Daily Mail, UK
November 24, 2012 Saturday 10:00 PM GMT
Filthy rich: Britain’s favourite dictatorship had so much oil its
heiresses bathe in it… but beneath the fabulous wealth of Azerbaijan
lurks very murky secrets
by WILL STEWART
Oil generated £19 billion in revenues last year, yet much is believed
to have gone straight into the pockets of President Ilham Aliyev and
his family
Azeri government has threatened journalists and activists are tortured
Leaked documents recently compared President Aliyev and his ruling
clan to the mafia family in the Godfather films
Cleopatra, queen of ancient Egypt, bathed in asses’ milk for the good
of her complexion, but here in Baku, capital of Azerbaijan, an even
more surprising treatment is on offer. Disrobing from their Gucci or
Oscar de la Renta outfits, the ladies who lunch lie naked in baths of
crude oil, believing, as did Marco Polo, that the warming effects of
40C crude cure skin diseases, rheumatism, arthritis and even ‘nerves’.
Medical science says that, beyond ten minutes, the effects are more
likely to be carcinogenic.
Oil is everywhere in Baku, even the spas. It is in the sharp, acrid
taste of the wind blowing in from the Caspian and in the army of
derricks marching far out to sea. Solidified into glass and concrete,
it is changing everything in this ancient town once known for dusty
streets and traditional carpets, creating instead a city of staggering
ostentation.
Baku is openly vying to become the Dubai of the Silk Road. Earlier
this year, it played host to the Eurovision final, staged in the new
Crystal Hall with its swirling lasers.
By 2019, Baku will boast the tallest building on the planet (or so it
is claimed): the £1.25 billion Azerbaijan Tower, soaring 3,445ft and
189 floors, or more than one kilometre, into the sky. It will be 30
per cent higher than Dubai’s Burj Khalifa tower, the current record
holder. And this in a region prone to earthquakes.
As night falls, the city becomes a noisy, pulsating LED show,
competing with the well-head flares in the darkness beyond.
No one knows quite how much of Azerbaijan’s extraordinary oil wealth
has made its way into the bank accounts of 50-year-old President
Ilham Aliyev and his family, or their retinue of friends and
hangers-on. But it is safe to say they are all unimaginably rich.
According to independent research, SOCAR, the state oil and gas
company may have brought in revenues of £19 billion last year – in a
country with fewer than ten million people.
Aliyev himself was educated in Russia, but nothing less than a British
school was acceptable for his children, so he sent daughters Leyla and
Arzu Aliyeva to the exclusive £15,000-a-year Queen’s College for girls
in London.
Today, the sisters are believed to share a property portfolio of £50
million – across Dubai, Paris and London – and to share construction
interests with their mother.
Leyla’s personal business empire is said to include lucrative airline
and mobile-phone concerns, but the opaque commercial world of Baku
makes it hard to be sure. It has even been claimed she owns
Azerbaijan’s London embassy.
Leyla, 26, has now settled in Britain with her husband, Russian singer
Emin Agalarov, the son of a billionaire property tycoon, and their two
sons. They lead an enviable life, occupying an extravagant penthouse
overlooking Hyde Park.
Styling herself as an artist and socialite, she has gathered an
influential social circle, including Elisabeth Murdoch, Lord Mandelson
and Prince Andrew.
She once spent nearly £300,000 on vintage champagne at a dinner party
for a dozen girlfriends.
She recently launched Baku, a vanity magazine to promote her country
to wealthy Westerners.
Any serious opposition against President Aliyeva is crushed –
activists are tortured
Her arrival in London has prompted a flood of Azeri oil money into UK
property and business interests. At Baku, a new Azeri restaurant in
Knightsbridge, Leyla and friends can choose from a menu offering
caviar, gutab (minced lamb pancakes), pomegranate-and-rose soufflé and
a £4,400 bottle of 1999 Cristal. A recent London Fashion Week cocktail
party there was sold out.
The site of the restaurant – formerly Gordon Ramsay’s La Noisette –
is owned by Azeri government minister Kamaladdin Heydarov’s
London-based billionaire sons, Tale, 27, and Nijat, 26. Former LSE
student Tale has been dubbed the ‘Abramovich of Azerbaijan’ after
pouring millions into his local football team, Gabala, and recruiting
former England captain Tony Adams on a £1 million annual contract.
Tale was introduced to Princes William and Harry at a charity match at
the Beaufort Polo Club in Gloucester, when they reportedly discussed
hosting a polo event in Azerbaijan to raise money for the Prince’s
Trust, Prince Charles’s charity.
