Acquisition of expensive real estate in Dubai raises questions to the
President of Azerbaijan
15:55:08 – 05/03/2010
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The Washington Post: Even by the standards of a city that celebrates
extravagance, it was a spectacular shopping spree: In just two weeks
early last year, an 11-year-old boy from Azerbaijan became the owner
of nine waterfront mansions.
The total price tag: about $44 million — or roughly 10,000 years’
worth of salary for the average citizen of Azerbaijan. But the preteen
who owns a big chunk of some of Dubai’s priciest real estate seems to
be anything but average.
His name, according to Dubai Land Department records, is Heydar
Aliyev, which just happens to be the same name as that of the son of
Azerbaijan’s president, Ilham Aliyev. The owner’s date of birth,
listed in property records, is also the same as that of the
president’s son.
Officials in Baku, the capital of Azerbaijan, declined to comment on
how the president’s son — or at least an Azerbaijani schoolboy with
the same birth date and the same name as the son’s — came to own
mansions on Palm Jumeirah, a luxury real estate development popular
with multimillionaire British soccer stars and others with cash to
burn. Ilham Aliyev’s annual salary as president is the equivalent of
$228,000, far short of what is needed to buy even the smallest Palm
property.
Azer Gasimov, the president’s spokesman, declined to discuss the Dubai
real estate purchases. ‘I have no comment on anything. I am stopping
this talk. Goodbye,’ he said when contacted by telephone and told
about the names on the property records. Gasimov did not respond to
requests for further comment sent by fax, e-mail and cellphone text
message.
Azerbaijan, a former Soviet republic blessed with plentiful oil and
gas reserves yet blighted by widespread poverty outside its glitzy
capital, has long had a reputation for corruption. But the Dubai
purchases, which have not been reported before, could provide a rare
concrete example of just how much money the country’s governing elite
has amassed and of the ways in which at least part of this wealth has
been stashed overseas.
Problem for Washington
The transactions sharpen a dilemma that has shadowed Washington’s
relations with Azerbaijan for years: how to reconcile the United
States’ security and energy interests in the oil-rich Caspian Sea
nation with what the State Department, in a report last year on human
rights around the world, described as the ‘pervasive corruption’ of
its increasingly authoritarian regime.
Azerbaijan has sent troops to support U.S. democracy-building efforts
in Afghanistan and Iraq but at home has retreated steadily from
democratic practices, according to diplomats and experts on the
region. Transparency International, in a 2009 survey of global
corruption, ranked Azerbaijan among the worst at 143 out of 180
nations.
In addition to recording nine properties owned by Heydar Aliyev, the
now-12-year-old schoolboy, Dubai’s Land Department also has files in
the names of Leyla and Arzu Aliyeva. President Aliyev has two
daughters with the same names and roughly the same ages. Their exact
dates of birth could not be established, but various reports indicate
Leyla’s birthday is the same as that of the Azerbaijani woman who
figures in the Land Department records.
In all, Azerbaijanis with the same names as the president’s three
children own real estate in Dubai worth about $75 million, property
data indicate. Dubai real estate dealers with knowledge of some of the
transactions said the purchases were made by a buyer representing
Azerbaijan’s ruling family. The dealers said the properties were paid
for upfront.
Ali Kerimli, chairman of the Azerbaijani Popular Front, an opposition
party, said in a telephone interview, ‘We all know that our country is
one of the most corrupt.’ But when told about the Dubai purchases, he
added that he was surprised at the apparent lack of effort to conceal
them.
Azerbaijan’s leaders, Kerimli said, ‘face no danger’ because the
judiciary, anti-corruption bodies and most of the country’s media
outlets are firmly under their control.
The rush to move assets overseas, often with scant regard for returns,
is a common feature of many oil-producing nations, where corrupt
elites seek to ensure that their wealth is safe just in case political
winds at home change. The phenomenon is part of the ‘resource curse,’
an ailment that has deformed the economies and politics of
corruption-addled, oil-producing nations from Nigeria to Venezuela.
