JekyllOCCRP - en2024-03-18T12:31:44+01:00https://www.occrp.org/en/feed.xmlOrganized Crime and Corruption Reporting ProjectOCCRPhttps://www.occrp.org/Middlemen Push Up Prices As Gazans Struggle To Survive2024-03-13T00:00:00+01:002024-03-13T00:00:00+01:00https://www.occrp.org/en/investigations/middlemen-push-up-prices-as-gazans-struggle-to-survive<p>Taxi driver Wesam Shaath has become used to scouring the street stalls and shops of the southern Gazan city of Rafah for diapers for his twin baby boys.</p><p>Taxi driver Wesam Shaath has become used to scouring the street stalls and shops of the southern Gazan city of Rafah for diapers for his twin baby boys.</p> <p>Before the Israel-Hamas war erupted on October 7, 2023, he paid the equivalent of around $6 for a box. Now he says vendors can charge up to $55, which he cannot afford. In desperation, he has tried to make his own diapers for the twins.</p> <p>“I tried to put ribbons and nylon on them, I tried more than one idea, but it didn’t work,” he told OCCRP. He struggles to afford even the most basic essential supplies for the babies, including formula milk.</p> <p>The plight of Gaza’s civilians has been highlighted by the U.N. and multiple aid agencies — but the situation is getting worse. Gaza’s 2.3 million people are facing acute food shortages and half a million people there face “catastrophic levels of deprivation and starvation,” according to the deputy chief of the United Nations’ humanitarian agency, OCHA.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/refugees-line-water-rafah-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Refugees in Rafah wait in line" data-img="/assets/investigations/refugees-line-water-rafah.jpg" id="img-9945" /> <img src="https://www.occrp.org/assets/investigations/refugees-line-water-rafah.jpg" class="hidden" id="aside-img-9945" alt="investigations/refugees-line-water-rafah.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Abed Rahim Khatib/dpa/Alamy Live News </small> Palestinian refugees in Rafah wait in line to fill bottles and jerrycans with water. </div> </div> <script> $(document).ready(function() { let rand_9945 = $("#aside-img-9945").prop("naturalWidth"); if(rand_9945<750){$("#img-9945").attr("src","/assets/investigations/refugees-line-water-rafah.jpg");} $(window).load(function() {$("#aside-img-9945").remove();}); }); </script> <p>Palestinian traders who spoke with OCCRP said the entry of commercial goods continues to be hindered by security checks imposed by Israel since the start of the war and constraints on movement, including multiple inspections, long queues at checkpoints, and devastated roads.</p> <p>But from speaking with traders and officials, reporters found that multiple layers of profiteering compound the problem. They described a broken and exploited system where money is skimmed at every point in the commercial supply chain, from transport to procurement and sale, leaving Gazans with scant goods at sky-high prices.</p> <p>At the An-najmah market in Rafah, where street vendors display small quantities of goods including fava beans, sardines, tuna fish, lentils, sugar, juices, and sweets, shoppers and traders said the price of some food items had risen tenfold since the beginning of the war.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/market-rafah-gaza-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Market in Rafah, Gaza" data-img="/assets/investigations/market-rafah-gaza.jpg" id="img-457" /> <img src="https://www.occrp.org/assets/investigations/market-rafah-gaza.jpg" class="hidden" id="aside-img-457" alt="investigations/market-rafah-gaza.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> OCCRP </small> A market in Rafah, Gaza, in late February. </div> </div> <script> $(document).ready(function() { let rand_457 = $("#aside-img-457").prop("naturalWidth"); if(rand_457<750){$("#img-457").attr("src","/assets/investigations/market-rafah-gaza.jpg");} $(window).load(function() {$("#aside-img-457").remove();}); }); </script> <p>“Prices have increased tremendously,” said Hala Emran, a displaced mother of eight, after inspecting goods at the market. “Everybody is complaining, and many cannot buy anything.”</p> <p>Hala said that she was unable even to buy a cookie for her young son, who is craving sugar. The cheapest one at the market is now selling for up to 10 shekels (approximately $2.70), compared to 1 shekel before the war, she said.</p> <p>With much of Gaza reduced to rubble, the price hikes come as livelihoods collapse.</p> <p>Wesam used to earn 30 to 40 shekels (between $8 and $11) in a day driving a taxi between Khan Yunis and Rafah, which is now crowded with 1.5 million displaced Gazans and under threat of an Israeli offensive. Since the war, his income has dried up.</p> <p>“Things are very tough on us. Without income, I am unable to buy anything,” he said.</p> <h2 id="traders-say-egyptian-transport-monopoly-charges-quadruple-pre-war-prices">Traders Say Egyptian Transport Monopoly Charges ‘Quadruple’ Pre-War Prices</h2> <p>Before the war, aid trucks and commercial goods entered Gaza by two routes: the majority via the Kerem Shalom crossing with Israel and the rest via Rafah, which lies on the border with Egypt and was mostly used for civilian movement.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/roads-rafah-gaza-destroyed-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Roads and buildings destroyed" data-img="/assets/investigations/roads-rafah-gaza-destroyed.jpg" id="img-7358" /> <img src="https://www.occrp.org/assets/investigations/roads-rafah-gaza-destroyed.jpg" class="hidden" id="aside-img-7358" alt="investigations/roads-rafah-gaza-destroyed.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Ismael Mohamad/UPI/Alamy Live News </small> Roads and buildings destroyed in Rafah, Gaza. </div> </div> <script> $(document).ready(function() { let rand_7358 = $("#aside-img-7358").prop("naturalWidth"); if(rand_7358<750){$("#img-7358").attr("src","/assets/investigations/roads-rafah-gaza-destroyed.jpg");} $(window).load(function() {$("#aside-img-7358").remove();}); }); </script> <p>Both crossings are intermittently open, but goods coming into Rafah are now diverted to Kerem Shalom first, unloaded, and checked before being taken back to Rafah to enter, creating queues and delays. Both humanitarian aid and commercial goods have slowed to a trickle and the costs of importing have skyrocketed.</p> <p>Limited supply is one of the drivers of rising prices, but traders in Gaza accused an Egyptian company that is key to the flow of imports of piling on costs.</p> <p>OCCRP reporters spoke with seven Palestinian traders, most of whom requested anonymity because they feared reprisals from Cairo, who said Egyptian logistics company Abnaa Sinai was profiting from an effective monopoly at Rafah.</p> <p>Meat importer Eyad Albuzum said that before the war, Abnaa Sinai would already charge a minimum of $5,000 per truck but is now charging much more. “Prices have now quadrupled compared to before the war,” he claimed.</p> <p>“Without going through them [Abnaa Sinai],” said another businessman, “you can’t take in anything. They were profiting from us before the war on the back of their monopoly, and they continue.”</p> <p>A senior official at the Hamas-run ministry of economy, who spoke on condition of anonymity to avoid offending Egypt during a time of war, echoed traders’ accusations. He said that Abnaa Sinai had had an exclusive right to bring in goods and aid at the Rafah border crossing since 2018, but had piled on costs since the start of the war.</p> <p>The official told OCCRP that according to traders he had spoken with, Abnaa Sinai had increased its prices sixfold and was also imposing a new charge of $75 per truck per day for waiting at the border for the security checks. If a trader wants to skip ahead in the queue, he also has to pay a bribe of up to $20,000, the official added. So between shipment charges, daily ground fees, and the bribe, the cargo could cost $40,000 just to get to Gaza.</p> <p>Abnaa Sinai did not reply to questions sent by OCCRP.</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-who-is-behind-egyptian-transport-company"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-who-is-behind-egyptian-transport-company">🔗</a>Who is Behind Egyptian Transport Company? </h3> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p><strong>Abnaa Sinai has powerful backers. It is one of eight firms operating under the Organi group, which is run by prominent Egyptian businessman Ibrahim Al-Organi.</strong></p><p>The company’s website describes Abnaa Sinai as Organi’s “inaugural venture” in 2010.</p><p>Organi has spoken publicly about the involvement of the Egyptian government in another of his organizations.</p><p>In a 2014 television interview, he confirmed that Organi group’s industrial and investment company Misr Sinai, which mines, extracts and supplies marble, was a joint venture with the Defense Ministry’s industrial conglomerate, the National Services Projects Organization (NSPO).</p><p>Organi said the NSPO owned 51% of Misr Sinai’s shares in partnership with two other firms belonging to the General Intelligence Service, which has ultimate control over the Rafah border crossing.</p><p>“As you can see, all state entities are in this company. That gives us advantages,” Organi said in the interview, referring to Misr Sinai.</p> </div> </div> </div> </div> </div> <p>In an ad on its Facebook page on November 15, Abnaa Sinai said that it was transporting fuel into Gaza “after efforts and complete coordination from the Egyptian state.”</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/screen-facebook-company-abnaa-sinai-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="A screenshot from a video shared on Abnaa Sinai's Facebook page describing its track record and reliability as a fuel transporter into Gaza" data-img="/assets/investigations/screen-facebook-company-abnaa-sinai.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/screen-facebook-company-abnaa-sinai.jpg" class="hidden" id="aside-img-3818" alt="investigations/screen-facebook-company-abnaa-sinai.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Facebook/Abnaa Sinai (شركة أبناء سيناء للتجارة والمقاولات العامة) via القاهرة الإخبارية AlQahera News </small> A screenshot from a video shared on Abnaa Sinai's Facebook page, previously shared by AlQahera News, describing its track record and reliability as a fuel transporter into Gaza. </div> </aside> <script>$(window).load(function() {$("#aside-img-3818").remove();});</script> <p>Organi told Egyptian media at the end of October: “We are ready with all our resources; cars, equipment, medicine, and food. And when the opportunity presents itself, we shall help our Palestinian brethren with no hesitation.”</p> <p>That help has been hard to discern. As supplies have dwindled, some hungry Palestinians have turned on each other. Trucks, mostly carrying U.N. relief goods, have been attacked and food consignments stolen.</p> <p>Ismael Thawabteh, head of the Hamas-run government media office, added that trucks can wait on the Egyptian side of the border for 50 days.</p> <h2 id="officials-and-traders-blame-each-other-for-price-hikes">Officials and Traders Blame Each Other for Price Hikes</h2> <p>As Gazans question why they can no longer afford even the most basic goods, each part of the commercial chain seeks to deflect blame for spiraling prices.</p> <p>Officials argue that they are trying to implement a system that controls prices and accuse unscrupulous traders of trying to circumvent their controls to charge more. Meanwhile, traders accuse the Hamas-run authorities of undercutting them on prices and enabling a black market to flourish off the back of their goods.</p> <p>Before the war, a company called Multi Trade, which one trader said was close to Hamas, was responsible for transporting goods from the Egyptian side of the border at Rafah to the Palestinian side, taking up to $500 per truck in “custom clearance” fees from importers. The Ministry of Finance also imposed between 3% to 4% in customs on merchandise, said the senior economy ministry official.</p> <p>Multi Trade no longer operates and Thawabteh said that customs on merchandise are no longer imposed “in appreciation of the exceptional situation our people are currently exposed to.”</p> <p>In a bid to control prices, a committee from the ministry of economy now buys the majority of each shipment from Palestinian importers, the senior economy ministry official said. Those products are taken to sales points run by the ministry in the three governorates of Rafah, Khan Yunis, and Central Gaza where prices are controlled, he added. The official blamed “traders, middlemen and thugs” for going around the system, trying to commandeer goods and hike prices.</p> <p>However, traders who spoke with OCCRP said the Hamas-run authorities do not pay a fair price for their shipments and do not properly control prices at the sales points, fuelling a black market that puts basic goods beyond the reach of ordinary Gazans.</p> <p>“The [economy ministry] takes the goods to selling points where goods are sold for unbelievable prices and no one adheres to the prices set by the ministry,” one trader told OCCRP.</p> <p>“Imagine the ministry distributes to the selling points 10,000 trays of eggs. Traders who buy it, sell 2,000 or 3,000 trays, hide the rest and later sell them on the black market. The ministry of economy cannot control them by staying there until all goods are distributed and sold,” he added.</p> <p>The official and traders described how, since the war started, Israel has imposed a new restriction whereby it authorizes only five Palestinian importers to transport goods into Gaza from Egypt.</p> <p>The senior economy ministry official accused the authorized importers of taking up to a 30 percent cut from the Palestinian businesses receiving the goods.</p> <p>Of the seven traders who spoke with OCCRP, three are among those now authorized by Israel to bring in commercial goods from Egypt to Gaza. They denied profiting from a monopoly, instead blaming Hamas-run authorities for seizing their goods and undercutting them.</p> <p>One of the authorized traders told OCCRP he no longer felt able to operate in the Hamas-run system. “I am not willing to take the risk so that they make profits,” he said.</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-basics-out-of-reach-for-ordinary-gazans"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-basics-out-of-reach-for-ordinary-gazans">🔗</a>Basics Out of Reach for Ordinary Gazans </h3> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p><strong>A local reporter who visited the Rafah market in late February said the prices of poultry, meat, vegetables, fruits, and other goods are skyrocketing.</strong></p><p>Before October 7, Palestinians in Gaza used to buy a kilogram of tomatoes for the equivalent of about $0.30. Now, the same amount costs $4 to $5. Three kilograms of sugar that would have sold for $2 to $2.50 are now selling for $21 to $22.</p><p>On average, the price of a chicken went up from $3 to $21. A kilo of onions, a basic food staple, went up from less than a dollar to between $4 to $5. A tray of 40 eggs is now sold for $20, while before the war it would have sold for less than $3.</p> </div> </div> </div> </div> </div> <h2 id="gazans-in-rafah-staring-death-in-the-face-says-un">Gazans in Rafah ‘Staring Death In the Face,’ Says U.N.</h2> <p>The Israeli Ministry of Defense did not reply to OCCRP’s request for comment on the checks of shipments that traders say lead to delays.</p> <p>Meanwhile, warnings from aid agencies of a complete collapse in Gaza become increasingly stark.</p> <p>As commercial goods slow to a trickle and fewer traders want to face the costs and security risks of doing business, aid is also severely restricted, leaving Gazans destitute as the holy month of Ramadan begins.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/aid-trucks-rafah-gaza-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="People running toward humanitarian aid tracks" data-img="/assets/investigations/aid-trucks-rafah-gaza.jpg" id="img-7881" /> <img src="https://www.occrp.org/assets/investigations/aid-trucks-rafah-gaza.jpg" class="hidden" id="aside-img-7881" alt="investigations/aid-trucks-rafah-gaza.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Abed Rahim Khatib/dpa/Alamy Live News </small> People running toward humanitarian aid tracks in Rafah, Gaza. </div> </div> <script> $(document).ready(function() { let rand_7881 = $("#aside-img-7881").prop("naturalWidth"); if(rand_7881<750){$("#img-7881").attr("src","/assets/investigations/aid-trucks-rafah-gaza.jpg");} $(window).load(function() {$("#aside-img-7881").remove();}); }); </script> <p>A U.S. ship is headed to the Gaza coastline to build a temporary pier in an attempt to create a new route for food and medical supplies to come in from Cyprus, but it could be as long as two months before the facility is up and running, according to reports.</p> <p>Last month the U.N.’s World Food Programme announced it was suspending aid deliveries to northern Gaza after some trucks were met by hungry crowds and gunfire.</p> <p>The U.N. said there had also been “instances of Israeli strikes and naval fire hitting aid convoys and the security personnel accompanying aid missions in Rafah”.</p> <p>In a statement in mid-February, Martin Griffiths, the U.N.’s humanitarian chief, described the Gazans crammed into Rafah as “staring death in the face: They have little to eat, hardly any access to medical care, nowhere to sleep, nowhere safe to go.”</p> <p>Griffiths said the humanitarian response in Gaza was “in tatters.”</p> <p>“Military operations in Rafah could lead to a slaughter in Gaza,” he said. “They could also leave an already fragile humanitarian operation at death’s door.”</p>OCCRPhttps://www.occrp.org/Stand up for Press Freedom in Kyrgyzstan!2024-03-11T00:00:00+01:002024-03-11T00:00:00+01:00https://www.occrp.org/en/uncensored-the-kyrgyzstan-project/stand-up-for-press-freedom-in-kyrgyzstan<p>Journalism is under threat in Kyrgyzstan, where multiple independent outlets have been pressured or closed.</p><p>Journalism is under threat in Kyrgyzstan, where multiple independent outlets have been pressured or closed.</p> <p>In January, 11 current and former employees of our reporting partner, Temirov Live, were arrested and falsely accused of “inciting mass unrest.” (You can read more here: “<a href="/en/uncensored-the-kyrgyzstan-project/">Uncensored: The Kyrgyzstan Project</a>.”)</p> <p>Some are still in jail and some are under house arrest, but the implication is clear: they were arrested for their connection to independent reporting.</p> <p>Stand up for press freedom in Kyrgyzstan — and show your support for the journalists who were wrongfully arrested!</p> <h2 id="join-us-please-make-a-short-video">Join us! Please make a short video:</h2> <ul> <li>60 seconds or less</li> <li>Vertical format</li> <li>Post on all your social media platforms</li> <li>Use <strong>#FreeKyrgyz11 #freepress</strong></li> </ul> <h2 id="you-could-start-with-something-like">You could start with something like:</h2> <ul> <li>“I support journalists in Kyrgyzstan… “</li> <li>“I stand with the reporters jailed in Bishkek…”</li> <li>“To the journalists jailed in Kyrgyzstan, please know I stand with you…”</li> <li>“Independent reporting in Kyrgyzstan shouldn’t be a crime.”</li> </ul> <h2 id="please-end-with-a-call-to-action-encouraging-people-to-post-their-own-messages-of-support">Please end with a call to action, encouraging people to post their own messages of support.</h2> <p>“Join us as we remind journalists in Kyrgyzstan that they aren’t alone. Post your own video of support for press freedom in Kyrgyzstan today using #FreeKyrgyz11.”</p> <p>This attention is not only important for the families of the imprisoned and for the journalists, but also for all newsrooms and media organizations in Kyrgyzstan, where journalists have been working under extreme pressure.</p> <p>Thank you for your support!</p>OCCRPhttps://www.occrp.org/With Journalists Behind Bars, Kyrgyzstan Enters New Era of Repression2024-03-11T00:00:00+01:002024-03-11T00:00:00+01:00https://www.occrp.org/en/uncensored-the-kyrgyzstan-project/with-journalists-behind-bars-kyrgyzstan-enters-new-era-of-repression<p>On Aike Beishekeyeva’s twenty-third birthday on January 16, the young Kyrgyz journalist was planning to buy a cake to share with her colleagues.</p><p>On Aike Beishekeyeva’s twenty-third birthday on January 16, the young Kyrgyz journalist was planning to buy a cake to share with her colleagues.</p> <p>That celebration never happened. Instead, early that morning, Beishekeyeva was arrested at her family home on suspicion of “inciting mass unrest.” For weeks, she has been awaiting trial in Detention Center 1, a grim warren of low-slung buildings in the center of Kyrgyzstan’s capital Bishkek.</p> <p>Her mother, Nazgul Matanayeva, recalls how her daughter looked at a court hearing — brave, but tired. “She holds herself well, but you can tell by her eyes,” she says. “As a mother, I can tell. … She’s not getting enough sleep.”</p> <p>Matanayeva has been frantic with worry. “I’ve lost weight. I couldn’t sleep for two weeks. If I don’t distract myself, all kinds of bad thoughts come,” she says. “Twenty-three years old — for me, she’s still little. For a mother, she’ll always be little.”</p> <p>Beishekeyeva may be young, but she was doing serious work. Just a few months into her career, she had recently been hired by Temirov Live, a team of journalists whose video investigations — sometimes performed as traditional Kyrgyz poems — have repeatedly uncovered gross corruption on the part of top officials in the Central Asian country. (OCCRP has partnered with Temirov Live on several investigations.)</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/uncensored-the-kyrgyzstan-project/screengrab-journalist-aike-beishekeyeva-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Aike Beishekeyeva presenting an investigation" data-img="/assets/uncensored-the-kyrgyzstan-project/screengrab-journalist-aike-beishekeyeva.jpg" id="img-4306" /> <img src="https://www.occrp.org/assets/uncensored-the-kyrgyzstan-project/screengrab-journalist-aike-beishekeyeva.jpg" class="hidden" id="aside-img-4306" alt="uncensored-the-kyrgyzstan-project/screengrab-journalist-aike-beishekeyeva.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Temirov Live/YouTube </small> Aike Beishekeyeva presenting an investigation on Temirov Live. </div> </div> <script> $(document).ready(function() { let rand_4306 = $("#aside-img-4306").prop("naturalWidth"); if(rand_4306<750){$("#img-4306").attr("src","/assets/uncensored-the-kyrgyzstan-project/screengrab-journalist-aike-beishekeyeva.jpg");} $(window).load(function() {$("#aside-img-4306").remove();}); }); </script> <p>“I told her this was dangerous work,” Matanayeva says, “But she always calmed me down: ‘Mom, don’t worry, there are journalists like this all over the world.’”</p> <p>In Kyrgyzstan, though, there may soon be none left. Along with Aike, 10 other current and former Temirov Live employees were arrested on that January day. They, too, are accused of inciting mass unrest under a law being used with increasing frequency to target dissenting voices. If convicted, they face years in prison.</p> <p>All 11 have denied the accusations. “‘Look at her. She’s still a child,’” Matanayeva says she told the officers who came to arrest her daughter. “‘How could she gather people for a demonstration? Or is she so rich that she could pay someone [to protest]?’”</p> <aside class="box-side "> <h3 class="occrp-section ">Uncensored: The Kyrgyzstan Project</h3> <div class="text"> <p style="padding-top: 0 !important;">At the time of their arrest, several of the detained journalists were working on stories with OCCRP. We, and over a dozen other media partners publishing this story, will continue their important investigative work as part of <a href="/en/uncensored-the-kyrgyzstan-project/">Uncensored: The Kyrgyzstan Project</a>.</p> </div> </aside> <p>The campaign against the group is the latest symptom of Kyrgyzstan’s deepening democratic malaise.</p> <p>The country was once the freest of Central Asia’s former Soviet republics by a large margin. Though known for frequent revolutions — it’s had three since independence in 1991 — it also had real elections, a vibrant media scene, and a vigorous civil society that included everything from feminist groups to disability rights activists.</p> <p>In the last few years, however, under a president who combines populist rhetoric with Russian-style methods of control, the noose has tightened. Multiple independent outlets have been pressured or closed. On Reporters Without Borders’ index of worldwide press freedom, Kyrgyzstan’s rank has dropped 50 places in a single year, plunging from the level of Japan to the level of South Sudan.</p> <p>The detentions of the Temirov Live staff, observers say, are part of a campaign directed against the outlet’s founder and one of the government’s most vocal critics, Bolot Temirov.</p> <p>“The authorities simply want to play this scorched-earth strategy, where they just burn everything around Temirov, so he has no team,” says Leila Nazgul Seiitbek, a Kyrgyz human rights activist working from exile in Vienna.</p> <p>“The only thing the authorities want right now, more than anything else, is for everyone to just be silent and do nothing,” Seiitbek says. “And the question is, are people ready to do that?”</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-temirov-live-s-top-investigations"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-temirov-live-s-top-investigations">🔗</a>Temirov Live’s Top Investigations </h3> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p>Temirov and his team have not shied away from reporting on the two most powerful men in Kyrgyzstan: President Sadyr Japarov and security chief Kamchybek Tashiev.</p><p>In Temirov Live’s most widely-viewed videos, they <a href="https://www.youtube.com/watch?v=CNNuPazBJ2k" target="_blank">exposed dealings between the Tashiev family and the state oil company</a> and discovered (<a href="/en/the-shadow-investor/friend-of-kyrgyz-presidents-son-revealed-as-co-owner-of-construction-company-behind-high-profile-property-developments">jointly with OCCRP</a>) ties between the president’s son and a <a href="https://www.youtube.com/watch?v=NhMBY6v2Cfo" target="_blank">notorious family exposed for alleged smuggling and money laundering</a>.</p> </div> </div> </div> </div> </div> <p>One person not ready to be silent is Temirov himself. The 44-year-old has already paid dearly for his investigative journalism. In the last few years he has been beaten, bugged by the secret services, deprived of his citizenship, and deported to Russia. His wife, who worked as the director of Temirov Live, was among the journalists arrested in January.</p> <p>Now working from an undisclosed location in Europe, Temirov maintains a furious stream of videos and social media posts decrying the authorities and demanding that they free his colleagues.</p> <p>The authorities have attempted to get to Temirov through his staff before. In a <a href="/en/investigations/inside-kyrgyzstans-campaign-to-silence-bolot-temirov">2022 investigation</a>, OCCRP revealed how agents of Kyrgyzstan’s secret service, the GKNB, entrapped a young woman who worked for Temirov, threatening to release compromising videos unless she provided information about him and his work.</p> <p>Now, the jailed journalists have been questioned about Temirov’s whereabouts, he says. And his wife was warned that the couple’s 11-year-old son could be placed in an orphanage if she did not cooperate with investigators.</p> <p>Kyrgyz officials at the presidential administration, the interior ministry, the prosecutors’ office, and the GKNB did not respond to OCCRP’s requests for comment on the case. But in the two months since the arrests, several have made revealing public statements.</p> <p>On a talk show hosted by Radio Azattyk, Deputy Chairman of Kyrgyzstan’s Cabinet of Ministers Edil Baisalov <a href="https://www.youtube.com/shorts/-oMMXl4E15U" target="_blank">framed the case</a> as a matter of discipline and re-education.</p> <p>“These young guys, of course they’re not enemies, of course they’ve made a mistake. Neither the president, nor any state bodies or courts want them to rot in prison,” Baisalov said.</p> <p>“It’s a question of education. A fatherly, brotherly duty — education,” he continued. “In some cases, someone — the head of a family, the master of a house — has to call things to order.”</p> <p>In response to a request for comment about his statements, Baisalov again emphasized that “no one among the authorities considers these guys to be enemies of the people.”</p> <p>Kyrgyz society is undergoing a transformation, he wrote, with a growing economy and a new willingness to reconsider old priorities. “I’m talking about education because we need to reorient the youth, we need to build the country and raise up the people, to distract from empty actions, to say that this is no longer trendy and dignified,” he wrote.</p> <p>President Sadyr Japarov has aired his own views in an interview with the newspaper Vecherny Bishkek, arguing that boundaries must be imposed on freedom of speech to preserve security.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/uncensored-the-kyrgyzstan-project/sadyr-japarov-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="President of Kyrgyzstan Sadyr Japarov" data-img="/assets/uncensored-the-kyrgyzstan-project/sadyr-japarov.jpg" id="img-3719" /> <img src="https://www.occrp.org/assets/uncensored-the-kyrgyzstan-project/sadyr-japarov.jpg" class="hidden" id="aside-img-3719" alt="uncensored-the-kyrgyzstan-project/sadyr-japarov.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> PA Images/Alamy Stock Photo </small> Sadyr Japarov, president of Kyrgyzstan. </div> </div> <script> $(document).ready(function() { let rand_3719 = $("#aside-img-3719").prop("naturalWidth"); if(rand_3719<750){$("#img-3719").attr("src","/assets/uncensored-the-kyrgyzstan-project/sadyr-japarov.jpg");} $(window).load(function() {$("#aside-img-3719").remove();}); }); </script> <p>“In today’s turbulent and restless times, freedom of speech is tightly intertwined with responsibility,” he said. “Countries that one could count as the most democratically developed are already instituting restrictions against those who use freedom of speech to reach political goals and destabilize society. In this respect, we have to take preventative measures.”</p> <p>“In the current case,” the president continued, referring to the Temirov Live arrests, “the forensic service of the Justice Ministry established that video messages from [Temirov’s wife] Makhabat Tazhibek kyzy include calls to mass unrest.”</p> <p>In the video he referred to, posted on YouTube in December, Tahibek angrily denounces corruption and authorities who have been “sitting in their chairs for 30 years.” It does not contain any calls for uprising or violence.</p> <p>“She says in this video that all coups and revolutions are useless, because one clan will only replace another,” Temirov says. “It’s hard to describe this as a call to revolution.”</p> <p>This accusation, Temirov says, demonstrates the absurdity of the whole affair.</p> <p>According to multiple people with knowledge of the case, Makhabat’s video was the only piece of evidence officials have presented as justification for all 11 detentions — though six of the detained are no longer employed at Temirov Live. Some haven’t been there for years.</p> <p>“None of the others have any connection to this video,” Temirov says. “Not even the camera operator.”</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/uncensored-the-kyrgyzstan-project/bolot-temirov-raid-arrest-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Police officers lead Bolot Temirov out in handcuffs" data-img="/assets/uncensored-the-kyrgyzstan-project/bolot-temirov-raid-arrest.jpg" id="img-8692" /> <img src="https://www.occrp.org/assets/uncensored-the-kyrgyzstan-project/bolot-temirov-raid-arrest.jpg" class="hidden" id="aside-img-8692" alt="uncensored-the-kyrgyzstan-project/bolot-temirov-raid-arrest.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Aziza Raimberdieva </small> Police officers lead Bolot Temirov out in handcuffs after a raid on his office on January 22, 2022. </div> </div> <script> $(document).ready(function() { let rand_8692 = $("#aside-img-8692").prop("naturalWidth"); if(rand_8692<750){$("#img-8692").attr("src","/assets/uncensored-the-kyrgyzstan-project/bolot-temirov-raid-arrest.jpg");} $(window).load(function() {$("#aside-img-8692").remove();}); }); </script> <h2 id="rapper-and-poet-among-those-arrested">Rapper and Poet Among Those Arrested</h2> <p>The YouTube channel on which the video appeared, called Ait Ait Dese, is one of Temirov’s most unique projects. A sister channel of the main Temirov Live account, it posts videos entirely in Kyrgyz — a way, Temirov says, of reaching the widest possible audience: “Our goal was to be closer to the people, become the voice of the people and speak with them in one language.”</p> <p>In addition to more traditional journalistic reports, Ait Ait Dese features rhymed performances by traditional poets, called akyns, calling for action against social problems, inveighing against corruption, or even presenting the findings of Temirov Live’s investigations.</p> <p>In <a href="https://www.youtube.com/watch?v=7mDWwgWisY8" target="_blank">one video for the channel</a>, an akyn named Bolot Nazarov retells in poetic form an investigation into Maltese offshore companies allegedly tied to relatives of the chairman of Kyrgyzstan’s Council of Ministers, Akylbek Japarov. In <a href="https://www.youtube.com/watch?v=66rBN-RvijE" target="_blank">another performance</a>, he denounces the dual power wielded in the country by President Japarov and secret service head Kamchybek Tashiev.</p> <p>The technique is powerful, says Seiitbek, the exiled human rights activist.</p> <p>“The akyns are traditionally these voices that always spoke about the problems that the Kyrgyz people had. And it’s also traditional that the rulers never went after the akyns. That’s their job to speak about grievances, to make fun of politicians.”</p> <p>“Many people don’t watch things on YouTube if they are not traditionally Kyrgyz things,” she says. “But people do go to concerts to listen to akyns, because that speaks to their heart. It’s something that they understand, something they grew up with.”</p> <p>With the January arrests, Ait Ait Dese’s work is now on hold. One of the channels’s star performers, rapper and poet Azamat Ishenbekov, is among those in detention.</p> <p>As Temirov tells it, Ishenbekov left school to work as a migrant worker in Russia while building a following for his performances on TikTok. When one of Temirov’s colleagues noticed his popularity, he was invited to collaborate.</p> <p>“Though driving taxis in Moscow he earned much more, he chose to become a member of our team,” Temirov wrote in a Facebook post calling for Ishenbekov’s freedom.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/uncensored-the-kyrgyzstan-project/azamat-ishenbekov-arrested-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Azamat Ishenbekov under arrest" data-img="/assets/uncensored-the-kyrgyzstan-project/azamat-ishenbekov-arrested.jpg" id="img-1495" /> <img src="https://www.occrp.org/assets/uncensored-the-kyrgyzstan-project/azamat-ishenbekov-arrested.jpg" class="hidden" id="aside-img-1495" alt="uncensored-the-kyrgyzstan-project/azamat-ishenbekov-arrested.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Politklinika </small> Azamat Ishenbekov, a rapper and poet who performed for Temirov Live’s sister channel, Ait Ait Dese, under arrest. </div> </div> <script> $(document).ready(function() { let rand_1495 = $("#aside-img-1495").prop("naturalWidth"); if(rand_1495<750){$("#img-1495").attr("src","/assets/uncensored-the-kyrgyzstan-project/azamat-ishenbekov-arrested.jpg");} $(window).load(function() {$("#aside-img-1495").remove();}); }); </script> <p>The arrest of a streetwise artist who has appeared in <a href="https://www.youtube.com/watch?v=RZnEFSYMEwM" target="_blank">hip-hop videos</a> and <a href="https://www.youtube.com/watch?v=1QtFcEbThw4" target="_blank">crooned pop songs</a> underscores the diverse backgrounds of the jailed 11. Among them is Aktilek Kaparov, who went from attending Temirov’s fact-checking trainings to working for Temirov Live to opening his own outlet, and Saipidin Sultanaliev, an educator who came to journalism later in his life and whom Temirov calls “an interviewer from God.”</p> <p>And then there’s Aike Beishekeyeva, the youngest of them all, arrested in her parents’ apartment on her twenty-third birthday.</p> <p>Her mother, Matanayeva, says she was a studious child who preferred to spend time reading books and learning languages online over going out with friends.</p> <p>“I wanted to sign her up for courses, but she felt sorry for us, [saying] ‘Why should you spend money on courses? Let me just study at home,’” Matanayeva says.</p> <p>To expand her horizons, Beishekeyeva took an internship in Japan, a country her mother says she admired for its culture, and studied journalism at a university in Poland.</p> <p>But Matanayeva was shocked when her daughter actually went into the profession, taking a job with the Temirov Live team. Her father, a professional musician, was dead-set against a career he considered far too dangerous. He fought with his daughter, and with his wife, who was more supportive. Just a few months later, the police were at the family’s door.</p> <p>Frantic with worry, Matanayeva has withdrawn into herself since her daughter’s arrest. “If anyone says anything about it, I just start to cry. So I’m trying not to see anyone,” she says.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/uncensored-the-kyrgyzstan-project/young-journalist-aike-beishekeyeva-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Aike Beishekeyeva" data-img="/assets/uncensored-the-kyrgyzstan-project/young-journalist-aike-beishekeyeva.jpg" id="img-4375" /> <img src="https://www.occrp.org/assets/uncensored-the-kyrgyzstan-project/young-journalist-aike-beishekeyeva.jpg" class="hidden" id="aside-img-4375" alt="uncensored-the-kyrgyzstan-project/young-journalist-aike-beishekeyeva.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Politklinika </small> Aike Beishekeyeva, 23, is the youngest of the detained journalists. </div> </div> <script> $(document).ready(function() { let rand_4375 = $("#aside-img-4375").prop("naturalWidth"); if(rand_4375<750){$("#img-4375").attr("src","/assets/uncensored-the-kyrgyzstan-project/young-journalist-aike-beishekeyeva.jpg");} $(window).load(function() {$("#aside-img-4375").remove();}); }); </script> <h2 id="a-climate-of-fear">A Climate of Fear</h2> <p>While some in Kyrgyzstan stay silent out of grief, others do so out of fear. An analyst based in the country declined to be interviewed for this story, citing concern for their personal safety — the first time this has happened in this reporter’s experience.</p> <p>Activists describe a suffocating dread spreading across Kyrgyz civil society that can be felt even from afar.</p> <p>“People are very afraid,” says Seiitbek, the Vienna-based human rights activist. “Even our colleagues, which I’ve never seen before. There were situations where they were afraid to bring books with them [back to Kyrgyzstan] from trips abroad. That never happened before.”</p> <p>The feeling that anyone could be targeted next is only enhanced by the absurdist flavor that sometimes accompanies Kyrgyzstan’s recent cases of repression.</p> <p>When OCCRP’s award-winning Kyrgyz member center, Kloop, was <a href="/en/announcements/40-presss-releases/18472-independent-media-under-attack-in-kyrgyzstan-as-court-shuts-down-occrp-member-center-kloop-media">shut down by court order</a> last month, prosecutors used testimony from psychiatrists to show that the outlet “affected people’s mental health” by “upsetting” them with negative information. (Kloop is fighting the decision and plans to continue to operate.)</p> <p>Then there’s President Japarov’s explanation for why the country’s <a href="https://eurasianet.org/the-kempir-abad-saga-ground-zero-of-kyrgyzstans-latest-authoritarian-turn" target="_blank">highest-profile case against a group of dissidents</a> was being conducted in secret. Asked at a national gathering of community leaders about the jailed opponents of a land swap with neighboring Uzbekistan, he said their efforts had been financed by the ambassador of an unnamed foreign country.</p> <p>“If we make this public, you’ll start to hate this country,” he said. “And then there could be a misunderstanding, our relationship could be disrupted. That’s why it’s a closed case.”</p> <h2 id="there-are-no-institutions">‘There Are No Institutions’</h2> <p>How did Kyrgyzstan come to this? After all, the country was once commonly referred to as Central Asia’s “island of democracy,” with observers often impressed by its repeated popular revolutions against unpopular regimes.</p> <p>Asel Doolotkeldieva, an expert on Kyrgyzstan and non-resident fellow at George Washington University, agrees that the Kyrgyz public has strong democratic expectations. But, she said on a <a href="https://talkeasterneurope.eu/episodes/episode-165-kyrgyzstans-populist-turn-raises-concerns-for-media-and-civil-society" target="_blank">recent episode</a> of the Talk Eastern Europe podcast, a mobilized public isn’t enough.</p> <p>“You can’t expect such deep transformations of society just on the back of vibrant civil society alone,” she said. “There are no institutions to carry out democratization… You need political parties, you need ideologies, left, right, you need proper political conflict to formulate these ideologies. Without that, you can’t expect sustainable changes.”</p> <p>Indeed, it was a popular uprising that put Kyrgyzstan’s current leaders in power. In October 2020, Kyrgyz citizens poured onto the streets in outrage at the results of an allegedly rigged election and at the government’s management of the COVID-19 pandemic.</p> <p>In the chaos, Sadyr Japarov — a former member of parliament and populist firebrand who was serving a prison sentence for kidnapping a local official — was sprung out by a crowd of supporters. He then managed to maneuver himself into the halls of power, first becoming interim president and then winning a presidential election several months later.</p> <p>One of Japarov’s most consequential decisions was to appoint his ally, Kamychbek Tashiev, to run the GKNB. Both men have made frequent use of nationalist rhetoric, aggressively decrying foreign values and influence and claiming to stand for ordinary Kyrgyz citizens. In practice, as the influence of the secret service has grown, they have built what local specialists call a “tandem” rule over the country.</p> <p>“Since 2020, a lot of money from the budget was allocated to strengthen the special security forces,” said Doolotkeldieva. “In these three years, there have been allegedly 50 new buildings opening across the countryside, which are basically the buildings of the special security forces. Which means that [it’s] not only the capital, there is a huge effort to take under control the countryside as well.”</p> <p>With little organized political opposition and no genuinely independent judiciary, Japarov’s government has also been pushing a series of laws — on misinformation, on the media, on the nonprofit sector, and on “foreign agents” — to tighten his control.</p> <p>Much of this legislation is reminiscent of the laws used against dissidents in Russia, and observers say this has been no accident.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/uncensored-the-kyrgyzstan-project/sadyr-japarov-vladimir-putin-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Kyrgyzstan's President Sadyr Japarov meets with Russian President Vladimir Putin" data-img="/assets/uncensored-the-kyrgyzstan-project/sadyr-japarov-vladimir-putin.jpg" id="img-4184" /> <img src="https://www.occrp.org/assets/uncensored-the-kyrgyzstan-project/sadyr-japarov-vladimir-putin.jpg" class="hidden" id="aside-img-4184" alt="uncensored-the-kyrgyzstan-project/sadyr-japarov-vladimir-putin.