Azerbaijan’s Secret ‘Laundromat’ Scheme Pays $1.5 Million to US Lobbying Firm

The Azerbaijani Laundromat
Harut Sassounian

Harut Sassounian

BY HARUT SASSOUNIAN

The website of Organized Crime and Corruption Reporting Project (OCCRP) revealed last week the possibly illegal lobbying in the United States funded by Azerbaijani sources.

Investigative journalist Jonny Wrate reported on May 23, 2018 that “some of the money that passed through the Azerbaijani Laundromat, a secret money laundering scheme and slush fund that saw $2.9 billion flow out of the country between 2012 and 2014, ended up in the hands of a purportedly private Azerbaijani organization that hired a Virginia firm to lobby the US government for more than a decade.”

OCCRP had reported earlier that “other monies from the fund were used to advance the Azerbaijani government’s political agenda, with some ending up in bank accounts belonging to European politicians who spoke highly of President Ilham Aliyev’s regime even as it arrested journalists and political activists. The precise origins of the funds are unknown, hidden behind secretive shell companies. But there is ample evidence that the authoritarian country’s ruling elite is behind them.”

Last week, OCCRP revealed that two shell companies established by Azerbaijan “funneled over a million and a half dollars to a mysterious Baku-based organization called Renaissance Associates” which in turn hired “a US lobbying firm to orchestrate praise for Azerbaijan and had its representatives make thousands of dollars in campaign donations, including to Senators and Representatives who sat on committees that determine foreign aid budgets.”

At the center of this scheme is Elkhan Suleymanov who “runs a pro-regime organization in Baku which appears to work hand-in-hand with Renaissance, even using the same office space…. Other payments were made to an influential oil and gas consultant with close ties to President Aliyev who presents himself as an immigration success story and lives in Dayton Ohio — even as he also lobbies the US government on his homeland’s behalf.”

The Azerbaijani Laundromat

The Azerbaijani Laundromat

According to OCCRP, two offshore shell companies — Metastar Invest and Hilux Services — made 18 payments totaling $1.7 million to Renaissance Associates S.A. from September 2012 to December 2014 through two separate bank accounts at Volksbank AG in Liechtenstein and Privatbank IHAG Zurich AG in Switzerland. US Justice Department reports filed by Bob Lawrence & Associates (BL&A), a lobbying firm in Alexandria, Virginia, showed that it received $1.5 million from Renaissance — which almost equals the amount transferred by the Azeri shell companies to Renaissance, BL&A’s sole international client.

Since 2004, BL&A has handled the visit of Pres. Ilham Aliyev to the White House and three years later arranged for Pres. Obama’s former campaign manager, David Plouffe, to visit Baku and meet with Azeri officials. BL&A has also lobbied for US Defense appropriations to Azerbaijan, against Karabagh (Artsakh), and for the oil pipeline from Azerbaijan to Turkey. Between 2008 and 2016, BL&A president Bob Lawrence has testified before the House Appropriations Subcommittee on State, Foreign Operations and Related Matters, recommending foreign aid to Azerbaijan. In his testimony, Lawrence called Armenia “a rogue nation… clearly protecting criminals” and that it commits human rights violations.

US Justice Department reports indicate that BL&A paid $250,000 in 2015 to hire the Crane Group to lobby on behalf of Azerbaijan. At the same time, BL&A contracted former Cong. Solomon Ortiz (D-TX) and his firm, Solomon P. Ortiz Holdings LLC, to lobby for the interests of Azerbaijan.

OCCRP also reported that “between 2012 and 2015, individuals registered as lobbyists acting directly or indirectly on behalf of Renaissance made thousands of dollars in donations to political candidates, including to Senators and Representatives who were sitting on, or chaired, appropriations subcommittees at the time.”

Surprisingly, and possibly illegally, BL&A has not registered with the US Justice Department as a lobbyist for Azerbaijan. On its website, BL&A states that it “does not work for, report to, or take directions from the Azerbaijani government or any member of the Azerbaijani government.” OCCRP stated that “in 2005 — a year after BL&A first began working with Renaissance — Azerbaijan’s independent Turan News Agency reported that it had received a letter identifying Renaissance as a lobbying firm representing the Azerbaijan government in Washington.”

Furthermore, “between at least 2006 and 2008, BL&A’s website listed the country of Azerbaijan, rather than Renaissance, as its client. In May 2012, BL&A agreed to represent the Embassy of Azerbaijan and disclosed this under FARA [Foreign Agents Registration Act] before quickly annulling the registration, claiming that no services had actually been performed and no payments received.”

BL&A acknowledges on its website that it collaborates with the Association for Civil Society Development in Azerbaijan (ACSDA), a pro-regime non-profit organization based in Baku and controlled by Elkhan Suleymanov, a member of Azerbaijan’s parliament. According to BL&A’s website, Renaissance “supports and nurtures ACSDA. The two organizations share the same Baku apartment.” OCCRP also reported that “when in April 2016, ACSDA signed a three-month contract with US lobbying firm Greenberg Traurig, the firm’s FARA filing shows that the $25,000 per month fees had been paid by Renaissance.”

