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Azerbaijan Report: July 20, 2001

20 July 2001
Viktor Kozeny: President Aliyev Made Promises
Viktor Kozeny, a Czech businessman who made millions of dollars from his country's voucher privatization program in the early 1990s, in an exclusive interview with the RFE/RL Azerbaijani Service, urged Azerbaijani President Heidar Aliyev to fulfill his promises made in 1997-1998 concerning the privatization program in his country. According to Kozeny, President Aliyev and his son, Ilham, personally met with him and other members of Kozeny's investors group in Baku and encouraged them to buy vouchers from citizens.

Kozeny and his investors group intended to buy shares of the state oil company in course of privatization. The president's son, Ilham Aliev, is a vice president of the state oil company in Azerbaijan. "We have invested about $500 million in privatization checks in Azerbaijan," said Kozeny in his interview. But the Azerbaijani government decided in 1998 not to privatize the state oil company. Viktor Kozeny's $500 million worth of vouchers became worthless paper.

The U.S. investors have taken Kozeny to court, arguing that Kozeny deceived them about the risks of investing in Azerbaijan. Kozeny in turn claims that his partners, including former U.S. Senator George Mitchell and the U.S. insurance company AIG, knew of the risks of investing in Azerbaijan.

In an interview with RFE/RL's Azerbaijani Service, Kozeny said that not only he but some of his other partners at the time met with President Aliyev and received the same assurances that the privatization program would be implemented:

" Well, we (the president and I) discussed a variety of issues. These issues all centered around privatization -- and obviously it was of great concern to us that the privatization is going to go through and that a sufficient and valuable asset will be privatized in the foreseeable future. (We were) given all the necessary assurances that this is the case. Besides myself meeting Mr. President, also one of our directors, Senator George Mitchell, met with him and confirmed the same," said Kozeny.

Shortly after the first part of the interview with Viktor Kozeny was aired, the newspaper "Alternativ," with close ties to the President's Office, reacted promptly, claiming that President Aliyev or his son Ilham never met with Kozeny. The paper admitted Kozeny may have been tricked by some officials, but rejected his claim that President Aliyev made any commitments to his group.

However, after the second part of the interview was aired, the same paper admitted that President Aliyev meets with all foreign investors, but denied again that he made any commitment to Viktor Kozeny.

The head of the State Property Committee, Nadir Nasibov, who also was mentioned in Kozeny's interview as one of the high-ranking officials involved in the transaction in his interview with the local newspaper "Zerkalo," denied the accusations made by Kozeny. Nasibov refuted Kozeny's charges that the Azerbaijani leadership deceived him and his investors group.

Viktor Kozeny in his interview expressed optimism that he will win the court case and the Azerbaijani government will finally give up and let the privatization program go on, which means letting Kozeny use his $500 million in vouchers. It is still too early to argue whether this optimism that the vouchers bought in Azerbaijan will pay off is real, or surreal.

(Mirza Khazar)

Foreign Minister: Use Of Military Means Possible
Azerbaijan may reconsider its position if the talks on a Karabakh settlement produce no result at a certain stage, Azerbaijani Foreign Minister Vilayat Guliyev said in an interview with the Turan news agency on 17 July. Guliyev noted that his country was trying to settle the problem by peaceful means for the time being and would continue to work in this direction. However, it cannot continue forever, he said. Guliyev did not rule out the possibility using military means to settle the Karabakh conflict, noting that Azerbaijan cannot be satisfied with the current situation.

In the meantime, a high-ranking World Bank official says the bank will increase economic assistance to Armenia, Azerbaijan, and Georgia if they find solutions to the ethnic conflicts in the volatile region, reported a RFE/RL correspondent from Yerevan.

Johannes Linn, the bank's vice president for Europe and Central Asia, said the success of World Bank efforts to promote economic integration in the impoverished South Caucasus depends on progress in internationally sponsored negotiations to end the conflicts in Nagorno-Karabakh, Abkhazia, and elsewhere in the region.

Linn made the comments today in Yerevan at the end of his tour of Armenia, Azerbaijan, and Georgia.

Ban On Fishing And Caviar Exports
Russian authorities today placed a one-year ban on sturgeon fishing and exports of black caviar in its sector of the Caspian Sea and the Volga River delta. Interfax news agency reports that the move follows recommendations by the Convention on International Trade in Endangered Species, which said over-fishing threatened the existence of the sturgeon which produces black caviar. The ban is expected to allow stocks of the fish to grow again.

Azerbaijan and Kazakhstan have also said they will support a temporary freeze on sturgeon fishing. But local observers express doubt that this intention will be realized, because sturgeon fishing and exports of black caviar in Azerbaijan are not fully under government control. Illegal trade in sturgeon and black caviar bring huge amount of cash to several groups in Azerbaijan, but at the same time threaten the existence of sturgeon in the Azerbaijani part of the Caspian Sea.

Government Wants To Evict ANIP From Its Office
Head of the Azerbaijan National Independent Party Etibar Mamedov held a press conference on 20 July devoted to the efforts made by government to evict the party from its headquarters. The Economic Development Ministry, in its letter addressed to the leadership of the party, said that the AMIP should leave the headquarters within five days. As a replacement, the ministry proposed the second and third floors of the Binagadi Raion Administration building.

Mamedov considers the most recent fact as the pressure on the AMIP by President Aliyev and Head of the President's Office Ramiz Mekhdiyev. "The moves by the government are politically motivated. If there is a necessity that the AMIP leave its headquarters, the authorities should propose to the party a place equal to the party's recent office," Mamedov said. He noted that the area of the AMIP headquarters is 2,637 square kilometers, but the area of the two floors of the Binagadi Raion Administration is 1,779 square kilometers, of which 1,000 square kilometers is useless.