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> American Photo Archive/Alamy Stock Photo </small> Kyrgyzstan's President Sadyr Japarov meets with Russian President Vladimir Putin at the Moscow Victory Day Parade. </div> </div> <script> $(document).ready(function() { let rand_4184 = $("#aside-img-4184").prop("naturalWidth"); if(rand_4184<750){$("#img-4184").attr("src","/assets/uncensored-the-kyrgyzstan-project/sadyr-japarov-vladimir-putin.jpg");} $(window).load(function() {$("#aside-img-4184").remove();}); }); </script> <p>“The Russian security services have been sitting in the GKNB building for years. And it’s a big contingent, it’s not like one or two people,” says Seiitbek.</p> <p>“Kyrgyzstan is under very strong Russian influence, stronger than anyone would have guessed. It comes from the authorities being weak by themselves. They have to rely on somebody to keep their power safe and keep them in power. So they traditionally see Putin as this guarantor of their safety. And when you have Putin as your lord protector, obviously there isn’t much you can do in terms of development of democracy.”</p> <p><strong><em>Eldiyar Arykbaev (OCCRP) and Vyacheslav Abramov (OCCRP/Vlast.kz) contributed reporting.</em></strong></p>OCCRPhttps://www.occrp.org/Coordinated Cash: Donation Data From Armenia’s Ruling Party Raises Questions About Source of Funds2024-03-07T00:00:00+01:002024-03-07T00:00:00+01:00https://www.occrp.org/en/investigations/coordinated-cash-donation-data-from-armenias-ruling-party-raises-questions-about-source-of-funds<p>“Is this a prank?”</p><p>“Is this a prank?”</p> <p>Lilit Haroyan, a city council member in the small Armenian town of Charentsavan, was incredulous when a reporter told her she was listed as having made a substantial donation to her political party in 2022. The amount she supposedly gave to Armenia’s ruling Civil Contract party, 1 million drams (around $2,500), was particularly striking since she declared having earned no income that year.</p> <p>“I’m hearing about this for the first time,” she said of the donation.</p> <p>She is not alone; an investigation by OCCRP’s Armenian partner Civilnet found that multiple listed donors were party members who said they had never donated at all.</p> <p>Civil Contract swept into power in 2018 with a mandate to root out corruption, following a mass protest movement that toppled Armenia’s former regime. But this and other curious patterns found by reporters in the party’s 2022 financial statement raises questions about its sources of funding.</p> <p>Of the 140 donors the party reported in 2022, all but six were Civil Contract’s own candidates in recent council elections. Half of the <span class="expand">31 donors reached for comment <span class="expandright"> Reporters sought to call at least one donor in each municipality. They focused on those who made the biggest contributions and whose contact information they were able to find. <i></i> </span> </span> denied making such a donation. Others refused to answer or said they did not remember.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/civil-contract-donors-2022-map-eng-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.png" alt="" data-img="/assets/investigations/civil-contract-donors-2022-map-eng.png" id="img-8917" /> <img src="https://www.occrp.org/assets/investigations/civil-contract-donors-2022-map-eng.png" class="hidden" id="aside-img-8917" alt="investigations/civil-contract-donors-2022-map-eng.png" /> </a> <div class="inset-caption"> </div> </div> <script> $(document).ready(function() { let rand_8917 = $("#aside-img-8917").prop("naturalWidth"); if(rand_8917<750){$("#img-8917").attr("src","/assets/investigations/civil-contract-donors-2022-map-eng.png");} $(window).load(function() {$("#aside-img-8917").remove();}); }); </script> <style> #img-8917 { box-shadow: none; } </style> <p>Some of the reported donations are striking for other reasons too. In 10 separate towns across Armenia, 10 or more local council candidates sent exactly the same amount of money on the same day. In 26 cases, the donations amounted to at least half of the yearly income and total savings of the donors, based on their asset declarations. Four donations exceeded the legal limit on individual contributions of 2.5 million drams ($6,200) per person.</p> <p>These unusual donation patterns emerged just one year after the government passed anti-corruption reforms barring businesses from donating to political parties, outlawing cash donations, and capping the maximum amount that private individuals could contribute. The bill was framed as a key plank in efforts to root out the influence of the oligarchic elite that had ruled Armenia prior to the protest movement that ushered Civil Contract into office.</p> <p>But experts say the data could suggest an effort to evade the restrictions of the new law. Just two years prior, in 2020, Civil Contract’s reported donations looked very different, with most of the funds arriving in large amounts from companies and individual businessmen.</p> <p>“Basically, in order to raise the necessary funds, political parties might attempt to by-pass the rules and utilize unlawful mechanisms,” said Sona Ayvazyan, from Transparency International Anticorruption Center in Armenia, after reviewing the data.</p> <p>“The findings are very significant and need further elaboration, explanation and action from competent public authorities.”</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/civil-contract-party-armenia-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Nikol Pashinyan joins a march through Yerevan's streets" data-img="/assets/investigations/civil-contract-party-armenia.jpg" id="img-3173" /> <img src="https://www.occrp.org/assets/investigations/civil-contract-party-armenia.jpg" class="hidden" id="aside-img-3173" alt="investigations/civil-contract-party-armenia.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Celestino Arce/NurPhoto/Alamy Stock Photo </small> Nikol Pashinyan, now the prime minister of Armenia, center, joins a march through Yerevan's streets with the Civil Contract party during the 2021 parliamentary election campaign. </div> </div> <script> $(document).ready(function() { let rand_3173 = $("#aside-img-3173").prop("naturalWidth"); if(rand_3173<750){$("#img-3173").attr("src","/assets/investigations/civil-contract-party-armenia.jpg");} $(window).load(function() {$("#aside-img-3173").remove();}); }); </script> <p>Vardine Grigoryan, a democracy coordinator at the NGO Helsinki Citizens’ Assembly-Vanadzor, agreed the patterns could be evidence of an unlawful effort to hide the origins of the funds taken in by the party.</p> <p>The money could have been “collected in cash from unreported sources and then deposited on behalf of candidates,” she said. Or, she continued, individual donations that exceeded the legal limit could have been “broken into legally allowed amounts under the names of candidates or other individuals who may be absolutely unaware of the transaction.”</p> <p>“Both phenomena are not new and could be identified before if we looked at campaign funds from previous years as well,” she said.</p> <p>The Civil Contract party did not answer detailed questions about the data sent by reporters.</p> <p>Civilnet’s investigation focused on data from 2022, but an <a href="https://infocom.am/hy/article/123299" target="_blank">investigation published in January</a> by the Armenian news outlet Infocom also found suspicious patterns in the party’s 2023 donor report, including similar donations from 88 local council candidates, as well as large sums of money donated by people connected to big businesses.</p> <p>At a question-and-answer session in parliament last month, Prime Minister Nikol Pashinyan touted the investigation as proof of the party’s transparency.</p> <p>“If we did not ensure transparency, how do you know so much?” the prime minister asked members of parliament. “If you know about it, it means transparency is fully ensured.”</p> <p>Earlier this week, the local branch of Radio Free Europe/Radio Liberty reported that the Prosecutor General’s Office had investigated the 2023 donations but found no evidence of a crime.</p> <h2 id="ten-at-a-time">Ten at a Time</h2> <p>In 2022, Civil Contract reported receiving about 170 million Armenian drams — the equivalent of around $420,000 — in donations, accounting for over a third of the party’s funding for the year. (The rest came from state funding and membership fees.)</p> <p>When analyzing the donor list, reporters discovered a number of unusual patterns in addition to the overwhelming share of local party candidates.</p> <p>In 10 cases, the first 10 candidates on local election lists had made donations of the same amount on the same day. (Under Armenia’s electoral system, political parties compile lists of candidates for each election, and the number of candidates who enter office is determined by the share of the vote the party receives).</p> <p>In the small, 1,600-person community of Tsaghkahovit, for instance, Civil Contract reported receiving donations from the first 10 candidates on the local list, each for 1 million drams ($2,500), two days before the town’s September 2022 election of its local council of elders.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/winning-elections-armenia-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Nikol Pashinyan greets his supporters" data-img="/assets/investigations/winning-elections-armenia.jpg" id="img-472" /> <img src="https://www.occrp.org/assets/investigations/winning-elections-armenia.jpg" class="hidden" id="aside-img-472" alt="investigations/winning-elections-armenia.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Celestino Arce/NurPhoto/Alamy stock photo </small> The lead candidate of the Civil Contract party, Nikol Pashinyan, greets his supporters during a rally in Yerevan, celebrating their victory in the parliamentary elections in Armenia. </div> </div> <script> $(document).ready(function() { let rand_472 = $("#aside-img-472").prop("naturalWidth"); if(rand_472<750){$("#img-472").attr("src","/assets/investigations/winning-elections-armenia.jpg");} $(window).load(function() {$("#aside-img-472").remove();}); }); </script> <p>In Charentsavan, a larger municipality of just over 20,000 people in central Armenia, the first 10 candidates on Civil Contract’s list also donated 1 million drams ($2,500) each, this time one day before the vote.</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-what-when-donors-respond-to-journalists-with-confusion"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-what-when-donors-respond-to-journalists-with-confusion">🔗</a>‘What? When?’ Donors Respond to Journalists With Confusion </h3> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p><strong>When reporters contacted the municipal politicians named on the donor list, many expressed surprise or confusion.</strong></p><p>“What donation?” responded Serob Avetisyan, a local council member from Vedi, a small community about 50 kilometers from the capital, when asked about the 1.5 million drams ($3,700) he was reported to have given. “Maybe you have the wrong number? If you’re actually a journalist, I don’t have time to talk to you,” he said. Later in the conversation, he denied giving any funds to the party.</p><p>Asked if she had made a donation to Civil Contract in 2022, Astghik Mkrtchyan, the Assistant Community Manager from Ani, a municipality in the northwest corner of Armenia, said she could “remember something like that” but would have to check “with the leader of our faction” for the details. Then, before abruptly hanging up, she stated she had indeed agreed to allow a donation be made on her behalf.</p><p>Sargis Grigoryan, a local council member in Talin, confirmed he had given a 1-million-dram ($2,500) contribution to the party. But when the journalist informed him that this amounted to two-thirds of his reported income for the year, Grigoryan was vague. “Incomes are good one year and bad the next,” he said. “Whatever is written, that’s how much the donation was.”</p><p>Others unequivocally denied knowledge of the money supposedly given in their names.</p><p>Vache Khachatryan, a local council member and schoolteacher in Areni, balked at the idea that he could have made a donation of 1 million drams ($2,500) considering his salary. “I work in a school, I barely survive,” he told Civilnet.</p><p>When asked if he too had given 1 million drams ($2,500), the deputy head of Loriberd’s council, Eduard Meliksetyan, was categorical: “No, no, no, in no way!”</p> </div> </div> </div> </div> </div> <p>Of the six donors from 2022 who were not municipal election candidates, one is a member of parliament from Civil Contract, and two were municipal employees at the time the donations were made, including Sisak Shahbazyan, a driver for the head of the Avan district administration in Yerevan.</p> <p>According to the report, Shahbazyan made four donations totalling 1.7 million drams ($4,200) between August and November 2022. When contacted by Civilnet, Shahbazyan said that the money was not his. He claimed that he had been asked by party members to transfer it to pay office rent in the district. The journalist asked why they had asked a driver to make the payment, but he could not provide an explanation.</p> <p>“Close friends gave it [the money], I just paid,” Shahbazyan said. “We gave a donation to the party so that the party would pay the rent.”</p> <h2 id="donations-exceeding-income">Donations Exceeding Income</h2> <p>Reporters also checked the donations against the declared wealth of 69 donors who had submitted <span class="expand">asset declarations <span class="expandright"> Officials and municipal staff members are required by law in Armenia to submit asset declarations each year, though exceptions are made for public servants in the country’s smallest municipalities. <i></i> </span> </span> , and found that 26 of them would have donated over half of their total wealth, which includes yearly income and savings combined. A fifth supposedly gave donations that exceeded their total declared wealth.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/donors-declared-income-chart-eng-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.png" alt="" data-img="/assets/investigations/donors-declared-income-chart-eng.png" id="img-7401" /> <img src="https://www.occrp.org/assets/investigations/donors-declared-income-chart-eng.png" class="hidden" id="aside-img-7401" alt="investigations/donors-declared-income-chart-eng.png" /> </a> <div class="inset-caption"> </div> </div> <script> $(document).ready(function() { let rand_7401 = $("#aside-img-7401").prop("naturalWidth"); if(rand_7401<750){$("#img-7401").attr("src","/assets/investigations/donors-declared-income-chart-eng.png");} $(window).load(function() {$("#aside-img-7401").remove();}); }); </script> <style> #img-7401 { box-shadow: none; } </style> <p>Meline Sukiasyan, a council member from Tashir, near the border with Georgia, was listed as having made two donations in October and November 2022 totalling 3 million Armenian drams (around $7,500), more than her income and savings combined, according to her declaration.</p> <p>“I didn’t have that kind of money and I couldn’t have transferred it,” Sukiasyan told reporters when reached for comment. “I lost my trust in them [Civil Contract]. If you have in hand such documents, pass them on to me. I will not allow my name to be manipulated.”</p> <p>Only eight of the 31 listed donors reached by reporters confirmed they had made the donations reported by the ruling party.</p> <p>One of them, a candidate for the council in the small town of Vedi, was listed as contributing 1.5 million drams ($3,700) — over seven times her declared income and savings combined.</p> <p>“The donation was not made alone — I made it with my friends,” Anna Movsisyan said when reached for comment. “The money was collected together and it was submitted in my name. I don’t think that’s a crime.”</p> <p>However, when asked how she transferred the money to the party, she claimed to have made the donation in cash, which is not permitted under Armenian law.</p> <p>In response to an inquiry from Civilnet, the acting chairman of Armenia’s Corruption Prevention Commission, Mariam Galstyan, said the committee had not checked the party’s financial report because the audit is still ongoing and would not be completed until February 2024.</p> <p>Sona Ayvazyan, from Transparency International, urged authorities to investigate and further increase transparency around party financing.</p> <p>“The findings imply there is need for institutional reforms and rigorous approach from public authorities towards the compliance to the political party finance rules,” she said.</p>OCCRPhttps://www.occrp.org/Pro-Kremlin U.S. Filmmaker Pitched Fawning Films to Dictators — Starring Oliver Stone2024-03-05T00:00:00+01:002024-03-05T00:00:00+01:00https://www.occrp.org/en/investigations/pro-kremlin-us-filmmaker-pitched-fawning-films-to-dictators-starring-oliver-stone<p>Vladimir Putin, Alexander Lukashenko, and Ilham Aliyev have all been accused of horrific crimes against the citizens of the countries they rule.</p><p>Vladimir Putin, Alexander Lukashenko, and Ilham Aliyev have all been accused of horrific crimes against the citizens of the countries they rule.</p> <p>But where the world sees brutal dictators, Igor Lopatonok sees opportunity.</p> <p>The U.S.-based documentary filmmaker already has several controversial projects under his belt. In collaboration with acclaimed Hollywood film director Oliver Stone, he has produced two documentaries on Ukraine that were widely panned as pro-Kremlin propaganda and a hagiographic eight-part mini-series on Kazakh leader Nursultan Nazarbayev.</p> <p>As it turns out, he had much more in store. In dozens of documents obtained by OCCRP and Vlast.kz, Lopatonok laid out plans for a series of fawning documentaries meant to burnish the reputations of the autocratic leaders of Belarus, Azerbaijan, and several other authoritarian nations. A key selling point of at least two of these pitches was the involvement of Stone, who would supposedly conduct on-camera interviews with the dictators.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/oliver-stone-igor-lopatonok-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Oliver Stone and Igor Lopatonok" data-img="/assets/investigations/oliver-stone-igor-lopatonok.jpg" id="img-4985" /> <img src="https://www.occrp.org/assets/investigations/oliver-stone-igor-lopatonok.jpg" class="hidden" id="aside-img-4985" alt="investigations/oliver-stone-igor-lopatonok.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Independent Photo Agency/Alamy Live News </small> From left to right, Oliver Stone and Igor Lopatonok. </div> </div> <script> $(document).ready(function() { let rand_4985 = $("#aside-img-4985").prop("naturalWidth"); if(rand_4985<750){$("#img-4985").attr("src","/assets/investigations/oliver-stone-igor-lopatonok.jpg");} $(window).load(function() {$("#aside-img-4985").remove();}); }); </script> <p>It’s unclear from the documents — which include internal emails and film synopses as well as pitch brochures — whether Stone was on board with Lopatonok’s plans this time around, or even aware of most of them. None of the projects has come to fruition. Stone and his business manager did not respond to requests for comment.</p> <p>Lopatonok, in an interview with OCCRP last week, said Stone was fully aware that he had proposed documentaries to several dictators, whom he referred to as “my heroes.”</p> <p>“You will not make any news with that,” Lopatonok said in response to a question about Stone’s knowledge of the pitches. “You know that, right?”</p> <p>Lopatonok declined to answer specific questions on the financing of his earlier films, or how the proposed documentaries with Stone would be financed. After an increasingly combative Lopatonok threatened journalists and their sources, shouting “we’re going after you personally,” and “we’re going to destroy you,” an OCCRP editor ended the interview.</p> <p>Lopatonok did not respond to a follow-up email that invited him to answer questions in writing, instead co-authoring a piece on a website he is affiliated with, Intelligencer.today, that describes him as a “victim” of OCCRP’s “hit-piece information operations.”</p> <p>But the documents obtained by reporters show just how explicit Lopatonok was about the true aim of his films and how he apparently sought to pitch them to his subjects: by promising to bolster their reputations on the world stage.</p> <p>One of Lopatonok’s glossy pitches — titled “Untitled Oliver Stone Documentary” and “About Ilham Aliyev and Azerbaijan” — promises that Stone would “sit face to face” with the Azerbaijani strongman and cover not only “emerging of leader to the head of state rank, but all questions of colorful and fascinating history of Azerbaijan.”</p> <style> @media screen and (max-width: 412px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-aliyev-en iframe { height: 500px !important; } } @media screen and (min-width: 413px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-aliyev-en iframe { height: 590px !important; } } @media screen and (min-width: 630px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-aliyev-en iframe { height: 680px !important; } } @media screen and (min-width: 801px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-aliyev-en iframe { height: 680px !important; } } @media screen and (min-width: 941px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-aliyev-en iframe { height: 680px !important; } } @media screen and (min-width: 1101px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-aliyev-en iframe { height: 760px !important; } } </style> <div class="flourish-embed flourish-embed--wide flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-aliyev-en"> <iframe scrolling="no" src="https://cdn.occrp.org/projects/oliver-stone-flourishes/aliyev/en/"></iframe> <div> <a href="https://flourish.studio/?utm_source=embed" target="_top"><img alt="Made with Flourish" src="https://public.flourish.studio/resources/made_with_flourish.svg" /></a> </div> </div> <p>Another pitch offers to “bring the dramatic history of modern Belarus and its leader to a wide audience” at a moment when “the attention of the whole world was focused on Belarus.”</p> <p>“We, as the creators of the film, believe in the wisdom and consistency of Alexander Grigorievich Lukashenko’s actions,” reads the pitch, which is fronted with a black-and-white montage juxtaposing Lukashenko’s face with Stone’s.</p> <p>The document is undated. It is unclear which “actions” are being referred to, but in 2020, mass pro-democracy protests swept the country before being violently suppressed by President Lukashenko’s regime. It is not clear if Stone was aware of this pitch.</p> <style> @media screen and (max-width: 412px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-lukashenko-en iframe { height: 500px !important; } } @media screen and (min-width: 413px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-lukashenko-en iframe { height: 590px !important; } } @media screen and (min-width: 630px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-lukashenko-en iframe { height: 680px !important; } } @media screen and (min-width: 801px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-lukashenko-en iframe { height: 680px !important; } } @media screen and (min-width: 941px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-lukashenko-en iframe { height: 680px !important; } } @media screen and (min-width: 1101px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-lukashenko-en iframe { height: 760px !important; } } </style> <div class="flourish-embed flourish-embed--wide flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-lukashenko-en"> <iframe scrolling="no" src="https://cdn.occrp.org/projects/oliver-stone-flourishes/lukashenko/en/"></iframe> <div> <a href="https://flourish.studio/?utm_source=embed" target="_top"><img alt="Made with Flourish" src="https://public.flourish.studio/resources/made_with_flourish.svg" /></a> </div> </div> <p>Emails between members of Lopatonok’s team suggest that Stone had agreed to participate in at least one of the projects, the Lukashenko film — until the full-scale Russian invasion of Ukraine in February 2022, which appears to have put a stop to his involvement. (Stone publicly spoke out against the war in March that year, saying that Russia had been “wrong” to invade — although he also argued that Putin had been “baited” into the decision by the United States.)</p> <p>“Unfortunately, the [Belarus] project was put on pause because of Oliver’s refusal,” wrote producer Igor Kobzev to a crew member in June that year. “All the attempts to find a new interviewer were unsuccessful because of the war in Ukraine (everyone that we contacted refused). I’m in a very difficult situation.” Kobzev did not respond to a request for comment.</p> <p>Until that roadblock, Lopatonok seemed to have hit upon a promising formula. He had assembled a small team of screenwriters and producers who churned out film ideas to pitch to dictators, making an enticing offer: copious screen time with a world-famous director.</p> <p>The key to “monetizing” the process was simple, said an insider who worked on the team, and agreed to speak with reporters on condition of anonymity. Lopatonok had figured out how to offer powerful people something they couldn’t resist: Legitimacy on the world stage.</p> <p>“There’s a star — Stone — who can be sold. That’s it,” the insider said. “They’re being bought for trinkets, only the trinkets are Oliver Stone. The targets jump on it: ‘Oh, I’m with Oliver Stone! I’ll be shown all over the world!’”</p> <p>This image of Stone as a ticket to worldwide fame may be several decades out of date. Once a critical darling and reliable engineer of box-office success, the Academy Award-winner has more recently been described by Variety magazine as a purveyor of “cantankerous takes.”</p> <p>In a series of documentaries in the 2000 and 2010s, he provided a sympathetic platform for Fidel Castro and Hugo Chavez to tout their leftist political programs. In 2017, he released “The Putin Interviews,” a widely-discussed four-part series of conversations between Stone and Russian President Vladimir Putin. (The New York Times <a href="https://www.nytimes.com/2017/06/09/arts/television/review-the-putin-interviews-showtime-oliver-stone.html" target="_blank">called the interviews</a> “obsequious,” “awkward,” and “embarrassingly generous” to the Russian leader, who was allowed to present himself to U.S. television audiences as a “tough-but-fair leader, beset by the calumny of hypocritical Westerners.” “Does he see Mr. Stone as a journalist, an ally or a fool?” the reviewer wondered.)</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/oliver-stone-interviewing-putin-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Oliver Stone interviewing Vladimir Putin" data-img="/assets/investigations/oliver-stone-interviewing-putin.jpg" id="img-3618" /> <img src="https://www.occrp.org/assets/investigations/oliver-stone-interviewing-putin.jpg" class="hidden" id="aside-img-3618" alt="investigations/oliver-stone-interviewing-putin.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Russian Government/Alamy Stock Photo </small> Oliver Stone (right) interviewing Vladimir Putin at the Kremlin in 2019. </div> </div> <script> $(document).ready(function() { let rand_3618 = $("#aside-img-3618").prop("naturalWidth"); if(rand_3618<750){$("#img-3618").attr("src","/assets/investigations/oliver-stone-interviewing-putin.jpg");} $(window).load(function() {$("#aside-img-3618").remove();}); }); </script> <p>But his recent work with Lopatonok — a vocal supporter of Putin’s regime with a checkered financial history — has received less attention, even as it has ventured further into the realm of what <a href="https://twitter.com/P_Kallioniemi/status/1660664743886036993" target="_blank">critics say</a> is blatant propaganda.</p> <p>In his pitch to Aliyev for the “Oliver Stone documentary,” Lopatonok underscores that the planned film would “have a unique positive impact on publicity of [the] president and Azerbaijan.”</p> <p>Although it’s unclear if Aliyev ever engaged with the pitch, an expert on Eurasia said it would be in line with the strongman’s previous efforts to present his regime as a dynamic, modernizing influence in the region.</p> <p>“I do see it as in line with all of these potential vectors of image washing — culture, sports, those are the big ones, [and] global events, global conferences,” said Alexander Cooley, a political science professor at New York’s Barnard College and an expert on Eurasian transnational networks.</p> <p>Post-Soviet rulers often “really want to present themselves as contemporary, worldly modernizers,” he said. “These rulers have always had lobbyists… but what reputation-laundering does is give greater weight and plausibility to their claims about their modernizing intentions.”</p> <p>But when authoritarian leaders get a Hollywood glow-up, it often comes at the expense of the people they rule over, said Casey Michel, head of the Human Rights Foundation’s Combating Kleptocracy Program. The foundation has spent years campaigning for Hollywood stars to stop working with dictatorial regimes.</p> <p>“I can’t imagine how dispiriting it must be for citizens in places like Kazakhstan … to watch this American director come and turn into a propaganda mouthpiece for their dictators,” Michel said. “These people know how horrific these regimes truly are — and then they watch this American parachute in, and gobble up all of the dictators’ talking points, without even bothering to push back.</p> <h2 id="once-upon-a-time-in-dnipro">Once Upon a Time… in Dnipro</h2> <p>Lopatonok, 56, was born in a small Ukrainian city near Dnipro, about 250 miles southeast of Kyiv. After studying at a technical university, he worked a variety of jobs before carving out a niche in Ukraine’s film industry by colorizing old Soviet movies.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/igor-lopatonok-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Igor Lopatonok" data-img="/assets/investigations/igor-lopatonok.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/igor-lopatonok.jpg" class="hidden" id="aside-img-8900" alt="investigations/igor-lopatonok.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Neca Dantas/NurPhoto/Alamy Stock Photo </small> Igor Lopatonok. </div> </aside> <script>$(window).load(function() {$("#aside-img-8900").remove();});</script> <p>He emigrated to the U.S. in 2008, and the following year started a company called Grading Dimension Pictures Inc. It is low-key for a Hollywood entity. Its Facebook page, which describes itself in broken English as “production house specialized on producing move from development to post-production,” has just 31 followers.</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-a-lawsuit-and-a-bankruptcy"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-a-lawsuit-and-a-bankruptcy">🔗</a>A Lawsuit and a Bankruptcy </h3> <div class="subheader"> <p>Most of what is publicly available about Lopatonok comes from Los Angeles County civil court cases, including a civil lawsuit filed in late 2011 by the co-founder of Grading Dimension Pictures, filmmaker Aleksandr Shapiro, alleging that Lopatonok had embezzled more than $1 million in company funds.</p> </div> <input type="checkbox" id="occrp-inset-box-control-a-lawsuit-and-a-bankruptcy" /> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p>Shapiro accused Lopatonok of using the corporation’s bank account and credit cards to make payments to his and his wife’s personal credit cards, for his son’s private school and to jewelry and clothing stores. The exhibits in the case showed Lopatonok charging more than $3,000 at diamond giant De Beers’ store on Rodeo Drive and almost $1,200 at Giorgio Armani.</p><p>The court filing said initially Lopatonok owned 60 percent of the company to Shapiro’s 40 percent, but in 2011 they became 50-50 partners. From the outset, Shapiro was listed as CEO and Lopatonok the chief financial officer.</p><p>The case was settled in November 2012, but court documents do not say how. Jay J. Plotkin, the lawyer who brought Shapiro’s complaint, confirmed that the case was settled but declined to discuss it with reporters. Shapiro is not known to be involved in Lopatonok’s recent filmmaking efforts. Lopatonok did not respond to a request to comment on the suit.</p><p>In 2018, Lopatonok twice filed for bankruptcy to stave off foreclosure of his Malibu home that he estimated was worth $2.75 million. In a sworn statement filed with the case, Lopatonok declared he had “obtained financing” to refinance his home loan and pay off creditors.</p> </div> </div> <label for="occrp-inset-box-control-a-lawsuit-and-a-bankruptcy"><span>More</span><span>Less</span></label> </div> </div> </div> <p>Despite having moved to the U.S. and acquired U.S. citizenship, Lopatonok has been unapologetic in echoing pro-Kremlin views on social media and in appearances on Russia’s state-owned media outlet Sputnik. He has also been a guest on “The Politics of Survival,” a YouTube channel hosted by Tara Reade, who claimed during the 2020 U.S. election that President Joe Biden had sexually assaulted her in the 1990s. (After her <a href="https://www.nytimes.com/2020/05/31/us/politics/tara-reade-joe-biden.html" target="_blank">claims were discredited</a>, Reade defected to Russia and currently lives in Moscow.)</p> <p>It’s unclear how he first encountered Stone, but starting in the mid-2010s the two men partnered together to make two films about Lopatonok’s native Ukraine — “Ukraine on Fire,” released in 2016, and “Revealing Ukraine,” released in 2019. The documentaries portrayed a Kremlin-friendly view of the 2014 Euromaidan Revolution that saw anti-corruption protests drive out Ukraine’s pro-Russian president Viktor Yanukovych.</p> <p>“My attitude to Maidan was immediately negative,” Lopatonok said in a 2016 interview with Komsomolskaya Pravda, a Russian pro-government tabloid, adding that he considered it a coup ‘supported’ by foreign secret services.”</p> <p>Stone and Lopatonok’s collaborations were ignored by most international media, but praised in Russia, with the pro-government media outlet Izvestia writing that the film had “shocked Europe by exposing the Kyiv elite.”</p> <p>When “Revealing Ukraine” premiered at the 2019 Taormina Film Fest in Sicily, Stone and Lopatonok were joined on the red carpet by Ukrainian oligarch and politician Viktor Medvedchuk, a close ally of Vladimir Putin who featured prominently in the film and was interviewed by Stone.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/taorming-film-festival-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="A screenshot of an image posted on Instagram by Lopatonok" data-img="/assets/investigations/taorming-film-festival.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/taorming-film-festival.jpg" class="hidden" id="aside-img-7791" alt="investigations/taorming-film-festival.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Instagram/@lopatonok </small> A screenshot of an image posted on Instagram by Lopatonok showing him at the Taormina Film Fest with Medvedchuk’s wife, Oksana Marchenko (left), Viktor Medvedchuk (second from left), and Lopatonok's wife, film producer,Vera Tomilova (right). </div> </aside> <script>$(window).load(function() {$("#aside-img-7791").remove();});</script> <p>U.S. outlet <a href="https://www.thedailybeast.com/revealing-ukraine-oliver-stones-latest-piece-of-pro-putin-propaganda-may-be-his-most-shameless-move-yet" target="_blank">The Daily Beast speculated</a> the film may have been intended as a “PR vehicle” for Medvedchuk at a time when he was staging a political comeback in Ukraine. (The Russian invasion of Ukraine put a permanent end to his political career in that country, since he was accused of treason and ultimately traded to Russia in a prisoner swap.)</p> <p>Now, internal emails obtained by Vlast suggest that the movie was at least partially financed by Medvedchuk.</p> <p>“In Taormina…I swapped a few words with [Medvedchuk’s wife] Oksana Medvedchuk and later with Goran,” a screenwriter on the team wrote to Lopatonok’s wife at the time. “Naturally they said that that was it, the budget of the movie is completely covered by them.”</p> <p>She responded that Goran had sent “a part of Oliver’s fee and paid for the shooting in Monaco,” but then said “they didn’t give him any more.” Reporters were not able to identify Goran’s surname or confirm his role.</p> <p>Medvedchuk and his wife did not respond to requests for comment, while Lopatonok did not respond to queries on the funding of “Revealing Ukraine.”</p> <p>Asked in an interview with OCCRP why he was focusing his lens on autocrats, Lopatonok said he was simply making movies about his personal heroes.</p> <p>“I admire how they rule their people,” he said. ‘I admire that the city of Minsk has clean streets and no homeless people … as in my Los Angeles.”</p> <h2 id="a-flurry-of-pitches">A Flurry of Pitches</h2> <p>In late 2019, Stone and Lopatonok started working on “Qazaq: History of the Golden Man,” their documentary about Nazarbayev. OCCRP and Vlast <a href="/en/investigations/sidebar/oliver-stone-documentary-about-kazakhstans-former-leader-nazarbayev-was-funded-by-a-nazarbayev-foundation">reported in 2022</a> that a charitable foundation controlled by Nazarbayev paid the duo at least $5 million to produce the film.</p> <p>It aired on Kazakh national television in December 2021 as an eight-part miniseries in praise of Nazarbayev’s achievements. One month later, tiring of the longtime leader’s continued <span class="expand">hold on power <span class="expandright"> Nazarbayev stepped down as Kazakhstan’s president in 2019, but he still wielded significant power behind the scenes as head of the country’s Security Council and its ruling party, among many other positions he retained. <i></i> </span> </span> , thousands of Kazakh protesters took to the streets shouting “Old man, go” in an effort to drive him from power. The documentary is not known to have ever been broadcast in Kazakhstan again.</p> <p>But still, the Kazakh film may have given Lopatonok a template for how to approach other dictators: They or people close to them would provide the funding, and he’d deliver a hagiography with high production values — and a star interviewer to boot.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/qazaq-trailer-golden-man-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="A screengrab of the trailer" data-img="/assets/investigations/qazaq-trailer-golden-man.jpg" id="img-1065" /> <img src="https://www.occrp.org/assets/investigations/qazaq-trailer-golden-man.jpg" class="hidden" id="aside-img-1065" alt="investigations/qazaq-trailer-golden-man.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Global Tree Pictures/YouTube </small> A screengrab of the trailer for “Qazaq: History of the Golden Man,” shared by Global Tree Pictures on YouTube. </div> </div> <script> $(document).ready(function() { let rand_1065 = $("#aside-img-1065").prop("naturalWidth"); if(rand_1065<750){$("#img-1065").attr("src","/assets/investigations/qazaq-trailer-golden-man.jpg");} $(window).load(function() {$("#aside-img-1065").remove();}); }); </script> <p>The documents obtained by reporters show that his team prepared synopses of potential films about at least six other authoritarian governments, including China, the United Arab Emirates, and the Russian republic of Tatarstan, alongside the pitches to Aliyev and Lukashenko promising that Stone would interview their leaders and help tell their “true story.”</p> <p>Among the topics proposed for Stone’s discussion with Azerbaijani President Ilham Aliyev were the country’s “”success” under the “dynastic rule” of the Aliyev family, and its ongoing conflict with “an Armenia that is losing its stability and teetering on the edge of an abyss.”</p> <p>A summary of the proposed film makes clear the tenor of Lopatonok’s approach: It describes Aliyev as a “true successor” to his father, the previous president, who had taught him to be a “wise leader.”</p> <p>“Is the model of state governance chosen by Azerbaijan really so bad?” the summary asks, seeming to anticipate a measure of criticism. “Can you really call the existing state system in Azerbaijan a ‘Cult of Personality’? Or is it just a tribute of people’s respect to a leader who was able to turn the country from poverty into one of the developed, prosperous countries?”</p> <p>Lopatonok wrote in the pitch that the Aliyev film would cost $15 million to produce — triple what is known to have been paid for the Nazarbayev film.</p> <p>Another synopsis, for a film focusing on Turkish President Recip Tayyip Erdogan, offered the leader a chance to tout his defense of Turkish interests.</p> <blockquote> <p>Erdogan is a Turk and hardly needs to be basing his actions on the interests of other countries. But what interests does he have? Can he restore the Great Silk Road? And does he really have expansionist plans? What is Erdogan trying to achieve? He should answer these questions himself. And only himself. We should not try to divine [Erdogan’s plans] from coffee grounds, even if it is magnificent Turkish coffee that they know how to make only in Istanbul.”</p> </blockquote> <p>It’s unclear how far any of these projects got, but in a 2021 interview at a screening of “Qazaq” in Baku, the capital of Azerbaijan, Lopatonok discussed his hopes for a future film.</p> <p>“This country has a very rich and colorful culture,” he told local media. “When I was here in 2012-2013, I learned to distinguish the Karabakh carpets from all others, identifying [them] by their ornament. I would make a good film about Azerbaijan.”</p> <p>In a 2018 interview, Ibrahim Kalin, then the spokesman for Turkish President Recep Tayyip Erdogan, <a href="https://www.aa.com.tr/tr/turkiye/cumhurbaskanligi-sozcusu-kalin-stone-ile-henuz-bir-gorusme-yok/1318425" target="_blank">confirmed</a> that they had received a pitch for a documentary about Erdogan around the same time Stone was in Turkey. “We are looking at it, we are evaluating it,” he said. “I know the series he made for Mr. Putin before.”</p> <p>Lopatonok’s Belarusian documentary had already begun pre-production when it was halted after Russia’s invasion of Ukraine. A document obtained by reporters shows that it was scheduled to be filmed at locations across Belarus, including Lukashenko’s childhood home and a milk factory. At each site, the president would be asked a series of questions:</p> <blockquote> <p>What he would like to discuss:<br /> Childhood, work as chairman of kolkhoz [Soviet collective farm], mother, father, wedding - wife, children.<br /> Becoming a legislator, why?<br /> Presidential pre-election campaign, assassination attempt</p> <p>Events of 2020:</p> <p>Independent Belarus, how our hero sees it now and in the future?<br /> The events of 2020?<br /> The elections, who really won?<br /> Why did people stand in lines all day in Minsk to vote for [Lukashenko opponent] Tikhanovskaya?</p> </blockquote> <p>Lopatonok’s most ambitious pitch, titled “The War,” looks like it may have been aimed at the Kremlin. It promises a sympathetic appraisal of Russian heroism along the Eastern Front in World War II — a topic Putin is known to be obsessed with — to be narrated by Hollywood star Hugh Grant and produced by Lord of the Rings director Peter Jackson.</p> <p>Grant did not respond to requests for comment. Jackson, through his agent, said that he had never heard of the project and that his name had been used without his permission.</p> <p>“I find it distressing to have my name and reputation stolen like this, and I’ve put it in the hands of my lawyer,” he said.