Kerimli said Washington paid too much attention to security and energy
issues and thus ‘sent a signal to our country that democratic reform
is not important.’ When Richard B. Cheney visited Baku as vice
president in 2008, he not only held talks with President Aliyev
focused on energy but also met with executives of BP and the U.S. oil
company Chevron, both of which have operations in Azerbaijan, as do
Exxon and other foreign oil companies. Azerbaijan and the United
States, Cheney said, ‘have many interests in common.’
The Obama administration has also focused on strategic issues in its
relations with Azerbaijan. On a visit to Baku two weeks ago, William
J. Burns, undersecretary of state for political affairs, praised
Azerbaijan for supporting the United States in Afghanistan and
trumpeted the role of a U.S.-backed oil pipeline from Baku to Turkey
that broke Russia’s stranglehold on energy exports from the Caspian
Sea.
In a speech, Burns avoided direct criticism of Azerbaijan, noting
only: ‘We also believe that the strengthening of democratic
institutions, rule of law and respect for human rights will have a
positive effect on the future of this country.’
The Aliyev government and its supporters, meanwhile, have tried to
burnish Azerbaijan’s image, sponsoring trips to Baku by prominent
foreigners and hiring lobbyists to trumpet the country’s achievements.
David Plouffe, President Obama’s former election campaign manager,
visited Baku last year to deliver a paid-for speech; a few months
later came former British prime minister Tony Blair, who also received
a fee to speak. Plouffe declined to comment about his trip.
All in the family
Azerbaijan, which became an independent nation with the collapse of
the Soviet Union in 1991, has been ruled almost continuously by the
same family. Aliyev took over from his father, Heydar Aliyev, who was
president from 1993 until his death in 2003.
The Aliyev family’s long grip on power has provided a measure of
stability and robust, energy-fueled economic growth in a country that
shares borders with Iran and Russia. But it has also left Azerbaijan
riddled with graft and a culture of impunity.
The role played by the Aliyev family at the center of this system
figured prominently in the New York trial last year of Frederic A.
Bourke Jr., an American millionaire convicted of violating the Foreign
Corrupt Practices Act as a result of bribes paid in Azerbaijan. Bourke
has appealed his conviction.
The case related to an abortive attempt in the 1990s to buy
Azerbaijan’s state oil company, SOCAR, where Aliyev, now the country’s
president, was then a senior executive. In courtroom testimony and an
affidavit filed with the court, Thomas Farrell, a Virginia businessman
involved in the failed scheme, told of large illicit payments that he
thought were destined for ‘the family.’
Farrell, in his affidavit, related how Heydar Aliyev, the father, ‘had
directed that we wire transfer sums of money into bank accounts held
for the benefit of relatives of Heydar Aliyev.’ Farrell also told that
he had been ‘instructed that money be sent to members of Heydar
Aliyev’s family for ‘shopping sprees.’ Typically the amount of money
requested was $1 million.’
These alleged payments, however, are dwarfed by the amounts invested
in a series of Dubai real estate deals that, according to property
records, began in 2008 and reached their climax in January and
February last year.
The Dubai properties registered in the names of three people with the
same names as President Aliyev’s children cost roughly 330 times his
annual salary.
Some members of the family, however, do have money. The president’s
older daughter, Leyla, is married to Emin Agalarov, a wealthy Russian
businessman, and relatives of the first lady, Mehriban, have lucrative
business interests in Azerbaijan. Agalarov declined to comment when
asked whether he had helped buy Dubai properties for his wife or
Aliyev’s other children. He said he had ‘joined businesses and
properties’ with his wife but did not elaborate, saying in an e-mail:
‘We wish not to comment on that.’
Sabit Bagirov, a former head of SOCAR, the oil company, said that he
did not know whether the Aliyevs own property in Dubai but that it
would be highly unusual for them to register any such property
purchases under their real names. ‘They would not do this so openly.
It could be a provocation,’ he said, suggesting that the regime’s
enemies may have staged the Dubai deals to embarrass Aliyev. Bagirov
declined to elaborate.