Sunday, November 23, 2014


Azerbaijan

Azerbaijani President's Family Benefits From Eurovision Hall Construction

Baku's Crystal Hall will host the 2012 Eurovision Song Contest.
Baku's Crystal Hall will host the 2012 Eurovision Song Contest.
By Khadija Ismayilova
BAKU -- Later this month, the eyes of the world will be focused on a shimmering glass-and-steel building newly erected on the shores of the Caspian Sea to welcome the pop stars and television crews from the more than 40 European countries that will broadcast the Eurovision Song Contest 2012 spectacle.

Azerbaijan won hosting rights to the popular extravaganza last year, when its pop duo of Ell and Nikki sang their way to victory in Eurovision 2011. The Azerbaijani government responded proudly with plans for a new $134 million concert showplace called the Crystal Hall, which seats 23,000.

Finished only a few weeks ago, it was a tense race to get the venue ready in time. Its importance was signaled by the frequent visits made by President Ilham Aliyev and First Lady Mehriban Aliyeva to the bold geometric structure as it rose amid the construction site.

But their interest was not just ceremonial and patriotic. An investigation by the Organized Crime and Corruption Reporting Project (OCCRP) and RFE/RL has discovered that the first family is personally profiting from the massive construction project through its hidden ownership in the Azenco construction company.

The company contracted for the work has long been identified in all official announcements as Germany's Alpine Bau Deutschland AG. Yet some of the equipment at the construction site is stamped with the company name Azenco. Rolf Herr, a representative of Alpine Bau in Azerbaijan, described Azenco as a subcontractor.

He would give no other details of its involvement. The Alpine Bau press office in Germany did not respond to questions about how subcontractors and vendors had been chosen.

Front Companies

Azenco is owned through a series of front companies that mask the real owners. The official newspaper of the agency for privatization of state property in Azerbaijan announced in 2010 that Baku-based Interenerji MMC acquired 97.5 percent of the shares of Azenco.

The Crystal Hall under construction, with Azenco equipment taking partThe Crystal Hall under construction, with Azenco equipment taking part
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The Crystal Hall under construction, with Azenco equipment taking part
The Crystal Hall under construction, with Azenco equipment taking part
According to privatization records from March 2010, ADOR MMC, another Baku-based company, controls 70 percent of the ownership of Interenerji. Company registration documents list ADOR's legal address as "7 Samed Vurgun Street." The registered occupants of that address at the time were Mehriban Aliyeva, Leyla Aliyeva, and Arzu Aliyeva, the wife and daughters of the president, respectively.

In 2010, RFE/RL investigated the privatization of the State Aviation Company's infrastructure, including Azalbank (currently Silkwaybank), which also has as a registered shareholder Arzu Aliyeva, residing at the same address. Presidential spokesman Azer Gasimov at the time confirmed that the shareholder was indeed the president's daughter.

Gasimov did not respond to repeated phone calls and a written inquiry about the presidential family's connection to Azenco and the appearance of a conflict of interest if Azenco is profiting from state-funded construction projects.

Predating Eurovision?

Eurovision 2012 event coordinator Sietse Bakker said it was not the proper organization to answer questions about the first lady or the Crystal Hall construction.

Bakker said the city of Baku commissioned the multifunctional indoor venue before Azerbaijan won Eurovision. "We have no involvement with the construction of the hall, so you should ask this question to the responsible authorities," he said.

Official records do not support Bakker's contention. Presidential Order 1620, from July 2011, to build the concert hall, came after the May Eurovision victory.

"I have not seen written records," Bakker said, "but it doesn't take much to realize that there is quite a lot of planning going into the construction of such [a] venue."

Very Expensive Flag

The Crystal Hall is the second project to raise conflict-of-interest questions about Azenco.

It also helped construct the grandiose $38 million State Flag Square near the Crystal Hall, which briefly held the "Guinness Book of World Records" title for tallest flagpole in the world.

An enormous Azerbaijani flag flies above the construction site of the Crystal Hall on the Caspian shoreline in Baku earlier this year.An enormous Azerbaijani flag flies above the construction site of the Crystal Hall on the Caspian shoreline in Baku earlier this year.
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An enormous Azerbaijani flag flies above the construction site of the Crystal Hall on the Caspian shoreline in Baku earlier this year.
An enormous Azerbaijani flag flies above the construction site of the Crystal Hall on the Caspian shoreline in Baku earlier this year.
A few months after it was put up, Azerbaijan's 162-meter flagpole was surpassed by an even taller flagpole in Dushanbe, Tajikistan.

Two-thirds of the cost of the square in Baku came from the Reserve Fund of the head of state by presidential Decrees 532 (October 26, 2009) and 1052 (August 3, 2010). The other one-third came directly from the 2011 state budget in accordance with a decree by the Cabinet of Ministers 260 S (August 25, 2011).

A spokesman for the cabinet, Akif Ali, refused to respond to questions about how Azenco came to be chosen as a partner in the project.

Looting State Coffers

Azenco has been employed on numerous state-funded projects less showy but possibly no less profitable than the Baku work. State Procurement Agency records show that in 2010 alone the company was awarded contracts worth $79 million. The company also recently gained control of Sumqayit Technology Park, a former state-funded enterprise started by Azerenerji, the government-owned energy producer.