</p> <p>The goal of the World War II film, according to the pitch, was to convey the “truth” about Russia’s role in the war to an international audience, while avoiding the appearance of any official links to the country.</p> <style> @media screen and (max-width: 412px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-bouha-en iframe { height: 500px !important; } } @media screen and (min-width: 413px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-bouha-en iframe { height: 590px !important; } } @media screen and (min-width: 630px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-bouha-en iframe { height: 680px !important; } } @media screen and (min-width: 801px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-bouha-en iframe { height: 680px !important; } } @media screen and (min-width: 941px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-bouha-en iframe { height: 680px !important; } } @media screen and (min-width: 1101px) { .flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-bouha-en iframe { height: 760px !important; } } </style> <div class="flourish-embed flourish-embed--wide flourish-embed--https-cdn-occrp-org-projects-oliver-stone-flourishes-bouha-en"> <iframe scrolling="no" src="https://cdn.occrp.org/projects/oliver-stone-flourishes/bouha/en/"></iframe> <div> <a href="https://flourish.studio/?utm_source=embed" target="_top"><img alt="Made with Flourish" src="https://public.flourish.studio/resources/made_with_flourish.svg" /></a> </div> </div> <p>Russia, the pitch laments, had been “declared guilty” of instigating the war — a likely reference to historical debates about the Soviet Union’s pre-war alliance with Nazi Germany.</p> <p>“Any response from the Russian side is perceived in advance as propaganda,” the pitch reads. “That means it has no reason to be accepted.”</p> <blockquote> <p>Therefore, we should put forward a contrasting product that:<br /> A. Will not be formally connected with Russia in any way<br /> B. Will have fundamentally new and attractive, promising ways of presenting the material (we expect interest at least for the next decade)<br /> C. Will have not explicitly contain elements of direct dispute or refutation<br /> D. Will produce an effect both on the factual and on the emotional levels</p> </blockquote> <p>Despite the other big names, it’s Lopatonok’s partnership with Stone — whom he refers to as “Maestro” — that is at the center of his sales pitches. In ‘The War,’ Stone was offered up as a screenwriter and narrator as well as a producer.</p> <p>“This is one magical quality in Oliver films – they aging [sic] nicely, like a fine wine,” Lopatonok wrote in a 2022 Instagram post. “I’m very proud that my films with Maestro carry on this quality as well.”</p> <p><strong><em>Kevin G. Hall, Kelly Bloss, Dan Mika, and Julia Wallace contributed reporting.</em></strong></p>OCCRPhttps://www.occrp.org/As Europe Urges ‘Reform’ in Serbia, Local Election Observers Point to State Machinery Behind Vote Rigging2024-02-26T00:00:00+01:002024-02-26T00:00:00+01:00https://www.occrp.org/en/investigations/as-europe-urges-reform-in-serbia-local-election-observers-point-to-state-machinery-behind-vote-rigging<p>When Serbia went to the polls this December, it seemed that — for the first time in a decade — the country’s beleaguered opposition had a shot at a meaningful victory.</p><p>When Serbia went to the polls this December, it seemed that — for the first time in a decade — the country’s beleaguered opposition had a shot at a meaningful victory.</p> <p>The headwinds were strong. President Aleksandar Vučić, who served as information minister under Yugoslav dictator Slobodan Milošević, has spent years tightening his grip over the Balkan country.</p> <p>While there was little doubt his party would keep its majority in parliament, a separate election in Serbia’s capital offered his opponents a rare opportunity. In the wake of two mass shootings that rocked the country earlier in the year, Belgrade had become a locus of anti-government protest. Pre-election polls showed that the opposition, united in a coalition called “Serbia Against Violence,” had a chance to win control of the city assembly.</p> <p>On the day of the election, however, it quickly became clear that something was wrong. As residents of the city set out to vote, many noticed an unsettling sight: People arriving at their neighborhood polling stations who seemed to have little idea of where they were.</p> <p>As became clear throughout the day, Serbs from other parts of the country, and from neighboring Bosnia and Herzegovina, were being driven around the city to vote in organized groups.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/screenshot-x-elections-line-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="A line of people heading into the Belgrade Arena" data-img="/assets/investigations/screenshot-x-elections-line.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/screenshot-x-elections-line.jpg" class="hidden" id="aside-img-6387" alt="investigations/screenshot-x-elections-line.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Djordje Miketic/X </small> On election day, a user posts a video on X of a line of people heading into the Belgrade Arena, an apparent meeting point for voters who had come from Bosnia. He jokingly refers to it as “Bosnia Arena.” </div> </aside> <script>$(window).load(function() {$("#aside-img-6387").remove();});</script> <p>Many assumed this invasion had been arranged to ensure the ruling Serbian Progressive Party (SNS) retained its hold on the Belgrade assembly. When the preliminary results were announced that evening, the SNS came out slightly ahead. (With no party claiming an outright majority, the Belgrade assembly election now appears to be <a href="https://balkaninsight.com/2024/02/16/re-run-of-belgrade-elections-offers-way-out-for-vucic-serbian-expert/" target="_blank">headed for a rerun</a>.)</p> <p>The affair set off several weeks of heated protests — and calls for the international community to take notice. Serbia, after all, has spent over a decade in negotiations to join the world’s biggest democratic club, the European Union. It’s also a member of the Organization for Security and Co-operation in Europe (OSCE), whose human rights arm led an international mission to observe the vote.</p> <p>And yet, with several exceptions, the most prominent Western responses seemed to treat Serbia’s electoral problems as a matter of insufficient technical capacity. U.S. diplomats and European leaders alike noted their “concern” about “deficiencies” in the country’s election practices. The government, they said, should “implement observers’ recommendations” and “accelerate its work on reforms.”</p> <p>This approach — finding ways to obliquely criticize President Vučić while leaving him plenty of room to rejoin the fold — has become familiar in recent years. But a closer look at the findings of Serbia’s most prominent independent election observation group suggests the problem runs much deeper than the need for a few ‘reforms.’</p> <p>A report released last week by the group, <span class="expand">CRTA <span class="expandright"> The Center for Research, Transparency and Accountability. <i></i> </span> </span> , puts it in stark terms: “The results of the election largely resulted from advantages that the ruling party gained illegally, with the complicity of several state institutions,” it concluded. “From the moment the elections were called, the institutions released the brakes of the law more and more recklessly.”</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/protesters-serbia-elections-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Demonstrators attempt to enter the town hall" data-img="/assets/investigations/protesters-serbia-elections.jpg" id="img-8136" /> <img src="https://www.occrp.org/assets/investigations/protesters-serbia-elections.jpg" class="hidden" id="aside-img-8136" alt="investigations/protesters-serbia-elections.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Imago/Alamy Stock Photo </small> Irregularities in parliamentary and local elections in Belgrade, Serbia, led to opposition protests, during which demonstrators attempted to enter the town hall. </div> </div> <script> $(document).ready(function() { let rand_8136 = $("#aside-img-8136").prop("naturalWidth"); if(rand_8136<750){$("#img-8136").attr("src","/assets/investigations/protesters-serbia-elections.jpg");} $(window).load(function() {$("#aside-img-8136").remove();}); }); </script> <p>Combining leaks from government insiders, observation at the polls, and statistical analysis, CRTA has been able to paint the most complete picture of what happened in Belgrade on election day.</p> <style> .aside-story {padding: 0 !important;background: #fff;} .aside-story:hover {box-shadow: 0 4px 5px 0 rgba(0, 0, 0, 0.14), 0 1px 10px 0 rgba(0, 0, 0, 0.12), 0 2px 4px -1px rgba(0, 0, 0, 0.2);} .aside-story img{ margin-top: 0;margin-right: 0;} .aside-story .full-image{box-shadow:none;} .aside-story .full-image:hover{box-shadow:none;} .aside-story a:hover, .aside-story a:focus{text-decoration: none;} .aside-story a h3{color: #000;font-size: 21px;font-weight: 700;font-family: "Open Sans", sans-serif;margin: 0; max-width: 100%;width: 100%;} .aside-story-title {margin: 0;padding: 10px;background: #fff;} .aside-story-desc {font-family: "Noto Serif", Georgia, serif;font-size: 17px;font-weight: 400;margin: 0;padding: 0 10px 10px 10px;;color: #000;} .aside-story-readmore {display: grid;grid-template-columns: auto 25px;align-items: center;margin: 0 0 10px 0;padding: 0 10px;background: #fff;text-align: right;font-size: 18px;font-weight: 700;font-family: "Open Sans", sans-serif;} .aside-story-readmore img{transform: rotate(90deg); overflow: visible;width: 90%;margin: 5px 10px 5px 0;border-radius: 12px;box-shadow: rgba(0, 0, 0, 0.14) 0px 2px 2px 0px, rgba(0, 0, 0, 0.2) 0px 3px 1px -2px, rgba(0, 0, 0, 0.12) 0px 1px 5px 0px;} .aside-story-readmore-text {margin-right:10px;} .aside-story:hover a .aside-story-readmore .aside-story-readmore-text {color:#941c1e !important;} .aside-story-image {padding-bottom: 70%;background-size: cover; background-position: center;} .aside-story-title, .aside-story-desc {padding: 13px 17px;} .aside-story-title {padding-bottom: 0;line-height: 1.4;} .aside-story-desc {padding-top: 5px;} .aside-story {border-radius: 3px;overflow: hidden;transition: box-shadow 0.2s ease;} .aside-story-desc {color: #333333;} .aside-story a h3 {font-style: normal;font-family: "Open Sans";font-size: 24px;font-weight: 700;} .aside-story-readmore img {box-shadow: none;} .aside-story-undercover-at-an-sns-call-center .aside-story-image {background-image: url(/assets/investigations/call-centar-cins-thumb.jpg);} @media only screen and (max-width: 800px) { .aside-story {margin-bottom: 31px;} .aside-story-image {padding-bottom: 0;} .aside-story a {display: grid;grid-template-columns: 2fr 3fr; } .aside-story a h3 {font-size: 16px; } .aside-story-title, .aside-story-desc {padding: 5px 10px 5px 8px;} .aside-story-title {padding-bottom: 0;} .aside-story-desc {font-size: 12px;} .aside-story-readmore {font-size: 13px;grid-template-columns: auto 11px;margin-bottom: 3px;margin-top: -7px; } .aside-story-readmore-text {margin-right: 3px;} .aside-story-readmore img {width: 15px;margin: 5px 10px 3px 0;} .aside-story-undercover-at-an-sns-call-center .aside-story-image {background-image: url(/assets/biometric-bribery-semlex/Semlex-Banner2.jpg);} } </style> <aside class="box-side aside-story aside-story-undercover-at-an-sns-call-center" id="aside-story-undercover-at-an-sns-call-center"> <a href="https://www.cins.rs/en/cins-inside-snss-call-center-hostess-agency-vote-buying-and-millions-in-cash/" target="_blank"> <div class="aside-story-image"></div> <div><div class="aside-story-title"><h3>Undercover at an SNS Call Center</h3></div> <div class="aside-story-desc">In Nov. 2023, reporters from CINS, an OCCRP member center, went undercover to expose an SNS call center. Its operations raised suspicions of vote-buying and funding using “black money.”</div> <div class="aside-story-readmore"><div class="aside-story-readmore-text">Read more</div><div><img src="https://www.occrp.org/assets/common/back_to_top.png" alt="Right Arrow" /></div></div></div></a> </aside> <p>More than a fifth of the city’s polling stations were affected by “serious irregularities,” the group found, concluding “very conservatively” that the SNS engineered at least 30,000 extra votes for itself in the capital. Far from technical or anecdotal, the group concluded, the violations were part of a systematic, months-long effort by the ruling party to use captured government bodies to ensure electoral victory.</p> <p>Daniel Bochsler, a political scientist at Central European University, described it as a “new era of electoral misconduct” for Serbia, which has long faced accusations of various election irregularities.</p> <p>“This is not a country that can make any progress on the EU membership process,” he said.</p> <h2 id="they-drove-us-here">‘They Drove Us Here’</h2> <p>On the day of the vote, outraged Belgrade residents took to social media to post dozens of photos and videos that appeared to show the election being stolen before their eyes.</p> <p>One man <a href="https://twitter.com/PatogeniP/status/1736439008471703831" target="_blank">recorded himself confronting</a> the elderly driver of a yellow school bus parked near a polling station. “How can there be school on Sunday?” he asks. “What is it? Organized bringing people to vote? Is that it?”</p> <p>“Close the door,” the driver snaps.</p> <p>In <a href="https://twitter.com/TSerbula/status/1736409313915101436" target="_blank">another video</a>, a woman admits that she is from Bosnia — but registered to vote in Belgrade. “They drove us here and they have to drive us back,” she says. “I don’t know what to tell you. I just want to gather all these people here so I can get back home.”</p> <p>Enthusiastic or not, these voters were part of something big. But how did it work? Who had arranged it? And how much of a difference had it made?</p> <p>For senior foreign officials, including <a href="https://www.eeas.europa.eu/eeas/serbia-joint-statement-high-representative-josep-borrell-and-commissioner-neighbourhood-and-0_en" target="_blank">the EU’s top diplomat</a>, its <a href="https://www.eeas.europa.eu/eeas/ep-plenary-speech-high-representativevice-president-josep-borrell-elections-serbia_en" target="_blank">justice commissioner</a>, and <a href="https://twitter.com/USEmbassySerbia/status/1738129109845250288" target="_blank">the U.S. Ambassador</a>, the main source of truth about Serbia’s election has been the observation mission organized by the OSCE.</p> <p>The organization’s Warsaw-based democracy and human rights office, ODIHR, has been observing elections for decades and the 361-strong contingent it organized for Serbia’s December poll was by far the highest-profile international mission in the country. And so a report it published on the day after the vote, technically a “<a href="https://www.osce.org/files/f/documents/6/8/560650_1.pdf" target="_blank">statement of preliminary findings and conclusions</a>,” has become a key reference for international commentary on what happened on the ground.</p> <p>Its main conclusion is that the election, “though technically well-administered,” had taken place in “unjust conditions” due to the “the ruling party’s systemic advantages” and the “decisive involvement of President Vučić” (who was not himself on the ballot). The report also noted “allegations of organizing and busing of voters to support the ruling party” in the local Belgrade election and “9 cases of vote buying and 5 cases of ballot box stuffing.”</p> <p>But it provides no answer to the key question on the mind of many in Belgrade — how their city assembly election had come to be infiltrated by outsiders.</p> <p>In part, this is because ODIHR’s picture is incomplete. The mission’s several hundred observers could only hope to view a small fraction of the country’s 8,200 polling stations, often only for an hour each.</p> <p>More importantly, the mission was deployed specifically to observe the nationwide parliamentary vote, leaving the Belgrade city council race outside its purview. Asked why, ODIHR spokesperson Katya Andrusz said that the organization had limited financial and human resources and needed to focus on its primary mandate.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/serbia-president-elections-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Aleksandar Vučić in the Stark Belgrade Arena" data-img="/assets/investigations/serbia-president-elections.jpg" id="img-233" /> <img src="https://www.occrp.org/assets/investigations/serbia-president-elections.jpg" class="hidden" id="aside-img-233" alt="investigations/serbia-president-elections.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Imago/Alamy Live News </small> Aleksandar Vučić, the President of Serbia, addressed supporters at a pre-election rally held in the Stark Belgrade Arena, with his party's flag prominently displayed. </div> </div> <script> $(document).ready(function() { let rand_233 = $("#aside-img-233").prop("naturalWidth"); if(rand_233<750){$("#img-233").attr("src","/assets/investigations/serbia-president-elections.jpg");} $(window).load(function() {$("#aside-img-233").remove();}); }); </script> <h2 id="this-system-is-rigged">‘This System Is Rigged’</h2> <p>Fortunately, Serbia has its own election observers. The key player on the ground, CRTA, is a non-profit that has its roots in the democratic transition that followed the ouster of Milošević in 2000.</p> <p>With funding from <a href="https://crta.rs/en/about-us/" target="_blank">several foreign governments and foundations</a>, the organization has spent years advocating for stronger civic culture and better citizen involvement in Serbia’s political life. On December 17, it carried out its biggest election observation mission yet, featuring about 2,500 accredited observers.</p> <p>CRTA’s fast-talking director, Raša Nedeljkov, has the harried air of a man with a mission — there is always too much to uncover, and too little time and money to do it.</p> <p>“Тwo weeks before the election day, we discovered what was going on with the voter registry,” he said. “We had different insiders giving us documents that proved our suspicion that there was something wrong. So we wanted to actually play the role of investigative journalists.”</p> <p>What he and his team say they’ve uncovered is an organized effort by the ruling SNS party to change voters’ places of residence. The scheme was possible, Nedeljkov said, because, in a move without precedent in the history of modern Serbia, local elections had been called in only about a third of the country’s municipalities. As a result, government supporters who were not voting at home were available to vote where they were needed.</p> <p>“We’re talking about a completely rigged system within the Ministry of the Interior, which is in charge of residences and citizenship, and the Ministry of Public Administration and Local Self-Government, which is in charge of maintaining the voter registry,” Nedeljkov said.</p> <p>The preparations started weeks before the election, according to CRTA’s findings. In one case investigated and verified by its researchers, a person living near Belgrade reported that their elderly parent, a supporter of President Vučić, had been invited by an SNS party committee to “show up at the local police station and bring their ID.”</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/rasa-nedeljkov-crta-election-day-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Raša Nedeljkov" data-img="/assets/investigations/rasa-nedeljkov-crta-election-day.jpg" id="img-1081" /> <img src="https://www.occrp.org/assets/investigations/rasa-nedeljkov-crta-election-day.jpg" class="hidden" id="aside-img-1081" alt="investigations/rasa-nedeljkov-crta-election-day.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Marko Risovic </small> Raša Nedeljkov, the director of CRTA, speaks at the organization’s press center on election day. </div> </div> <script> $(document).ready(function() { let rand_1081 = $("#aside-img-1081").prop("naturalWidth"); if(rand_1081<750){$("#img-1081").attr("src","/assets/investigations/rasa-nedeljkov-crta-election-day.jpg");} $(window).load(function() {$("#aside-img-1081").remove();}); }); </script> <p>There — along with about 20 others, they said — the parent’s official residence was changed to a neighboring village that was technically part of Belgrade. In exchange for voting there, an SNS activist promised each attendee 2,000 dinars ($18).</p> <p>As many Belgrade residents noticed, voters were also brought in from outside the country, particularly the Serb-majority region of neighboring Bosnia and Herzegovina.</p> <p>An analysis by CRTA that compared voter lists from both countries found over 1,400 Belgrade addresses where unusual numbers of voters who appeared to be living in Bosnia had been registered as “residents.” In one especially egregious example, 129 people from Bosnia were registered at a building in the working-class neighborhood of Dušanovac that was <a href="https://crta.rs/en/one-voter-in-several-cities-and-countries-at-once/" target="_blank">still under construction</a>.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/danijelova-serbia-building-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="A half-completed building at Danijelova 9" data-img="/assets/investigations/danijelova-serbia-building.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/danijelova-serbia-building.jpg" class="hidden" id="aside-img-9288" alt="investigations/danijelova-serbia-building.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> CRTA </small> The half-completed building at Danijelova 9, where CRTA found 129 “residents” who appeared to be from Bosnia. </div> </aside> <script>$(window).load(function() {$("#aside-img-9288").remove();});</script> <p>If they hold Serbian citizenship, there’s nothing to stop people living in Bosnia from taking part in national elections, Nedeljkov said: “We encourage them to vote!” But, he said, only people who genuinely live in Belgrade should be able to vote for its local assembly.</p> <p>On the day of the election itself, CRTA’s observers documented how foreign voters were distributed across the city. According to the organization’s <a href="https://crta.rs/zavrsni-izvestaj-posmatracke-misije-crte/" target="_blank">final election report</a>, a large sports hall, known as Belgrade Arena, was turned into a logistical hub.</p> <p>“Observers reported seeing private security personnel in front of the arena, many buses and vehicles from Bosnia and Herzegovina, and groups coordinating voter transportation,” the report reads. “The scheme entailed welcoming voters, facilitating their registration inside the arena, assigning [them] to polling stations, arranging complimentary transportation using party-organized buses, vans, taxis and private cars, and bringing them back.”</p> <p>This system, Nedeljkov said, was a sign of the regime’s sophistication.</p> <p>Back in the 90s, the Milošević regime “would literally bring big bags of pre-filled votes and put them in the ballot box. Today it’s not like that. We’re talking about ten or twenty [votes] here, ten or twenty there. And it accumulates just enough.”</p> <p>In total, CRTA’s election-day observers found signs of “organized voter migration” at 71 Belgrade polling stations, representing 14 percent of those observed. Statistical analyses conducted after the election found data anomalies at the same locations. One of these techniques yielded a lower-bound estimate of how many extra votes the ruling party had finagled: 30,000.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/arena-serbia-elections-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Inside the Belgrade Arena" data-img="/assets/investigations/arena-serbia-elections.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/arena-serbia-elections.jpg" class="hidden" id="aside-img-7083" alt="investigations/arena-serbia-elections.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> CRTA </small> A photo of the Belgrade Arena taken by a CRTA observer. The procedure was “well-organized,” the organization reported. “Following party activists’ guidance … sixty-person groups under the direction of a leader were assigned to booths according to the municipality in which they were to cast their ballots.” </div> </aside> <script>$(window).load(function() {$("#aside-img-7083").remove();});</script> <p>Nedeljkov does not like to tout this number, pointing out that it is both conservative and prone to misinterpretation.</p> <p>“At some point, when you accumulate enough different tools to say something is wrong, the most professional thing from our side is to say that the will of the people has not been represented,” he said. “The most important thing is how we combined different types of irregularities and triangulated them to specific polling stations.”</p> <h2 id="the-ring-is-closing">‘The Ring Is Closing’</h2> <p>Following its observations, CRTA submitted a number of complaints to official bodies, from the anti-corruption agency to the police to the electronic media regulator. But these submissions, along with the opposition’s formal filings and the protests of tens of thousands of outraged citizens, have failed to overturn what they say are flawed results.</p> <p>Senior government officials have admitted that Serbs from abroad had voted — but only, they said, in accordance with the law. President Vučić described the elections as the “cleanest and most honest” in Serbia’s history. The prime minister dismissed reports of violations as anecdotal. And the state-aligned media <a href="https://x.com/JasminMuj/status/1736955986261467253?s=20" target="_blank">blamed the protests on foreign organizers</a>.</p> <p>CRTA itself has also come under sustained attack, with top SNS officials branding the staff as representatives of foreign interests, revealing their private information in public, and calling for their arrest.</p> <p>The SNS party and President Vučić’s administration did not respond to requests for comment.</p> <p>In his conversation with OCCRP, Nedeljkov repeatedly underscored that the organized voter migration is only the tip of the iceberg.</p> <p>“We are talking about a cancer that just exploded this year, but it’s been growing, mutating for years,” he said.</p> <p>He noted problems that have undermined the country’s elections for years, including widespread intimidation of voters, the use of public funding to compel people to vote for the ruling party, pressure on public sector employees, and an overwhelmingly pro-government media environment.</p> <p>Nedeljkov worries the deteriorating state of Serbian democracy is not getting through to international observers.</p> <p>“We’re trying to prove the case to the international community that Serbia is sliding into autocracy, dictatorship. And they’re always saying: ‘Come on, you’re not Belarus or Turkey. You have elections. You can get into parliament.’”</p> <p>“They’re right, I’m still able to speak from the warmth of my home,” he continued. “But we’re seeing that the ring is closing. From month to month, from year to year, every election is worse than the previous one.”</p> <p>Srdjan Milivojević, a longtime parliamentarian with the Democratic Party who was once a key figure in the uprising against Milošević, said the current state of crisis reminded him of that era. “I asked [U.S. Ambassador] Christopher Hill: If this happened in America, would it be ok?”</p> <p>“He said no,” Milivojević said with a laugh.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/srdjan-milivojevic-interview-state-election-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Raša Nedeljkov" data-img="/assets/investigations/srdjan-milivojevic-interview-state-election.jpg" id="img-1709" /> <img src="https://www.occrp.org/assets/investigations/srdjan-milivojevic-interview-state-election.jpg" class="hidden" id="aside-img-1709" alt="investigations/srdjan-milivojevic-interview-state-election.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Imago/Alamy Stock Photo </small> Srdjan Milivojević, center, a member of parliament with the Democratic Party, is interviewed by reporters in front of Serbia’s state election commission building on December 27, 2023. </div> </div> <script> $(document).ready(function() { let rand_1709 = $("#aside-img-1709").prop("naturalWidth"); if(rand_1709<750){$("#img-1709").attr("src","/assets/investigations/srdjan-milivojevic-interview-state-election.jpg");} $(window).load(function() {$("#aside-img-1709").remove();}); }); </script> <p>Hill is among those who have come under fire for reactions that, critics say, have failed to meet the moment. He has been roundly pilloried by Vučić opponents for a <a href="https://twitter.com/USEmbassySerbia/status/1738129109845250288" target="_blank">post-election video message</a> in which he said he was “really looking forward” to continued cooperation with the Serbian government and urged it to “work with the OSCE, work with the international observers,” to address “deficiencies” in the vote.</p> <p>In this kind of rhetoric — implying the Serbian government and international election monitors were pulling in the same direction — he was not alone.</p> <p>The EU’s <a href="https://www.eeas.europa.eu/eeas/serbia-joint-statement-high-representative-josep-borrell-and-commissioner-neighbourhood-and-0_en" target="_blank">initial response</a> was to “conclude with concern that [Serbia’s] electoral process requires tangible improvement and further reform.”</p> <p>And even when the election was taken up for debate in the European Parliament, some comments had the flavor of urging a wayward friend to do better. “We expect that all credible reports of irregularities [be] followed up in a transparent manner by the competent national authorities,” said EU Justice Commissioner Didier Reynders in his <a href="https://www.eeas.europa.eu/eeas/ep-plenary-speech-high-representativevice-president-josep-borrell-elections-serbia_en" target="_blank">introductory speech</a>.</p> <p>Representatives of these EU officials did not respond to requests for comment. A representative of the U.S. State Department pointed reporters to what she described as “complete, fulsome” comments that had been made by State Department officials. In <a href="https://www.state.gov/online-press-briefing-with-ambassador-james-obrien-assistant-secretary-of-the-bureau-of-european-and-eurasian-affairs/" target="_blank">each of</a> the <a href="https://www.state.gov/briefings/department-press-briefing-december-18-2023/" target="_blank">linked</a> <a href="https://www.state.gov/briefings/department-press-briefing-december-19-2023/" target="_blank">briefings</a> she provided, the official acknowledged problems with Serbia’s elections and included references to “working with Serbia’s government” to address them.</p> <p>Other actors have stepped forward with stronger demands. Earlier this month, the European Parliament passed a resolution calling for “respected international legal experts and institutions” to look into electoral violations. A separate group of senior European politicians have also <a href="https://www.politico.eu/article/senior-politicians-urge-ursula-von-der-leyen-to-probe-serbian-election/" target="_blank">urged the EU to investigate</a>. And the German Foreign Ministry has used harsh language, calling an election of this kind “unacceptable for a country with EU candidate status.”</p> <p>But there has been little visible recognition of what some say is the most logical conclusion: That the Vučić government is more interested in staying in power than in joining any foreign club.</p> <p>“The Serbian government is not interested in EU accession,” says Professor Bochsler. “The Serbian government is interested in this limbo situation they have, where they can get some financial and other support from the EU. They don’t want to make proper reforms, because the reforms would mean they would need to start prosecuting themselves.”</p>OCCRPhttps://www.occrp.org/Bitter Fruit: Kenyans Sue Pineapple Producer for Alleged Torture and Murder2024-02-22T00:00:00+01:002024-02-22T00:00:00+01:00https://www.occrp.org/en/investigations/bitter-fruit-kenyans-sue-pineapple-producer-for-alleged-torture-and-murder<p>First, they found his shoes. Then they spotted another man’s body, before finally discovering Francis Kilule floating dead and naked in the river.</p><p>First, they found his shoes. Then they spotted another man’s body, before finally discovering Francis Kilule floating dead and naked in the river.</p> <p>His older brother, Benjamin, had been looking forward to spending Christmas with him at their home in Thika, an hour northeast of Kenya’s capital of Nairobi. They were going to plan Francis’ upcoming wedding.</p> <p>But on December 21, Francis went missing. Benjamin, alongside family and friends, searched agonizingly for days. On Christmas eve, they found his body on the Fresh Del Monte pineapple plantation.</p> <p>Public roads run through the 8,000 acre farm, which community members have been using for centuries to reach the town. But this puts them at the mercy of Del Monte’s security guards who for the last decade have been known for their alleged violence.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/bite-kenya-nose-victim-horizontal-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Geoffrey Kariuki with Simon Wamaitha, whose nose and ear was bitten by guard dogs" data-img="/assets/investigations/bite-kenya-nose-victim-horizontal.jpg" id="img-7412" /> <img src="https://www.occrp.org/assets/investigations/bite-kenya-nose-victim-horizontal.jpg" class="hidden" id="aside-img-7412" alt="investigations/bite-kenya-nose-victim-horizontal.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Georgia Gee/OCCRP </small> Geoffrey Kariuki (left) with Simon Wamaitha (right), whose nose and ear was bitten by guard dogs on Del Monte farm. </div> </div> <script> $(document).ready(function() { let rand_7412 = $("#aside-img-7412").prop("naturalWidth"); if(rand_7412<750){$("#img-7412").attr("src","/assets/investigations/bite-kenya-nose-victim-horizontal.jpg");} $(window).load(function() {$("#aside-img-7412").remove();}); }); </script> <p>At the end of December, a civil claim was filed against Fresh Del Monte by a group of human rights organisations on behalf of 10 individuals, who alleged they were stabbed, stoned, tortured and raped by the company’s guards.</p> <p>Francis is not named as part of that claim, but his family wants to join the case. On February 8, they arrived at the court, along with dozens of other alleged victims, hoping to be added as petitioners.</p> <p>Del Monte, whose fresh fruit is a global staple, is the largest exporter of Kenyan produce to the world, and one of the East African country’s biggest employers.</p> <p>The civil case alleges that individuals trespassing through “have been found, beaten, tortured, killed and drowned in dams within Del Monte.” According to plaintiffs, the violence is due to the company’s failure “to train the guards they employ and deploy to act in lawful methods while conducting security enforcement operations.”</p> <p>Del Monte argued at the February 8 hearing that it could not be sued in Kenya since it is headquartered outside the country, in the Cayman Islands. However, a company spokesperson later told OCCRP that its subsidiary, Del Monte Kenya, would handle the case.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/del-monte-billboard-kenya-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Del Monte billboard" data-img="/assets/investigations/del-monte-billboard-kenya.jpg" id="img-7634" /> <img src="https://www.occrp.org/assets/investigations/del-monte-billboard-kenya.jpg" class="hidden" id="aside-img-7634" alt="investigations/del-monte-billboard-kenya.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Georgia Gee/OCCRP </small> Del Monte billboard in Kenya. </div> </div> <script> $(document).ready(function() { let rand_7634 = $("#aside-img-7634").prop("naturalWidth"); if(rand_7634<750){$("#img-7634").attr("src","/assets/investigations/del-monte-billboard-kenya.jpg");} $(window).load(function() {$("#aside-img-7634").remove();}); }); </script> <p>“We welcome the opportunity for all parties to present evidence in a public forum and trust those proceedings will reveal the truth and expose the attempts to tarnish our good name,” said the spokesperson, who was identified in an email only by her first name, Claudia.</p> <p>Francis, who was 32 when he was killed, had visible injuries to his head and ribs. The postmortem report stated the cause of death was drowning and “soft tissue injuries due to multiple blunt force trauma.”</p> <p>“He was my closest brother and friend,” Benjamin told OCCRP. “Del Monte should really think, they should really do something. We want justice.”</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/benjamin-kilule-kenya-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Benjamin Kilule outside the Thika High Court" data-img="/assets/investigations/benjamin-kilule-kenya.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/benjamin-kilule-kenya.jpg" class="hidden" id="aside-img-1195" alt="investigations/benjamin-kilule-kenya.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Georgia Gee/OCCRP </small> Benjamin Kilule outside the Thika High Court on February 8. </div> </aside> <script>$(window).load(function() {$("#aside-img-1195").remove();});</script> <p>Francis was one of four people who went missing over the Christmas period on Del Monte land, while allegedly there to steal pineapples. Three of the bodies have been recovered. One month earlier, a man’s body was found <a href="https://www.thebureauinvestigates.com/stories/2023-12-10/human-rights-investigation-into-new-death-on-del-monte-pineapple-farm/" target="_blank">dumped in a dam on the farm</a>.</p> <p>The company spokesperson told OCCRP that Kenyan authorities had investigated the November and December cases and found “no foul play on Del Monte’s part.”</p> <p>“Organized crime targeting our fields, and the subsequent sale of stolen pineapples, has brought about an unbearable toll on our community,” the spokesperson added.</p> <p>Kenyan police did not respond to requests for comment sent via email and WhatsApp.</p> <p>In a recent investigation by <a href="https://www.theguardian.com/world/2024/feb/08/del-monte-kenya-representatives-accused-of-seeking-to-cover-up-circumstances-of-mens-deaths" target="_blank">the Guardian</a> and <a href="https://www.thebureauinvestigates.com/stories/2024-02-08/del-monte-accused-of-bribing-witnesses-to-pineapple-farm-deaths/" target="_blank">The Bureau for Investigative Journalism</a>, representatives of Del Monte Kenya were accused in interviews and affidavits of offering bribes to witnesses to cover up the circumstances in which Francis and the other men were killed.</p> <p>“We do not bribe. We do not instruct our guards to beat,” the Del Monte spokesperson told OCCRP in response to the allegations. “We believe that these misleading headlines are part of a disinformation campaign being led by interested parties with close connections to the media.”</p> <p>Benjamin was among about 50 community members who showed up at Thika High Court to observe the February 8 proceedings, and to show support for a petition to add Francis and other alleged victims to the case.</p> <p>“Those represented are just the tip of the iceberg,” said Brian Gitau of the Kagama Community Action Forum, which has documented over 1,860 individual human rights abuses on the farm. “We have more people coming in day by day.”</p> <p>Many of those waiting outside the courthouse displayed injuries, from dog bites to scars across their limbs and heads, bone fractures and knocked out teeth. Some told OCCRP they were just walking or driving on their motorbikes through the farm before being attacked by groups of guards who accused them of stealing pineapples.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/police-kenya-thika-high-court-2-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Police surround victims at the Thika High Court" data-img="/assets/investigations/police-kenya-thika-high-court-2.jpg" id="img-3159" /> <img src="https://www.occrp.org/assets/investigations/police-kenya-thika-high-court-2.jpg" class="hidden" id="aside-img-3159" alt="investigations/police-kenya-thika-high-court-2.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Georgia Gee/OCCRP </small> Police surround victims at the Thika High Court on February 8. </div> </div> <script> $(document).ready(function() { let rand_3159 = $("#aside-img-3159").prop("naturalWidth"); if(rand_3159<750){$("#img-3159").attr("src","/assets/investigations/police-kenya-thika-high-court-2.jpg");} $(window).load(function() {$("#aside-img-3159").remove();}); }); </script> <p>The proceedings ended up being virtual, but those who came to attend stood solemnly in the rain in front of the courthouse, surrounded by heavily armed police who tried to drive them out of the compound. Others had been blocked by officers at the entrance, or on the highway to the town center.</p> <p>“Never have I seen such a large police presence at this court,” said Tom Macharia, a lawyer leading the case on behalf of the victims, in the hearing. “Citizens have already been brutalized, this is further brutalizing them.”</p> <p>Speaking outside the courthouse, Geoffrey Kariuki told OCCRP he had walked through the farm to pick up stones to help construct his mother’s home, before being surrounded and brutally beaten by half a dozen guards.</p> <p>“Whenever I see pineapples, I feel bitterness,” he said. “I refuse to eat pineapple.”</p>OCCRPhttps://www.occrp.org/In ‘False Transit’ Loophole, Russia’s War Machine Is Supplied Through Kazakh Companies and Belarusian Warehouses2024-02-21T00:00:00+01:002024-02-21T00:00:00+01:00https://www.occrp.org/en/investigations/in-false-transit-loophole-russias-war-machine-is-supplied-through-kazakh-companies-and-belarusian-warehouses<p>On February 24, Russia’s full-scale war against Ukraine will enter its third grueling year, with no sign of ending.</p><p>On February 24, Russia’s full-scale war against Ukraine will enter its third grueling year, with no sign of ending.</p> <p>Countries around the world have imposed sanctions intended to cripple Russia’s ability to wage war, but the flow of high-tech foreign goods into the country continues.</p> <p>A new investigation by Buro Media, Verstka, and OCCRP exposes one of the ways this is accomplished — a scheme known as “false transit” that takes advantage of lighter or non-existent sanctions against two of Russia’s closest economic partners, Kazakhstan and Belarus.</p> <p>Both countries are members of the <a href="http://www.eaeunion.org/#about-countries" target="_blank">Eurasian Economic Union</a>, a Russian-led trade bloc that integrates the economies of <span class="expand">five former Soviet republics <span class="expandright"> Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. <i></i> </span> </span> , allowing goods to flow freely across national borders with no customs checks.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/putin-lukashenko-alamy-2-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Russian President Vladimir Putin and Belarusian President Alexander Lukashenko" data-img="/assets/investigations/putin-lukashenko-alamy-2.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/putin-lukashenko-alamy-2.jpg" class="hidden" id="aside-img-2215" alt="investigations/putin-lukashenko-alamy-2.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> The Russian President's Office/American Photo Archive/Alamy Stock Photo </small> Russian President Vladimir Putin (left) and Belarusian President Alexander Lukashenko. </div> </aside> <script>$(window).load(function() {$("#aside-img-2215").remove();});</script> <p>As reported in previous investigations by <a href="/en/investigations/kazakhstan-has-become-a-pathway-for-the-supply-of-russias-war-machine-heres-how-it-works">OCCRP</a> and <a href="https://buromedia.io/ru/investigations/sponsory-roskoshi" target="_blank">Buro Media</a>, sanctioned goods are known to flow to Russia through each of these countries. But the scheme revealed in this investigation makes use of a major loophole that involves both at once.