Leyla is not the only Aliyev who likes to spend. In 2010, the story
emerged of an extraordinary two-week shopping spree in Dubai conducted
by an Azeri boy aged 11. Over this happy fortnight, he became owner of
nine waterfront mansions for £28 million, a sum that would take the
average Azeri citizen 10,000 years to earn.
The boy’s identity? Heydar Aliyev, son of the president, if the Dubai
Land Department records are to be believed.
‘I have no comment on anything. I am stopping this talk. Goodbye,’
snapped the presidential spokesman when asked about the purchases.
If rich Azeris seem fond of life in Britain, it is as nothing to the
deepening love affair between British businessmen and the oil wealth
of Baku. The relationship has been growing inexorably stronger.
Political delegations visit every year at the behest of SOCAR and the
European Azerbaijan Society, or TEAS, based in London.
Ex-Defence Secretary Liam Fox, Lord Fraser, Lord Sheikh, Bob Blackman
MP, Mark Field MP, Transport Minister Stephen Hammond – all Tories –
and Ulster Unionist peer Lord Kilclooney have all enjoyed trips to
Azerbaijan. Discreet visits by military big-wigs are not unknown.
Tony Blair, another traveller to these parts, was reportedly paid
£90,000 for a 20-minute speech on a visit in 2009: £75 a second.
But none has been so high- profile or controversial as Prince Andrew,
a regular guest of President Aliyev.
In Azerbaijan, Prince Andrew is routinely described as a ‘dear guest’
by the leader of a country that ranks as one of the most corrupt in
the world on the Transparency Index.
But in Britain, the Prince has been heavily criticised for a
friendship that appears to be continuing, though he has now stood down
from his role as trade envoy. Last month, he met with Britain’s
Ambassador to Azerbaijan at Buckingham Palace.
Prince Andrew has made eight visits to Azerbaijan in six years; two of
these were private, arousing suspicion that he has business interests
there, including a soon-to-be-built golf complex. These claims have
been vigorously denied by Buckingham Palace.
The UK is Azerbaijan’s biggest investor, mainly through BP, though via
dozens of other oil-related companies, too: about £20 billion has been
pumped into the country since 1991.
Still, it is clear who is boss here: Aliyev recently condemned BP for
‘grave errors’ and sharp declines in oil output, leading to a £5
billion loss for Azerbaijan. BP quickly replaced its top man in Baku.
The British auction house Christie’s organised its first exhibition in
Baku at the newly opened Four Seasons Hotel in September, flying in
dealers, collectors, experts and its chairman, Viscount Linley, to
accompany the works of art. Rolls-Royce are here, as are accountancy
giant PricewaterhouseCoopers and travel and corporate services giant
Hogg Robinson. Stella McCartney has an outlet too. In preparation for
Eurovision, Azerbaijan purchased 1,000 London black cabs to whisk
visitors from one freakish new building to another.
Mocking Azerbaijan is such easy sport that you wonder if it was this
Caspian potentate that was Sacha Baron Cohen’s real target when he
invented Borat, not Kazakhstan. WikiLeaks did not help. Leaked cables
showed US diplomats likening moustachioed despot Aliyev and his ruling
clan to the mafia family in the Godfather films, quoting the line: ‘I
don’t feel I have to wipe everybody out – just my enemies.’
The same documents revealed his First Lady, Mehriban, 48, ‘wears
dresses that would be considered provocative even in the Western
world’, and lacks a ‘full range of facial expression’ following
‘substantial cosmetic surgery, [done] presumably overseas’.
Aliyev assumed power from his KGB-boss father in the 2003 election
that is widely believed to have been rigged. It is said the Duke of
York makes him laugh and that the two men share a taste for risque
jokes – and the services of a blind Russian masseur with ‘the best
hands in the world’.
However, if the vulgar ostentation of Baku is pure comedy, the darker
side of the regime is no joke at all.
Take, for example, the locking up of irreverent youths for slight
impoliteness towards the ruler’s late, and deified, mother Zarifa. Or
how ordinary people were evicted from apartment blocks to make way for
the totemic towers and esplanades, including the £85 million palace
for Eurovision.
When grandmother Shirinbazhi Rzayeva refused to move out of her flat
near the site, somebody used a mechanical digger to drop a concrete
block through the roof.
‘We called the fire department but all they did was ask us why we
wouldn’t sell. The president wants to build his new city at my
expense. I refuse to be part of that.’
