The Guardian on September 4 published the results of an investigation revealing a $2.9bn money laundering scheme involving the Azerbaijani government, opaque Azerbaijani companies, the Russian government, and four UK-registered companies. The "laundromat" formula was used to pay for public relations for the government of Azerbaijan and for a number of luxury services and goods for its elites, the report argues.
The slush fund revelations came from confidential banking records from one of the Estonian branches of Danske Bank, Denmark's largest lender, showing that a shady Azerbaijani company, Baktelecom LLC, had funnelled some $1.4bn into the branch. In addition, Russian weapons manufacturer Roboboronexport and several other companies operated out of Moscow made payments into the account.
Batktelecom has been linked to Azerbaijan's first lady and vice president, Mehriban Aliyeva. Its transfers to the Danske Bank account were conducted through the crisis-stricken International Bank of Azerbaijan.
Danske Bank acknowledged that illegal money laundering operations had taken place at its Estonian branch and vowed to conduct internal controls.
The money was funneled into four UK-based companies - Hilux Services, Polux Management, LCM Alliance and Metastar Invest, all of which were limited liability companies with corporate partners based out of Belize, the Seychelles and the British Virgin Islands.
Some $2.9bn in payments to companies and $50mn to individuals were made via these channels. Among the recipients of payments were Luca Volonte, a former Italian EMP who is currently on trial for accepting bribes from Baku in exchange for favourable decisions at the Council of Europe; Kalin Mitrev, a Bulgarian who is on the board of the European Bank for Reconstruction and Development and is married to UNESCO's director general, Irina Bokova; Eduard Litner, a German ex-MP; Eckart Sager, a London-based former CNN producer; and Jovdat Guliyev, a London-based Azerbaijani citizen who is a member of the Anglo Azerbaijani Society, a lobbying group.
Some 200 transfers from the fund were made to different education facilities in the UK, including the ICS International School in London, Bellerbys college and Queen Ethelburga's Collegiate, a private boarding school in York.
Some of the institutions named in the investigation said that they were looking into the allegations when contacted by the Guardian. Furthermore, Madis Reimand, head of Estonia's financial intelligence agency, said that his agency identified suspicious cash flows related to Azerbaijan as early as 2013 and tried cooperating with Baku, but said that "this didn't work out".
There is no suggestion that all of the recipients of money were aware of its original source, the investigation added.