</p> <p>In this case, a Kazakh company ordered high-tech semiconductor production equipment and other goods from Europe and had them delivered to a temporary Belarusian storage facility. A letter obtained by reporters shows the Kazakh company issuing orders to the storage facility to change the destination of some shipments to Russia, avoiding having to route them through Central Asia.</p> <p>In total, Russian customs data shows, the scheme appeared to supply nearly $5.9 million worth of sanctioned high-tech goods to a group of Russian companies with extensive military contracts.</p> <p>Experts say the scheme underscores the key role Belarus continues to play in supplying Russia’s war machine, with the discrepancy in sanctions between the countries creating what one called “a severe hole in the sanctions net.”</p> <div class="occrp-inset-box quotebox" id="quote"> <div class="inner occrp-container-inner"> <div class="quote-text"><div class="quote-line"></div><div>Today the Belarus gap is large enough for an armada of trucks, cars and other goods to pass from the West into Russia, and potentially onwards to the battlefields in Ukraine.</div></div> <div class="quote-author">– Aage Borchgrevink, senior adviser to the Norwegian Helsinki Committee</div> </div> </div> <p>“Many of the key war-relevant goods pass through Belarus, which is the key passway of European sanctioned goods besides that via Turkey,” said Erlend Björtvedt, founder and CEO of Corisk, a Norwegian risk advisory firm.</p> <p>“The role of Belarus is totally different from those of Kazakhstan or Kyrgyzstan,” he explained. “Belarus is a main physical gateway. The sanctioned goods … are routed from Northern Europe via Belarus to central Russia.”</p> <p>“Countries in Central Asia take a different role,” he continued. “Their trading companies act as middlemen in the trade but the sanctioned goods are not actually routed physically via those countries.”</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/putin-tokayev-alamy-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Russian President Vladimir Putin and Kazakh President Kassym-Jomart Tokayev at the Kremlin" data-img="/assets/investigations/putin-tokayev-alamy.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/putin-tokayev-alamy.jpg" class="hidden" id="aside-img-8354" alt="investigations/putin-tokayev-alamy.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Mikhail Klimentyev/Kremlin Pool/Alamy Live News </small> Russian President Vladimir Putin (left) and Kazakh President Kassym-Jomart Tokayev at the Kremlin. </div> </aside> <script>$(window).load(function() {$("#aside-img-8354").remove();});</script> <p>Based on trade data from Lithuania, Poland, and Germany in 2022 and 2023, Corisk estimates that about 10 billion euros’ worth of goods ended up in Russia via Belarus — either exported directly to Belarus and then resold, or simply shipped through the country.</p> <p>“It’s fairly obvious that, in order to make the export controls effective, the Belarus sanctions must mirror the Russia sanctions,” said Aage Borchgrevink, senior adviser to the Norwegian Helsinki Committee.</p> <p>“Today the Belarus gap is large enough for an armada of trucks, cars and other goods to pass from the West into Russia, and potentially onwards to the battlefields in Ukraine,” he said. “Harmonization of the sanction regimes is also logical, in our view, as Belarus from the start has been Russia’s most important and dependable ally: the platform from where the main attack against Kyiv was launched in 2022.”</p> <h2 id="a-key-supplier">A Key Supplier</h2> <p>Russia’s military is supported by a vast array of private companies. Among these is the Ostec Group, a conglomerate that supports high-tech industrial production. Ostec does not produce weapons itself, instead providing the equipment and setting up facilities other contractors need to multiply the military’s arsenal.</p> <p>Its clients include several major Russian military contractors. Ostec provided foreign-made technologies and technical services to the developer and producer of the <a href="https://www.bbc.com/russian/news-61038473" target="_blank">Tochka-U</a> and <a href="https://www.bbc.com/russian/articles/cv2vlekpyr8o" target="_blank">Iskander-M</a> missile systems. The conglomerate is also a supplier and contractor of the Ryazan Radio Plant, owned by Rostec, a major defense conglomerate and one of the largest suppliers of radio communications equipment to the Russian military-industrial complex.</p> <p>It has also won tenders from the Moscow-based Central Scientific Research Institute of Chemistry and Mechanics, which produces aerial bombs being dropped in Ukraine and was <a href="https://home.treasury.gov/news/press-releases/sm1162" target="_blank">sanctioned in 2020</a> by the U.S. for developing technology that enabled a major malware attack.</p> <p>Leaked Russian customs data shows that, before the full-scale war began in February 2022, Ostec was able to import products manufactured all over the world. It sourced many of them from suppliers across Europe, including Portugal, Slovenia, Belgium, and especially Germany.</p> <p>Immediately after the invasion, many international companies <a href="https://www.nytimes.com/interactive/2022/04/07/opinion/companies-ukraine-boycott.html" target="_blank">cut their ties</a> with Russia voluntarily, before any sanctions were imposed. Within weeks, all of Ostec’s European partners ceased their shipments to the company — except one.</p> <p>This supplier, key for Ostec even before the war, was a company called Inter-Trans LLC.</p> <p>Though located in the Polish city of Siedlce and controlled by a German logistics firm called <span class="expand">BMA Spedition GmbH <span class="expandright"> BMA Spedition was renamed in Dec 2023, according to a document signed by the shareholders. It is now called Trans-Bridge Logistics GmbH, and was registered in Germany under its new name in January 2024. <i></i> </span> </span> , Inter-Trans was <span class="expand">majority-owned <span class="expandright"> The minority co-owner was BelMagistralAvtoTrans, a Belarusian state mechanical engineering company of which Kostiouk himself was the director. <i></i> </span> </span> by a Belarusian businessman named Evgueni Kostiouk.</p> <p>Over the course of 2022, Inter-Trans supplied Ostec with at least $24 million in goods — or about half of Ostec’s total imports for the year, as reflected in the leaked customs data. This appears to include all of the goods delivered to Ostec from Europe following the invasion, including solvents and paint thinners, centrifuges for product testing, and optical devices.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/poland-map-2-en-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.png" alt="" data-img="/assets/investigations/poland-map-2-en.png" id="img-4480" /> <img src="https://www.occrp.org/assets/investigations/poland-map-2-en.png" class="hidden" id="aside-img-4480" alt="investigations/poland-map-2-en.png" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Edin Pašović/OCCRP </small> In 2022, Russia’s Ostec Group received the vast majority of the goods it imported from Europe through this supply chain. </div> </div> <script> $(document).ready(function() { let rand_4480 = $("#aside-img-4480").prop("naturalWidth"); if(rand_4480<750){$("#img-4480").attr("src","/assets/investigations/poland-map-2-en.png");} $(window).load(function() {$("#aside-img-4480").remove();}); }); </script> <p>Among the shipments was over $4.7 million worth of semiconductor and microchip production equipment.</p> <p>In February 2023, a full year after the invasion, European sanctions were finally imposed on these items, and Inter-Trans’ deliveries to Ostec dried up as well.</p> <p>A person answering the telephone number of BMA Spedition, which owns Inter-Trans, said the company had done nothing wrong. “One of the suppliers was set [on the sanctions list],” said the man, who introduced himself at different times as both a manager and an ex-manager. “We were also because we were in the supply chain as a transport company. That’s all.”</p> <h2 id="send-it-to-ostec">‘Send it to Ostec’</h2> <p>By the time European sanctions were imposed, an alternate route for Ostec had already been set up, based in Kazakhstan but with ties to Kostiouk, the Belarusian businessman behind Inter-Trans.</p> <p>The Kazakhstan connection appears to date back to 2014, when <span class="expand">a Russian firm owned by Kostiouk <span class="expandright"> Kostiouk transferred his majority shareholding in Mirtrans to his daughter in 2019. <i></i> </span> </span> , Mirtrans, established a daughter company in Kazakhstan, KBR-Trans LLP.</p> <p>In May 2022, three months after the war started, the longtime director of KBR-Trans, Zhanat Ibraev, co-founded a new Kazakh firm with the same prefix, KBR-Technologies LLP, which quickly started making shipments to Ostec of the same kinds of high-tech goods previously supplied by Inter-Trans.</p> <p>Among them were six shipments of semiconductor production equipment, largely made in South Korea, that became the first example journalists could find of the Kazakh company sending goods through Belarus.</p> <p>A letter of instruction obtained by journalists shows how it appears to have worked. In the letter, the director of KBR-Technologies informs the shipping company that the recipient of three shipments, <span class="expand">apparently from that July <span class="expandright"> Each of the three shipment codes includes an apparent date: “07/2022.” <i></i> </span> </span> , had changed. The new recipient would be Tefida, a company based in Belarus.</p> <p>The letter also specifies what would happen next: “KBR Technologies LLP authorizes the private enterprise Tefida to possess the cargo on the territory of the Republic of Belarus and place it under the customs procedure of a customs warehouse, and send it to Ostec Integra LLC of the Russian Federation.”</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/kazakh-map-2-en-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.png" alt="" data-img="/assets/investigations/kazakh-map-2-en.png" id="img-5650" /> <img src="https://www.occrp.org/assets/investigations/kazakh-map-2-en.png" class="hidden" id="aside-img-5650" alt="investigations/kazakh-map-2-en.png" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Edin Pašović/OCCRP </small> Starting in mid-2022, Ostec’s suppliers changed tactics and began using a “false transit” scheme to order goods from Kazakhstan, then route the shipments through Belarus. </div> </div> <script> $(document).ready(function() { let rand_5650 = $("#aside-img-5650").prop("naturalWidth"); if(rand_5650<750){$("#img-5650").attr("src","/assets/investigations/kazakh-map-2-en.png");} $(window).load(function() {$("#aside-img-5650").remove();}); }); </script> <p>The letter does not explicitly indicate what the three shipments contained. But customs data confirms that the six shipments of semiconductor production equipment ordered by KBR-Technologies that summer did indeed arrive in Russia in August 2022 — shipped from Tefida.</p> <p>This equipment was only worth around $716,000, but the following year the same supply route would grow in importance.</p> <p>On February 22, 2023, three days before the EU announced a ban on sending any semiconductor and microchip production equipment to Russia, Tefida’s shipments of exactly the same products on behalf of KBR-Technologies started ramping up. Over just three months, Ostec received almost $8.6 million worth of imports sent through Belarus by Tefida.</p> <p>Tefida is owned by Belarusian citizen Maryna Kosmach; its director is her brother Alexander Shibko. When contacted by journalists, Shibko denied any involvement in sanctions evasion, although he acknowledged that the goods had moved through his company’s warehouse.</p> <p>“We didn’t supply anything,” Shibko told Buro Media. “I didn’t sign any waybills for anything sanctioned. They also cleared customs themselves. We were simply a temporary storage warehouse.”</p> <p>The co-owner of KBR-Technologies, Zhanat Ibraev, declined to comment, and the company did not respond to emailed questions. Ostec officials also did not respond to requests for comment.</p> <p>In May 2023, the U.S. Treasury sanctioned Ostec Group, their supplier Kostiouk, and his companies Inter-Trans and BMA Spedition, prohibiting anyone from doing business with them. Shortly after that, shipments from Kostiouk’s companies stopped being sent directly to the Ostec Group.</p> <p>However, between April and August Tefida supplied about $2.5 million worth of <span class="expand">high-tech equipment <span class="expandright"> The equipment included lathes for grinding and polishing optical glass, optical emission spectrometers, electrolytic capacitors, stereo microscopes, and X-ray diffractometers. <i></i> </span> </span> on behalf of KBR-Technologies to another Russian company, FabCenter LLC, which is tied to the Ostec Group through shared current and former owners.</p> <p>Reporters have found no evidence that Kostiouk and his companies are still supplying Russian military contractors today. But similar schemes, operated by individuals who have not come to the attention of any sanctioning authorities, are likely still in operation, experts say.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/ukraine-protest-sanctions-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="People in London protesting against Russia's full-scale invasion of Ukraine" data-img="/assets/investigations/ukraine-protest-sanctions.jpg" id="img-4430" /> <img src="https://www.occrp.org/assets/investigations/ukraine-protest-sanctions.jpg" class="hidden" id="aside-img-4430" alt="investigations/ukraine-protest-sanctions.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Robert Smith/Alamy Stock Photo </small> People in London protesting against Russia's full-scale invasion of Ukraine. </div> </div> <script> $(document).ready(function() { let rand_4430 = $("#aside-img-4430").prop("naturalWidth"); if(rand_4430<750){$("#img-4430").attr("src","/assets/investigations/ukraine-protest-sanctions.jpg");} $(window).load(function() {$("#aside-img-4430").remove();}); }); </script> <p>The continued flow of sanctioned high-tech equipment into Russia might be bad news for Ukraine — but it also suggests that Russia is having trouble manufacturing these goods on its own.</p> <p>“A significant share of the Russian imports of these goods still ultimately comes from Western companies,” said Benjamin Hilgenstock, a senior economist at the Kyiv School of Economics. “That’s good news and bad news at the same time. The good news is that Russia has not substituted them or been able to substitute them. … The bad news is obviously, well, if Russia is still buying these things then our export control enforcement is facing serious challenges.”</p> <p>“These companies need to properly control their supply chains,” he added. “They say they can’t, but we think that that’s a cheap excuse, and ultimately it’s a question of incentive.”</p>OCCRPhttps://www.occrp.org/U.K. Offshore Ownership Registry Reveals Luxury Properties Owned By Armenian Ex-President’s Family2024-02-06T00:00:00+01:002024-02-06T00:00:00+01:00https://www.occrp.org/en/investigations/uk-offshore-ownership-registry-reveals-luxury-properties-owned-by-armenian-ex-presidents-family<p>Running along the north bank of the River Thames, Cheyne Walk has been home to many of London’s richest residents. James Bond author Ian Fleming once lived there; so did at least two members of the Rolling Stones.</p><p>Running along the north bank of the River Thames, Cheyne Walk has been home to many of London’s richest residents. James Bond author Ian Fleming once lived there; so did at least two members of the Rolling Stones.</p> <p>In 2018, OCCRP’s Armenian partner, Hetq, <a href="https://hetq.am/en/article/87243" target="_blank">discovered more denizens</a> of the posh Chelsea neighborhood: the wife and sons of the president of Armenia at the time, Armen Sarkissian, were registered to live in a five-story brick mansion there. The exact ownership of the property was hidden behind an opaque offshore company registered in the British Virgin Islands.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/cheyne-walk-mansion-exterior-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="A five-story brick mansion on Cheyne Walk" data-img="/assets/investigations/cheyne-walk-mansion-exterior.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/cheyne-walk-mansion-exterior.jpg" class="hidden" id="aside-img-5389" alt="investigations/cheyne-walk-mansion-exterior.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Will Jordan/OCCRP </small> This five-story brick mansion on posh Cheyne Walk is owned by Armen Sarkissian's sister. </div> </aside> <script>$(window).load(function() {$("#aside-img-5389").remove();});</script> <p>Now, reporters have discovered the name behind that company. On paper, the owner of the mansion is Sarkissian’s sister, Karine Sargsyan. Through different offshore companies, she also owns four other high-end London properties worth tens of millions of pounds.</p> <p>For years, the ownership of these five firms was hidden from public view. But in 2022, the U.K. passed a law requiring offshore firms that own property in the country to declare their beneficial owners, which enabled reporters to discover that Karine was listed as their owner. Two of Sarkissian’s sons were also listed as persons of “significant influence or control” in two of the companies.</p> <p>“New transparency rules are starting to unveil how the world’s political leaders, including those from countries with serious governance issues, own vast amounts of U.K. real estate via once secretive offshore companies,” Juliet Swann, Nations and Regions Programme Manager at Transparency International U.K., told OCCRP.</p> <p>Asked for comment on the properties, Sarkissian said that in the 1990s when he first entered public service, he “made the decision to entrust my wealth — earned from developing software and video games — to my sister.” This arrangement included making her the beneficiary of the companies he founded, and hiring professional managers to run them and make investments, he wrote in a response to journalists’ questions.</p> <p>“Some of them [the investments] were held by companies based in the British Virgin Islands,” Sarkissian wrote. “This was a completely standard set of arrangements for managing wealth on which professional advice and expertise was received. It is largely with the proceeds of these investments that the properties you mention were bought.”</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/former-president-armen-sarkissian-2-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Former Armenian President Armen Sarkissian" data-img="/assets/investigations/former-president-armen-sarkissian-2.jpg" id="img-8136" /> <img src="https://www.occrp.org/assets/investigations/former-president-armen-sarkissian-2.jpg" class="hidden" id="aside-img-8136" alt="investigations/former-president-armen-sarkissian-2.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> President.am </small> Former Armenian President Armen Sarkissian. </div> </div> <script> $(document).ready(function() { let rand_8136 = $("#aside-img-8136").prop("naturalWidth"); if(rand_8136<750){$("#img-8136").attr("src","/assets/investigations/former-president-armen-sarkissian-2.jpg");} $(window).load(function() {$("#aside-img-8136").remove();}); }); </script> <p>If Armen Sarkissian was the true owner of the London properties, he was required by law to declare them to the Armenian government when he returned to politics in 2013 after a stint in the private sector. But the properties don’t show up in Sarkissian’s asset declarations from 2013 to 2022.</p> <p>Previous reporting has shown that Sarkissian’s declarations omitted other assets. Hetq has reported that the ex-president <a href="https://hetq.am/en/article/137496" target="_blank">held an undeclared directorship</a> of a French company that owned real estate in Paris, and that he <a href="https://hetq.am/en/article/141303" target="_blank">shared a secret Swiss bank account</a> with his sister that has held 10 million francs.</p> <p>Unlike his sister, who spent years working as a doctor at Armenian state hospitals, Sarkissian is a successful businessman who would have little trouble affording luxury properties. In the early 1990s, Sarkissian cashed in on the video game boom, co-inventing the Tetris spinoff Wordtris, which appeared on Nintendo’s popular SNES and Game Boy systems.</p> <p>U.K company records show that his sons became persons of “significant influence or control” in two of the BVI companies behind two of the London properties as of February 2022, less than a month after Sarkissian abruptly <a href="https://hetq.am/en/article/140389" target="_blank">resigned as Armenia’s president</a>.</p> <p>“In 2022, after my retirement from politics, and as she was approaching her 70s, my sister gifted two properties to my sons, while continuing to own the remainder,” Sarkissian told OCCRP.</p> <h2 id="british-background">British Background</h2> <p>Sarkissian’s stated reasons for stepping down from office after four years included his belief that the Armenian presidency lacked the authority to influence important issues, as well as health problems resulting from political “attacks” against him and his family.</p> <p>He left office just days after receiving questions from Hetq and OCCRP reporters for a <a href="https://hetq.am/en/article/140389" target="_blank">story that revealed</a> he held a passport from the Caribbean nation of St. Kitts and Nevis while in office.</p> <p>It is a violation of the constitution for an Armenian president to hold foreign citizenship, and authorities are currently investigating whether Sarkissian committed a criminal offense, the Armenian prosecutor’s office told OCCRP.</p> <p>While working in the private sector prior to his 2013 return to public service, Sarkissian also held British citizenship, U.K. corporate records show. According to a spokesperson, he gave up his British passport as required before being named his country’s ambassador to the U.K. that year.</p> <p>During his time in the private sector, Sarkissian took up advisory positions at a handful of European foundations and companies, including the French telecommunications giant Alcatel Trade International AG and British Petroleum. He also founded a consulting firm called Eurasia House International.</p> <p>It was also during this period — between 2000 and 2008, property records show — that four of his family’s five London properties were purchased.</p> <p>Corporate records show that each of the properties is owned by a separate company registered in the British Virgin Islands. One of these firms owns the five-story brick building on Cheyne Walk, while another owns a neighboring property on the same street. A different firm owns a third-floor flat at Evelyn Mansions, just a 10-minute walk from Buckingham Palace.</p> <p>Another company owns The Mulberry, a country mansion on the outskirts of London in the affluent village of Virginia Water. The house next door was owned by Gulnara Karimova, daughter of the late Uzbek dictator Islam Karimov, until it was <a href="https://twitter.com/UKSFO/status/1688946105449381888" target="_blank">confiscated by Britain’s Serious Fraud Office</a> in August.</p> <style> @media screen and (max-width: 412px) { .flourish-embed--https-cdn-occrp-org-projects-armenia-london-properties-flourish-en iframe { height: 360px !important; } } @media screen and (min-width: 413px) { .flourish-embed--https-cdn-occrp-org-projects-armenia-london-properties-flourish-en iframe { height: 430px !important; } } @media screen and (min-width: 630px) { .flourish-embed--https-cdn-occrp-org-projects-armenia-london-properties-flourish-en iframe { height: 500px !important; } } @media screen and (min-width: 801px) { .flourish-embed--https-cdn-occrp-org-projects-armenia-london-properties-flourish-en iframe { height: 500px !important; } } @media screen and (min-width: 941px) { .flourish-embed--https-cdn-occrp-org-projects-armenia-london-properties-flourish-en iframe { height: 500px !important; } } @media screen and (min-width: 1101px) { .flourish-embed--https-cdn-occrp-org-projects-armenia-london-properties-flourish-en iframe { height: 560px !important; } } </style> <div class="flourish-embed flourish-embed--wide flourish-embed--https-cdn-occrp-org-projects-armenia-london-properties-flourish-en"> <iframe scrolling="no" src="https://cdn.occrp.org/projects/armenia-london-properties-flourish/en/"></iframe> <div> <a href="https://flourish.studio/?utm_source=embed" target="_top"><img alt="Made with Flourish" src="https://public.flourish.studio/resources/made_with_flourish.svg" /></a> </div> </div> <p>The purchase prices of two of the properties — one of the Cheyne Walk mansions and the Evelyn Mansions flat — are not publicly available, but according to online real estate databases, they are estimated to be worth a total of at least 6 million British pounds today. The other two mansions were purchased in 2006 and 2008 for a total of 24 million British pounds.</p> <p>Late last year, Karine Sargsyan declared she was the owner of a fifth property, a central London flat that was acquired by another BVI firm in 2018. Its value is currently estimated at 789,000 British pounds.</p> <p>Sarkissian told OCCRP that the properties “were not initially purchased at their current high values,” although he did not elaborate on how much his family had paid to buy them.</p> <p>“The appreciation of their value over the years suggests smart investment rather than, as you seem to imply, extravagant expenditure,” he said, adding that the purchase of “some of the property” was financed by a loan.</p> <p>Records show a mortgage taken out on 12-14 Cheyne Walk, but it was registered in 2018, a decade after the purchase.</p> <p><a id="document-download-box"></a></p> <style> #occrp-documents-box--karine-sargsyan-s-british-virgin-islands-companies-3322 { box-shadow: none !important; } #occrp-documents-box--karine-sargsyan-s-british-virgin-islands-companies-3322 .occrp-documents-grid { grid-template-columns: 19% 19% 19% 19% 19% !important; padding: 10px !important; grid-gap: 1%; } #occrp-documents-box--karine-sargsyan-s-british-virgin-islands-companies-3322 .occrp-container-inner { padding: 0px !important; 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margin-left: 4%; margin-right: 4%;width: 92%;} } </style> <p></div></p> <div class="occrp-inset-box occrp-documents" id="occrp-documents-box--karine-sargsyan-s-british-virgin-islands-companies-3322"> <div class="inner occrp-container-inner"> <h3 class="occrp-section document-title">Karine Sargsyan’s British Virgin Islands Companies</h3> <p class="documents-description">U.K. Companies House records show that the sister of former Armenian president Armen Sarkissian owns multiple properties in and around London through these BVI firms.</p> <div class="occrp-documents-grid" id="occrp-grid-box--karine-sargsyan-s-british-virgin-islands-companies-3322"> <div class="occrp-documents-panel"> <a href="https://cdn.occrp.org/projects/documents/investigations-uk-offshore-ownership-registry-reveals-luxury-properties/first-cheyne-walk-property-peterman-properties-ltd.pdf" target="_blank"> <img src="https://www.occrp.org/assets/investigations/thumbnail-first-cheyne-walk-2.png" alt="investigations/thumbnail-first-cheyne-walk-2.png" /> <div class="document-hover"><i class="fa fa-download" aria-hidden="true"></i></div> <i class="fa fa-file file-icon" aria-hidden="true"></i> </a> <h3 class="document-title">First Cheyne Walk</h3> </div> <div class="occrp-documents-panel"> <a href="https://cdn.occrp.org/projects/documents/investigations-uk-offshore-ownership-registry-reveals-luxury-properties/evelyn-mansions-property-simonds-establishment-ltd.pdf" target="_blank"> <img src="https://www.occrp.org/assets/investigations/thumbnail-evelyn-mansions-2.png" alt="investigations/thumbnail-evelyn-mansions-2.png" /> <div class="document-hover"><i class="fa fa-download" aria-hidden="true"></i></div> <i class="fa fa-file file-icon" aria-hidden="true"></i> </a> <h3 class="document-title">Evelyn Mansions</h3> </div> <div class="occrp-documents-panel"> <a href="https://cdn.occrp.org/projects/documents/investigations-uk-offshore-ownership-registry-reveals-luxury-properties/mulberry-property-virginia-country-property-ltd.pdf" target="_blank"> <img src="https://www.occrp.org/assets/investigations/thumbnail-mulberry-house-2.png" alt="investigations/thumbnail-mulberry-house-2.png" /> <div class="document-hover"><i class="fa fa-download" aria-hidden="true"></i></div> <i class="fa fa-file file-icon" aria-hidden="true"></i> </a> <h3 class="document-title">Mulberry</h3> </div> <div class="occrp-documents-panel"> <a href="https://cdn.occrp.org/projects/documents/investigations-uk-offshore-ownership-registry-reveals-luxury-properties/second-cheyne-walk-property-mulberry-c-international-ltd.pdf" target="_blank"> <img src="https://www.occrp.org/assets/investigations/thumbnail-second-cheyne-walk-2.png" alt="investigations/thumbnail-second-cheyne-walk-2.png" /> <div class="document-hover"><i class="fa fa-download" aria-hidden="true"></i></div> <i class="fa fa-file file-icon" aria-hidden="true"></i> </a> <h3 class="document-title">Second Cheyne Walk</h3> </div> <div class="occrp-documents-panel"> <a href="https://cdn.occrp.org/projects/documents/investigations-uk-offshore-ownership-registry-reveals-luxury-properties/sandringham-house-western-union-establishment-ltd.pdf" target="_blank"> <img src="https://www.occrp.org/assets/investigations/thumbnail-sandringham-house-2.png" alt="investigations/thumbnail-sandringham-house-2.png" /> <div class="document-hover"><i class="fa fa-download" aria-hidden="true"></i></div> <i class="fa fa-file file-icon" aria-hidden="true"></i> </a> <h3 class="document-title">Sandringham House</h3> </div> </div> </div> </div> <link type="text/css" rel="stylesheet" href="/assets/slick.css" /> <script type="text/javascript" src="/assets/slick.min.js"></script> <div style="display: none;"> <img src="https://www.occrp.org/assets/slick.woff" alt="slick.woff" /> <img src="https://www.occrp.org/assets/slick.ttf" alt="slick.ttf" /> </div> <script> if (screen.height > screen.width){ $(document).ready(function(){ $('#occrp-grid-box--karine-sargsyan-s-british-virgin-islands-companies-3322').slick({ centerMode: true, dots: true, centerPadding: '10px', slidesToShow: 5, responsive: [ { breakpoint: 500, settings: { arrows: false, centerMode: true, centerPadding: '5px', dots: true, slidesToShow: 1 } }, { breakpoint: 800, settings: { arrows: false, centerMode: true, centerPadding: '5px', dots: true, slidesToShow: 2 } }, { breakpoint: 1200, settings: { arrows: true, centerMode: true, centerPadding: '10px', dots: true, slidesToShow: 3 } }, { breakpoint: 1400, settings: { arrows: true, centerMode: true, centerPadding: '10px', dots: true, slidesToShow: 4 } } ] }); }); } </script> <div class="occrp-story"> <h2 id="cyprus-company">Cyprus Company</h2> <p>Karine has also held corporate assets belonging to the family. A recent <a href="https://www.occrp.org/en/cyprus-confidential/" target="_blank">leak of documents from corporate service providers in Cyprus</a> has revealed that Karine was also listed as the beneficial owner of a company called Twoford Business Limited. That company imports and licenses major international brands like Pepsi, Nestle, and Carlsberg in Armenia, Georgia, and Uzbekistan.</p> <p>The 2020 documents show that Twoford had been renamed Revery Group Limited and that, in August 2020, Karine had transferred its ownership to a trust in the name of her brother Armen’s son, Hayk Sarkissian. Though corporate documents show that Karine owned the company briefly in 2008 and continuously from 2012 to 2020, Revery’s website says Hayk founded the company in 2015.</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-investor-relations"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-investor-relations">🔗</a>Investor Relations </h3> <div class="subheader"> <p>The paperwork for the transfer of ownership of Revery Group to Sarkissian’s son reveal some of the company’s business partners. All have ties to Sarkissian, and none to his sister, suggesting that she may have been acting as a proxy for her brother in her ownership of the company before the transfer.</p> </div> <input type="checkbox" id="occrp-inset-box-control-investor-relations" /> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p>The transfer papers included a letter from a Swiss law firm to a Russian bank explaining the ownership structure of one of the companies Revery invested in. It shows that Revery owned shares in Moscow-based TPF Kaskad LLC. Kaskad’s main business is real estate leasing and management, and it made a profit in 2022 of about $3 million.</p><p>Through various trusts and offshore companies, there are three other investors in Kaskad, all of whom have ties to Sarkissian, but none to Karine:</p><p><ul><li>The billionaire Italian Cremonini family, who supply hamburger meat to McDonald’s and Burger King in several countries and provide catering services on passenger trains across Europe, Russia, and Turkey. When the Cremoninis’ Inalca S.p.a. first struck a catering deal with Russian Railways in 2014, Sarkissian attended the signing of the agreement as chairman of another company, Knightsbridge Group, Cremonini’s partner in Eurasia.</li><li>A businessman in the Armenian diaspora, Haig Didizian, who passed away this year. Didizian supported Sarkissian’s charity Yerevan My Love, which aimed to preserve the Armenian capital’s historical architecture and help disadvantaged children. When Didizian and his wife <a href="https://mirrorspectator.com/2017/10/05/opening-haig-elza-didizian-masters-school-youth-center-yerevan/" target="_blank">opened a school in Yerevan</a>, Sarkissian was there to cut the ribbon with them.</li><li>Almas Sultangazin –– the 40th richest Kazakh businessman, according to Forbes’ 2023 list –– is an <a href="https://internetelite.org/nsk/dariga-nazarbaeva-muhamedzhanov-sultangazin-i-drugie-pyanyj-bomond-i-den-pobedy-video.html" target="_blank">associate of Dariga Nazarbayeva</a>, daughter of Kazakhstan’s former president, Nursultan Nazarbayev. Sarkissian’s ties to Nazarbayeva are extensive: They served as co-directors of Sarkissian’s consulting business Eurasia House International from 2002 to 2005, and co-founded a yearly conference, the Eurasian Media Forum, in Kazakhstan in 2002. Nazarbayeva even <a href="https://web.archive.org/web/20210927040005/https:/asbarez.com/yereven-my-love-prince-charles-hosts-dinner-to-celebrate-british-and-armenian-charities-at-windsor-castle/" target="_blank">sang Kazakh and Armenian folk songs</a> in 2010 at a charity event organized by Sarkissian and hosted by then-Prince Charles.</li></ul></p> </div> </div> <label for="occrp-inset-box-control-investor-relations"><span>More</span><span>Less</span></label> </div> </div> </div> <p>In his response to OCCRP, Sarkissian confirmed that Hayk founded the company, but added that it “once existed in a different form.”</p> <p>Sarkissian added that his “family initially invested” in the company, but he did not have a personal stake he would have been required to report to Armenian authorities.</p> <p>“I had no declarable interest during my time in office,” Sarkissian said.</p> <p><strong><em>Additional reporting by Ben Cowdock (Transparency International UK), OCCRP ID</em></strong></p> </div>OCCRPhttps://www.occrp.org/‘Total Control’: Azerbaijan’s Jails Fill With Journalists and Dissidents as Election Approaches2024-02-01T00:00:00+01:002024-02-01T00:00:00+01:00https://www.occrp.org/en/investigations/total-control-azerbaijans-jails-fill-with-journalists-and-dissidents-as-election-approaches<p>When she was a teenager, Sevinj Vaqifqizi wanted to be a journalist so badly that she almost sabotaged her college application.</p><p>When she was a teenager, Sevinj Vaqifqizi wanted to be a journalist so badly that she almost sabotaged her college application.</p> <p>“We were given the chance to list our top 10 choices of places to study,” she once <a href="/en/the-pegasus-project/sevinj-vaqifqizi-azerbaijani-reporter">recalled in a personal essay</a> for OCCRP. “I filled in eight of them, and in every slot I wrote the same thing: the School of Journalism at Baku State University.”</p> <p>“My teachers told me it would be better to list another choice, in case my test scores weren’t good enough,” she added. “But my decision was firm: journalism or nothing.”</p> <p>It’s a career path that has now landed her in jail, along with five colleagues and dozens of other critics of Azerbaijan’s authoritarian government. The crackdown that has swept through the country in recent months has entangled <a href="https://oc-media.org/azerbaijan-detains-human-rights-activist-on-drug-charges/" target="_blank">whistleblowers</a>, <a href="https://www.hrw.org/news/2023/12/19/azerbaijan-prominent-opposition-figure-arrested" target="_blank">activists</a>, <a href="https://www.rferl.org/a/azerbaijan-trade-union-activist-arrested/32604835.html" target="_blank">union organizers</a>, <a href="https://humanrightshouse.org/statements/azerbaijani-authorities-must-end-mass-crackdown-against-the-remaining-free-media-and-independent-voices-in-the-country/" target="_blank">other journalists</a>, and a well-respected academic whose life may be hanging by a thread.</p> <p>As they languish behind bars, the country’s President Ilham Aliyev is projecting confidence. He has fought publicly with the United States, defied international human rights bodies, and found time to celebrate his most recent victory: the expulsion of over 100,000 Armenians from their homes in the long-disputed Azerbaijani territory of Nagorno-Karabakh.</p> <p>Aliyev has also called a snap election for February 7, the outcome of which is, of course, not in doubt. It will take place in an environment that has been swept clean of any trace of organized criticism or opposition.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/aliyev-kisses-azerbaijani-flag-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="President Ilham Aliyev kisses an Azerbaijani flag" data-img="/assets/investigations/aliyev-kisses-azerbaijani-flag.jpg" id="img-8822" /> <img src="https://www.occrp.org/assets/investigations/aliyev-kisses-azerbaijani-flag.jpg" class="hidden" id="aside-img-8822" alt="investigations/aliyev-kisses-azerbaijani-flag.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> President.az </small> In October 2023, President Ilham Aliyev kisses an Azerbaijani flag in Khojaly, a town that had been retaken by his military the previous month. </div> </div> <script> $(document).ready(function() { let rand_8822 = $("#aside-img-8822").prop("naturalWidth"); if(rand_8822<750){$("#img-8822").attr("src","/assets/investigations/aliyev-kisses-azerbaijani-flag.jpg");} $(window).load(function() {$("#aside-img-8822").remove();}); }); </script> <p>It’s been a long road. Azerbaijan was already a dangerous place for independent-minded reporters back in 2005, when Vaqifqizi was still applying to university. Just a few years earlier, as Azerbaijan’s previous president lay dying in an American hospital, his son Ilham Aliyev won his first election, marked by rampant fraud and intimidation of his opponents.</p> <p>It wouldn’t be the last. Each subsequent vote or constitutional change only served to cement the younger Aliyev’s corrupt and dictatorial rule. By 2010, when Vaqifqizi graduated from university and took her first newspaper job, the term limits on the presidency had been abolished. In 2013, the year she started working for the well-known Azadliq newspaper, election ‘results’ touting an impressive Aliyev victory were accidentally released before the voting had even started.</p> <p>But Vaqifqizi kept reporting. She covered poor schools, decrepit hospitals, environmental pollution, and corrupt government contracts, impressing her colleagues with her professionalism and her ability to maintain a strict line between journalism and activism in a country where many did not feel they had that luxury.</p> <p>“As the years passed, we got used to it,” she wrote for OCCRP in 2021. “Fear faded out. Honestly, I don’t feel fear anymore. I know what they can do, and it does not stop me.”</p> <p>By that point, she had already faced a four-year ban on foreign travel and had her phone hacked by <a href="/en/the-pegasus-project/">spyware of terrifying power</a>. But this November, she was forced to prove her mettle again.</p> <p>While on a trip to Turkey, the 34-year-old Vaqifqizi — now the editor-in-chief of Abzas Media, one of the few remaining independent outlets in Azerbaijan — got word that her boss, the outlet’s founder Ulvi Hasanli, had been arrested. Authorities claimed to have found 40,000 euros held in the organization’s office illegally, which Abzas Media says did not belong to them, implying the money had been planted by law enforcement agents.</p> <p>But though the departure lounges in Istanbul airport lead anywhere in the world, Vaqifqizi would countenance only one destination: home. “I couldn’t bear to live abroad while Ulvi is in jail,” she told a friend who tried to dissuade her from returning. “I would rather die in Azerbaijan.”</p> <p>Then, still in the departure lounge, as other travelers milled around behind her, she made a defiant statement on behalf of herself and her colleagues. In an <a href="https://www.youtube.com/watch?v=YZpZZ7MPKYQ" target="_blank">interview with an outlet based in exile</a>, Vaqifqizi laid the blame for her colleague’s detention at the president’s feet.</p> <p>“The arrest of Ulvi Hasanli is on the order of Ilham Aliyev, because we’ve proven how companies belonging to [Aliyev’s] family members won projects … with opaque mechanisms,” she said. “Their purpose in detaining Ulvi Hasanli and making false charges against him is to stop the work of Abzas Media. From now on, there should be no journalists or media organizations exposing the corrupt crimes that occurred in our country.”</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/sevinj-vaqifqizi-final-statement-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Sevinj Vaqifqizi makes a final statement" data-img="/assets/investigations/sevinj-vaqifqizi-final-statement.jpg" id="img-1061" /> <img src="https://www.occrp.org/assets/investigations/sevinj-vaqifqizi-final-statement.jpg" class="hidden" id="aside-img-1061" alt="investigations/sevinj-vaqifqizi-final-statement.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> YouTube / Meydan TV </small> Sevinj Vaqifqizi makes a final statement in the Istanbul airport before boarding her flight to Azerbaijan — and prison. </div> </div> <script> $(document).ready(function() { let rand_1061 = $("#aside-img-1061").prop("naturalWidth"); if(rand_1061<750){$("#img-1061").attr("src","/assets/investigations/sevinj-vaqifqizi-final-statement.jpg");} $(window).load(function() {$("#aside-img-1061").remove();}); }); </script> <p>“We will continue to do what we believe is right,” she said with a final flash of her eyes. “They should not think they can stop these investigations by arresting individual persons. It will not happen. And we will continue to disappoint them.”</p> <p>Vaqifqizi boarded her plane. Hours later, as she disembarked in the Azeri capital of Baku, she was arrested before even reaching passport control.</p> <p>She wasn’t the last: Soon another colleague was detained. Then another. And another. Five journalists associated with Abzas Media, plus the organization’s deputy director, have now spent over two months in pre-trial detention on charges of smuggling foreign currency. The police searched their offices and confiscated their laptops, and within days <a href="https://report.az/analitika/abzas-media-rehberliyinin-xarici-donor-tes-kilatlari-ile-gizli-emekdas-ligi-askarlanib/{:target="_blank"}">stories appeared in the state press</a> accusing them of receiving foreign money for nefarious purposes.