More sinister still is Aliyev’s crushing of any serious opposition, as
confirmed by groups including Human Rights Watch and Amnesty. Phones
are routinely tapped. Four years ago, the interior minister publicly
admitted that suspects have been tortured in pre-trial detention.
Last year, Turac Zeynalov, 31, was detained on espionage charges.
Relatives who visited him felt he had been beaten and said he could
not move. He died three days later ‘of skin cancer’, according to
officials.
Aliyev’s feared secret police like nothing better than to snoop on
female investigative journalists, the hidden cameras rolling as they
have sex in the privacy of their own apartments.
In an infamous case, Khadija Ismailova, 36, a reporter with Radio
Liberty, received a warning letter which read: ‘Whore! Behave, or you
will be defamed!’ She ignored the threat and continued to investigate
allegations of gross corruption within the first family and the
Byzantine court that encircles them.
‘I focused too closely on the daughters of Ilham Aliyev, they didn’t
like that,’ she said. As a result, her most intimate moments with her
boyfriend were exposed on the internet.
Says a friend: ‘For any woman this would be painful, for an unmarried
Muslim woman more so, yet Ismailova knows how low they will stoop and
refuses to be intimidated.’ Another potential victim of such tactics
slept in a tent in her bedroom.
There are plenty of reporters and activists in the gruesome Baku
prison whose ‘crime’ is being simply that: journalists, activists,
bloggers.
Walking the streets as a reporter is a dangerous activity.
And what are these 4m-high sandstone walls on the new highway into
Baku from the airport? Taxi driver Malik explains as he speeds into
the city at the wheel of a ‘black cab’ now painted purple: ‘To stop
you and other foreign visitors seeing the poverty on the other side.’
Vagrants are routinely cleared off the streets, while the poor,
disabled and orphaned are shipped out to makeshift care homes.
But to dwell on the cartoonish excesses of this sinister regime is to
miss the main point. ‘Dubai on the Caspian’ has developed a
hydrocarbon hold over the whole of Western Europe, Britain included –
and its grip will last for decades.
No wonder the Foreign Office has turned an almost blind eye to human-
rights abuses, including curbs on freedom of expression, assembly and
association, political interference in courts, and repeated claims of
torture and abuse of foes.
Instead, the FO has been only too happy to assist Prince Andrew with
visits here, while US Secretary of State Hillary Clinton has been
half-hearted in her denunciations of the regime.
Perhaps they have a point. Aliyev might be a tyrant, but he’s a
pro-British tyrant, is the argument. Certainly, a steady stream of
mega-contracts is flowing to the hundreds of our companies now linked
to Baku. It is likely Prince Andrew has been far more important to the
cause of UK business in Azerbaijan than anyone realises, or at least
will acknowledge.
It is also true that the stakes here are far bigger than most people
realise: they include European ‘energy security’ for generations to
come. Aliyev claims to have enough gas for a hundred years – a fuel
supply that is beyond the reach of Gazprom and the Russian bear, and
free of the fundamentalist despotism of Saudi Arabia or Iran.
For all its absurdities, Azerbaijan is a Western-facing Muslim
country, an oasis of calm and stability in a region of notorious
turmoil. Go south little more than a hundred miles from Baku and
you’re in the nuclear-ambitious theocracy of Iran.
Here is a Muslim country where women generally do not cover their
heads, and couples stroll hand in hand and kiss on park benches close
to delightful fountains. Nightclubs are common.
In Iran, the mullahs despise all they see in Azerbaijan, including its
open business and diplomatic ties to Israel and the West. Tehran
withdrew its ambassador in protest at the staging of Eurovision so
nearby.
Jennifer Lopez, Rihanna and Shakira, all known for provocative
costumes and dance routines, have recently filled Baku concert halls.
No one batted an eyelid. It has been suggested Azerbaijan poses the
greatest threat to Iran simply by being itself: a (relatively)
outward-looking Shi’ite state, in stark contrast to its neighbour. A
high-ranking Azeri official at the Jo-Lo extravaganza was quoted
saying: ‘You could almost feel the Iranians seething. This stuff makes
them crazy.’
Azerbaijan means the Land of Fire in Persian. Zoroastrians built
temples round burning gas vents in ancient times. Marco Polo wrote of
a ‘fountain from which oil springs in great abundance. . . not edible
but good for burning and to treat men and animals with mange, and
camels with hives and ulcers’. Other places have bounteous fruit
orchards – this country has spewing geysers of flaming gas.