Azer Mehtiyev, director of the Center for Assistance to Economic Initiatives, a politically independent think tank, says Azenco looks like a clear example of a scheme to "misappropriate" some of the country's oil wealth.

"With the big oil money flowing into the budget, a parallel process of monopolization of spheres of economy, redivision of state property...[made] way for the misappropriation of revenues," Mehtiyev said.

"Big infrastructure projects financed by oil revenues are mainly distributed to companies which belong to high-ranking officials. The government keeps the information about owners of the companies secret. The state contracts are assigned to companies established in offshore zones with unknown owners making public control over the process impossible," he added.

According to Mehtiyev, it is especially difficult to get information about the business interests of the president's family.

Anticorruption Talk, No Action

Azerbaijan adopted an Anticorruption Law in 2004 that obliges officials to declare the income and property holdings of themselves and their relatives.

President Ilham Aliyev (second from right) and his wife, Mehriban (right), attend the opening of the Crystal Hall.President Ilham Aliyev (second from right) and his wife, Mehriban (right), attend the opening of the Crystal Hall.
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President Ilham Aliyev (second from right) and his wife, Mehriban (right), attend the opening of the Crystal Hall.
President Ilham Aliyev (second from right) and his wife, Mehriban (right), attend the opening of the Crystal Hall.
In August 2005 (order No. 278), the president ordered the Cabinet of Ministers to prepare a special form on which officials would give that information within two months. But the forms were never drafted and officials never provided the information. It is not clear if the president or the first lady, who is also a member of parliament, have submitted declarations in the past decade.

The presidential administration and the Central Election Commission will not respond to questions about their property. A written inquiry sent to the first lady's website was not answered.

In January 2011, President Aliyev declared that the government would take serious measures against corrupt officials.

The 2012 Eurovision event will have one other tie to the first family besides the new showcase auditorium: The president's son-in-law, singer Emin Agalarov, was chosen to entertain the crowd between acts.

This report was produced by the Organized Crime and Corruption Reporting Project (OCCRP) in cooperation with RFE/RL's Azerbaijani Service
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Comment Sorting
Comments
     
by: Camel Anaturk from: Kurdistan
May 09, 2012 23:10
You ungrateful envious armenians,these beautiful girls deserve their dowry down to the last billion,who cares if their countrymen are the poorest in the region,if we exclude Sultan Ali Baba Ilhan and his azeri kgb cronies!!!And the president`s son-in-law is nothing compared to Ilhan Alievich who entertains the whole world with his bigger than life antics for a second decade now-why criticize him-the `man` has given so much money to win the fairest of all contests and now he has got every right to take some of his money back.Allah akbar-Allahtan Ilhan is even greater!!!

by: Eugenio from: Vienna
May 10, 2012 07:33
It's interesting that - for some unclear reason - Aliyev and his family clan have all of a sudden become a bunch of "bad guys" for the RFE/RL. For years they have actually been "reliable allies" in the "courageous struggle of the West" against the "futile" Russian attempts to impose its gas-import monopoly on the EU.
And then just like out of the blue all this "blue stream" of negative news on Azerbaijan: people demonstrating on the streets against Aliyev, human rights violations, now this never-ending stream of stories on the most boring "song" contest in the world...
I wonder if there is some connection between this change of reporting direction AND the stories that this (and other) site(s) published a couple of months ago on the supposed intention of Israel to "bomb Iran" with the use of some facilities allegedly located in Azerbaijan. The way this latter story kind of died quick and quietly might suggest that Aliyev probably told the Israelis and theis US bosses where to go with their smart bombing idea - which would explain why the RFE/RL suddenly needs to publish so much negative material on Azerbaijan ausgerechnet now (compared to the absence thereof earlier).

by: Alex from: Baku
May 11, 2012 08:59
On the whole, the article is interesting; however, the charges against the President are indirect, and there are no credible facts proving his complicity or involvement in the things mentioned in the article.
In Response

by: nina from: world
May 11, 2012 18:40
I would agree with Alex, basing all investigation on fact that "Company registration documents list ADOR's legal address as "7 Samed Vurgun Street." The registered occupants of that address at the time were Mehriban Aliyeva, Leyla Aliyeva, and Arzu Aliyeva, the wife and daughters of the president, respectively." is not convincing me that there is an direct link between family of president and company not to mention that it is potentially libel...as a reader...just not convince...

by: gulare from: esgerova
May 18, 2012 09:14
The beauty of our state and it is improving day by day, which for us are very grateful to the family of Aliyev! they shall do their utmost for the welfare of our country! Long live the President and his beautiful, intelligent, modest Lady Aliyeva!

by: behram from: gozelov
May 18, 2012 12:43
Our victory of Eurovision was not only the victory of Ell and Nikki. The Azerbaijani people who have a rich culture won at this contest ….. One of the victories over Azerbaijan!!!!

by: elnare from: balashova
May 22, 2012 07:07
At last the great day has achieved ! I wish success to the participants of the Eurovision Song Contest

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