</p> <p>An analyst based in Azerbaijan, whose name cannot be revealed to ensure his safety, says the end-point of the latest crack-down is grim: “I believe this is part of a bigger ambition to turn the country into something that’s similar to Turkmenistan,” he says. “Where there is total control.”</p> <p>“This is the right time, because the whole global order is changing, and they understand that it’s not in favor of the democratic governments. And also, they don’t need good relations with the West any longer.”</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-the-baku-connection"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-the-baku-connection">🔗</a>‘The Baku Connection’ </h3> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p>This story is part of <a href="https://forbiddenstories.org/case/the-baku-connection/" target="_blank"><strong>The Baku Connection</strong></a>, a collaborative journalistic effort led by the Paris-based <a href="https://forbiddenstories.org/" target="_blank">Forbidden Stories</a>. As part of the project, a group of 15 media partners will follow up on Abzas Media’s reporting to ensure that their arrest does not put an end to their work. Read Forbidden Stories’ initial investigations into <a href="https://forbiddenstories.org/torture-in-azerbaijan-how-european-funds-flow-to-bakus-prisons" target="_blank">how European funds flow into Azerbaijani prisons</a> and how the government <a href="https://forbiddenstories.org/from-azerbaijan-to-smartphones-how-tainted-gold-ends-up-in-high-tech-products" target="_blank">suppresses environmental protests at a dirty Western-operated gold mine</a>.</p> </div> </div> </div> </div> </div> <h2 id="the-taste-of-caviar">The Taste of Caviar</h2> <p>If any country needs independent investigative journalism of the kind practiced by Vaqifqizi and her colleagues, it’s Azerbaijan.</p> <p>Of the former Soviet republics, it is among the richest in energy sources. Azerbaijan’s state energy company, SOCAR, rivals the Russian oil and gas giants in its success at selling to the world and in its role as the keystone of the country’s wealth.</p> <p>Unfortunately, as in Russia, most of this money fails to make its way to ordinary citizens. Over the years, Aliyev has proven adept at using the energy money sloshing through Azerbaijan’s economy for two purposes: enriching his family and sidelining foreign criticism of his human rights record.</p> <p>In 2021, for example, a leak of offshore documents known as the Pandora Papers helped OCCRP uncover a <a href="/en/the-pandora-papers/azerbaijans-ruling-aliyev-family-and-their-associates-acquired-dozens-of-prime-london-properties-worth-nearly-700-million">London property empire worth nearly $700 million</a> that had been accumulated by Aliyev’s children, his father-in-law, and his associates through a network of dozens of secretive shell companies. The holdings included penthouse apartments, townhouses, commercial properties, and even an entire 8-story building that was owned, for years, by Aliyev’s underage son.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/aliyeva-knightsbridge-apartments-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="The 'Knightsbridge' apartment building" data-img="/assets/investigations/aliyeva-knightsbridge-apartments.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/aliyeva-knightsbridge-apartments.jpg" class="hidden" id="aside-img-8172" alt="investigations/aliyeva-knightsbridge-apartments.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Will Jordan / OCCRP </small> Five apartments in this London apartment building, the ‘Knightsbridge,’ — including two duplex penthouses — were owned by offshore companies that belonged to President Ilham Aliyev’s daughter Arzu Aliyeva. </div> </aside> <script>$(window).load(function() {$("#aside-img-8172").remove();});</script> <p>This alone would be enough to impress many of the world’s less ambitious autocrats. But it was just the latest finding in years of painstaking reporting, often conducted with the help of young Azerbaijani journalists who could not be credited to protect them and their families.</p> <p>As part of the “Khadija Project” — named after then-imprisoned Azerbaijani reporter Khadija Ismayilova — OCCRP revealed <a href="https://www.occrp.org/en/corruptistan/azerbaijan/2015/09/01/aliyev-family-friends-cruise-aboard-socar-super-yachts.en.html">yachts</a>, <a href="https://www.occrp.org/en/corruptistan/azerbaijan/2015/08/05/azerbaijan-first-familys-opulent-russian-dacha.en.html">summer homes</a>, <a href="https://www.occrp.org/en/corruptistan/azerbaijan/2015/06/28/aliyevs-own-some-of-the-best-hotels-in-baku.en.html">hotels</a>, <a href="https://www.occrp.org/en/corruptistan/azerbaijan/2015/06/15/the-mansion-on-the-heath.en.html">mansions</a>, <a href="https://www.occrp.org/en/corruptistan/azerbaijan/2015/06/11/azerbaijani-first-family-big-on-banking.en.html">banks</a>, and other assets accumulated by the country’s “first family” or appropriated for their benefit.</p> <p>Ismayilova’s arrest at the end of 2014, and her sentencing to a lengthy prison term the following year, was part of a massive wave of repression that devastated much of Azerbaijan’s civil society in the mid-2010s.</p> <p>During that time, Radio Free Europe’s Azerbaijani service, independent outlet Meydan TV, Voice of America, and many other outlets were shut down or forced into exile. Dozens of journalists, activists, and NGO workers were also arrested.</p> <p>But in the outside world — often the last place political prisoners can turn for support — the reaction was underwhelming. Still determined to maintain his alliances with the West, Aliyev made sure to reserve plenty of carrots for persuadable foreign friends — even as Azerbaijanis got the sticks at home.</p> <p>To upgrade his country’s image, Aliyev made Azerbaijan the host of a range of splashy international extravaganzas, including the <a href="http://www.theguardian.com/world/2012/may/25/eurovision-azerbaijan-human-rights" target="_blank">Eurovision song contest</a> in 2012, the first-ever <a href="https://carnegieeurope.eu/strategiceurope/?fa=60366" target="_blank">European Games</a> in 2015, and the <a href="https://bleacherreport.com/articles/2647168-european-grand-prix-2016-results-winner-standings-highlights-reaction" target="_blank">Formula 1 Grand Prix of Europe</a> in 2016.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/advert-sign-baku-games-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="A sign advertising the Baku European Games" data-img="/assets/investigations/advert-sign-baku-games.jpg" id="img-3920" /> <img src="https://www.occrp.org/assets/investigations/advert-sign-baku-games.jpg" class="hidden" id="aside-img-3920" alt="investigations/advert-sign-baku-games.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Eric Nathan / Alamy Stock Photo </small> A sign advertising the Baku European Games in 2015. </div> </div> <script> $(document).ready(function() { let rand_3920 = $("#aside-img-3920").prop("naturalWidth"); if(rand_3920<750){$("#img-3920").attr("src","/assets/investigations/advert-sign-baku-games.jpg");} $(window).load(function() {$("#aside-img-3920").remove();}); }); </script> <p>On the other side of the Atlantic, reports proliferated of how Azerbaijan’s lobbyists were busy convincing U.S. members of congress of the country’s value as an energy supplier and ally in the ‘War on Terror.’ In the middle of the crackdown, <a href="https://foreignpolicy.com/2015/06/11/how-azerbaijan-and-its-lobbyists-spin-congress/" target="_blank">American legislators praised Azerbaijan</a> for its “close and important relationship” with the United States and its “commitment to the ideals of democracy.” Meanwhile, the <a href="http://www.washingtonpost.com/investigations/10-members-of-congress-took-trip-secretly-funded-by-foreign-government/2015/05/13/76b55332-f720-11e4-9030-b4732caefe81_story.html" target="_blank">Washington Post exposed</a> how 10 members of congress had gone on an all-expenses-paid trip to the country that was secretly sponsored by SOCAR.</p> <p>But much of the action — or lack thereof — was in Europe. In what became known as ‘caviar diplomacy’ after a series of reports by a <a href="https://www.esiweb.org/" target="_blank">Berlin-based watchdog group</a>, it emerged that Azerbaijan had poured cash and expensive gifts, including tins of caviar, into befriending legislators at the Council of Europe, the continent’s premier human rights body.</p> <p>As a result, though Azerbaijan came in for repeated criticism there, a high-profile report on political prisoners in the country was voted down. And though human rights groups repeatedly pushed for Azerbaijan’s delegation to the body’s Parliamentary Assembly (PACE) be suspended, Baku stayed on.</p> <p>“There was a decision of the European Court of Human Rights which recognized that there are political prisoners in the country, which is against all the values of the Council of Europe,” says the Azerbaijan-based analyst. “There were elections held that were in very significant violation of all the Council of Europe provisions. But [the expulsion] never happened.”</p> <p>That long battle, at least, now appears to be over. Last week, citing Azerbaijan’s failure to fulfill “major commitments” over 20 years after joining the Council, and noting that “at least 18 journalists and media actors are currently in detention,” the PACE voted to suspend the Azerbaijani delegation.</p> <h2 id="spy-network">‘Spy Network’</h2> <p>Azerbaijan’s suspension was a “historic moment,” according to Gerald Knaus, the chairman and co-founder of the European Stability Initiative, which authored the original ‘caviar diplomacy’ reports.</p> <p>Meanwhile, the Azerbaijani-based analyst hailed PACE’s move as “the first official sanction that the government faced because of [its] human rights violations.”</p> <p>A less charitable interpretation is that Azerbaijan no longer cares enough to cater to Western pressures about human rights.</p> <p>“Azerbaijan is feeling that it needs what the West has to offer less,” says Thomas de Waal, a British journalist and expert on the Caucuses. “They could have easily fought to stay in the PACE and made a few concessions, but they didn’t. They let that happen to them. And that’s indicative.”</p> <p>De Waal noted that Azerbaijan has been building stronger ties with Turkey and Russia –– countries that are far less critical of its government.</p> <p>The Azerbaijani government is especially sensitive to any reproval of its recent actions in regard to Armenia. In fact, the arrest of the Abzas Media journalists — who the Azerbaijani government appears to regard as paid U.S. agents — was preceded by an unusually public and nasty spat with the United States over this issue.</p> <p>On November 15, just five days before the arrest of Abzas Media cofounder Hasanli, U.S. Assistant Secretary of State James O’Brien <a href="https://docs.house.gov/meetings/FA/FA14/20231115/116574/HHRG-118-FA14-Wstate-OBrienJ-20231115.pdf" target="_blank">condemned Azerbaijan’s incursion</a> into Nagorno-Karabakh in testimony before the House. On the following day, the U.S. Congress voted to suspend all military aid to Azerbaijan.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/ulvi-hasanli-facebook-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Ulvi Hasanli" data-img="/assets/investigations/ulvi-hasanli-facebook.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/ulvi-hasanli-facebook.jpg" class="hidden" id="aside-img-5986" alt="investigations/ulvi-hasanli-facebook.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Facebook </small> Abzas Media cofounder Ulvi Hasanli, currently held in pre-trial detention. His sister, who lives abroad, told reporters she is currently being prevented from leaving the country. </div> </aside> <script>$(window).load(function() {$("#aside-img-5986").remove();});</script> <p>The reaction on the Azerbaijani side was openly furious. The Foreign Ministry called O’Brien’s statements “counterproductive, baseless, and unacceptable,” and within days, the Azerbaijani media was filled with <a href="https://report.az/ru/analitika/ssha-obnovlyayut-svoi-provokacionnye-tehnologii-formiruyutsya-kompaktnye-operativnye-gruppy/" target="_blank">conspiratorial stories</a> about nefarious U.S. spy networks.</p> <p>The situation didn’t stop spiraling until O’Brien visited Azerbaijan for talks with President Aliyev in early December. On that occasion, both sides <a href="https://president.az/en/articles/view/62404" target="_blank">issued</a> <a href="https://www.state.gov/assistant-secretary-obriens-meetings-in-baku/" target="_blank">statements</a> celebrating the two countries’ deep historical ties and the resumption of mutual diplomatic visits.</p> <p>Neither the Azerbaijani nor the American read-out of the meeting made any mention of the imprisoned Abzas journalists or any other political prisoners.</p> <p>“That was a big frustration,” says the Azerbaijan-based analyst. “That [O’Brien] didn’t even meet, or consider meeting, anyone in the civil society or opposition, although the civil society and opposition were targeted in the framework of relations with the U.S.”</p> <p>In response to a request for comment, a U.S. State Department spokesperson wrote that the United States is “increasingly troubled” by the government’s recent detentions of journalists and activists, adding that O’Brien “raised these human rights concerns in his meetings with government officials.”</p> <p>In an interview with journalists from France24, Azerbaijan’s ambassador to France rejected criticism of her country’s human rights record.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/elnara-gasimova-facebook-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Elnara Gasimova" data-img="/assets/investigations/elnara-gasimova-facebook.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/elnara-gasimova-facebook.jpg" class="hidden" id="aside-img-5283" alt="investigations/elnara-gasimova-facebook.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Facebook </small> Abzas Media reporter Elnara Gasimova, currently held in pre-trial detention. “I think we need to continue somehow,” she said in her final pre-jail interview. “The people in this system should see that no matter what they do, there are those who will go to prison laughing.” </div> </aside> <script>$(window).load(function() {$("#aside-img-5283").remove();});</script> <p>“No one in Azerbaijan is imprisoned or interrogated for their profession or their political opinions,” she said. “If there is a questioning of a journalist or of a person from the opposition, it is simply for a violation of the law.”</p> <p>“In Azerbaijan, we have a separation of powers, like anywhere in Europe,” she said. “Justice and the law work the same everywhere.”</p> <h2 id="systematic-torture">Systematic Torture</h2> <p>For Vaqifqizi and her imprisoned colleagues at Abzas Media — Ulvi Hasanli, Nargiz Absalamova, Elnara Gasimova, Hafiz Babali, and Mahammad Kekalov — such geopolitical considerations may now be a moot point.</p> <p>For now, their supporters have one overwhelming worry — that they may be beaten, tortured, or otherwise mistreated while in their prison cells.</p> <p>Hasanli has already indicated that he was beaten while in custody.</p> <p>Vaqifqizi’s lawyer, Elchin Sadigov, has warned that there are “numerous cases of mistreatment and torture of individuals in prisons.”</p> <p>“Generally, mistreatment of political prisoners doesn’t occur without orders from higher authorities,” he told reporters from Forbidden Stories.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/tofig-yagublu-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Tofig Yagublu" data-img="/assets/investigations/tofig-yagublu.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/tofig-yagublu.jpg" class="hidden" id="aside-img-6003" alt="investigations/tofig-yagublu.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> DR </small> Tofig Yagublu, a well-known opposition figure, after his arrest by the police in December 2021. He was arrested again this December, in the same wave of repression that swept up the Abzas Media journalists and other government critics. </div> </aside> <script>$(window).load(function() {$("#aside-img-6003").remove();});</script> <p>One does not have to go far to find horrific stories from Azerbaijan’s prisons and detention centers. Numerous cases, including beatings with hard objects, electric shocks, and truncheon blows on the soles of the feet, have been <a href="https://rm.coe.int/16808c5e46" target="_blank">documented</a> by the Council of Europe’s Committee to Prevent Torture (CPT), which is empowered to conduct visits to the country’s detention centers.</p> <p>It is unknown whether any of the Abzas journalists are currently undergoing any such treatment, as they have long been denied communication with their families.</p> <h2 id="he-knew-what-he-was-doing">‘He Knew What He Was Doing’</h2> <p>The family of another high-profile Azerbaijani political prisoner — economist and civil activist Gubad Ibadoglu — fears that even without explicit torture, their loved one may never again see the light of day.</p> <p>“The thing I miss the most is every day getting a call from my father,” says Emin Bayramli, Ibadoglu’s 21-year-old son, who is studying at Rutgers University in the United States.</p> <p>“My eyes are tearing up because I miss it a lot. I used to get a call from my father every single day, before midterms. You know, do I need money? Do I have warm clothes? Did I get a coffee today?”</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/dr-gubad-ibadoglu-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Dr. Gubad Ibadoglu" data-img="/assets/investigations/dr-gubad-ibadoglu.jpg" id="img-5937" /> <img src="https://www.occrp.org/assets/investigations/dr-gubad-ibadoglu.jpg" class="hidden" id="aside-img-5937" alt="investigations/dr-gubad-ibadoglu.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Voice of America </small> Dr. Gubad Ibadoglu, currently being held in what his family says are life-threatening conditions in pre-trial detention. </div> </div> <script> $(document).ready(function() { let rand_5937 = $("#aside-img-5937").prop("naturalWidth"); if(rand_5937<750){$("#img-5937").attr("src","/assets/investigations/dr-gubad-ibadoglu.jpg");} $(window).load(function() {$("#aside-img-5937").remove();}); }); </script> <p>Ibadoglu was violently arrested in Azerbaijan on July 23, 2023, in the early stages of the crackdown that swept up the Abzas journalists.</p> <p>He has recently been based in the United Kingdom, but had traveled to Azerbaijan to see his elderly mother, his son Bayramli says — a “personal visit” that had no political motive. Nevertheless, the authorities charged Ibadoglu with possession of counterfeit money and religious extremism. By <a href="https://eap-csf.eu/project/steering-committee-statement-on-detention-ibadoghlu/" target="_blank">some accounts</a>, the amount recovered from Ibadoglu’s office was $40,000 — the same figure associated with the Abzas journalists’ arrests, only in a different currency.</p> <p>He has been ordered held for nearly four months pending trial. Over that period, his family says, Ibadoglu’s health has deteriorated sharply. The academic suffers from diabetes and other ailments, which his son can recall in almost encyclopedic detail.</p> <p>“My dad’s heart, the aortic root, has expanded from 37 to 45 millimeters,” he says. “That was September. And now it’s [so much] greater that they’re not even saying what it is.”</p> <p>“He has a very, very high type 2 diabetes. He needs immediate help. He’s facing a diabetic coma. He has run out of all of his medication,” he says. “There are no outside doctors seeing him. The International Committee of the Red Cross tried to see him three times or more. All have been denied.”</p> <p>Asked why he thought his father was under such persecution, Bayramli cited his outspoken work in economics.</p> <p>Perhaps most irritatingly for Aliyev, Ibadoglu has been a sharp critic of how Azerbaijan’s government has exploited its vast energy resources.</p> <p>“Despite huge spending,” reads the <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3489617" target="_blank">abstract of one of his papers</a>, “[Azerbaijan’s] role as an economic leader in the region is declining and people are suffering from poverty and poor social services. Oil and gas revenues have brought neither improved welfare nor democracy to Azerbaijan.”</p> <p>“His most dangerous thing is that he knew what he was doing,” said Ibadoglu’s son, Bayramli.</p> <p>Among other activities, Ibadoglu has attempted to register an Azerbaijani political party, maintained a YouTube channel with thousands of subscribers, and run an Azerbaijani think tank that was shut down in the mid-2010s crackdown.</p> <p>In what may have been the final straw, just weeks before his detention, Ibadoglu co-founded the Azerbaijani Youth Education Foundation in the U.K. According to a now-deleted Facebook post, the organization, which was meant to support higher education for young Azerbaijanis and place them in foreign universities, was to be funded in part by assets confiscated from corrupt Azerbaijani elites abroad.</p> <p>“I think Aliyev wanted to do this for a long time,” Bayramli says, referring to his father’s arrest and imprisonment. “He doesn’t even have to ask his aides about my father’s case. He knows all about it.”</p> <p><strong><em>Kelly Bloss, Aidan Iusubova, Fatima Karimova, and journalists from multiple outlets contributed reporting as part of Forbidden Stories’ <a href="https://forbiddenstories.org/case/the-baku-connection/" target="_blank">The Baku Connection</a> project.</em></strong></p> <p><strong><em>Clarification, February 2, 2024: This story has been updated to more clearly represent the legal representation of some of the arrested Abzas Media journalists. Elchin Sadigov is Sevinj Vaqifqizi’s lawyer.</em></strong></p>OCCRPhttps://www.occrp.org/China-Born Businesswoman Charged Over Meth Flight Built a Web of Influence in Papua New Guinea2024-01-26T00:00:00+01:002024-01-26T00:00:00+01:00https://www.occrp.org/en/investigations/china-born-businesswoman-charged-over-meth-flight-built-a-web-of-influence-in-papua-new-guinea<p>Chinese-born businesswoman Mei Lin spent more than a decade building an economic empire in Papua New Guinea –– spanning sectors from retail to real estate –– and cultivating ties with wealthy and powerful figures in the Pacific nation.</p><p>Chinese-born businesswoman Mei Lin spent more than a decade building an economic empire in Papua New Guinea –– spanning sectors from retail to real estate –– and cultivating ties with wealthy and powerful figures in the Pacific nation.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/mei-lin-portrait-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Mei Lin" data-img="/assets/investigations/mei-lin-portrait.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/mei-lin-portrait.jpg" class="hidden" id="aside-img-8146" alt="investigations/mei-lin-portrait.jpg" /> <div class="image-caption"> Mei Lin </div> </aside> <script>$(window).load(function() {$("#aside-img-8146").remove();});</script> <p>But that world came crashing down on January 16 when Lin, 41, was arrested in the Australian city of Brisbane. Police accuse her of facilitating a “black flight” last year that smuggled over 71 kilograms of methamphetamine from a remote hillside airstrip in PNG to Australia.</p> <p>The drug smuggling scheme was foiled on March 21 in a coordinated operation by PNG and Australian police, who swooped in as the light plane stopped to refuel in the rural Australian community of Monto. Six people were arrested and charged in Australia, including two pilots. Eight others were charged in PNG, including a police officer and a soldier.</p> <p>But it took nine months for police to collect enough evidence to arrest and charge Lin. She is alleged to have stored the meth and organized its transportation within PNG, the Australian Federal Police said in a <a href="https://www.afp.gov.au/news-centre/media-release/seventh-person-arrested-over-black-flight-meth-importation" target="_blank">statement after her arrest</a>, as well as paying for fuel for the aircraft and the use of the runway in the town of Bulolo, where it took off.</p> <p>OCCRP and its local partner center, Inside PNG, spent months investigating Lin, who had previously attracted nationwide controversy over dealings unrelated to drugs. Reporters examined thousands of pages of public documents and court records, and spoke to police in both PNG and Australia.</p> <p>They found that, prior to her arrest, she built business ties with some of PNG’s most prominent figures, including the country’s former deputy prime minister, Moses Maladina. Companies linked to Lin appear to have also benefited from Australian government assistance to the country.</p> <p>Lin is now “the prime suspect” in the methamphetamine smuggling case, said Manu Pulei, the lead PNG police investigator. “Without Mei Lin, this thing wouldn’t have happened,” Pulei told Inside PNG.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/intercepted-plane-australia-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="A light plane that was intercepted in Australia" data-img="/assets/investigations/intercepted-plane-australia.jpg" id="img-9641" /> <img src="https://www.occrp.org/assets/investigations/intercepted-plane-australia.jpg" class="hidden" id="aside-img-9641" alt="investigations/intercepted-plane-australia.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Australian Federal Police </small> The light plane intercepted in Australia with methamphetamine on board last March. </div> </div> <script> $(document).ready(function() { let rand_9641 = $("#aside-img-9641").prop("naturalWidth"); if(rand_9641<750){$("#img-9641").attr("src","/assets/investigations/intercepted-plane-australia.jpg");} $(window).load(function() {$("#aside-img-9641").remove();}); }); </script> <p>PNG court records obtained by reporters show that the allegations against Lin center on her role as owner and boss of KC 2, a wholesale and retail firm in Lae where the meth was allegedly stored. A KC 2 employee arrested last year over the drug smuggling operation, Lin Hezhong, is her uncle.</p> <p>That business, however, is just one of nearly two dozen companies involving Lin in PNG and Australia, according to corporate documents obtained by reporters.</p> <p>Documents show that Lin was a manager at one company owned by former Deputy Prime Minister Maladina, Chatswood PNG, which is the <a href="https://www.abc.net.au/news/2024-01-24/png-refugee-fund-australian-government-alleged-black-flight/103381134" target="_blank">subject of an investigation</a> into the alleged abuse of Australian government funding for the care of refugees and asylum seekers in the country under Australia’s “offshore processing” regime.</p> <p>Maladina and his company are not alleged to be connected to drug trafficking.</p> <p>OCCRP sent a detailed list of questions to Lin’s lawyer. No response was received by press time.</p> <p>In a written response to reporters’ questions, Maladina denied any wrongdoing in the migration scheme and said Lin had only briefly worked for his company.</p> <p>“Chatswood is not and has never been involved in any illegal [activity], and we strongly oppose the use of and involvement with drugs in our society. Chatswood and its Directors and staff are NOT in any way associated with the activities of Mei Lin,” Maladina said.</p> <p>Lin’s other recent business partners have included a prominent Malaysia-born business tycoon, the daughter of a former prime minister, and two prominent ethnic Chinese business figures who have played senior roles in Beijing-backed organizations in the country.</p> <p>None of those people are accused of any connection to drug smuggling, and the charges against Lin have yet to be tried in court.</p> <p>Lin’s case comes <a href="https://www.lowyinstitute.org/the-interpreter/pacific-islands-become-collateral-damage-drug-superhighway" target="_blank">amid fears</a> that rising drug trafficking through PNG could further destabilize a country that is already rife with poverty and elite corruption. The country is already <a href="https://www.rnz.co.nz/international/pacific-news/501292/an-open-secret-papua-new-guinea-s-gun-problem-difficult-to-solve-journalist-says" target="_blank">awash with illegal guns</a> and is frequently gripped by violence, such as urban riots <a href="https://www.rnz.co.nz/international/pacific-news/506642/death-toll-in-png-riots-jumps-to-22-after-gruesome-discovery-of-bodies-in-burnt-out-shops" target="_blank">earlier this month</a> that killed 22 people.</p> <p>Surging demand for narcotics in Australia — one of the world’s most expensive drug markets — makes PNG a natural transit point for international drug traffickers, said Jeremy Douglas, regional representative of the United Nations Office on Drugs and Crime for Southeast Asia and the Pacific.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/meth-flight-map-infographic-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.png" alt="Infographic showing the route the black flight took" data-img="/assets/investigations/meth-flight-map-infographic.png" id="img-5211" /> <img src="https://www.occrp.org/assets/investigations/meth-flight-map-infographic.png" class="hidden" id="aside-img-5211" alt="investigations/meth-flight-map-infographic.png" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Edin Pašović </small> The route the “black flight” took from Papua New Guinea to Australia on March 21, 2023. </div> </div> <script> $(document).ready(function() { let rand_5211 = $("#aside-img-5211").prop("naturalWidth"); if(rand_5211<750){$("#img-5211").attr("src","/assets/investigations/meth-flight-map-infographic.png");} $(window).load(function() {$("#aside-img-5211").remove();}); }); </script> <p>“The proximity of PNG to Australia is perfect for staging shipments by small private planes [and] fishing vessels,” Douglas said. “We’ve seen traffickers fronting as business people to build connections with local elites and power players across the region. It is simply easier to co-opt elites and officials where capacities are lower and activities are not heavily scrutinized,” Douglas said.</p> <h2 id="unclear-origins">Unclear Origins</h2> <p>Lin had been a well-known — and controversial — figure in PNG even before her arrest.</p> <p>Born in China’s southeastern Fujian province in 1982, Lin — who also goes by the name Gigi — claims to have immigrated to PNG with her family as a teenager, attending two of the country’s most exclusive schools, according to documents submitted to PNG authorities as part of her successful 2016 citizenship application, which were obtained by reporters.</p> <p>But the information she submitted to acquire citizenship contains key inconsistencies.</p> <p>Lin gave PNG authorities a letter written in error-riddled English attesting to her attendance at Port Moresby Grammar School. But school administrator David Olley told reporters it was a “fraudulent letter” that had been signed by a person who had never worked there.</p> <p>“Any agency or reader should be able to detect that it is a fraud and therefore not respect the letter,” Olley said.</p> <p>Lin also told authorities she had studied at the elite Port Moresby International School in 2003 — when, according to the Chinese birth certificate she supplied to them, she was already 20 years old. But the school’s secretary, Albina Melua, said she could find no record of Lin’s attendance.</p> <p>“In 2003, there was no Lin here,” Melua said.</p> <p>Whatever her true history, public records show that Lin has, over the last decade, become a force in business in her adopted country.</p> <p>She built her base of power in her adoptive hometown of Lae, a port city that acts as the gateway to PNG’s fabled highlands. Corporate documents show that Lin set up the centerpiece of her network there in 2013, the supermarket and wholesaler KC 2.</p> <p>Business soon boomed, with company revenues exploding from just 6.4 million kina (US$1.7 million in current value) in 2013, to over 121 million kina ($33 million) by 2022.</p> <p>Lin soon built a reputation as a local power player who treated even public officials “just like talking to an ordinary friend or colleague or employee,” said Joikere Kusip, a lawyer who has worked for her.</p> <p>Lin also began to attract <a href="https://www.looppng.com/png-news/chinese-businesswoman-defends-firm-99256" target="_blank">critical nationwide attention</a>, after local <a href="https://pngicentral.org/reports/nhc-targets-grieving-widow-in-illegal-sell-off-to-foreign-businessperson/" target="_blank">media reports alleged</a> that she had improperly obtained state-owned land and violently evicted tenants. One of her land deals was ruled illegal, and Lin was questioned by a parliamentary committee in 2021.</p> <h2 id="elite-education-and-kwik-moni">Elite Education and ‘Kwik Moni’</h2> <p>Negative publicity doesn’t appear to have slowed Lin’s rise among PNG’s movers and shakers.</p> <p>Corporate records show that Lin has over the last decade established at least a dozen other PNG-based companies, along with other close family members and partners. The firms have spanned sectors including property, security, nightclubs, gambling, and finance.</p> <p>Lin’s list of business associates has included some prominent local names.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/billy-huaan-lin-training-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Billy Huaan Lin at a training for PNG law enforcement" data-img="/assets/investigations/billy-huaan-lin-training.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/billy-huaan-lin-training.jpg" class="hidden" id="aside-img-4064" alt="investigations/billy-huaan-lin-training.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Sohu.com </small> A screenshot of a video showing Billy Huaan Lin, center, in PNG police uniform, at a training for PNG law enforcement in China. </div> </aside> <script>$(window).load(function() {$("#aside-img-4064").remove();});</script> <p>In 2020, Lin became a founding director of the Raggiana International Academy, an elite school in Lae partly owned by Vanessa Chan-Pelgen, the daughter of former PNG Prime Minister Sir Julius Chan. Lin is still a director at the academy.Chan-Pelgen did not respond to questions about Lin’s association with the school.</p> <p>The following year, Lin co-founded a new financial institution, Kwik Moni, alongside a roster of other well-known figures in PNG.</p> <p><a href="https://www.kwikmoni.com.pg/" target="_blank">Kwik Moni</a> bills itself as a lender for personal expenses including “school fees, bride price, funeral expenses… and any worthwhile purposes.”</p> <p>Lin’s fellow shareholders included Jimmy Poh, a Malaysia-born businessman whose interests include high-profile property developments in the capital, Port Moresby. He was previously a director of a major PNG health supplies company, Borneo Pacific Pharmaceuticals. Founded by his brother, Martin, Borneo Pacific has been a key supplier of medical kits and drugs to the PNG government. Australia reportedly <a href="https://www.abc.net.au/news/2013-12-26/an-australia-cuts-funding-of-png-medical-kits/5174992" target="_blank">withdrew funding</a> for a PNG health program involving Borneo in 2013, citing concerns over how the company was awarded the contract and allegations by doctors that it had imported substandard drugs into the country.</p> <p>Poh did not respond to questions about his business ties with Lin.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/irene-seeto-facebook-2-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Irene Wan Xia Seeto" data-img="/assets/investigations/irene-seeto-facebook-2.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/irene-seeto-facebook-2.jpg" class="hidden" id="aside-img-1301" alt="investigations/irene-seeto-facebook-2.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Facebook </small> Screenshot from Facebook of Irene Wan Xia Seeto. </div> </aside> <script>$(window).load(function() {$("#aside-img-1301").remove();});</script> <p>Other partners in Kwik Moni include two people who have held senior roles in the China and PNG Friendship Association, an advocacy organization for the Chinese diaspora in the country. Although ostensibly aimed at promoting bilateral relations and the interests of overseas Chinese, analysts say such organizations ultimately fall under the control of the ruling Chinese Communist Party under a so-called “United Front” strategy to push Beijing’s interests abroad.</p> <p>One of these Kwik Moni partners, Billy Huaan Lin, also hails from Fujian province and is the owner of a network of companies in PNG including a Port Moresby-based car dealership, 2 Fast Motors Ltd. He has served in several leadership roles in the China and PNG Friendship Association. He has also played an intermediary role in PNG’s security relationship with China, donning a PNG police uniform and traveling with PNG officers to China for training, according to Chinese media coverage.</p> <p>Another partner in Kwik Moni, Irene Wan Xia Seeto, has been identified in local media as recently as 2021 as chapter head of the China-PNG association in the township of Rabaul.</p> <p>Neither Billy Lin nor Irene Seeto responded directly to requests for comment from OCCRP, but after questions were sent to them and Poh, Kwik Moni issued a press release saying that Mei Lin had been “requested to resign from the board and dispose of her shareholdings” in March 2023, after the company became aware of allegations against her. Indeed, corporate records obtained by reporters show that Lin relinquished her stake in the company last April, about three weeks after the meth flight. The shares were transferred to her father and another person who appears to be a relative.</p> <p>But Lin’s alleged involvement in the flight did not deter her Kwik Moni business partner, Seeto, from continuing their business relationship. Corporate records from Australia show that Seeto and Lin opened a new company together in August 2023, called IG Developments Pty Ltd, which lists its place of business as what appears to be an empty lot in suburban Brisbane. It is unclear what the company does.</p> <p>Lin and the Malaysian-born businessman Poh have also remained partners in a Port Moresby-based company, Arabica Coffee Exports (PNG) Ltd, according to company filings.</p> <p>OCCRP and Inside PNG are not alleging any wrongdoing by Poh, Seeto, or Billy Lin.</p> <h2 id="immigration-deals">Immigration Deals</h2> <p>Some of Lin’s most consequential dealings relate to her business relationship with the former PNG deputy prime minister, Maladina.</p> <p>That relationship was <a href="https://www.abc.net.au/news/2024-01-21/papua-new-guinea-businesswoman-mei-lin-in-court-black-flight/103370862" target="_blank">first reported</a> by the Australian Broadcasting Corporation (ABC) on January 20, but OCCRP and Inside PNG have uncovered additional documents that provide further detail on the ties between Maladina and Lin.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/moses-maladina-portrait-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Moses Maladina" data-img="/assets/investigations/moses-maladina-portrait.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/moses-maladina-portrait.jpg" class="hidden" id="aside-img-1129" alt="investigations/moses-maladina-portrait.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Kumul Consolidated Holdings </small> Moses Maladina. </div> </aside> <script>$(window).load(function() {$("#aside-img-1129").remove();});</script> <p>Maladina has recently faced scrutiny over allegations that the company he founded, Chatswood PNG, has mismanaged funds granted by Australia under a <a href="https://www.documentcloud.org/documents/23883185-senate-committee-funding-for-papua-new-guinea" target="_blank">secret deal</a> to care for migrants left in the country by Australia’s much-criticized policy of turning back boats carrying asylum seekers.</p> <p>Australia’s Home Affairs Department in late 2021 handed over to PNG authorities responsibility for the accommodation and welfare of previously detained migrants living in the country and awaiting refugee resettlement. The agreement came with a commitment by Australia to provide an undisclosed amount of funding, in an arrangement known as the PNG humanitarian program (PHP).</p> <p>Maladina’s Chatswood PNG, which was designated a key service provider under the deal, soon faced allegations from migrants that it was failing to provide services like food deliveries. PNG’s immigration minister <a href="https://www.theguardian.com/world/2023/oct/31/png-corruption-claims-investigation-australia-funded-refugee-program-papua-new-guinea" target="_blank">pledged an investigation</a> last October after whistleblower complaints from within PNG’s Immigration and Citizenship Authority alleged that millions of dollars had likely gone missing under the scheme, and that Chatswood PNG was allegedly involved in fraudulent billing.</p> <p>Maladina told reporters that Chatswood PNG was just one of several contractors on the PHP and that “the person named as Mei Lin has absolutely no association with the company in its Ownership, Shareholding or Directorship,” he said. Lin had only worked for the company’s property division for two months “on a casual basis,” he said. He gave a <a href="https://www.abc.net.au/news/2024-01-21/papua-new-guinea-businesswoman-mei-lin-in-court-black-flight/103370862" target="_blank">similar statement</a> to the ABC.</p> <p>However, OCCRP and Inside PNG have obtained documents that appear to show that Mei Lin did in fact play a senior role in Chatswood PNG. These include a February 2022 letter bearing the company’s seal and signed by Lin, in which she identified herself as the “property manager” of Chatswood PNG, and a Chatswood PNG corporate visa card in her name.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/chatswood-letter-card-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="A Chatswood PNG company card and letter bearing the Chatswood PNG seal" data-img="/assets/investigations/chatswood-letter-card.jpg" id="img-7421" /> <img src="https://www.occrp.org/assets/investigations/chatswood-letter-card.jpg" class="hidden" id="aside-img-7421" alt="investigations/chatswood-letter-card.jpg" /> </a> <div class="inset-caption"> A Chatswood PNG company card in Mei Lin’s name (left) and a letter bearing the Chatswood PNG seal in which Mei Lin, who also uses the first name Gigi, identifies herself as a “property manager” for the company. </div> </div> <script> $(document).ready(function() { let rand_7421 = $("#aside-img-7421").prop("naturalWidth"); if(rand_7421<750){$("#img-7421").attr("src","/assets/investigations/chatswood-letter-card.jpg");} $(window).load(function() {$("#aside-img-7421").remove();}); }); </script> <p>Namora Niugini, a Lin family business, is also alleged by the whistleblower to have been involved in fraudulently charging the PHP in concert with Chatswood PNG.</p> <p>PNG’s chief migration officer, Stanis Hulahau, has previously <a href="https://www.thenational.com.pg/migration-chief-clarifies-funding/" target="_blank">told local media</a> that Namora Niugini was a contractor on the project, while Chatswood PNG was the program case manager. The company “provided groceries/vouchers and an allowance for the refugees,” Hulahau was quoted as saying.</p> <p>A third company, bearing the name PNG Humanitarian Program Ltd was established by Maladina in October 2021, two months before the bilateral agreement was inked, corporate records show. It was transferred to Lin’s ownership five months later and subsequently renamed ABC Enterprises. It is unclear if the firm has played a role in the administration of the migration scheme.