Exclusive
Status: 05.10.2021 4:01 a.m.
The Azerbaijani presidential family has invested hundreds of millions of euros in Europe through letterbox companies over the years. German businessmen also helped with the campaign, as the “Pandora Papers” research shows.
There have been allegations of corruption against Azerbaijan’s President Ilham Aliyev for years. Now the “Pandora Papers” show that relatives and friends of the Azerbaijani presidential family have invested hundreds of millions of euros in Europe over the years. Where the money comes from remains unclear.
A lot has been invested in London, for example in the case of the President’s son Heydar Aliyev. According to confidential records, an offshore company he owned owned real estate in London for £ 33 million. Heydar was eleven years old at the time.
According to the documents, his two sisters Leyla and Arzu also owned numerous properties, all of which were acquired discreetly through letterbox companies. The leaked data show that the three children of the incumbent Azerbaijani President Ilham Aliyev and confidants and relatives of the presidential family bought real estate for more than 550 million euros in the UK alone between 2006 and 2014. Many of the buildings have already been sold on.
“Pandora Papers”
The “Pandora Papers” are a huge data leak from the world of shadow financial centers. The data shed light on the real owners of more than 27,000 offshore companies. The data includes politicians, the super-rich, oligarchs, criminals and celebrities. The 11.9 million confidential records include letters of incorporation from letterbox companies and trusts, emails, accounts and other documents.
The data were evaluated in a secret research by more than 600 journalists from 117 countries. Media such as the “Washington Post”, the BBC, Radio France, ORF, “El País” and “Aftenposten” were involved. In Germany, journalists from NDR, WDR and SZ at the data leak.
The data set was leaked to the International Consortium for Investigative Journalists (ICIJ) from an anonymous source. The ICIJ shared the data with the partner media and coordinated the research. The ICIJ has conducted global research on shadow financial centers, including the Panama Papers, the Paradise Papers and the Luxembourg Leaks.
The confidential documents come from 14 offshore providers, i.e. from companies that help their customers to set up letterbox companies, trusts, etc. Often, letterbox companies are legally located in countries that are internationally noticeable due to weak money laundering controls, non-transparent financial practices and particularly low tax rates.
Owning a mailbox company is not illegal. Offshore firms can also be used for legal purposes. Often, however, such company structures serve money laundering, tax evasion or tax structuring.
Czech bank accounts and German real estate
The President’s children and their confidants appear in the “Pandora Papers” in hundreds of documents, mostly as owners or shareholders of letterbox companies that hold numerous apartments, houses and a historic building that is now a luxury hotel.
Other owners of the properties – as the “Pandora Papers” show – are the former Azerbaijani Minister for Taxes and the head of one of the largest economic conglomerates in the country on the Caspian Sea. In addition to the real estate in London and the surrounding area, the Aliyev’s gigantic offshore company network also includes numerous accounts with a Czech bank and land in Turkey.
Apparently, the Azerbaijani ruling family was drawn to Germany on their shopping tour. In the confidential papers there are two companies, Garrisol Resources Limited and Faroe Resources Limited, each of which is noted: “Holds property in Berlin, Germany”.
For years, massive criticism of President Aliyev
The Aliyev’s offshore empire raises many questions. In 2003, Ilham Aliyev succeeded his father as president. Since then, the ruler has been exposed to international criticism. Among other things, he is accused of massive election fraud; critical journalists are repeatedly persecuted, imprisoned and sometimes tortured in Azerbaijan.
Above all, however, President Aliyev is accused of having turned the oil-rich country into a kind of self-service shop. International research has made it clear in recent years that there is hardly a lucrative business in which the presidential family does not earn money through company shares, be it in the banking sector, in the construction industry or in the telecommunications sector.
The non-governmental organization Transparency International has certified that the country has grave maladministration, and the research network Organized Crime and Corruption Project (OCCRP) named Aliyev in 2012 the “most corrupt man of the year”.
The Aliyev’s helpers
The human rights policy spokesman for the SPD in the Bundestag, Frank Schwabe, calls the research results from the “Pandora Papers” “terrifying”. “If there are autocrats who basically pillage their country and then invest their money in Europe, then there must be much more rigid mechanisms to act against it.”
In fact, Schwabe hits a sore point with his criticism. Even if it is not clear that the money comes from corrupt deals, the investments should at least be concealed by letterbox companies. The “Pandora Papers” also show that the Aliyevs had numerous helpers in building their offshore empire – in notorious low-tax countries, but also in Switzerland and Germany.
More than 60 of the letterbox companies identified were made available by TridentTrust. According to the research, business apparently continued, although TridentTrust was informed internally about the corruption allegations against Aliyev’s daughter Arzu. Upon request from NDR, WDR and “Süddeutscher Zeitung” as well as the International Consortium for Investigative Journalists (ICIJ), the company TridentTrust only wanted to express itself in general: one always adheres to all legal provisions.
The data also shows that at least 60 letterbox companies from the Aliyev environment were managed by the Swiss company Sandy Ventures. When asked, company boss Susanne Reinhardt said that she hadn’t known for a long time who was behind the company. She also did not know what the company’s business was about and saw herself more as a “secretary”. “Today I don’t think that’s okay,” says the woman who says she made good money managing the company.
Several German-Turkish entrepreneurs also supported the Aliyev. According to the documents, three men from Düsseldorf acted as directors for numerous Aliyev offshore companies. For longer periods of time, they even held bank powers of attorney for the accounts of the president’s daughter Arzu Aliyeva. It remains unclear why the men who worked in a consulting firm relied on behalf of the Aliyev’s interests. The three left a comprehensive inquiry unanswered. Neither President Ilham Aliyev nor his children answered extensive questionnaires.