OCCRP’s extensive report revealed many other lobbying activities funded by this secret slush fund. All these efforts should be reported to the US Congress asking for a thorough investigation. A lawsuit should also be filed against BL&A to block its unregistered lobbying campaigns!

Azeri-American Adil Baguirov Receives $250,000 to Lobby for Azerbaijan
Above, I referred to the payment made to “an influential oil and gas consultant with close ties to President Aliyev who presents himself as an immigration success story and lives in Dayton Ohio — even as he also lobbies the US government on his homeland’s behalf.”

Jonny Wrate, in his article, “Baku’s Man in America,” on the OCCRP.org website (Organized Crime and Corruption Reporting Project), provided extensive details of Adil Baguirov’s activities and the large payment he had received from Azeri sources to lobby on behalf of Azerbaijan in the United States.

Wrate reported that Baguirov, “a vocal member of the Azerbaijani diaspora, received the $253,150 transfer just months after a non-profit organization he runs, the Houston-based US Azeris Network, helped host a conference in Baku, Azerbaijan’s capital, that was attended by 10 members of Congress. The junket was widely criticized, and investigated by the House Ethics Committee, for being secretly funded by Azerbaijan’s state oil company…. The precise origins of the money Baguirov received are unknown, hidden behind secretive shell companies. But there is ample evidence that the authoritarian country’s ruling elite is behind it.”

Baguirov, who “also helped organize other US-Azeri conferences in Washington, repeatedly testified before the House [of Representatives] in favor of US military aid to Azerbaijan, served as the coordinator of the Congressional Azerbaijan Caucus, and worked prominently in a Houston-based company that claims to have organized a trip by the country’s president, Ilham Aliyev, to the White House,” wrote Wrate.

Baguirov and his family have extensive ties with Pres. Ilham Aliyev who awarded him a medal for his services in the US on behalf of Azerbaijan. However, Baguirov had not registered as a lobbyist, as required by US law, under the Foreign Agents Registration Act (FARA). When contacted by OCCRP reporters, Baguirov said that the payment he had received was none of their business.

Baguirov moved to the United States at the age of 16. He graduated from the University of Southern California in international relations and business administration. Subsequently, he received a Ph.D. in political science in Moscow. Interestingly, Baguirov “was elected to Dayton’s school board, a position he held until 2017, when he resigned more than a month before the end of his term after local activist David Esrati discovered that he appeared to have lied about his residential address.”

Wrate revealed that Turbillion LLC, a consulting company Baguirov runs, received a payment of $253,150 from Hilux Services, a shell firm that is part of the Azerbaijani Laundromat. Turbillion is registered in Wyoming, “a state popular with those looking to create secretive companies due to its tax-free incentives and provision of anonymity.” Another Wyoming company controlled by Baguirov, which has the same mailing address as Turbillion, is called “Nobel Brothers Pictures LLC,” which is “allegedly producing a Hollywood movie about the history of the Azerbaijani oil industry.”

Six months before Baguirov received the payment of $253,150, his Houston-based non-profit US Azeris Network (USAN) “helped organize a two-day conference in Baku called “US-Azerbaijan Relations: Vision for Future.” Wrate revealed that two other conferences were organized by USAN in Washington.

“The Baku meeting in 2013 was attended by 11 members of [US] Congress, 10 of whom were paid for, and over 30 of their staff — and that, according to a confidential report by the Office of Congressional Ethics (OCE) obtained by the Washington Post, they were lavished with silk scarves, crystal tea sets and Azerbaijani rugs valued at $2,500 to $10,000,” Wrate reported.

In addition, Baguirov worked for Cong. Curt Weldon (R-PA) as Special Advisor on Russia and the former Soviet Union. Weldon lost his seat in 2006 “after the Justice Department investigated him for allegedly steering to his daughter’s lobbying firm almost $1 million in consulting contracts from two Russian companies and a Serbian foundation,” according to Wrate. Weldon founded the Congressional Azerbaijan Caucus in 2004 together with fellow Congressman Solomon Ortiz (D-TX) who subsequently worked for Azerbaijan as a lobbyist. Baguirov “served as the Caucus’ coordinator and allegedly traveled with Congressional delegations to the former Soviet Union in 2003 and 2004.”

Furthermore, Wrate revealed that “between 2008 and 2016, Baguirov was also invited almost annually to recommend foreign economic and military aid budgets for Azerbaijan and Armenia to the House Appropriations Subcommittee on State, Foreign Operations and Related Matters. In some years, other representatives of USAN and the Karabakh Foundation — another of Baguirov’s non-profit organizations — also testified.” In his congressional testimonies, Baguirov urged the US Congress to reduce the aid for Armenia to zero, while requesting that Azerbaijan receive $26 million from USAID and $3.9 million in military aid.

Baguirov was also the Executive Vice President of International Affairs for Worldwide Strategic Energy, Inc., a Houston-based company that offered its “strong business and political ties” to help prospective clients capitalize on hydrocarbon development opportunities in “politically complicated countries,” including Azerbaijan.

The US Justice Department should be asked to investigate Baguirov’s unregistered lobbying activities in the United States on behalf of Azerbaijan to see if any illegalities have been committed!

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