</p> <p>Maladina told OCCRP and Inside PNG that his company had no direct relationship to Namora Niugini.</p> <p>Maladina also said that although he had “assisted” in the establishment of PNG Humanitarian Program Ltd, he “had no involvement whatsoever [in] the subsequent creation of ABC Enterprises Ltd… [and] no knowledge of its business and functions.”</p> <p>Australia’s Department of Home Affairs said in a written response that reporters’ questions were “a matter for the PNG government.” Hulahau did not respond to questions.</p> <h2 id="new-evidence">New Evidence</h2> <p>Despite Lin’s growing prominence in PNG, law enforcement appeared to have been unaware of any alleged connection between Lin and drugs prior to last year’s meth flight.</p> <p>OCCRP and Inside PNG reconstructed the investigation using public documents, PNG court records, and interviews with police in both PNG and Australia.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/australian-police-arrest-mei-lin-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Australian police arresting Mei Lin" data-img="/assets/investigations/australian-police-arrest-mei-lin.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/australian-police-arrest-mei-lin.jpg" class="hidden" id="aside-img-8708" alt="investigations/australian-police-arrest-mei-lin.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Australian Federal Police </small> Australian police arresting Mei Lin in her Brisbane home on January 16. </div> </aside> <script>$(window).load(function() {$("#aside-img-8708").remove();});</script> <p>The investigation that foiled the flight started in late 2022 in Australia’s commercial capital, Sydney, where AFP narcotics investigators picked up intelligence that a group including local pilots and their associates allegedly intended to fly meth into Australia from PNG.</p> <p>At least one similar scheme had been attempted before. In 2020, a light plane weighed down by a <a href="https://www.theguardian.com/world/2020/aug/02/pngs-biggest-drug-bust-the-plane-crash-the-dead-man-and-the-half-tonne-of-cocaine" target="_blank">reported half-tonne of cocaine</a> crashed in PNG’s forests while attempting to reach Australia.</p> <p>The following year, a raid on a hotel in PNG’s capital of Port Moresby reportedly <a href="https://www.abc.net.au/news/2021-11-24/australian-jamie-pang-png-hotel-alleged-meth-lab-drug-bust/100643446" target="_blank">uncovered a meth lab</a> operated by an Australian citizen. The suspect was released after local authorities made the embarrassing discovery that methamphetamine had not yet been added to the country’s list of controlled substances.</p> <p>After getting wind last year that a group of Australians including pilots were allegedly plotting to import meth by plane from PNG, the AFP put the group under surveillance. They worked with other Australian law enforcement and PNG police to spring a trap on both sides of the Torres Strait, which separates Australia from its northern neighbor.</p> <p>At the time, they were still unaware of the identity of Mei Lin or her alleged accomplices in PNG, AFP Eastern Command investigations head Kate Ferry told OCCRP.</p> <p>“The AFP and [PNG police] were investigating who was involved in the drug import plot in PNG but we did not identify the alleged offenders until the day of the flight,” Ferry said.</p> <p>Arrests in PNG on March 21 led police to a warehouse owned by Lin’s KC 2 that served as a storage point for the meth, which a chemical analysis found was similar to drugs produced by Mexican cartels.</p> <p>Officers found that Lin had left Lae for Australia the day before the meth flight. Two days after that, she was questioned at Brisbane airport as she prepared to fly to Taiwan. She was allowed to depart after insufficient evidence was found to arrest her. She subsequently returned to Australia and lived in Brisbane until her arrest.</p> <p>But back in PNG, the investigation into the eight suspects arrested there eventually produced evidence –– including CCTV footage and testimony –– that allegedly implicated Lin.</p> <p>That investigation is ongoing and authorities will release only “limited information” until it is complete, PNG’s police minister Peter Tsiamalili said in a January 22 statement.</p> <p>“These international criminal networks, particularly from parts of Asia, are organized and the damage they cause to people in our countries is devastating,” Tsiamalili said.</p>OCCRPhttps://www.occrp.org/As Singapore Police Probe Money Laundering Ring, a Private Equity Entrepreneur Disappears2023-12-22T00:00:00+01:002023-12-22T00:00:00+01:00https://www.occrp.org/en/investigations/as-singapore-police-probe-money-laundering-ring-a-private-equity-entrepreneur-disappears<p>The founder of an Asian private equity firm has disappeared from his Singapore home and workplace as police sought to question him in connection to an alleged $2-billion money laundering ring busted in August this year, a Straits Times/OCCRP investigation has found.</p><p>The founder of an Asian private equity firm has disappeared from his Singapore home and workplace as police sought to question him in connection to an alleged $2-billion money laundering ring busted in August this year, a Straits Times/OCCRP investigation has found.</p> <p>Su Binghai, an entrepreneur of Chinese origin, is a “person of interest” in an ongoing investigation into the alleged laundering ring, a source familiar with the case told the Straits Times.</p> <p>The source, who spoke on condition of anonymity, did not provide further details. Su Binghai has not been formally named as a suspect, which does not happen in Singapore until after an arrest.</p> <p>Corporate registry data shows that Su Binghai founded the private equity outfit New Future International in 2017. He became a co-owner of the firm the following year along with Wang Dehai, one of 10 people <a href="/en/investigations/members-of-alleged-singapore-money-laundering-syndicate-bought-london-properties-worth-dollar56m">arrested by Singapore police</a> during the bust on August 15.</p> <p>Two other New Future International directors, Su Bingwang and Su Fuxiang, are also “persons of interest,” said the source, without adding details. (It is not clear if the three Sus are part of the same family, but the three often cited the same residential address in their Hong Kong corporate filings.)</p> <p>None of the Sus could be reached for comment.</p> <p>Singapore’s August raids on the alleged money laundering ring sent shockwaves through the country’s political elite, and have raised questions about how lax regulations and an easily exploited residency program have contributed to a flood of dirty money into the Southeast Asian financial hub. Most of those arrested lived in upmarket areas, and many belonged to prestigious golf clubs.</p> <p>Headquartered in Hong Kong, Su Binghai’s New Future has a Singapore-based offshoot and multiple subsidiaries. The company maintains offices in both cities and its website showcases a portfolio of countries and industries in which the company says it invests, though it does not provide details and reporters could find no public record of any specific investments it has made. Police have not said that New Future is subject to investigation.</p> <p>The owners of New Future have been obscured since 2019, when its ownership entity was shifted from Hong Kong to the British Virgin Islands, a tax haven with high levels of corporate secrecy.</p> <p>Su Binghai, who remains a director of New Future, holds multiple passports and an entree into elite social circles in Hong Kong and Singapore. He, Su Bingwang, and Su Fuxiang, each own tens of millions of dollars worth of property around the world.</p> <p>When a Straits Times reporter visited Su Binghai’s Singapore residence this month, a domestic worker said that more than 10 uniformed police had visited the property in September, just weeks after the raids, looking for her employer. But Su Binghai and his wife had already left the home and did not say where they were going or when they would return, she added. The worker identified Su Binghai from a photo and confirmed he was her boss.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/su-binghai-singapore-home-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Su Binghai's Singapore residence" data-img="/assets/investigations/su-binghai-singapore-home.jpg" id="img-2674" /> <img src="https://www.occrp.org/assets/investigations/su-binghai-singapore-home.jpg" class="hidden" id="aside-img-2674" alt="investigations/su-binghai-singapore-home.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> The Straits Times </small> Su Binghai's Singapore residence. </div> </div> <script> $(document).ready(function() { let rand_2674 = $("#aside-img-2674").prop("naturalWidth"); if(rand_2674<750){$("#img-2674").attr("src","/assets/investigations/su-binghai-singapore-home.jpg");} $(window).load(function() {$("#aside-img-2674").remove();}); }); </script> <p>Another domestic worker answered the phone at a Dubai number registered to Su Binghai, and told OCCRP that “Mr Su” was not there. She was unable to provide information on his whereabouts.</p> <p>Like Su Binghai, the two other New Future directors suddenly left their Singapore homes and workplaces in September, two colleagues and a neighbor told the Straits Times. (Singapore’s police did not respond to requests for comment about the Sus’ links to Wang Dehai or whether they had left the country.)</p> <p>The plush home of one of the company’s directors, Su Bingwang, is located on Singapore’s Rochalie Drive, close to embassies and other grand homes. When the Straits Times visited this month, it was empty.</p> <p>A neighbor confirmed that a Su Bingwang had lived there for about a year, and added that movers had turned up in September to remove items from the home. The home is currently being advertised on real estate websites as a rental for $33,800 per month.</p> <p>When the Straits Times visited New Future’s Singapore office on December 1, a staff member asked unprompted if the reporter was there about “the money laundering case.”</p> <p>“Is this about the Sus? I am not sure they will want to speak to you,” the employee added.</p> <p>The staff member, who asked not to be identified, confirmed that Su Binghai and Su Fuxiang were involved in the firm and were frequent visitors to the Singapore office, but hadn’t been seen there “for a while.”</p> <p>On a second visit on December 13, the employee affirmed that both men worked at the Singapore office, adding they had not been seen since September. The employee declined to respond to questions about where the two were.</p> <p>New Future International did not respond to questions about the Sus and its operations. Wang Dehai’s lawyer did not respond to questions.</p> <p>More than 150 properties have been confiscated by Singapore authorities in connection with the crackdown on the alleged money laundering ring so far. Some 68 gold bars, cryptocurrencies, millions in cash, 546 pieces of jewelry, and 62 vehicles were also impounded during the raids.</p> <h2 id="online-then-on-the-run">Online, Then on the Run</h2> <p>Even before he fell afoul of Singapore authorities, Wang Dehai was a wanted man. In February 2018, Chinese authorities published an arrest warrant alleging he was involved in illegal gaming.</p> <p>Along with Wang, two others arrested in Singapore in August had a background in online gaming. According to authorities, this was not a coincidence: A large amount of the funds laundered in Singapore, police said, was generated by online casinos and telecommunications scam factories.</p> <p>Southeast Asia is in the midst of a lucrative cybercrime spree, much of it targeting Chinese citizens. China’s Ministry of Public Security has estimated illegal gambling by mainland Chinese amounts to 1 trillion yuan a year, or about $140 billion.</p> <p>The scam and online casino industry in Cambodia alone has been estimated to be worth between $7.5 billion and $12.5 billion a year, Jeremy Douglas, head of Southeast Asia operations at the United Nations Office on Drugs and Crime, told OCCRP.</p> <p>Wang was at the forefront of the online gambling revolution in the region, working in the Philippines between 2012 and 2016, according to media accounts of court testimony he has given since his arrest. The industry was legal in the Philippines but, because the casinos targeted bettors in China where gambling is illegal, he was breaking Chinese laws.</p> <p>Just a few months after Wang’s 2018 Chinese arrest warrant was publicized on police social media accounts, he and Su Binghai incorporated a company called Yuen Zheng Holding Limited, splitting ownership equally, Hong Kong corporate registry data shows.</p> <p>That same year, Yuen Zheng took over 100 percent of the shares of New Future International Limited, the private equity firm which Su Binghai had founded a year earlier.</p> <p>In 2019, New Future was again taken over by another company registered in the British Virgin Islands: “Yuan Zheng Holding Limited,” which is spelled exactly the same as the Hong Kong entity’s Chinese characters in standard pinyin transliteration. Because of the territory’s corporate secrecy rules, it was not possible to determine who owns Yuan Zheng. (Su Binghai and Wang Dehai’s Hong Kong-based company, Yuen Zheng, was dissolved in 2021.)</p> <p>Despite the change of the ownership entity, the three Sus remain directors of New Future, according to a 2023 corporate filing in Hong Kong. Singapore corporate records also show Su Binghai and Su Fuxiang are the majority shareholders of New Future’s Singapore subsidiary. Su Binghai, meanwhile, features prominently on New Future’s corporate website, where he is pictured sitting at the center of a group of suited professionals.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/web-screenshot-new-future-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Su Binghai seated at center of screenshot taken from website" data-img="/assets/investigations/web-screenshot-new-future.jpg" id="img-2292" /> <img src="https://www.occrp.org/assets/investigations/web-screenshot-new-future.jpg" class="hidden" id="aside-img-2292" alt="investigations/web-screenshot-new-future.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> New Future International </small> Screenshot of New Future International's website showing Su Binghai seated at center. </div> </div> <script> $(document).ready(function() { let rand_2292 = $("#aside-img-2292").prop("naturalWidth"); if(rand_2292<750){$("#img-2292").attr("src","/assets/investigations/web-screenshot-new-future.jpg");} $(window).load(function() {$("#aside-img-2292").remove();}); }); </script> <p>New Future’s Singapore arm also nominated Wang Dehai for membership of the deluxe Sentosa Golf Club, according to a list of defaulting members reviewed by the Straits Times this month.</p> <p>The three Sus are all natives of Anxi County, an inland mountainous area of Fujian province on China’s southeastern coast. Otherwise known only for its tea plantations, Anxi has become a hotbed of online scams and illegal gambling.</p> <p>The Sus also hold multiple passports. All three are citizens of Cambodia, and at least two — Su Binghai and Su Fuxiang — hold citizenship of the Caribbean nation of St. Kitts and Nevis. Su Binghai also listed a Vanuatu passport in the documents seen by reporters.</p> <p>They have used these citizenships to set up dozens of companies in Hong Kong and Singapore. Many of those in Hong Kong reported just one Hong Kong dollar in registered capital, the minimum required to set up a company.</p> <h2 id="sudden-rise-of-the-sus">Sudden Rise of the Sus</h2> <p>New Future does not publish financial results, but boasts on its corporate website that “the Founding Partners have, separately or jointly as co-investors, made over $2 billion of private equity investments in Greater China during the five-year period prior to founding New Future.”</p> <p>The website also lists a portfolio of industries — including “Environmental Material Technology and Applications,” “Digital Mobile Payment Service,” and “VR Immersive Solutions” — in which it says it invests in Hong Kong, China, Singapore, and Indonesia. But it does not provide details of those investments and reporters could find no evidence of them in public records.</p> <p>In Hong Kong company registries, the three Sus list high-end residential addresses as their correspondence addresses. In Singapore, the last known addresses for both Su Binghai and Su Bingwang were ultra-luxury bungalows — Su Bingwang’s just a stone’s throw from embassies and the Ministry of Foreign Affairs.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/su-bingwang-singapore-home-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Su Bingwang’s Singapore residence" data-img="/assets/investigations/su-bingwang-singapore-home.jpg" id="img-3454" /> <img src="https://www.occrp.org/assets/investigations/su-bingwang-singapore-home.jpg" class="hidden" id="aside-img-3454" alt="investigations/su-bingwang-singapore-home.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> The Straits Times </small> Su Bingwang’s Singapore residence. </div> </div> <script> $(document).ready(function() { let rand_3454 = $("#aside-img-3454").prop("naturalWidth"); if(rand_3454<750){$("#img-3454").attr("src","/assets/investigations/su-bingwang-singapore-home.jpg");} $(window).load(function() {$("#aside-img-3454").remove();}); }); </script> <p>Su Binghai bought a Hong Kong luxury flat for $13.8 million in late 2017. In the U.K., Su Binghai is also listed as the founding shareholder of two active holding companies, Su Empire Limited and Su Group Limited.</p> <p>The three Sus also appear to have splashed out significant sums on prestige and personal status.</p> <p>Rubbing shoulders with Hong Kong’s elite at the Hong Kong Jockey Club, Su Binghai is listed as a registered member of “Gin,” “Happy Mission,” and “The Easy Ride” –– syndicates that offer joint ownership of racehorses.</p> <p>In Singapore, the Sus are members of at least one expensive golf club and have been top donors to several charitable causes, including a 2022 golf event organized by the Singapore Disability Sports Council.</p> <p>Su Fuxiang helped sponsor a classical music concert in May attended by the country’s deputy prime minister, Heng Swee Keat, in the prestigious Esplanade Hall. The concert, held by the Orchestra of the Music Makers, would make Singapore a “more refined, sophisticated and vibrant place to live,” Su Fuxiang said in the program notes.</p> <p>A spokesperson for the charity said Su Fuxiang had cleared its due diligence process.</p> <p>“He said he was keen to set up a foundation to increase his contributions to the community after settling down with his family in Singapore for more than three years,” he said.</p> <p>Orchestra of the Music Makers is in the process of lodging a precautionary suspicious transaction report regarding the donation, the spokesperson added.</p>OCCRPhttps://www.occrp.org/Central Asian Cotton Powers Russia’s Sanctioned Gunpowder Plants2023-12-21T00:00:00+01:002023-12-21T00:00:00+01:00https://www.occrp.org/en/investigations/central-asian-cotton-powers-russias-sanctioned-gunpowder-plants<p>The Kazan gunpowder plant in southwest Russia, whose entrance is framed by two cannons, has been producing munitions for the Russian army for over two centuries.</p><p>The Kazan gunpowder plant in southwest Russia, whose entrance is framed by two cannons, has been producing munitions for the Russian army for over two centuries.</p> <p>Like others around the country, the factory has stepped up production since 2022 to feed Russia’s war machine, which relies heavily on artillery fire in the conflict in Ukraine.</p> <p>While Western sanctions have complicated Russia’s efforts to secure a range of foreign-made military technologies, Moscow can still count on two Central Asian countries to supply the Kazan plant and other state factories with a key component of gunpowder: cotton pulp.</p> <p>When mixed with certain acids, the fibrous product, also known as cotton cellulose, can be transformed into a highly flammable propellant used in explosives.</p> <p>Documents obtained by OCCRP and its partners Vlast and IStories show that Kazakhstan and Uzbekistan have supplied over 98 percent of Russia’s imported cotton pulp for the past decade — and that the trade has grown since Russia’s full-scale invasion of Ukraine.</p> <p>According to leaked export-import operation data, in the first nine months of 2023, Uzbek firms exported some $8.7 million worth of cotton pulp to Russia — more than 70 percent than they did the entire previous year.</p> <p>Kazakhstan, whose cotton pulp exports go to almost exclusively Russia, also ramped up its shipments in 2022, sending nearly 60 percent more than the previous year, according to the United Nations Comtrade database. Government statistics show a sharp decrease in exports in the first ten months of 2023, but the data could not be independently confirmed.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/cotton-pulp-exporters-infographic-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.png" alt="Infographic of Russia's cotton pulp exporters" data-img="/assets/investigations/cotton-pulp-exporters-infographic.png" id="img-2510" /> <img src="https://www.occrp.org/assets/investigations/cotton-pulp-exporters-infographic.png" class="hidden" id="aside-img-2510" alt="investigations/cotton-pulp-exporters-infographic.png" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Edin Pašović / OCCRP </small> </div> </div> <script> $(document).ready(function() { let rand_2510 = $("#aside-img-2510").prop("naturalWidth"); if(rand_2510<750){$("#img-2510").attr("src","/assets/investigations/cotton-pulp-exporters-infographic.png");} $(window).load(function() {$("#aside-img-2510").remove();}); }); </script> <style> #img-2510 { box-shadow: none; } </style> <p>Most of the private firms responsible for these exports did not respond to requests to comment, though two said their products were used by Russian plants for lacquers and paints, not gunpowder.</p> <p>While reporters could not confirm the final use of the cotton products in Russia or link it directly to the battlefield in Ukraine, public procurement contracts show cotton cellulose imports from both countries have been bought by Russian munitions factories for defense purposes.</p> <p>Those state plants, which specialize in the manufacture of gunpowder, ammunition, and artillery, do not release official data about their output and did not respond to requests for comment. Four of the plants have been sanctioned by the U.S., Switzerland, and Ukraine.</p> <p>Like other traditional Kremlin allies, Kazakhstan and Uzbekistan have attempted to pull off a delicate diplomatic dance since Vladimir Putin launched his full-scale invasion of Ukraine in February 2022.</p> <p>Both countries have taken a neutral stance on the war while continuing to maintain long-standing diplomatic and economic ties with Moscow. But the Central Asian states have also welcomed engagement from Washington and Brussels, who they have promised to help curb sanctions evasion — the practice of re-routing Western goods through third countries before re-exporting them to Russia.</p> <p>Most of Uzbekistan and Kazakhstan’s cotton pulp exports to Russia were sold first to private import companies, which then sold the product to the sanctioned state powder factories. But at least two Uzbek exporters have made direct deals with Russia’s military factories, trade data shows.</p> <p>Those direct sales could raise the risk of secondary sanctions, according to Eric Woods, a specialist in export controls at the James Martin Center for Nonproliferation Studies at the Middlebury Institute of International Studies at Monterey. Russia’s cotton pulp importers could also be targeted, he told OCCRP.</p> <p>“Ukraine’s partner countries are increasingly aggressive in going after non-sanctioned intermediaries,” he said. “If specific intermediaries are supplying to sanctioned entities involved in military production that will be investigated as a violation with secondary sanctions imposed.”</p> <p>While cotton pulp can also be used for other goods, it has been subject to export controls in the European Union since June 2023 because of its potential military uses.</p> <p>When reached for comment, Kazakhstan’s Ministry of Foreign Affairs, which has stressed its commitment to avoiding potential sanctions, said that cotton cellulose shipments to Russian gunpowder plants were not within its “competence” and recommended contacting other ministries.</p> <p>One of those ministries, the Ministry of Trade and Integration, recommended contacting the Ministry of Industry and Construction, which is in charge of identifying which goods require special export licensing. According to a government database, cotton cellulose is not subject to export control in Kazakhstan.</p> <p>Uzbekistan’s Ministry of Foreign Affairs did not respond to requests for comment.</p> <p></div> <!-- .occrp-story --></p> <div class="occrp-full-width"> <div class="image" style="background-image: url('/assets/investigations/cotton-field-uzbekistan.jpg'); min-height: 80vh;"></div> <div class="caption"> <small class="image-credit"><strong>Credit:</strong> Isroil Hamroyev / Alamy Stock Photo </small> Cotton field in Uzbekistan. </div> </div> <div class="occrp-story"> <h2 id="white-gold-of-uzbekistan">White Gold of Uzbekistan</h2> <p>Uzbekistan has long been known for its snow-white cotton — the country was responsible for supplying much of the Soviet Union, and notoriously relied on forced labor in its fields.</p> <p>While that practice has been largely rooted out, Uzbekistan remains a major cotton grower, and was ranked fourth among the world’s exporters of cotton cellulose in 2022, according to the UN Comtrade database.</p> <p>Data obtained by reporters shows that at least seven Uzbek companies sold a total of 4.8 million kilograms of cotton pulp to Russian import companies in the first nine months of 2023.</p> <p>Documents from Russia’s Federal Taxation Service obtained by reporters also confirm that at least three Russian importing companies — Bina Group, KhimTrade, and Lenakhim — sold imported cotton cellulose to Russia’s military plants this year.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/cotton-pulp-share-infographic-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.png" alt="Infographic of the share of cotton pulp bought by Russian import companies" data-img="/assets/investigations/cotton-pulp-share-infographic.png" id="img-7672" /> <img src="https://www.occrp.org/assets/investigations/cotton-pulp-share-infographic.png" class="hidden" id="aside-img-7672" alt="investigations/cotton-pulp-share-infographic.png" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Edin Pašović / OCCRP </small> </div> </div> <script> $(document).ready(function() { let rand_7672 = $("#aside-img-7672").prop("naturalWidth"); if(rand_7672<750){$("#img-7672").attr("src","/assets/investigations/cotton-pulp-share-infographic.png");} $(window).load(function() {$("#aside-img-7672").remove();}); }); </script> <style> #img-7672 { box-shadow: none; } </style> <p>Uzbekistan’s top supplier was Fergana Chemical Plant, one of the country’s largest cotton pulp producers, according to its website. Corporate records show the company’s ultimate owners are two Russian citizens.</p> <p>In addition to selling to Russian importers, the Fergana factory also made direct shipments throughout 2022 and early 2023 to two Russian gunpowder plants — in Kazan and Perm — for over $2.2 million, according to the trade database Import Genius.</p> <p>The other top Uzbek exporter, Raw Materials Cellulose, is a little known company which partners with Russian and other foreign manufacturers of “sodium carboxymethylcellulose, nitrocellulose and gunpowder,” according to its description on an online business platform. Nitrocellulose is the flammable byproduct of cotton pulp used to make propellants.</p> <p>While most of the company’s exports were sold to Russian importers, in 2022 Raw Materials Cellulose also made 14 direct shipments to Russia’s Tambov powder plant for almost half a million dollars, trade data shows.</p> <p>In 2023, the company’s exports to Russia totalled at least $2.6 million, which appears to be a major increase from the year prior according to the available data.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/cotton-pulp-uzbek-infographic-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.png" alt="Infographic of Russia's cotton pulp exporters" data-img="/assets/investigations/cotton-pulp-uzbek-infographic.png" id="img-6280" /> <img src="https://www.occrp.org/assets/investigations/cotton-pulp-uzbek-infographic.png" class="hidden" id="aside-img-6280" alt="investigations/cotton-pulp-uzbek-infographic.png" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Edin Pašović / OCCRP </small> </div> </div> <script> $(document).ready(function() { let rand_6280 = $("#aside-img-6280").prop("naturalWidth"); if(rand_6280<750){$("#img-6280").attr("src","/assets/investigations/cotton-pulp-uzbek-infographic.png");} $(window).load(function() {$("#aside-img-6280").remove();}); }); </script> <style> #img-6280 { box-shadow: none; } </style> <p>The Russian import company Lenakhim confirmed it supplied cotton pulp from the Fergana Chemical Plant and Raw Materials Cellulose to “enterprises with which we have contractual obligations for the supply of cotton pulp,” but said it did not know what the enterprises did with the product. Other importers did not respond to requests for comment.</p> <p>Since the invasion, Russia’s state powder plants have largely stopped releasing public records about their procurement of cotton pulp, making it difficult to track the ultimate destination of the shipments. Under Russian law, public disclosure requirements do not apply to information that could constitute a state secret.</p> <p>Yet some long-term contracts signed before the conflict erupted, or shortly thereafter, show Uzbek cotton cellulose was bought specifically for defense purposes.</p> <p>A public procurement document signed in late 2021, for instance, shows that cotton pulp produced in Fergana was secured by Russia’s powder plant in Perm until the end of 2022 for the production of ballistite, an explosive that can be used for smokeless powder or rocket fuel. The procurement was conducted for “providing defense of the country and safety of the state,” according to the contract.</p> <p>When reached for comment, Fergana Chemical Plant said its cotton cellulose does not meet the requirements for the production of “special powders.”</p> <p>“For the most part, it is used as nitrocellulose, which is intended for the production of nitro varnishes,” read a letter from the company. The letter also denied having any direct contracts with the Russian powder plants.</p> <p>“Cooperation with Russian companies is strictly controlled both by us and by the government and banks of Uzbekistan in order to avoid our products and company being included in the sanctions lists,” the company said.</p> <p>The General Director of Uzbekistan’s other top exporter, Raw Materials Cellulose, did not answer reporters’ questions. Other exporters from Uzbekistan did not respond to requests for comment by the time of publication.</p> </div> <p><!-- .occrp-story --></p> <div class="occrp-full-width"> <div class="image" style="background-image: url('/assets/investigations/cotton-illustration-2.jpg'); min-height: 80vh;"></div> <div class="caption"> <small class="image-credit"><strong>Credit:</strong> Maksym Filipenko </small> </div> </div> <div class="occrp-story"> <h2 id="all-to-russia">All to Russia</h2> <p>The other half of Russia’s cotton pulp imports — 46 percent in 2022, the year of the invasion — came from neighboring Kazakhstan.</p> <p>The country’s cellulose production has been concentrated in the hands of one firm, Khlopkoprom-Cellulosa. That cotton cellulose from this company’s factory has previously been used by Russia to produce gunpowder is no secret — media reports from before the war <a href="https://www.youtube.com/watch?v=i8csvdhBOCE" target="_blank">confirmed this to be the case</a>.</p> <p>Several contracts seen by reporters show that Kazakh cotton pulp has continued to go to Russia’s gunpowder plants since the invasion.</p> <p>One long-term contract signed in March 2020 secured Kazakh cotton pulp for the Kazan powder plant until January 2026. Another, signed in December 2022, ensured shipments for the Aleksin Chemical Plant, which also produces gunpowder, until January 2024.</p> <p>In a phone call with reporters, Ravshan Nurbekov, a representative of Khlopkoprom-Cellulosa, confirmed the company sold pulp to Russian importing companies, but said it was ultimately used for paints and lacquers — not gunpowder.</p> <p>While Russia’s gunpowder factories also produce those paint products, several contracts seen by reporters show they procured Kazakh pulp for defense purposes.</p> <p>A <a href="https://zakupki.gov.ru/epz/contractfz223/card/contract-subject.html?id=15324373" target="_blank">contract from the Aleksin chemical plant</a> that was signed just three days before Russia’s invasion of Ukraine said a 213.9 ton supply of Kazakh cotton cellulose running until the end of 2023 was part of a state defense procurement.</p> <p>A separate contract ordering 300 tons of Kazakh cotton pulp to the plant until May 2023 said that the cellulose may be used for state defense purposes as well.</p> <p>Khlopkoprom-Cellulosa’s representative Nurbekov told reporters the company stopped all production this summer after partners of the importing company they sold to were sanctioned.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/cotton-plant-kazakhstan-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Cotton plant in Kazakhstan" data-img="/assets/investigations/cotton-plant-kazakhstan.jpg" id="img-9506" /> <img src="https://www.occrp.org/assets/investigations/cotton-plant-kazakhstan.jpg" class="hidden" id="aside-img-9506" alt="investigations/cotton-plant-kazakhstan.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Alexey Rezvykh / Alamy Stock Photo </small> Khlopkoprom-Cellulosa’s cotton plant in Kazakhstan. </div> </div> <script> $(document).ready(function() { let rand_9506 = $("#aside-img-9506").prop("naturalWidth"); if(rand_9506<750){$("#img-9506").attr("src","/assets/investigations/cotton-plant-kazakhstan.jpg");} $(window).load(function() {$("#aside-img-9506").remove();}); }); </script> <p>“Due to the fact that we can not supply [them], our factory stopped working,” Nurbekov said, adding that the company is looking for importers in Europe and is not planning to resume shipments to Russia.</p> <p>In October 2023, Kazakh government data shows another shipment of 19 tons of cotton pulp was sent to Russia, though the exporter is not specified.</p> <p>Russia’s heavy reliance on artillery makes its gunpowder needs especially critical. At the start of the invasion, its forces used an estimated 80,000 shells per day, according to Alexander Kovalenko, a military analyst from the non-governmental Ukrainian platform “Information Resistance.”</p> <p>As the war has dragged on for longer than expected, those figures have declined to around 15,000 per day, he said.</p> <p>“All of this shows how serious their deficit is now, how depleted ammunition warehouses are, and how dependent Russia is becoming on any supplies of any ammunition of any caliber … and the necessary elements, including the chemical elements, for their production,” Kovalenko said.</p> <p>While Russia only grows very small quantities of its own cotton, there have been studies and discussion of the possibility of extracting cellulose from domestically grown crops, such as wood or flax. It’s unclear how long the switch in production would take, or what the costs would be.</p> </div>OCCRPhttps://www.occrp.org/Glamorous Cyprus Resort’s Investors Linked to Infamous ‘Magnitsky Affair’2023-12-19T00:00:00+01:002023-12-19T00:00:00+01:00https://www.occrp.org/en/cyprus-confidential/glamorous-cyprus-resorts-investors-linked-to-infamous-magnitsky-affair<p>Not long ago, the sleepy seaside village of Pegeia on Cyprus’s western coast was best known for its banana plantations and olive groves. Its biggest landmarks were the St. George chapel and its namesake fish tavern.</p><p>Not long ago, the sleepy seaside village of Pegeia on Cyprus’s western coast was best known for its banana plantations and olive groves. Its biggest landmarks were the St. George chapel and its namesake fish tavern.</p> <p>Today, that chapel has a glitzier namesake: the Cap St Georges development, which is home to a new luxury hotel and hundreds of expensive beachfront villas — one of which is reportedly owned by pop star Shakira.</p> <p>Advertisements and billboards around Cyprus identify the luxe resort’s developer as Korantina Homes, a company owned by Cypriot businessman George Ioannou.</p> <p>But Cap St Georges’ origins are a little more complex — and murky — than its advertisements suggest. The resort was actually developed by a group of companies that included opaque offshore firms, making it difficult to establish who owned or invested in the project over the years.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/villas-cap-st-georges-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Luxury villas at Cap St Georges" data-img="/assets/cyprus-confidential/villas-cap-st-georges.jpg" /></a> <img src="https://www.occrp.org/assets/cyprus-confidential/villas-cap-st-georges.jpg" class="hidden" id="aside-img-5087" alt="cyprus-confidential/villas-cap-st-georges.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> ZDF </small> The luxury villas at Cap St Georges had early investors linked to a notorious Russian tax fraud. </div> </aside> <script>$(window).load(function() {$("#aside-img-5087").remove();});</script> <p>Using leaked records and corporate filings, OCCRP reporters discovered that key early investments in the project came from two Russians linked to the infamous “Magnitsky Affair” <a href="/en/investigations/2382-the-silent-looting-of-russia">tax fraud</a>. The case was named after whistleblower Sergei Magnitsky, who died in prison after giving evidence about a scam in which $230 million was stolen from the Russian state and siphoned out of the country through a maze of shell companies.</p> <p>Some of the documents come from a leak of files from Cypriot corporate service providers that make up Cyprus Confidential, a global investigative collaboration led by the International Consortium of Investigative Journalists (ICIJ) and Paper Trail Media.</p> <p>The alleged ringleader of a criminal group behind the tax fraud, Dmitry Klyuev, was one of the first buyers of a villa at Cap St Georges and appears to have been a shareholder in an investment company behind the resort. Klyuev was identified by the U.S. government as an “organized crime” figure and sanctioned in 2014 for his alleged role in the criminal conspiracy uncovered by Magnitsky — but he appears to have held on to his villa until 2019 by transferring it to proxy owners.</p> <p>Igor Sagiryan — at the time chairman of a financial firm whose subsidiary allegedly received millions of dollars from companies linked to the proceeds from the tax scam — was a founding shareholder of the offshore holding company that brought investors into the Cap St Georges project. The holding company’s subsidiary owned part of the land the project was built on and sold its villas.</p> <aside class="box-side "> <div class="text"> <p style="padding-top: 0 !important;">In June 2009, Sagiryan left Renaissance Capital and became president of <a href="/en/troikalaundromat/">Troika Dialogue Group</a>.</p> </div> </aside> <p>Reporters also discovered that Sagiryan owned a Panamanian company that received $2 million in 2008 from two British Virgin Islands companies owned by Klyuev, which themselves had received money from companies named by the U.S. Department of Justice in a civil court case as recipients of proceeds of the tax fraud.</p> <p>“What you have here is a window into this murky world of criminal and corrupt capital that has left Russia and been distributed in financial havens around the world,” said Louise Shelley, an expert for the U.S. Southern District of New York’s case against <a href="/en/the-fincen-files/prevezon-holdings-the-black-money-collector">Prevezon Holdings</a>, a Cypriot real estate company that allegedly laundered proceeds of the tax fraud.</p> <p>“Some of this tainted money appears to have been consolidated” in the Cap St Georges real estate development, Shelley added.</p> <p>Tax advisor Magnitsky was jailed after testifying against the perpetrators of the scam. His death in prison prompted a campaign spearheaded by American-British investor Bill Browder, whose companies were targeted by the fraud. The campaign resulted in the so-called “Magnitsky Act,” which included a package of targeted U.S. sanctions against the alleged perpetrators, including Klyuev.</p> <p>Sagiryan has not been sanctioned. A lawyer for Browder’s company alleged, in testimony in a U.S. court case in 2009, that Renaissance Capital — the financial firm where Sagiryan was chairman at the time of the scam — may have had some link “to those who were involved in orchestrating the fraud.”</p> <p>Klyuev did not respond to a request for comment. In an email to OCCRP, Sagiryan confirmed his involvement in the Cap St Georges project, but said he divested in 2015 and made a loss on his investment. He said he was not involved with and did not benefit from the events surrounding the Magnitsky fraud.</p> <p>Ioannou said he had never met or even heard of Klyuev. He said Sagiryan had owned a villa at the resort and had promoted investments into the project, but that neither man “have any financial interests in Cap St Georges.”</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-about-the-cyprus-confidential-project"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-about-the-cyprus-confidential-project">🔗</a>About the ‘Cyprus Confidential’ Project </h3> <div class="subheader"> <p>Cyprus Confidential is a global investigation examining Russian influence in Cyprus, and how local service providers helped oligarchs and billionaires structure their wealth over the years preceding the 2022 full-scale invasion of Ukraine. The project is based on more than 3.6 million documents leaked from six different Cypriot service providers, as well as a Latvian firm.</p> </div> <input type="checkbox" id="occrp-inset-box-control-about-the-cyprus-confidential-project" /> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p>The Cypriot firms are DJC Accountants, ConnectedSky, Cypcodirect, MeritServus, MeritKapital, and Kallias and Associates. Additional records came from a Latvian company, Dataset SIA, which sells Cypriot corporate registry documents through a website called i-Cyprus.</p><p>The MeritServus and MeritKapital records were shared with OCCRP, ICIJ and other media outlets by Distributed Denial of Secrets (DDoS). OCCRP has previously reported on these firms, and the current project builds upon this work. ICIJ also shared the leaked records from Cypcodirect, ConnectedSky, i-Cyprus, and Kallias and Associates that were obtained by Paper Trail Media. In the case of Kallias and Associates, the documents were obtained from DDoS who shared them with Paper Trail Media and ICIJ. OCCRP shared the DJC Accountants leaked records with media partners after previously obtaining them via DDoS.</p> </div> </div> <label for="occrp-inset-box-control-about-the-cyprus-confidential-project"><span>More</span><span>Less</span></label> </div> </div> </div> <h2 id="a-mediterranean-dacha">A ‘Mediterranean Dacha’</h2> <p>An advertorial <a href="https://www.kommersant.ru/doc/1056191" target="_blank">published in the Russian business newspaper</a> Kommersant on November 20, 2008, promoted the Cap St Georges villas as a version of a “Mediterranean dacha,” an allusion to traditional Russian countryside getaways.