As the Azerbaijani Laundromat scandal reaches German court, will there finally be some accountability?

For an autocracy, maintaining a clean reputation is a Sisyphean task. While the international news cycle moves quickly from one scandal to the next, some stains are not easily erased. Silencing members of the opposition, journalists, academics and other independent voices can provide temporary relief. Regimes that imprison or intimidate dissidents effectively kill two birds with one stone: from behind bars or under serious threat, it is much harder to raise awareness or criticise the wrongdoings of public officials, while at the same time there are fewer people left to tell the stories of those who have been imprisoned for their opinions or participation in public affairs.

Nevertheless, this approach is not always sufficient for a squeaky-clean reputation. Hosting and footing the bill for important global events, such as the UN Climate Change Conference, may shift public discourse for a short while, but those blemishes remain.

When neither oppression nor showing off is enough, and powerholders refuse to settle for less than a seemingly impeccable reputation, then they need to buy the testimonies of those whose job it is to monitor the quality of human rights and the rule of law in in various countries: parliamentarians, journalists and non-governmental organisations.

Bribes, scandals and inaction
The Azerbaijani regime is not a new client in the reputation laundering market. According to the Caviar Diplomacy reports and the Azerbaijani Laundromat stories, the regime spent millions and millions of euros on bribing individuals capable of shaping public opinion in democratic countries. These pivotal reports came out approximately eight years ago, and shortly thereafter, the independent external investigation body of the Parliamentary Assembly of the Council of Europe (PACE) published its report on how Azerbaijan bribed PACE members.

This report identified about seventy individuals potentially implicated in the corruption scandal, as well as more than two dozen countries that have jurisdictions over them. Yet, domestic authorities have taken little action so far. In Italy, criminal proceedings against former MP Luca Volonte reached the trial phase but finished in acquittal, partly due to Italy’s extremely embarrassing statute of limitations. Belgian authorities also investigated the case of two Belgian politicians for a while but eventually dropped these.

Meanwhile, US and French authorities took on Danske Bank, whose Estonian branch played an important role in the Azerbaijani Laundromat. However, their focus extended far beyond Azerbaijan, and not on sweeping human rights violations under the carpet in exchange for some bribes.

Can we say that’s it – that all wrongdoers are off the hook, and no one paying or taking bribes to cover up the existence of political prisoners or rigged elections in the country must worry anymore?

Not yet.

German trial sheds new light, but questions remain
The trial of two former members of the German parliament and PACE started last month. The widower of a third former MP, who passed away after the investigation had commenced, is also involved in the procedure as authorities intend to claim back the bribes that his late wife allegedly took in the same scheme.

In March 2019, Transparency Germany filed criminal complaints against one current and one former member of Bundestag for bribery and corruption of public officials as part of the Azerbaijani Laundromat scandal. The Rostock public prosecutor decided in May 2019 not to launch an investigation. However, in a welcome step, the public prosecutor’s office in Frankfurt am Main announced their own investigation into corruption allegations against these individuals in January 2020.

In March 2021, it was reported that prosecutors were also looking into the role of yet another parliamentarian, Axel Fischer.

The prosecution gives a detailed list of payments the defendants allegedly received or distributed, along with a recap of various events where they seem to have breached their official duties to favour Azerbaijan. According to the indictment, one of the former MPs received 3.4 million euros from shell companies between 2008 and 2014, with no apparent services provided in exchange. On top of this, his company received an additional 591,000 euros between 2014 and 2016 from other shell companies, of which 760,000 euros was funnelled into pro-Azerbaijani organisations registered in Belgium.

The prosecutors claim that three MPs (including the one who passed away a few years ago) received monthly payments ranging from 3,000 to 10,000 euros. But where did the rest of the almost four million euros end up? Are there potentially more suspects, either in Germany or abroad? We don’t know yet, but it will be crucial that all authorities with jurisdiction over the case make an effort to find out.

This grand corruption scheme is just one of those cases where autocracies are trying to buy influence in democratic institutions and countries. It is rather worrying that investigative and prosecution services of more than a dozen other countries that fell victim to the Caviar Diplomacy have been sitting on their hands for years.

The public was fortunate that leaks revealing the movement of bribes allowed journalists to expose a significant part of the scheme. Autocracies learn from each other, and over time, they become more sophisticated in their reputation laundering efforts and corruption schemes.

It will be much more challenging to uncover similar attempts in the future and most European democracies seem to be indifferent to such threats. It is high time they became more vigilant and placed greater emphasis on fighting this type of corruption.

Article Credit: https://www.transparency.org/en/blog/azerbaijani-laundromat-scandal-reaches-german-court