Imagine the Corleone family in charge of an entire country, and you have Azerbaijan. Playing the role of Vito is President Ilham Aliyev. The commanding heights of the economy are divided among his family members and in-laws. A recent investigation by the Organized Crime and Corruption Reporting Project reveals how Aliyev along with his wife, children, and various associates are linked to a byzantine array of offshore companies whose alleged purpose is to pilfer the assets of the state (see also here and here). These are assets that formally belong to the people of Azerbaijan but which the Aliyev clan evidently sees as their personal property to be dispensed with at their pleasure. Over the past 22 years, untold billions in state funds have disappeared from the oil-rich republic into offshore tax havens. The Aliyev family enjoys complete impunity by virtue of its control over a repressive dictatorship that routinely hounds anyone who seeks to expose malfeasance among the ruling clique. The most notable victim is crusading journalist Khadija Ismayilova. Her investigations into the Aliyev family’s corrupt activities ended with her imprisonment and prosecution on the absurd charge of inciting a colleague to suicide. Her trial remains ongoing but its outcome appears preordained.
The Aliyevs are leading players in the spheres of banking, construction, transportation, insurance, mining, oil, and gas (see here and here). Investors beware of setting up shop in countries like Azerbaijan, where your main market competitor may end up being the ruling family itself.
A U.S. federal appeals court ruled Tuesday that internal documents at defense contractor Kellogg Brown & Root (KBR) are protected by attorney-client privilege and do not have to be released to a whistleblower who filed a complaint against the company in 2005. The documents contain information relating to allegations that KBR and various subcontractors defrauded the U.S. government during the war in Iraq by inflating costs and accepting kickbacks. In his monumental book, The Shadow World: Inside the Global Arms Trade, investigative journalist Andrew Feinstein reveals how the U.S. government routinely awarded billions of dollars in wasteful, excessive, and downright dubious wartime contracts to a host of politically-connected defense contractors. KBR and its parent company, Halliburton, feature prominently in his report.
An investigation by Pro Publica reveals how U.S. political organizations pose as “social welfare non-profits” to engage in dubious campaign-finance activities. Not only do they adopt the ruse of promoting “charity” as a tax-exempt cover for blatant fundraising, they are not obliged to identify the sources of the money they are channeling to politicians. Much like Super-PACs and LLCs, they thereby offer yet another avenue for plutocrats and criminals alike to try and influence U.S. politics. Nor are social-welfare non-profits small fry; with over $70m in donations in the current election cycle, they are emerging as “the primary conduit for anonymous big-money contributions,” Pro Publica writes.