</p> <p>The ad appeared just four days before Sergei Magnitsky was arrested on tax evasion allegations, following testimony he gave implicating Russian Interior Ministry officials and Klyuev in a complex fraud scheme. Magnitsky alleged Klyuev ran a criminal group that was behind the scam.</p> <p>As part of that scheme, police had raided the Russian offices of Browder’s companies in June 2007, based on false paperwork. The criminal group then seized these companies while laying claim to a fraudulent $230 million tax refund, Magnitsky alleged. The funds were funneled out of the country and laundered through a network of offshore firms.</p> <p>After Magnitsky’s death and the campaign led by Browder, the U.S. opened a civil case against Prevezon Holdings Limited, a Cypriot company, which it accused of laundering part of the fraud’s proceeds through New York real estate. (Prevezon agreed to a <a href="https://www.justice.gov/usao-sdny/pr/acting-manhattan-us-attorney-announces-59-million-settlement-civil-money-laundering-and" target="_blank">$5.9 million settlement</a> in 2017.)</p> <p>Court exhibits presented in the case identified over $9 million of the fraud’s proceeds that were channeled via 13 shell companies to the British Virgin Islands subsidiary of Renaissance Capital, where Sagiryan was president at the time.</p> <p>Another four shell companies identified in the exhibits sent money to two British Virgin Islands firms owned by Klyuev, which in turn sent $2 million to Athina Corporation, a Panamanian company <span class="expand">owned by Sagiryan <span class="expandright"> Sagiryan was the self-declared “underlying beneficial owner” of Athina Corporation, according to an April 2010 document seen by reporters. <i></i> </span> </span> , according to documents seen by reporters.</p> <p>“The source of this money has been identified by the top U.S. court … as being tainted money,” said Shelley, the U.S. government’s expert in the Prevezon case, adding that the proceeds have since been traced to Dubai and Cyprus.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/cap-st-georges-development-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Drone shot of Cap St Georges development" data-img="/assets/cyprus-confidential/cap-st-georges-development.jpg" id="img-6677" /> <img src="https://www.occrp.org/assets/cyprus-confidential/cap-st-georges-development.jpg" class="hidden" id="aside-img-6677" alt="cyprus-confidential/cap-st-georges-development.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> OCCRP </small> Cap St Georges development on the west coast of Cyprus. </div> </div> <script> $(document).ready(function() { let rand_6677 = $("#aside-img-6677").prop("naturalWidth"); if(rand_6677<750){$("#img-6677").attr("src","/assets/cyprus-confidential/cap-st-georges-development.jpg");} $(window).load(function() {$("#aside-img-6677").remove();}); }); </script> <h2 id="founder-shareholder">‘Founder Shareholder’</h2> <p>In March 2007, around three months before the police raids of Browder’s firms, a company called Alpha Arch Investments Limited was incorporated in the British Virgin Islands, apparently to manage investments into the eventual development of Cap St Georges.</p> <p>A letter from a representative of Alpha Arch to potential investors in the Cap St Georges project from June of that year described Sagiryan as one of three “founder shareholders” who held “class A” shares in the firm, and had responsibility for overseeing company business plans and investments.</p> <p>Outside investors into the project would receive class B shares, entitling them to dividends, but not to any influence over the company.</p> <p>Cypriot company Melkov Limited bought one of the first villas for 3.3 million euros in October 2009. Reporters could not find documentation of Melkov’s ownership for that month, but Klyuev is named as the company’s controlling shareholder in a December 2009 management agreement with a Cypriot fiduciary services firm. Melkov purchased the villa “A1” from Silfona Developments, a Cypriot company ultimately owned by Alpha Arch.</p> <p>The investment may have earned Klyuev shares in the firms behind the development, according to a leaked 2018 French law enforcement report.</p> <p>The resort was to be built on land owned by a Cypriot subsidiary of Alpha Arch called Silfona Limited — whose “beneficial owner,” the French report claimed, was Klyuev. A well-placed source who had seen company records told OCCRP that Klyuev had a minority stake in Silfona.</p> <p>Reporters could not independently corroborate the French document’s information about Klyuev and Silfona, or the source’s account.</p> <p>But Silfona’s 2011 company financials do list Klyuev’s Melkov as a “related party,” indicating Melkov’s owner may have had “the ability to control … or exercise significant influence” over Silfona’s ultimate parent company, according to the Silfona financials.</p> <p>Sagiryan told OCCRP that he was “one of the investors” in Cap St Georges but did not run the project or have control over Alpha Arch Investments. He said he was involved in the development until 2015, but “made a huge personal loss” on Cap St Georges, and that to his knowledge Klyuev was not an investor in the project.</p> <p>Klyuev did not respond to emailed requests for comment.</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-silfona-s-accounts"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-silfona-s-accounts">🔗</a>Silfona’s Accounts </h3> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p><strong>By 2011, Silfona was reporting that the value of its property under development was over 54 million euros. That had allowed the company to secure 35 million euros in loans from a Cypriot bank.</strong></p><p>But in its 2012 financial statements, the company said it had changed its valuation methods, suddenly reducing the value of its property under development to 14.4 million euros.</p><p>This reduction was “probably done to bring the amount of the loans to the true market value of the collateral assets, thus helping the company to remain solvent in order to meet its obligations,” Kyriacos Iordanou, the director of the Institute of Certified Public Accountants of Cyprus, which supervises the accounting profession, told OCCRP.</p><p>He said that the “image presented by the financial statements of the company raises several concerns,” including that its real estate portfolio had been overvalued.</p><p>Silfona’s director did not respond to questions about the company’s financial statements.</p> </div> </div> </div> </div> </div> <h2 id="enablers-inc">Enablers Inc.</h2> <p>By June 2012, interest in the Magnitsky Affair had turned into concrete policy in the U.S., where the Senate Foreign Relations Committee unanimously passed the Sergei Magnitsky Rule of Law Accountability Act. The following month, Klyuev exited Melkov’s parent company, Belize-registered Alpine Management Limited, according to a leaked letter from Klyuev to a corporate services firm.</p> <p>By February 2014, Klyuev’s shares in Alpine had been transferred to Sergey Smorodin, a former regional minister in Russia, other leaked corporate records show.</p> <p>Klyuev first transferred the shares to Larisa Bolkhovitina — a low-profile Russian businesswoman — before they moved via the Cypriot service provider ConnectedSky Legal & Corporate Consultants Limited to Smorodin.</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-the-proxies"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-the-proxies">🔗</a>The Proxies </h3> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p><strong>Records obtained by OCCRP suggest both Bolkhovitina and Smorodin acted as proxies for Klyuev in multiple cases:</strong></p><p><ul><li>Two other Klyuev companies, one in Belize and one in the British Virgin Islands, were transferred to Bolkhovitina and then to Smorodin, via ConnectedSky as nominee shareholders, according to leaked documents.</li><li>A banking alert, known as a “suspicious activity report,” filed by the Cypriot branch of Greece’s Eurobank, confirmed that Alpine, Melkov, and the Belize company were all owned by Klyuev but moved to Bolkhovitina by 2013.</li><li>Two Klyuev companies in the British Virgin Islands, which received funds from companies that handled proceeds of the tax fraud, were also transferred to Smorodin by August 2011, according to a leaked email.</li></ul></p> </div> </div> </div> </div> </div> <p>On paper, Smorodin remained the owner of Melkov until the villa was sold to Ioannou’s company Celicandia Limited for 3.8 million euros in 2019, according to the sales contract. But James Henry, an economist and lawyer who is an expert on illicit financial flows, said there were indications that Klyuev had remained the real owner of Melkov — and the Cypriot villa — the entire time.</p> <p>“There are many indications of a sham transfer to proxy cutouts, allowing the real owner to maintain control,” Henry said after reviewing the transfers. “In this situation a proper investigation by tax or [anti-money laundering] authorities is called for.”</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/bvi-firms-funds-documents-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Documents showing two BVI firms that received funds" data-img="/assets/cyprus-confidential/bvi-firms-funds-documents.jpg" id="img-9081" /> <img src="https://www.occrp.org/assets/cyprus-confidential/bvi-firms-funds-documents.jpg" class="hidden" id="aside-img-9081" alt="cyprus-confidential/bvi-firms-funds-documents.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> <a href="https://www.icij.org/investigations/cyprus-confidential/">Cyprus Confidential</a> </small> Two BVI firms that received funds from companies that handled proceeds of the tax fraud uncovered by Magnitsky had were transferred to Klyuev’s proxy, Sergey Smorodin. </div> </div> <script> $(document).ready(function() { let rand_9081 = $("#aside-img-9081").prop("naturalWidth"); if(rand_9081<750){$("#img-9081").attr("src","/assets/cyprus-confidential/bvi-firms-funds-documents.jpg");} $(window).load(function() {$("#aside-img-9081").remove();}); }); </script> <p>The service provider ConnectedSky administered multiple Klyuev companies, while also counting among its clients other suspects in the Magnitsky tax fraud, including Andrey Pavlov and Artem Zuev, according to leaked documents from Cyprus Confidential.</p> <p>When Cypriot law enforcement requested information from ConnectedSky for a criminal investigation of Klyuev and Pavlov in September 2018, the company responded with a letter, obtained by reporters, in which it confirmed that Pavlov was a client between 2012 and 2014, but claimed to have had no relationship with Klyuev at that time.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/document-klyuev-2013-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="A 2013 letter signed by Klyuev" data-img="/assets/cyprus-confidential/document-klyuev-2013.jpg" /></a> <img src="https://www.occrp.org/assets/cyprus-confidential/document-klyuev-2013.jpg" class="hidden" id="aside-img-7201" alt="cyprus-confidential/document-klyuev-2013.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> <a href="https://www.icij.org/investigations/cyprus-confidential/">Cyprus Confidential</a> </small> 2013 letter signed by Klyuev, authorizing ConnectedSky Legal & Corporate Consultants Limited and C. Samir & Co. LLC to act on behalf of his companies. </div> </aside> <script>$(window).load(function() {$("#aside-img-7201").remove();});</script> <p>But through the Cyprus Confidential leak reporters have obtained hundreds of documents covering dozens of companies directly or indirectly owned by Klyuev and his associates that were administered by ConnectedSky. Among the documents is a 2015 letter signed by the head of the firm, Charlambos Samir, identifying Klyuev as a client.</p> <p>The documents show that ConnectedSky and Samir personally served as directors and nominee shareholders of multiple Klyuev-linked companies, including Melkov and its Belize-registered parent company Alpine Management Limited, as recently as 2020.</p> <p>Bolkhovitina, and Smorodin could not be reached for comment, and Klyuev did not respond to emailed questions. ConnectedSky declined to answer questions, but the company said that it and its “associated companies are duly regulated companies, which always abide respective laws.” It said it did not represent Bolkhovitina and Smorodin.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/cap-st-georges-development-2-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Drone shot of Cap St Georges development" data-img="/assets/cyprus-confidential/cap-st-georges-development-2.jpg" id="img-2729" /> <img src="https://www.occrp.org/assets/cyprus-confidential/cap-st-georges-development-2.jpg" class="hidden" id="aside-img-2729" alt="cyprus-confidential/cap-st-georges-development-2.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> OCCRP </small> The Cap St Georges development was advertised as a plan for 50 houses near protected areas of the Akamas peninsula. Today it includes a hotel and 200 private villas, and is being expanded. </div> </div> <script> $(document).ready(function() { let rand_2729 = $("#aside-img-2729").prop("naturalWidth"); if(rand_2729<750){$("#img-2729").attr("src","/assets/cyprus-confidential/cap-st-georges-development-2.jpg");} $(window).load(function() {$("#aside-img-2729").remove();}); }); </script> <h2 id="regulation-violations">Regulation Violations</h2> <p>In December 2015, Alpha Arch’s subsidiaries sold the Cap St Georges real estate for 16 million euros to companies owned by Cypriot businessman Ioannou.</p> <p>Since then, the resort has grown into a sprawling development of 200 private villas with swimming pools, a hotel with 202 rooms, and accompanying sewage treatment plants.</p> <p>The development has also continued to generate controversy. Before the resort was built, Pegeira’s coastal caves housed the endangered Mediterranean monk seal, and nature lovers traveled here to walk on fields of poppies and anemones flowers.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/silfona-korantina-celicandia-docu-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="An agreement with the town planning authority to sell public land" data-img="/assets/cyprus-confidential/silfona-korantina-celicandia-docu.jpg" /></a> <img src="https://www.occrp.org/assets/cyprus-confidential/silfona-korantina-celicandia-docu.jpg" class="hidden" id="aside-img-2724" alt="cyprus-confidential/silfona-korantina-celicandia-docu.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> OCCRP </small> An agreement with the town planning authority to sell public land to a group of companies behind the development. Ioannou signed on behalf of all the companies. </div> </aside> <script>$(window).load(function() {$("#aside-img-2724").remove();});</script> <p>A 2019 “warning letter” from the European Commission to the Cypriot government accused Cyprus of failing to carry out an “appropriate assessment” of several projects that risked damaging sensitive environments — including Cap St Georges.</p> <p>Ioannou told OCCRP that when developing that area, “we were very cautious in abiding to all enforced regulations including environmental restrictions so that the development will not interfere or harm the natural beauty of the area.” He said that his company, Korantina, and all the companies under it, “always follow all the laws and regulations and we operate with full respect towards all our clients and associates.”</p> <p>From 2016 to 2022, Ioannou’s companies made at least 170,000 euros in political donations, including every party continuously in parliament in the past decade except the development’s fiercest critics — the Green Party. Theano Kalavana, chairwoman of OPEK, a Cypriot think tank focused on political and social problems, told OCCRP the donations were generous by the standards of Cypriot political giving.</p> <p>Ioannou said that all his political donations had been “below the maximum extent of contribution allowed by law” and that each donation was “transparent and is public data.”</p> <p>Alexandra Attalidou, a lawmaker elected in 2021 on the Green ballot before switching to another party this month, told OCCRP there should be an investigation into whether any donations had secured political favors for the companies and the Cap St Georges development.</p> <p>“Clearly this case should be looked into, as to what extent there is a correlation between these donations and the tolerance the state showed to such a blatant violation,” she said.</p>OCCRPhttps://www.occrp.org/How a $51-million State-Built Beauty Clinic in Turkmenistan Ended Up in the Hands of the President’s Family at a Massive Discount2023-12-18T00:00:00+01:002023-12-18T00:00:00+01:00https://www.occrp.org/en/investigations/how-a-51-million-state-built-beauty-clinic-in-turkmenistan-ended-up-in-the-hands-of-the-presidents-family-at-a-massive-discount<p>At the southern end of Turkmenistan’s capital Ashgabat stands the city’s brand new $51 million Aesthetics Center.</p><p>At the southern end of Turkmenistan’s capital Ashgabat stands the city’s brand new $51 million Aesthetics Center.</p> <p>Towering over the surrounding streets, the building’s top section resembles a giant glass hand mirror. For the center’s grand opening, a portrait was installed of the man who ordered it to be built: then-president and current “National Leader” Gurbanguly Berdimuhamedov.</p> <p>Though Berdimuhamedov was succeeded by his son Serdar last year, his influence is still felt across the country. The Aesthetics Center, paid for with government funds, officially opened in October 2020, with Berdimuhamedov himself in attendance.</p> <p>The new facility was equipped with “innovative technologies from the leading companies of the world,” and offered a range of cosmetic services, from weight loss courses to hairstyling, as well as training courses, according to state media. Photographs online show lavish interiors, with floors and columns apparently fashioned from marble, illuminated by intricate lighting fixtures.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/turkmen-beauty-1-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/investigations/turkmen-beauty-1.jpg" id="img-5636" /> <img src="https://www.occrp.org/assets/investigations/turkmen-beauty-1.jpg" class="hidden" id="aside-img-5636" alt="investigations/turkmen-beauty-1.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> EC Lighting Design Studio (Facebook) </small> Screenshot of an interior image of the Aesthetics Center in Ashgabat. </div> </div> <script> $(document).ready(function() { let rand_5636 = $("#aside-img-5636").prop("naturalWidth"); if(rand_5636<750){$("#img-5636").attr("src","/assets/investigations/turkmen-beauty-1.jpg");} $(window).load(function() {$("#aside-img-5636").remove();}); }); </script> <p>Unknown to the public, however, the president had signed another decree allowing the new center to be privatized without a competitive tender just two days before the grand opening.</p> <p>For the first time, an investigation by OCCRP and local partners Turkmen.News and Gundogar reveals not only that the center was privatized, but that the sale appears to have benefited the president’s own family.</p> <p>The center’s buyer was a company called the <span class="expand">Ashgabat International Aesthetic Treatment Center <span class="expandright"> Aşgabat halkara estetiki bejeriş merkezi ÝGPJ <i></i> </span> </span> (AIATC), whose shareholders include companies that reporters have in previous investigations identified as fronts for the president’s relatives, and whose manager has traveled with the president and worked with one of his sisters.</p> <p>Despite costing $51 million to build, the president set the center’s sale price at 155,750,000 Turkmen manats, worth about $44.5 million at the official exchange rate. It was therefore sold at a loss to the state of $6.5 million. AIATC was given ten years to pay for the center.</p> <p>The real discount reaped by the new owners may be much higher, thanks to Turkmenistan’s widely used unofficial exchange rate, which was <a href="https://www.hronikatm.com/2020/10/exchange-rate-35/">23.6 manats per dollar</a> at the time of the decree. At that rate, the center would have cost just $6.6 million — nearly 90 percent less than its building cost.</p> <p>The official exchange rate of 3.5 manats per dollar <a href="https://www.rferl.org/a/turkmen-manat-fall/31076670.html">was established</a> by the Central Bank of Turkmenistan in 2015 and has remained unchanged since then. AIATC and Turkmenistan’s Foreign Ministry did not respond to requests for comment.</p> <p>“This is kleptocracy pure and simple,” said Tom Mayne, the director of Freedom for Eurasia, a Vienna-based NGO that works on corruption and human rights issues, after reviewing a summary of the findings.</p> <p>“Turkmenistan does not have a system of privatization that resembles anything that occurs in a place of rule of law, where rival companies bid for a contract or asset in a competitive selection process,” he said.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/stefan-hammes2-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="" data-img="/assets/investigations/stefan-hammes2.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/stefan-hammes2.jpg" class="hidden" id="aside-img-2147" alt="investigations/stefan-hammes2.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Watan Habarlary (Turkmen state TV) </small> A group of foreign specialists attended the clinic’s opening. Contacted by OCCRP, Stefan Hammes from Germany (right) told reporters he was “one of the main consultants for the center,” but declined to comment further. </div> </aside> <script>$(window).load(function() {$("#aside-img-2147").remove();});</script> <p>Previous OCCRP investigations have revealed how members of the ruling family have benefited from <a href="https://www.occrp.org/en/the-pandora-papers/state-petrochemical-plants-in-turkmenistan-channel-exports-through-obscure-uk-companies-with-ties-to-presidents-nephews">petrochemicals exports</a>, state contracts to <a href="https://www.occrp.org/en/investigations/as-turkmenistans-people-go-hungry-presidents-nephew-profits-off-food-imports">import food</a>, and from the <a href="https://www.occrp.org/en/investigations/one-familys-golden-age-presidents-relative-controls-turkmenistans-only-mobile-operator">privatization of the state cell phone operator</a>.</p> <p>The services offered by the Aesthetics Center appear to be at odds with an informal campaign waged periodically by officials against heavy make-up, plastic surgery, and any clothing that fails to meet authorities’ conception of traditional national dress. Since 2018, women who have failed to comply with these standards have often been harassed or even fired.</p> <p>At a UN committee session in August, Turkmenistan’s then-Deputy Foreign Minister Vepa Hajiyev <a href="https://media.un.org/en/asset/k1v/k1vfsmtj7n">denied</a> that the campaign constituted an assault on women’s rights. As proof that women were free to maintain their own appearances, he cited the members of his own delegation as examples of “beautifully groomed” Turkmen women.</p> <p>The following week, Radio Free Europe/Radio Liberty’s Turkmen outlet Azatlyk reported that police in the city of Turkmenbashi <a href="https://rus.azathabar.com/a/v-turkmenistane-snova-okazyvayut-davlenie-na-zhenschin-i-zakryvayut-salony-krasoty/32568240.html">were detaining</a> and interrogating women for wearing false eyelashes, false nails, and skirts that were deemed too short or tight.</p> <h2 id="the-new-owners">The New Owners</h2> <p>According to a leaked membership database of the Union of Industrialists and Entrepreneurs of Turkmenistan (UIET) from February, AIATC is owned by a group of seven other legal entities registered in the country.</p> <p>A review of corporate records showed that two of the Turkmen entities that own AIATC have connections to the ruling family.</p> <p>The first is <span class="expand">Ak Rovach <span class="expandright"> Ak rowaç HK <i></i> </span> </span> , which is registered as a “trade” company in the UIET database. In 2021, a manager at Ak Rovach told reporters the company was the Turkmen representative of Delanore Limited, an oil and chemicals exporter owned by former President Berdimuhamedov’s nephew, Shamyrat Rejepov. Shamyrat is also married to his own first cousin, the daughter of Berdimuhamedov’s sister Gulnabat Dovletova. Rejepov did not respond to requests for comment.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/turkmen-beauty-yacht-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="" data-img="/assets/investigations/turkmen-beauty-yacht.jpg" /></a> <img src="https://www.occrp.org/assets/investigations/turkmen-beauty-yacht.jpg" class="hidden" id="aside-img-8457" alt="investigations/turkmen-beauty-yacht.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Ibabekir Bekdurdyev/Instagram </small> Shamyrat Rejepov (foreground). </div> </aside> <script>$(window).load(function() {$("#aside-img-8457").remove();});</script> <p>The UIET database shows that, at least as recently as February, Ak Rovach was run by a man named Amanguly Ataniyazov. Using an app which shows how a phone number is labeled in other people’s contact lists, reporters found that Ataniyazov is often listed as Shamyrat Rejepov’s employee.</p> <p>The second company is Nurana Bedew HK, run by Rustam Berkdurdiyev. His brother Ibabekir is married to another of Dovletova’s daughters. Berkdurdiyev did not respond to requests for comment.</p> <p>Nurana Bedew, which was founded in 2013, has been involved in a range of industries, including importing retail pharmaceuticals, exporting materials used for asphalt to neighboring Uzbekistan, and reportedly owning an Akhal-Teke breed racing horse.</p> <p>The remaining shareholders include a construction company and an Ashgabat law firm, and do not appear to be connected to the president — or, for the most part, to aesthetic medicine. Just one company, <span class="expand">Convenience, Durability and Beauty <span class="expandright"> Amatlylyk, berklik we gözellik HJ <i></i> </span> </span> , appeared from its name to have a connection to the industry — but, according to the UIET database its name was changed to Sadak HJ last year.</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-how-reporters-obtained-turkmenistan-company-data"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-how-reporters-obtained-turkmenistan-company-data">🔗</a>How Reporters Obtained Turkmenistan Company Data </h3> <div class="subheader"> <p>Turkmenistan does not make its commercial registry publicly available. All of the shareholder information in this investigation comes from a leaked database of members of the Union of Industrialists and Entrepreneurs of Turkmenistan (UIET).</p> </div> <input type="checkbox" id="occrp-inset-box-control-how-reporters-obtained-turkmenistan-company-data" /> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p>The UIET, which claims to promote the interests of small and medium-sized local businesses, is actually tightly controlled by the state. According to two members who spoke on condition of anonymity, membership in the union is informally required for the right to engage in foreign trade or to apply for government tenders.</p><p>“Without membership [in the union], there’s nothing,” one Turkmen businessman told OCCRP. “Like back in the Soviet times — there was no career advancement without membership in the party.”</p><p>Founded in 2008, the Union’s website states that its members come from nearly every sector of the economy — from agriculture and producing construction materials to advertising and shoe manufacturing. The Union itself runs its own business school and a newspaper while maintaining trade missions in China, Austria, and the UAE.</p> </div> </div> <label for="occrp-inset-box-control-how-reporters-obtained-turkmenistan-company-data"><span>More</span><span>Less</span></label> </div> </div> </div> <h2 id="the-clinics-director">The Clinic’s Director</h2> <p>While AIATC bought the center, the clinic is actually operated by a different locally registered company called <span class="expand">Beauty Aesthetic Center <span class="expandright"> Gözellik estetiki merkezi HK <i></i> </span> </span> , directed by a doctor named Gulya Annanepesova.</p> <p>Although the director of AIATC is not named in the UIET database, it does show the director’s date of birth, passport information, and address, and a telephone number. Apart from the phone number, all of this biographical information matches Annanepesova’s — suggesting that she runs both companies.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/turkmen-beauty-2-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/investigations/turkmen-beauty-2.jpg" id="img-2417" /> <img src="https://www.occrp.org/assets/investigations/turkmen-beauty-2.jpg" class="hidden" id="aside-img-2417" alt="investigations/turkmen-beauty-2.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> EC Lighting Design Studio (Facebook) </small> Screenshot of an image from the Aesthetics Center in Ashgabat. </div> </div> <script> $(document).ready(function() { let rand_2417 = $("#aside-img-2417").prop("naturalWidth"); if(rand_2417<750){$("#img-2417").attr("src","/assets/investigations/turkmen-beauty-2.jpg");} $(window).load(function() {$("#aside-img-2417").remove();}); }); </script> <p>Little is known about Annanepesova, but she accompanied then-President Berdimuhamedov on at least two state visits — to Qatar in March 2017 and Italy in November 2019. In lists of the full delegations, Annanepesova is listed as a cosmetologist or a doctor. Annanepesova did not respond to requests for comment.</p> <p>The National Leader has decorated Annanepesova at least twice. In October 2016, she was <a href="https://www.parahat.info/edict/parahat-info-law-916">awarded</a> a medal during the 25th anniversary of Turkmenistan’s independence. At the time, Annanepesova was employed as a doctor at a state-run hospital, the International Center for Internal Medicine, where her co-workers included a nurse who is Berdimuhamedov’s second youngest sister.</p> <p>About a year after the Aesthetics Center opened, Berdimuhamedov again honored Annanepesova, this time with a commemorative badge for her services in the development of Turkmenistan’s healthcare industry. In the list of recipients, she was identified as the director of Beauty Aesthetic Center.</p> <p>A source who knows the family personally said that Annanepesova is married to a man who has played a key role in Turkmenistan’s draconian internet censorship apparatus: Maksat Geldiyev. The source said that Geldiyev worked at the Ministry of National Security’s “Department 8,” which reportedly handles cyber censorship. A second, independent source corroborated the claim.</p> <p>Reporters attempting to verify the claim found that a phone number registered to Maksat Geldiyev in 2015 was registered in a 2020 database to another person whose surname and patronymic suggested he was Geldiyev’s son. Reporters found that this person shared a home address with Gulya Annanepesova.</p> <p>Geldiyev did not respond to requests for comment.</p>OCCRPhttps://www.occrp.org/Central American Development Bank’s Role in Guatemala’s Odebrecht Scandal2023-12-15T00:00:00+01:002023-12-15T00:00:00+01:00https://www.occrp.org/en/the-dictators-bank/cabeis-role-in-guatemalas-odebrecht-scandal<p>The Odebrecht corruption case has been a fixture of headlines for years in Guatemala, where the scandal-plagued Brazilian construction company was forced to repay over $17 million to the government after admitting that it bribed officials to gain a lucrative contract to renovate a major highway.</p><p>The Odebrecht corruption case has been a fixture of headlines for years in Guatemala, where the scandal-plagued Brazilian construction company was forced to repay over $17 million to the government after admitting that it bribed officials to gain a lucrative contract to renovate a major highway.</p> <p>But another player in the case has largely escaped public scrutiny: the highway’s major financier, the Central American Bank for Economic Integration, or CABEI.</p> <p>The bank provided the key loan to Odebrecht that allowed the project to move forward, agreeing in 2011 to lend almost $120 million to finance the longest section of Central American Highway 2, which would link El Salvador to Mexico.</p> <p>Along the way, it overrode its own procurement rules to insert a clause in its loan agreement mandating that Odebrecht must receive the contract to build the highway, without the normal bidding process. Later, Odebrecht paid out millions in bribes directly from the money CABEI disbursed, according to an investigation by a UN-backed anti-corruption commission.</p> <p>“Much of the corrupt diversion of funds from [CABEI’s] loans continues to be unaddressed due to the opaque and secretive policies that the bank applies to civil society groups and justice institutions that seek to know their final destination,” said Manfredo Marroquín, the president of Transparency International’s Guatemalan chapter, Acción Ciudadana</p> <p>The Guatemalan minister accused of personally receiving the largest chunk of the bribe money, Alejandro Jorge Sinibaldi Aparicio, turned himself in in 2020 after four years on the run. He then made an explosive statement to prosecutors that also accused a CABEI official of conspiring with Odebrecht to make sure the highway contract would be favorable to the company.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/the-dictators-bank/credit-oliver-de-ros-2-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/the-dictators-bank/credit-oliver-de-ros-2.jpg" id="img-7011" /> <img src="https://www.occrp.org/assets/the-dictators-bank/credit-oliver-de-ros-2.jpg" class="hidden" id="aside-img-7011" alt="the-dictators-bank/credit-oliver-de-ros-2.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Oliver de Ros/No Ficción </small> Former Guatemalan minister Alejandro Sinibaldi is escorted by police and members of Interpol after turning himself in to face corruption charges in August 2020. </div> </div> <script> $(document).ready(function() { let rand_7011 = $("#aside-img-7011").prop("naturalWidth"); if(rand_7011<750){$("#img-7011").attr("src","/assets/the-dictators-bank/credit-oliver-de-ros-2.jpg");} $(window).load(function() {$("#aside-img-7011").remove();}); }); </script> <p>While Sinibaldi’s testimony was widely reported, his comments on CABEI were not.</p> <p>But OCCRP and its Guatemalan partner, No Ficcion, can reveal that Sinibaldi described working with Odebrecht’s chief of operations to lobby CABEI, and traveling with him to Honduras to meet with top bank officials.</p> <p>The former minister said that CABEI was “fundamental” to the bribery scheme, and accused Odebrecht of paying a senior figure within the bank $500,000 “for his services” in getting the final steps of the loan approved. (Reporters were unable to find documentary evidence that such a bribe had been paid or offered.)</p> <p>Juan Francisco Sandoval, the former head of Guatemala’s Special Prosecutor’s Office Against Impunity (known by the Spanish acronym FECI), told reporters his office had started investigating the allegations of bribery within CABEI after Sinibaldi gave his testimony. But the probe was upended when Sandoval was fired in 2021 and forced into exile amid a crackdown on anti-corruption officials.</p> <p>FECI did not respond to questions about the status of the investigation.</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-guatemala-s-long-road-to-justice"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-guatemala-s-long-road-to-justice">🔗</a>Guatemala’s Long Road to Justice </h3> <div class="subheader"> <p>Since October, thousands of Guatemalans have taken to the streets in protest against the Public Prosecutor’s Office’s interference in democracy and to demand the Attorney General’s resignation.</p> </div> <input type="checkbox" id="occrp-inset-box-control-guatemala-s-long-road-to-justice" /> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p>While anti-corruption campaigner Bernado Arévalo won the presidential elections in a landslide victory this August, prosecutors have opened an investigation into his party and an electoral tribunal suspended it — moves widely seen as an attempt to prevent him from taking office in 2024.</p><p>The political crisis is the culmination of years of efforts to erode Guatemala’s justice system after a string of successes in the fight against impunity for corruption and genocide amongst the country’s highest halls of power.</p><p>Dozens of prosecutors and judges have been forced to flee spurious arrest warrants or threats against them, including those who pursued the Odebrecht case, which both Guatemalan public prosecutors and investigators from the International Commission Against Impunity in Guatemala (CICIG) began at the end of 2016 after receiving information from their Brazilian counterparts.</p><p>The CICIG had been created by the United Nations almost a decade earlier at the request of the Guatemalan government to help it combat illegal groups and clandestine “security” structures that remained active after the 1996 Peace Accords.</p><p>Although investigators initially made strides in bringing charges to those involved in Odebrecht’s bribery scheme, progress stalled when Guatemala’s then-president, Jimmy Morales, abruptly shut down the CICIG in 2019 as it was investigating him and his family for corruption and illicit campaign financing.</p><p>Since then, the Odebrecht case has been spearheaded by the Prosecutor’s Office Against Impunity (FECI). But FECI, too, has been undermined by a sustained effort to hamper the country’s fight against corruption.</p><p>“As I see it, everything that’s happening is actually revenge,” former FECI prosecutor Siomara Sosa, who led the Odebrecht case from the beginning, told OCCRP. “With those imprisonments, they began to analyze the situation to see how to take control of those cases.”</p><p>Sosa, who now has refugee status in Mexico, faces three criminal trials in Guatemala for her work, including for abuse of power in the Odebrecht case.</p><p>The Public Prosecutor’s Office did not respond to requests for comment.</p> </div> </div> <label for="occrp-inset-box-control-guatemala-s-long-road-to-justice"><span>More</span><span>Less</span></label> </div> </div> </div> <p>Sinibaldi — who was blacklisted for “significant corruption” by the United States while a fugitive — is currently awaiting trial in Guatemala related to this and several other alleged corruption schemes. He has since claimed he never made a statement to prosecutors at all, telling OCCRP that his testimony had been fabricated in order to generate conflict between him and “important political actors, public officials, and congressmen of Guatemala.”</p> <p>However, the current administration of FECI confirmed to reporters that, despite Sinibaldi’s claim, he did indeed give the testimony obtained by No Ficción. Three sources close to the Odebrecht case also confirmed that the former minister gave the testimony.</p> <p>The allegations against Odebrecht in Guatemala are part of one of the largest corruption scandals in Latin American history. After building some of the region’s biggest infrastructure projects, from capital city metro lines to World Cup stadiums, Odebrecht became the focus of Brazil’s Operation Car Wash corruption probe, and its dedicated bribery department became emblematic of its excesses.</p> <p>In 2016, the U.S. announced the company would pay $2.6 billion in penalties for orchestrating bribery schemes to obtain government contracts in a dozen countries. Everyone from presidents to lawyers has been imprisoned for colluding with Odebrecht, while the company’s chief executive was jailed for 19 years for bribery, money laundering, and organized crime.</p> <p>CABEI did not respond to requests for comment.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/the-dictators-bank/odebrecht-sign-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/the-dictators-bank/odebrecht-sign.jpg" id="img-7322" /> <img src="https://www.occrp.org/assets/the-dictators-bank/odebrecht-sign.jpg" class="hidden" id="aside-img-7322" alt="the-dictators-bank/odebrecht-sign.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> jbdodane/Alamy Stock Photo </small> Brazilian infrastructure giant Odebrecht was at the center of one of the largest corruption scandals in Latin American history. </div> </div> <script> $(document).ready(function() { let rand_7322 = $("#aside-img-7322").prop("naturalWidth"); if(rand_7322<750){$("#img-7322").attr("src","/assets/the-dictators-bank/odebrecht-sign.jpg");} $(window).load(function() {$("#aside-img-7322").remove();}); }); </script> <h2 id="a-historic-exception">A ‘Historic’ Exception</h2> <p>CABEI agreed to lend $119.4 million to co-finance the highway’s longest section — the CA-2 Occidente, or CA-West — in August 2011.</p> <p>However, its resolution on the funding contained an unusual clause: an exception to the bank’s own procurement policies that allowed it to name Odebrecht as the contractor for the highway right away, rather than putting the project up for public bidding.</p> <div class="occrp-inset-box quotebox" id="quote"> <div class="inner occrp-container-inner"> <div class="quote-text"><div class="quote-line"></div><div>“... as an exception to the Policy for the Obtaining of Goods and Related Services and Consulting Services with CABEI Resources and its application regulations, the project to be financed will be executed by the company Constructora Norberto Odebrecht, Sociedad Anónima.”</div></div> </div> </div> <p>In other words, CABEI would only fund the project if the contract was awarded to Odebrecht — even though this was against both the bank’s normal policies and Guatemalan law. In the resolution, this is explained as necessary so that the project can be co-financed by the Brazilian development bank BNDES. Neither CABEI nor BNDES responded to questions on the clause.</p> <p>Marroquín, of Acción Ciudadana, said the clause was a significant irregularity for such a large development bank.</p> <p>Preemptively awarding the contract to one company is “obviously a practice far removed from any principle of integrity and competence,” he said.</p> <p>After CABEI had agreed to the loan, the contract still had to be approved by Guatemala’s Congress. In his testimony, Sinibaldi described that task as “titanic,” since it was illegal in Guatemala to hand such a major public work to a company without a tender.</p> <p>He described working behind the scenes along with other government officials to push through decrees and memoranda that could circumvent the need for a bidding process. On October 11, 2012, Guatemala’s Congress approved a government decree to designate the highway a matter of national urgency, meaning the loans would be signed off in a single vote the same day.</p> <p>The decree flouted the public bidding process and reduced oversight of the project to a minimum. In his testimony, Sinibaldi called the congressional approval “historic.”</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/the-dictators-bank/roadmap-b-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/the-dictators-bank/roadmap-b.jpg" id="img-8641" /> <img src="https://www.occrp.org/assets/the-dictators-bank/roadmap-b.jpg" class="hidden" id="aside-img-8641" alt="the-dictators-bank/roadmap-b.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Edin Pasovic/OCCRP </small> </div> </div> <script> $(document).ready(function() { let rand_8641 = $("#aside-img-8641").prop("naturalWidth"); if(rand_8641<750){$("#img-8641").attr("src","/assets/the-dictators-bank/roadmap-b.jpg");} $(window).load(function() {$("#aside-img-8641").remove();}); }); </script> <p>In parallel to the Guatemalan approval, CABEI’s loan contract went through multiple stages of negotiation, and was changed both before and after it was signed in November 2012.