Mamedov told journalists that the AMIP appealed to the Economic Development Ministry to give the party some variants equal to the previous AMIP office. Mamedov also proposed that the government give his party the recent headquarters building of the ruling Yeni Azerbaijan Party because the latter in the near future will be transferred to another place.

Mamedov said that the West is interested in weakening the political parties which are able to influence the situation in the republic. Mamedov added that the place which the Economic Development Ministry proposed the AMIP is disputed because the building of the Binagadi Raion Administration belongs to the oil-gas extracting department and the latter demands that Binagadi Raion Administration leave the place.

(Maarif Chingisoglu)

Government Prohibited Activity of ABA Private Broadcasting Company
On 18 July, the president of the private broadcasting company ABA, Faig Zulfugarov, who has recently been living in the U.S., addressed a press conference by phone devoted to the pressure on the ABA by the government. Zulfugarov said that the prohibition of the broadcasting of ABA is the latest tragedy of the Azerbaijan media. "The only reason of the prohibition of the ABA is connected with the fact that it was not managed by President Aliev's family. ABA is the only independent television channel in the republic," Mamedov said. He accused the other private channels of serving the Aliyev family interests.

At the same time Zulfugarov believes that he will win in this struggle with the Azerbaijani government and President Aliev. Zulfugarov added that the investigation of the channel has a political character and the arrested director of the financial department of ABA Shamil Safiyev is a political prisoner. Safiyev, accused of tax evasion, was arrested on 24 May. The ABA president also said that he will return to his home country after a change of the Azerbaijan regime. He noted that he has appealed to the U.S. government for political asylum.

(Maarif Chingisoglu)

Court Sentences Karabakh War Invalids From One To Six Years
On 19 July, Republic Court on Serious Crime judge Nushaba Agayeva passed sentence on 16 Karabakh war invalids. Eight of them were sentenced from one to six years, while the remaining eight members of the Karabakh War Invalids Society were sentenced to suspended sentences. Deputy Chairman of the Karabakh War Invalids Society Gunduz Rakhimov and editor of the newspaper "Alillar" (Invalids) Rahim Namazov were sentenced to six years. Alizamin Dargakhov, who received a two-year suspended sentence, demanded to be imprisoned the same as his colleagues. Protesting the court decision, he attempted to commit suicide by slashing his wrist. Rizvan Aliev, the former fighter who presented the court process, also attempted to commit suicide by the same way.

Lawyer Vakil Osmanov said that the invalids will apply to the Court of Appeals. Osmanov stated that he is sure that the Court of Appeals will repeat the decision of the court.

"It is not easy legally to struggle against Heidar Aliyev government," Etimad Asadov, chairman of the Karabakh War Invalids Society, said after the court sentenced the invalids. Asadov said that the Society is not planning to commit any radical moves. He did not rule out that the Karabakh War Invalids Society will appeal to the political parties for help.

Musavat Party head Isa Gambar told RFE/RL's Azerbaijan Service that his party is ready to support the Karabakh war invalids within the Azerbaijan Constitution. Gambar said that the decision of the government was unexpected. "In this way President Aliyev wants to demonstrate that he will take a tough decisions in the all issues," he said.

Mirmakhmud Fattayev, head of the "classic" wing of the Azerbaijan Popular Party, said that he is ready to support Karabakh war invalids by all means.

Liberal Party head Lala Shovket Hadjiyeva said that the government's treatment of the Karabakh war invalids is an indicator of the Karabakh conflict. This process could lead to the loss of Karabakh. She suggested that all opposition parties should unite in the struggle against the government.

Democratic Party Secretary-General Sardar Jalaloglu considers it difficult to achieve success in the struggle against the government alone. He also proposed that all forces in the country unite and demand that President Aliyev retire.

(Natig Zeynalov, Babek Bakir)

(Reports From Baku Compiled & Translated By Samira Gaziyeva)

In an interview published by "Zerkalo," former head of the State Property Committee Nadir Nasibli rejects allegations raised by controversial Czech businessman Viktor Kozeny that Azerbaijani officials deceived him. Nasibli claims that there is no such problem as the so-called "Viktor Kozeny's vouchers" in Azerbaijan, but rather the real problem exists between a group of investors and Kozeny himself. Kozeny prefers offensive tactics and therefore resorted to slandering others. These investors entrusted large financial funds to him hoping to benefit from privatization in Azerbaijan. Nasibli suggests that talk of "bribery" cannot be taken seriously, because free trade of privatization vouchers is allowed in Azerbaijan.

Restoration of "Greater Azerbaijan" (apparently consisting of the Republic of Azerbaijan and northern parts of Iran where millions of Azerbaijanis are living) is possible, according to a commentary by the semi-independent newspaper "525." "The reform movement in Iran is gaining strength, and the national movement in South (Iranian) Azerbaijan is starting to attract the attention of world community," the paper comments. "Therefore, restoration of a united Azerbaijani state is viable." The newspaper suggests that if Turkey decides to join this state, a united Turkic state with a population of more than 100 million people might become a driving force within the European community.". The ethnic Azerbaijani population of South (Iranian) Azerbaijan is estimated at 20-30 million.

The worsening of the human rights situation in the country, repressions against press freedom, as well as recent measures taken against political parties suggest that Azerbaijan may be excluded from the Parliamentary Assembly of the Council of Europe (PACE), writes the newspaper "Zerkalo" in it's latest issue. According to the paper, the human rights situation and persecution of freedom of the press in Azerbaijan is on the agenda of the meeting of the PACE which will take place this autumn. A paper which is going to be presented to the meeting on human rights issues in Azerbaijan makes it impossible for Azerbaijan to remain in PACE, suggests the paper.