having received gifts from the Azerbaijan regime, which he categorically denied.
According to FFAC sources in Baku, Azerbaijani oligarchs consider Malta as one of their country’s “provinces”.
President Aliyev himself is reported to have said that he wants Azerbaijan to develop partnership relations with Malta.
On his part, Maltese Prime Minister Joseph Muscat is known to hold a pro-Azerbaijani position.
He participated in dealings that took place in Baku together with three of his close allies.
Later, a multi-million tender was won by Socar Trading SA for the building of an ElectoGas power plant, and an equal shareholding to the company with two other partners.
Besides, the Maltese government became bound to buy liquefied natural gas exclusively from Azerbaijan for a minimum of 18 years.
Minister Konrad Mizzi, who accompanied Muscat in the Baku dealings, had directed Enemalta to reach a three-year fuel hedging agreement with Socar Trading SA to the value of €67 million. This agreement was questioned by the Auditor General for incomplete documentation and resulted in a significant overall loss for the country that ended up paying much higher prices for fuel than the average price.
During a Pana hearing on November 28, Eva Jung, EU correspondent and investigative journalist at Berlingske, drew similarities between the Azerbaijani Laundromat money-laundering and the methods and procedures exposed in Malta.
Jung explained that money flows from a Dubai-registered company controlled by President Aliyev’s family, with accounts in a Dubai-based bank, have filtered through Ta’ Xbiex-based Pilatus Bank to Panama registered companies controlled by trusts in New Zealand whose beneficial owners and ultimate shareholders were politicians and officials in Malta.
Denis Tanti is a former assistant director (industrial and employment relations) in the Ministry for Health.