By the 19th Century, half the world’s oil gushed from here; families
including the Nobels and the Rothschilds built grandiose mansions in
what was then known as the Paris of the Caucasus. Yet it is not so
long since Soviet rule, when Azerbaijan was a bankrupt backwater,
almost wholly cut off from the world outside the USSR.
Its fortunes declined still further thanks to the devastating war with
Armenia over the disputed enclave of Nagorno-Karabakh (still a huge
bone of contention). Then, in the ‘Eldorado Era’ immediately after the
collapse of the Soviet Union, educated but impoverished local
‘Nastashas’ flung themselves at British oil workers for $100 a night
at seedy clubs. In this Wild East, drunk foreigners drooled at Azeri
belly dancers, clumsily stuffing hard currency into their bras and
knickers.
This was the period when I bumped into a grumpy Mark Thatcher who kept
a bolthole in Baku as he touted, like many other Western
wheeler-dealers, for a slice of the Azeri action.
Sir Mark was unsuccessful in Baku, like most foreign cowboys. People
here are among the most skilled and exasperating negotiators in the
world. Some of the best oil brains on Earth drank themselves silly
(and several went certifiably mad) waiting for Aliyev’s ruthless
father Heydar – former head of the KGB in the region and another man
familiar with torture – to agree the ‘deal of the century’ with
Western giants.
Heydar finally clinched it in 1994 with a consortium of oil companies
headed by BP, triggering $18 billion in investment and setting
Azerbaijan on course to its current riches.
Even in death Heydar stares threateningly from the posters and
statues: almost everything else about Baku has changed dramatically.
Chinese, Arab and US money is pouring in to the Khazar Islands.
Described by the regime as a new Venice, Baku’s 41 artificial islands
are expected to become one of the most desirable residential areas in
the world, with 50 hospitals, 150 schools, beautiful parks and
recreation facilities, gargantuan shopping malls, university campuses
and, inevitably, a Formula 1 racetrack.
The Hotel Crescent is due to open soon, a 33-storey half-moon shaped
structure by the sea. It will be followed by the seven-star Full Moon
Hotel with a design that has been likened to the Death Star from Star
Wars. ‘Baku White City’, built by Atkins UK, and with architects
including Sir Norman Foster, will, say one report, ‘cover an area
greater than Monaco, becoming the biggest development in the
Caucasus’.
‘The scale of what’s happening is mind-boggling,’ says a UK oil
executive as he sips whisky in a revolving bar atop the Baku Hilton.
‘There’s every designer boutique known to man. Streets are filled with
Bentleys and Ferraris. Here’s the crunch: the Azeris have only begun.
In another dozen or so years it will be one of the smartest, most
fashionable locations in the world. It’s a cut above the normal
Corruptistan stereotype of old Soviet states.’
Here is a prediction: it is likely you or those close to you will, in
years ahead, come here for an exotic weekend. It is equally likely you
will rather enjoy its often balmy weather, relaxed atmosphere and
opulence.
Visa rules are still restrictive for Westerners, except oil or gas
experts on expensive organised package tours; prying journalists are
unwelcome. Yet the expectation is that Baku will open up in the coming
years to compete with Dubai. The big international hotel chains are
well established, doffing caps to serious money in a once drab
communist outpost.
Qatar Airways has started regular flights, even if they are not cheap
(you can’t get a flight for less than £600, plus £60 entry visa). Baku
is already a playground to Middle Eastern visitors.
Meanwhile, the Old City, a maze of cobbled streets, charming garden
cafes and traditional rug sellers dating back to the 12th Century, is
eerily silent. Above it looms Baku’s Flame Towers, futuristic
high-rises shaped like tongues of fire in glass and steel.
For all the mockery and criticism of Aliyev, Western leaders are
secretly grateful to a man who has brought stability and the prospect
of oil and gas. They hold on to the thought that, compared with Iran,
the suppression and torture is on a lesser scale.
But realpolitik has its dangers. A former ambassador in the region
remembers the enthusiasm that greeted Bashar al-Assad coming to power
in Syria: ‘One Labour Foreign Minister described him as “good news”,
“very impressive” and “a warm individual”, adding for good measure,
“I found him as somebody who had a very modern outlook, who will take
Syria forward.”
‘The Minister was Peter Hain, but never mind. Hindsight makes us all
wise. All I can say is this: don’t be too sure about throwing all your
support behind the “stable” Aliyev dynasty and their skyscraper
palaces. Things may turn out differently one day.’