</p> <p>Sinibaldi told prosecutors that he and Marcos Machado, Odebrecht’s chief of operations at the time, had already been meeting about the highway project that year. When Oscar Pineda Robles was appointed as the country’s new director for CABEI in September 2012 they identified him as a person who could help as they worked to ensure the contract was drawn up according to plan. A lawyer by trade, Pineda was well-connected, having previously served as Guatemala’s minister of economy, vice minister of finance, and president of the central bank.</p> <p>In the testimony that Sinibaldi told reporters was fake — but which Guatemala’s Special Prosecutor’s Office Against Impunity confirmed he gave — he said that he visited Pineda at his home in 2012 to discuss the highway.</p> <p>“I explained to Oscar [Pineda] the importance of counting on his support and, when the time came, [for him] to lobby CABEI’s board of directors over the final steps,” Sinibaldi told prosecutors. “Oscar mentioned that he’d already met with Marco Machado.”</p> <p>Sinibaldi testified that Pineda later told him that Machado had offered a large sum of cash in exchange for his help, Sinibaldi claimed.</p> <p>“Returning to the management of the project’s approval, I have to say that the final steps in CABEI weren’t simple, and the role of Oscar Pineda Robles was fundamental,” Sinibaldi said to prosecutors. “On one occasion at Pineda Robles’ home, he told me that Odebrecht’s representatives had offered him $500,000 for his negotiations in the board of directors, and he indicated to me that another $500,000 would be necessary to buy some goodwill of those they lacked inside the board due to the loan’s complexity, so he asked me for support to convince Machado, a situation about which I chatted to Machado.</p> <p>“Later on, after CABEI’s process had concluded, Pineda Robles told me that everything had come out marvelous and that Machado had complied with just what was needed,” he told the prosecutors.</p> <p>He testified that Machado also told him that Odebrecht had paid Pineda $500,000 “for his services.”</p> <p>Reporters were unable to independently verify whether Pineda received payments from Odebrecht. Machado and Odebrecht told OCCRP they were unaware of any bribes to or illicit dealings with CABEI employees. Pineda denied participating in the negotiations over the loan and told OCCRP that he had never met with Sinibaldi or with anyone from Odebrecht.</p> <p>“I categorically deny having received any gift, remuneration, compensation, payments, gifts, bank transfers or sums of money from Constructora Norberto Odebrecht … for any reason,” he told OCCRP in an email.</p> <p>“I’ve never had any link or relationship with the aforementioned Brazilian company,” he added in a follow-up email. “EVERYTHING MALICIOUSLY ATTRIBUTED TO MY PERSON BY THAT REPROACHABLE AND PERVERSE CHARACTER [SINIBALDI] IS, WITHOUT EXCEPTION, AN ABSURD LIE.”</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/the-dictators-bank/pineda-president-perez-rischbeith-source-cabei-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="" data-img="/assets/the-dictators-bank/pineda-president-perez-rischbeith-source-cabei.jpg" /></a> <img src="https://www.occrp.org/assets/the-dictators-bank/pineda-president-perez-rischbeith-source-cabei.jpg" class="hidden" id="aside-img-6538" alt="the-dictators-bank/pineda-president-perez-rischbeith-source-cabei.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> CABEI </small> CABEI’s former Guatemala director Oscar Humberto Pineda Robles (left), the then Guatemalan President Otto Pérez Molina (center) and CABEI’s ex-president, Nick Rischbieth (right). </div> </aside> <script>$(window).load(function() {$("#aside-img-6538").remove();});</script> <p>He added that in his role as a CABEI director he had limited decision-making power — besides a single vote to approve a given project — and reviewed neither loan conditions nor modifications. He said the final approval for those things lies with the bank’s governors, country manager, and president.</p> <p>However, CABEI’s former president, Dante Mossi, said directors have significant decision-making powers inside the bank. “Contract modifications require a change of procurement plan — those changes are Board approved,” he said.</p> <p>A businessman who has been implicated in one of Sinibaldi’s alleged corruption schemes — who spoke on condition of anonymity due to the ongoing legal cases — said that Odebrecht executives spoke of having “secured” CABEI.</p> <p>Sinibaldi denied the <span class="expand">charges against him <span class="expandright"> Sinibaldi has not yet faced trial and his lawyers have sought to have the charges against him thrown out. In Guatemala, public prosecutors do not write indictments; evidence is handed to a court, whose judge decides whether it is sufficient to send the subject to trial. <i></i> </span> </span> , but told reporters he could not discuss the details of the allegations because the case is ongoing. He also denied ever having met Pineda, or discussing bribe payments with Pineda or Machado.</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-the-other-end-of-the-road"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-the-other-end-of-the-road">🔗</a>The Other End of the Road </h3> <div class="subheader"> <p>Just over two weeks after CABEI signed the contract to finance the CA-2 Occidente in late 2012, the development bank approved another $280 million to improve and expand a 100-km section of the highway that reaches the Salvadoran border in the east, known as the CA-2 Oriente.</p> </div> <input type="checkbox" id="occrp-inset-box-control-the-other-end-of-the-road" /> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p>It was a project that CABEI said would alleviate poverty along its route, create jobs, and generate millions of dollars in taxes. But it too ended in scandal.</p><p>In his testimony, Sinibaldi claimed that Guatemala’s then-president, Otto Pérez Molina, had ensured that Guatemalan firm Sigma Constructores S.A. would get the contract due to a “campaign compromise” and his friendship with its co-founder, José Maynor Palacios Guerra.</p><p>As it had for Odebrecht, CABEI made an exception to its rules to ensure that Sigma was contracted, without holding a public tender. Sigma did not respond to requests for comment.</p><p>CABEI’s Guatemala director, Oscar Pineda Robles, also “became a facilitator of the entire financing of Sigma Constructores’ project,” Sinibaldi said in the testimony that he told reporters was fabricated.</p><p>Sigma’s work on the CA-2 Oriente fell apart in 2016, during an illicit campaign financing case that implicated both Pérez and his vice president. Prosecutors and investigators from the UN-backed International Commission against Impunity in Guatemala (CICIG) found Sigma had paid Sinibaldi at least $1.15 million for the Patriot Party’s 2011 campaign, disguised through fraudulent contracts for services.</p><p>After a 2020 court hearing, Sinibaldi <a href="https://www.facebook.com/quehubopinulanoticias/videos/casosinibaldisigma-y-conasa-son-los-odebrecht-de-guatemala-afirm%C3%B3-el-exministro-/358202551979793/" target="_blank">told local press</a> that the highway contract bribery scheme was very similar to that of the CA-2 Occidente, and described Sigma as the “Odebrecht of Guatemala.” CICIG’s prosecutor general Thelma Aduana came to a similar conclusion. Sinibaldi has been charged with illicit association, soliciting bribes, money laundering, and illicit election financing related to this section of the highway. He has not yet faced trial, and he told OCCRP that he was innocent of any wrongdoing.</p><p>Pineda did not respond to specific questions about Sigma’s section of the highway, but reiterated that his role did not give him any power over others at the bank or their decision-making.</p><p>As far as reporters could establish, no one from CABEI has been investigated in relation to this section of the highway.</p> </div> </div> <label for="occrp-inset-box-control-the-other-end-of-the-road"><span>More</span><span>Less</span></label> </div> </div> </div> <h2 id="rising-costs">Rising Costs</h2> <p>In Machado’s own testimony given to prosecutors on the case, he described a long series of negotiations with various officials on what clauses the contract would contain. He listed half a dozen changes to the draft that had been requested by Sinibaldi’s ministry, including additional bridges, lanes, and asphalt calculations, which inflated the cost by more than $14 million.</p> <p>Each of the changes had to be approved by the two development banks financing the project, according to Machado’s testimony and documents seen by reporters.</p> <p>Even after Guatemala’s government signed off on the loan, additional changes to the project’s cost continued to be pushed. In Sinibaldi’s testimony, which he has since denied giving, he recounted a drunken dinner in Miami in October 2013 with Machado and other businessmen from Guatemala’s construction industry, during which they offered him a significant bribe if he approved raising the project’s cost by a further $250 million.</p> <p>“‘Who would finance the work?’” he recalled asking. “Machado answered that they already had CABEI aligned; that they wouldn’t oppose it and would give the financing.”</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/the-dictators-bank/ca2-occidente-2023-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/the-dictators-bank/ca2-occidente-2023.jpg" id="img-2433" /> <img src="https://www.occrp.org/assets/the-dictators-bank/ca2-occidente-2023.jpg" class="hidden" id="aside-img-2433" alt="the-dictators-bank/ca2-occidente-2023.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Posted on X by @AztecaNoticiaGT </small> Despite the rise in Odebrecht’s costs, images posted on social media show dangerous potholes on the CA-2 Occidente highway. </div> </div> <script> $(document).ready(function() { let rand_2433 = $("#aside-img-2433").prop("naturalWidth"); if(rand_2433<750){$("#img-2433").attr("src","/assets/the-dictators-bank/ca2-occidente-2023.jpg");} $(window).load(function() {$("#aside-img-2433").remove();}); }); </script> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/the-dictators-bank/ca2-occidente-20218-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/the-dictators-bank/ca2-occidente-20218.jpg" id="img-7693" /> <img src="https://www.occrp.org/assets/the-dictators-bank/ca2-occidente-20218.jpg" class="hidden" id="aside-img-7693" alt="the-dictators-bank/ca2-occidente-20218.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Posted on Twitter by @brupal </small> Social media users have documented problems with this section of the highway for years. </div> </div> <script> $(document).ready(function() { let rand_7693 = $("#aside-img-7693").prop("naturalWidth"); if(rand_7693<750){$("#img-7693").attr("src","/assets/the-dictators-bank/ca2-occidente-20218.jpg");} $(window).load(function() {$("#aside-img-7693").remove();}); }); </script> <p>Though Sinibaldi told prosecutors in his testimony that he refused their proposal, six modifications to the contract were approved and pushed through by the government one month later, according to documents obtained by No Ficción through freedom of information requests.</p> <p>Among them were additional budget items, changes to the prices of the planned works, and an amendment to Odebrecht’s advance — now 20 percent of the total project, totalling $73.6 million — to be paid out of CABEI and BNDES’ loans. CABEI issued “no objection” to all these modifications in November 2013.</p> <p>Neither Machado nor CABEI responded to requests for comment on this incident.</p> <p>CABEI transferred its first disbursement of $38 million to Odebrecht in April 2013. In his testimony to prosecutors, obtained by reporters, Machado said the first seven payments Odebrecht allegedly made to Sinibaldi and two other senior public officials were paid from this initial tranche of cash from the development bank.</p> <p>In their conclusion to an investigation into Odebrecht’s bribery, Guatemalan public prosecutors and investigators from the U.N.-backed CICIG said this “synchronization” of loan disbursements and payments was repeated with every tranche of funding Odebrecht received from CABEI and the Brazilian development bank.</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-the-risk-officer-s-novel"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-the-risk-officer-s-novel">🔗</a>The Risk Officer’s Novel </h3> <div class="subheader"> <p>The multiple scandals related to highway projects funded by CABEI bear a striking resemblance to a subplot in a book entitled “The Organization That Fights Against Poverty.” Self-published in May 2021, the novel was written by Diego Fiorito, who was CABEI’s chief risk officer at the time of Odebrecht’s alleged corruption schemes.</p> </div> <input type="checkbox" id="occrp-inset-box-control-the-risk-officer-s-novel" /> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p>The story describes the collapse of the fictional AS-7 North highway four years after it was built, because corners were cut with construction. As happened in Guatemala, the fictional government chooses the contractor by direct award, without public tender or transparency, due to the highway’s designation as “a special and urgent situation.”</p><p>The works were funded by the Organization That Fights Against Poverty (OFAP), a fictional development organization riddled with systemic corruption. OFAP’s loan for the AS-7 North highway included a clause stating that the contractor must be hired directly, just as CABEI had done for Odebrecht.</p><p>Fiorito’s novel also describes a similar corruption scheme to the one Sinibaldi outlined in his testimony to prosecutors. Private companies in the novel bribe public officials to vote in favor of dubious direct contracts, while also paying hefty “commissions” to the staff of development organizations, who help grease the wheels.</p><p>Like Odebrecht, the contractor in the book is ultimately engulfed in a continent-wide scandal after it was found to have systematically bribed government officials and presidents in return for state contracts.</p><p>The highways themselves, Fiorito writes, “remained unfinished ... becoming a living reflection of corruption.”</p><p>Fiorito declined to comment. CABEI did not respond to requests for comment.</p> </div> </div> <label for="occrp-inset-box-control-the-risk-officer-s-novel"><span>More</span><span>Less</span></label> </div> </div> </div> <p>“The banks CABEI and BNDES made the disbursements to Odebrecht, which in turn transferred the agreed bribes,” they wrote. They also found Odebrecht sent $17.9 million to offshore companies belonging to Sinibaldi and two other political figures between 2013 and 2015. These findings were forwarded to a judge and formed the basis for the pending case against Sinibaldi.</p> <p>The development of the CA-2 Occidente highway ground to a halt as the U.S. closed in on Odebrecht’s sprawling corruption scheme and its reach into Guatemala. CABEI stopped financing the project in early 2017, after giving a total of $85.5 million to Odebrecht, the Guatemalan public finance minister told local media at the time.</p> <p>In 2018, as part of a court settlement in Brazil, Odebrecht agreed to return the exact amount that CICIG and public prosecutors found it had paid in bribes — $17.9 million — to the Guatemalan state. Four people are already in prison for their part in laundering money from the scheme. But the cases relating to Odebrecht have been hampered by repeated crackdowns on the independence of Guatemala’s justice system.</p> <p>Odebrecht — now renamed Novonor — told OCCRP that it has filed an appeal over more than $45 million the company says it is owed by the Guatemalan government for the work done before the contract was terminated.</p> <p>Meanwhile, after years of work and hundreds of millions of dollars spent, the redevelopment of Central American Highway 2 remains incomplete. People who live nearby have complained about the state of the road, which they say is in terrible condition and causes accidents.</p> <p>Local media reports describe multiple accidents caused by huge potholes. One bus driver told the magazine <a href="https://concriterio.gt/carretera-ca2-una-ruta-olvidada-que-expone-a-conductores/" target="_blank">Con Criterio</a> in 2018 that some of the holes can be up to two feet deep, and can take out a car’s clutch.</p> <p>“So many people have died in accidents that the highway’s become a cemetery,” said Marroquín. “It’s not only that they stole money, it’s that they left behind a death trap.”</p> <p><strong><em><a href="mailto:eduardo.goulart@occrp.org">Eduardo Goulart de Andrade</a> (OCCRP), Andrew Little and Mariana Castro (both Columbia Journalism Investigations) contributed reporting.</em></strong></p>OCCRPhttps://www.occrp.org/A Journalist’s Cry from Gaza: “Please Have Mercy on Us”2023-12-15T00:00:00+01:002023-12-15T00:00:00+01:00https://www.occrp.org/en/investigations/a-journalists-cry-from-gaza-please-have-mercy-on-us<p><strong><em>Every time an ambulance arrives at Shuhada Al-Aqsa Hospital, the only medical facility in the central part of the Gaza Strip, freelance reporter Wafaa Abu Hajajj holds her breath for a few moments.</em></strong></p><p><strong><em>Every time an ambulance arrives at Shuhada Al-Aqsa Hospital, the only medical facility in the central part of the Gaza Strip, freelance reporter Wafaa Abu Hajajj holds her breath for a few moments.</em></strong></p> <p><strong><em>Could one of her beloved ones be inside this time?</em></strong></p> <p>When she finds that it’s not unloading a family member or someone close to her heart, she sighs with relief. A short-lived relief.</p> <p>“The sight of dead children is horrifying. Even the stones weep over them,” she says.</p> <p>Since the carnage in Gaza began, Abu Hajajj has been reporting from this hospital about deaths and injuries or the mass destruction and killings the ambulance drivers tell her about.</p> <p>The 40-year-old, along with five colleagues, occupies a small makeshift tent located on hospital premises. They also share three donated mattresses and blankets.</p> <p>“Thank God our other female colleagues go home every day to sleep; otherwise, it would be impossible to take a rest,” she tells OCCRP. “Every night, before we go to sleep, we pray for our family and loved ones to see the sun rise in the morning.”</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/wafaa-abu-hjajj-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/investigations/wafaa-abu-hjajj.jpg" id="img-1139" /> <img src="https://www.occrp.org/assets/investigations/wafaa-abu-hjajj.jpg" class="hidden" id="aside-img-1139" alt="investigations/wafaa-abu-hjajj.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Mohamed Al Hajjar </small> Wafaa Abu Hjajj </div> </div> <script> $(document).ready(function() { let rand_1139 = $("#aside-img-1139").prop("naturalWidth"); if(rand_1139<750){$("#img-1139").attr("src","/assets/investigations/wafaa-abu-hjajj.jpg");} $(window).load(function() {$("#aside-img-1139").remove();}); }); </script> <p>She uses her friend’s laptop to send her reports when the internet comes up. Her laptop and iPhone were smashed when the family home was hit in north Gaza, forcing them to flee.</p> <p>“We need some help in replacing the cameras, laptops, and smartphones that were destroyed,” she appeals.</p> <p>Hundreds of women and children, whose homes were destroyed, are now living at the hospital, sharing three toilets. “You have to queue for 20-30 minutes, if not more, to use one,” Abu Hajajj says. She showers whenever she visits her sister’s house in the Maghazi camp, where her family has taken refuge.</p> <p>Abu Hajajj has lost eight kilos since the war erupted, eating one meal a day if she is lucky. Food prices have doubled, if not tripled, because of the shortages. Unable to maintain normal hygiene, many women are trying to obtain pills that delay periods.</p> <p>The estimated 1,450 journalists reporting from Gaza are mainly Palestinians, as the only way foreign reporters can get in is with Israeli troops. Many of them have been displaced along with their families after their homes were destroyed.</p> <p>Like all the other 2.3 million residents navigating life in the confined and besieged Mediterranean strip, the reporters are struggling to find fresh water, food, a place to sleep, a toilet, electricity points to charge their laptops and phones, and even the most basic form of transport.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/reporter-sleeping-in-tent-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/investigations/reporter-sleeping-in-tent.jpg" id="img-4783" /> <img src="https://www.occrp.org/assets/investigations/reporter-sleeping-in-tent.jpg" class="hidden" id="aside-img-4783" alt="investigations/reporter-sleeping-in-tent.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Mohammad Abu Shahma </small> A reporter sleeping in a makeshift tent he is sharing with 14 colleagues. </div> </div> <script> $(document).ready(function() { let rand_4783 = $("#aside-img-4783").prop("naturalWidth"); if(rand_4783<750){$("#img-4783").attr("src","/assets/investigations/reporter-sleeping-in-tent.jpg");} $(window).load(function() {$("#aside-img-4783").remove();}); }); </script> <p>They are covering the intensifying war even though most of them lack safety vests, power banks, or SIM cards. NGOs say Israel is banning the entry of all safety gear into Gaza.</p> <p>By December 11, the Committee to Protect Journalists (CPJ) had confirmed the deaths of 63 journalists and media workers since the militant Palestinian group Hamas launched its unprecedented attack on Israel on Oct. 7, prompting full retaliation.</p> <p>The organization says that October has been the deadliest ever for media workers since it began keeping records in 1992.</p> <p>Among the fatalities were 56 Palestinians, four Israelis, and three Lebanese who were killed on their country’s southern border with Israel. But the figure could be higher.</p> <p>Journalists are often told by their editors not to become part of the story they are covering. But the Palestinian reporters in Gaza have no choice, and if death is their fate, there’s only one desire: for it to be swift, instantaneous.</p> <p>“I expect to die every second,” says Mohammad Abu Shahma, who freelances for Qatar’s Al-Jazeera TV. He is speaking from a small makeshift tent he had set up near the Rafah border crossing with Egypt.</p> <p>In the first eight weeks of the war, he moved his wife, five children, and aging mother four times after his house was bombed to the ground by airstrikes. It is impossible, he says, to find any safe place in the densely-populated enclave. His wife and daughter have just recovered from injuries they sustained.</p> <p>“It is my kids who worry me the most. What will happen to them?” he wonders. “Will they die? Will they become refugees? What will their fate be?”</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/mohammad-abu-shahma-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/investigations/mohammad-abu-shahma.jpg" id="img-7966" /> <img src="https://www.occrp.org/assets/investigations/mohammad-abu-shahma.jpg" class="hidden" id="aside-img-7966" alt="investigations/mohammad-abu-shahma.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Mohammad Abu Shahma </small> Freelance reporter Mohammad Abu Shahma is reporting from a mass funeral, where his own niece is being laid to rest. </div> </div> <script> $(document).ready(function() { let rand_7966 = $("#aside-img-7966").prop("naturalWidth"); if(rand_7966<750){$("#img-7966").attr("src","/assets/investigations/mohammad-abu-shahma.jpg");} $(window).load(function() {$("#aside-img-7966").remove();}); }); </script> <p>Abu Shahma, a peacetime investigative reporter, says he has had no time to mourn the death of his sister and her family, his niece, and paternal cousins who have been killed in the conflict. Now he is fighting to survive but often wonders if the risk of reporting this war is worth it.</p> <p>“There is no food to buy. If we don’t die from a rocket we will die from hunger,” he says. “People have started slaughtering donkeys and soon they will be eating cats.”</p> <p>Over 18,000 Palestinians have been killed and more than 45,000 injured since the war erupted.</p> <p>With nearly 85% of the Gaza Strip’s population displaced and unable to access any aid, the U.N. says society there is “on the verge of full-blown collapse,” and its ability to protect people is “reducing fast.”</p> <p>“I expect public order to completely break down soon, and a worse situation could unfold, including increased epidemic diseases and increased pressure for mass displacement to Egypt,” U.N. Secretary-general Antonio Guterres said over the weekend.</p> <p>His appeals have so far not changed anything.</p> <p>“Please find a way to send me some canned food,” a journalist colleague asked this reporter on the phone. “We’ve had nothing to eat in three days,” he said of his seven-member family, sobbing aloud.</p> <p>“We’re giving up on life… Ya Allah (O God), please have mercy on us.”</p>OCCRPhttps://www.occrp.org/Colombian Leak Gives Rare Glimpse Into Secretive World of ‘Controlled’ Drug Deliveries2023-12-14T00:00:00+01:002023-12-14T00:00:00+01:00https://www.occrp.org/en/narcofiles-the-new-criminal-order/colombian-leak-gives-rare-glimpse-into-secretive-world-of-controlled-drug-deliveries<p>A large truck carrying sacks of potatoes pulls into a warehouse in the Colombian city of Cartagena in late October 2019. Once inside, two men unload the real cargo: 700 kilos of cocaine.</p><p>A large truck carrying sacks of potatoes pulls into a warehouse in the Colombian city of Cartagena in late October 2019. Once inside, two men unload the real cargo: 700 kilos of cocaine.</p> <p>They hand the drugs over to a trusted partner who has elected to transport the drugs to Spain. He does as promised — but on a commercial Iberia flight under the watch of the U.S. Drug Enforcement Administration (DEA).</p> <p>This type of operation is known as an <span class="expand">“international controlled delivery,” <span class="expandright"> The term “controlled delivery” has a broad definition under UN conventions on anti-narcotics cooperation, where it is described as the technique of allowing an illicit substance to pass through a territory under the supervision of authorities. The DEA often uses the term “controlled delivery” to refer to domestic cases in which authorities detect contraband in a parcel and allow it to continue on its journey under surveillance for an eventual arrest. Far more secrecy surrounds their international use of the tactic, in which agents are actively arranging the movement of drugs across borders. <i></i> </span> </span> or ICD.</p> <p>It is a secretive practice that foreign law enforcement agencies such as the DEA have been using in partnership with Colombian authorities to infiltrate criminal gangs in order to gain intelligence on their movements, and eventually make arrests. (Spanish police arrested three people who arrived to pick up the delivery in a parking lot outside of Madrid.)</p> <p>The DEA seldom details its use of “ICDs” in its press releases or other public reports. Reporters could find no published record of statistics on the practice, and the agency did not respond to questions about the program.</p> <p>The program is subject to judicial review in Colombia, and two former DEA agents told OCCRP that the agency adheres to strict protocols in carrying out the deliveries. Several of the ICD cases reviewed by reporters resulted in indictments, extradition, and conviction, suggesting the tactic can be effective. But transparency advocates said that the program’s secrecy raises questions about oversight.</p> <p>Tom Devine, legal director for the Government Accountability Project, a Washington D.C. based advocacy group, said the DEA should implement an outside review process over the use of international controlled deliveries to ensure they are safeguarded against abuses.</p> <p>“There won’t be accountability unless one is established,” said Devine, whose group represents whistleblowers, including DEA agents who have been punished for reporting corruption.</p> <p>The Cartagena case is one of at least 92 individual requests made to Colombia’s judiciary — which must authorize parts of the operations — to approve controlled drug deliveries between 2017 and 2022. Reporters were able to gain rare insight into the inner workings and the scope of the program in the country, thanks to a leak of millions of emails from Colombia’s prosecutor’s office.</p> <p>The vast majority were filed by U.S. law enforcement agencies, <span class="expand">chiefly the DEA <span class="expandright"> These documents are among others in the NarcoFiles leak that expose the identities of more than 100 DEA agents, along with scores of their Colombian and global counterparts. <a href="https://www.occrp.org/en/narcofiles-the-new-criminal-order/dozens-of-dea-agents-exposed-in-colombian-prosecutors-office-leak" target="_blank">Read more about that here</a>. <i></i> </span> </span> , but there were also requests by authorities in Spain, France, the Netherlands, England, and Australia.</p> <p>In total, Colombia’s judiciary greenlit the use of up to $38.7 million and 44 tons of cocaine for such operations over the five-year period. Reporters found proof that at least two-thirds of the requests were approved, and discovered no documentation of any rejections. Colombian prosecutors declined to provide statistics or any other information about the program.</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-about-the-project"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-about-the-project">🔗</a>About the Project </h3> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p><strong>This article is part of NarcoFiles: The New Criminal Order, a transnational investigation into modern organized crime and how it has innovated and spread throughout the globe.</strong></p><p>The project began with a leak of emails from the Colombian Prosecutor’s Office. OCCRP, the Centro Latinoamericano de Investigación Periodística (CLIP), Vorágine, and Cerosetenta / 070 gained early access to the data from two organizations, Distributed Denial of Secrets and Enlace Hacktivista. They then shared the leak with more than 40 other media outlets. Journalists from over 23 countries worked on the investigation, chiefly in Latin America but also in Europe and the United States.</p><p>Reporters examined and corroborated the materials with hundreds of other documents, databases, and interviews.</p><p><a href="https://cdn.occrp.org/projects/narcofiles-the-new-criminal-order/en/">Explore the full project here</a>.</p> </div> </div> </div> </div> </div> <p>Luis Moreno, a retired State Department official who headed the narcotics control office in Bogotá, told OCCRP that details of ICD operations were not made public in court documents or press releases because that could put the lives of agents or informants at risk.</p> <p>“[Due to] the very nature of the operation, because you are playing with people’s lives really, secrecy is of utmost importance,” Moreno said. But he acknowledged that a lack of transparency can create opportunities for abuse: “That very secrecy which you need to conduct the operation is also conducive to people doing bad things.”</p> <p>Since 2000, Colombia has received some $13 billion in U.S. aid as part of the half-century <a href="https://www.occrp.org/en/investigations/an-addictive-war-how-cartel-bosses-are-playing-the-us-justice-system" target="_blank">“War on Drugs.”</a> But the efforts have dramatically failed to stem the flow of narcotics, with coca cultivation at record levels. Colombia remains the world’s top producer, much of it going to consumption in the U.S.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/narcofiles-the-new-criminal-order/coca-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/narcofiles-the-new-criminal-order/coca.jpg" id="img-6488" /> <img src="https://www.occrp.org/assets/narcofiles-the-new-criminal-order/coca.jpg" class="hidden" id="aside-img-6488" alt="narcofiles-the-new-criminal-order/coca.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> James Wagstaff / Alamy Stock Photo </small> Colombia remains the world’s top coca producer, despite some $13 billion of U.S. aid in the “War on Drugs.” </div> </div> <script> $(document).ready(function() { let rand_6488 = $("#aside-img-6488").prop("naturalWidth"); if(rand_6488<750){$("#img-6488").attr("src","/assets/narcofiles-the-new-criminal-order/coca.jpg");} $(window).load(function() {$("#aside-img-6488").remove();}); }); </script> <h2 id="how-it-works">How It Works</h2> <p>The leaked documents give a rare glimpse into how ICDs work in practice.</p> <p>First, the DEA, or another foreign partner, informs Colombian prosecutors in a formal letter about their knowledge of a transnational crime group. They then request the help of a Colombian undercover agent to pose as a trafficker, as well as permission to obtain and transport the group’s drugs with the goal of gaining information about its structure and securing evidence against its members. They ask for specific quantities of drugs and money and the operation is often set for a period of one year.</p> <p>Prosecutors put the request before a special Colombian judge, who accompanies the case and can authorize wiretaps and entry into homes and offices.</p> <p>Once the drugs are secured — frequently with the help of an informant — the contraband can then be transported abroad, often by the DEA or to its agents in foreign countries, with the aim of investigating and arresting those on the receiving end of the transaction.</p> <p>Using nearly identical language, many of the requests in the leaked documents sought authorization to use the same broad array of funds and substances: 200 kilograms of cocaine, five kilograms of heroin, 20 kilograms of methamphetamines, 20 kilograms of synthetic drugs, and $2 million of cash of illicit origin.</p> <p>In a February 2022 request, the U.S. Justice Department’s representative in Bogotá sought permission for an operation where the “seized substances” could be used as evidence for an investigation, carried out in New Jersey, into an organization that was allegedly trafficking drugs from Colombia to the U.S.</p> <p>The operation would see undercover agents secure the trust of the organization and agree to transport its drugs from Colombia to the U.S., the Dominican Republic, or Mexico — whichever location “has been established by the organization for the delivery,” the request explains.</p> <p>After undergoing lab testing for authenticity, the drugs would be flown on a commercial aircraft or a plane controlled by the U.S. embassy, it said. Documents reviewed by reporters did not make the outcome of the operation clear.</p> <p>Some requests were lighter on details. One appeal from the U.S. Department of Homeland Security said undercover agents would “coordinate the logistics for the transportation of the narcotic substance via (cargo or passenger flights), land (using buses, cars or cargo trucks) or river (with boats, speedboats or yachts) to Paraguay, Bolivia, Brazil, Honduras, Dominican Republic, Bahamas, Spain, Mexico, United States.”</p> <p>That was so broad it potentially covered almost anywhere in the Americas and nearly any form of transport.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/narcofiles-the-new-criminal-order/dea-colombia-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/narcofiles-the-new-criminal-order/dea-colombia.jpg" id="img-407" /> <img src="https://www.occrp.org/assets/narcofiles-the-new-criminal-order/dea-colombia.jpg" class="hidden" id="aside-img-407" alt="narcofiles-the-new-criminal-order/dea-colombia.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Long Visual Press / Alamy Stock Photo </small> A member of the DEA during a press conference in Bogotá this year. </div> </div> <script> $(document).ready(function() { let rand_407 = $("#aside-img-407").prop("naturalWidth"); if(rand_407<750){$("#img-407").attr("src","/assets/narcofiles-the-new-criminal-order/dea-colombia.jpg");} $(window).load(function() {$("#aside-img-407").remove();}); }); </script> <h2 id="operational-irregularities">Operational Irregularities</h2> <p>Other documents contained more specifics — and records of what a former DEA agent described as “irregularities” in the operations. In November 2020, for example, the U.S. Department of Homeland Security in San Diego requested permission from the Colombian prosecutors’ office to transport a batch of cocaine to Toronto.</p> <p>In preparation, two Colombian agents kept nearly 100 kilos of cocaine — about the weight of a refrigerator — stored in their unsecured office.</p> <p>This incident appears in a document addressed to the director of Colombian prosecutors’ specialized anti-narcotics office, in which the two Colombian agents are interrogated by colleagues over email about how the drugs ended up stored improperly.</p> <p>These two agents, according to the document, were involved in at least 37 controlled deliveries operations linked to this case, which eventually led to the seizure of 1.5 tons of cocaine, hundreds of thousands of dollars in cash, and nine arrests abroad.</p> <p>But in the April 2021 document to the anti-narcotics director, the pair was shown being grilled about rule violations. They were later criminally convicted with falsifying documents, though they are trying to challenge the ruling.</p> <p>The former DEA agent, who spoke to OCCRP on condition of anonymity, highlighted an irregularity in paperwork filed for a different operation in which an agent received funds from a criminal group that were intended to finance drug trafficking activities. The file includes a handwritten receipt from the Colombian agent to the DEA documenting the cash received.</p> <p>“Bag containing undetermined amount of bulk currency,” reads the note on a receipt form, adding that it includes bills in Colombian pesos and European euros that would later need to be added up.</p> <p>The former DEA agent noted that the document was missing the agent’s signature.</p> <p>“That right there is a red flag,” he said, explaining that delivery of money or drugs requires two signatures — an agent and a witness — to guard against theft and corruption. (The DEA declined to answer questions about the program from reporters.)</p> <p>A second, recently retired DEA agent who has worked on ICDs stressed that the agency does a “ton of internal record keeping” of the practice.</p> <p>The work of ICDs is rarely made public, he added, because most cases involve a “cooperating individual” — that is, an informant who is part of the organization and facing charges.</p> <p>The recently retired agent said that these risks mean the process requires strict confidentiality, especially as the informant may continue to work with the DEA.</p> <p>“You’re putting all these different steps in to insulate the informant,” the retired agent said. “That’s why it almost never comes out that, oh, my gosh, this was completely orchestrated by the government, and we had a cooperating informant.”</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-sensitive-investigation-units-under-scrutiny"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-sensitive-investigation-units-under-scrutiny">🔗</a>‘Sensitive Investigation Units’ Under Scrutiny </h3> <div class="subheader"> <p>Other DEA-run activities have come under scrutiny in the past. In February, the head of Colombia’s asset forfeiture unit, a key institution in its anti-narcotics efforts, was arrested on corruption charges.</p> </div> <input type="checkbox" id="occrp-inset-box-control-sensitive-investigation-units-under-scrutiny" /> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p>Three alleged co-conspirators, who were members of DEA-funded “Sensitive Investigation Units” — elite units often involved in carrying out ICDs — were accused by the prosecutor’s office of extorting “high sums of money” to keep suspects from being extradited to the U.S. The former asset forfeiture unit head was convicted in October. The status of the case against the others is unclear.</p> </div> </div> <label for="occrp-inset-box-control-sensitive-investigation-units-under-scrutiny"><span>More</span><span>Less</span></label> </div> </div> </div> <h2 id="program-oversight">Program Oversight</h2> <p>The risks of other secretive programs involving major transfers of money and contraband can be high — as demonstrated in a separate case by the conviction of DEA agent José Irizarry, who late last year began <a href="https://www.justice.gov/opa/pr/former-dea-special-agent-sentenced-prison-money-laundering-and-fraud-scheme" target="_blank">serving a 12-year prison sentence</a> for <a href="https://apnews.com/article/soccer-sports-la-liga-money-laundering-puerto-rico-38aed2da8cd0ac237aca28aa39321105" target="_blank">skimming millions of dollars from controlled money laundering operations</a>. (While similar in some respects to ICDs, the operations were not directly related.)</p> <p>In a December 2022 interview with the Associated Press, Irizarry said that the indictment “paints a picture of me, the corrupt agent that did this entire scheme. But it doesn’t talk about the rest of DEA. I wasn’t the mastermind.”</p> <p>In Colombia, the ICD practice is governed by a 2004 law that requires the operations to be accompanied by a specialized judge and tracks the operation’s progress. The leaked records show that Colombian agents are required to keep chain-of-custody documentation of the illicit substances used in ICDs.</p> <p>Undercover agents are also required to be accompanied by a “control agent,” who oversees the operation, according to authorization documents found in the leak.</p> <p>The DEA did not respond to requests for comment about what oversight is exercised over ICDs in the U.S. Reporters could find no mention of external oversight on the DEA’s website, its annual report, press releases, or in indictments that resulted from the use of ICDs or in congressional testimony.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/narcofiles-the-new-criminal-order/dea-cocaine-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="" data-img="/assets/narcofiles-the-new-criminal-order/dea-cocaine.jpg" /></a> <img src="https://www.occrp.org/assets/narcofiles-the-new-criminal-order/dea-cocaine.jpg" class="hidden" id="aside-img-3187" alt="narcofiles-the-new-criminal-order/dea-cocaine.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> The U.S. Drug Enforcement Administration </small> Bricks of cocaine seized by the DEA. </div> </aside> <script>$(window).load(function() {$("#aside-img-3187").remove();});</script> <p>The Justice Department, which the DEA falls under, is audited by an independent entity known as the Office of the Inspector General.</p> <p>The inspector general’s annual reports do not mention ICDs. But the office has previously raised concerns about the program of controlled money laundering operations Irizarry had taken part in, which involved undercover financial transactions used to dismantle drug trafficking and money laundering organizations.</p> <p>An August 2023 report by the inspector general, for instance, found the DEA had failed to fully implement controls over those money laundering operations. A 2020 audit referenced in that report had found that the DEA had downplayed “the risk of allowing illicit funds to ‘walk’ and filter through legitimate and illegal financial channels.”</p> <p>A 2021 audit by the inspector general also raised concern about the agency’s lack of monitoring over its foreign operations writ large, citing “insufficient” oversight for the high-risk environment in which these units operate.”</p> <p>The inspector general’s office declined to comment beyond pointing to its reports.</p> <p>The recently retired DEA agent — who reviewed several of the leaked records to help confirm their authenticity — said that ICDs were effective due to the “rigid protocols” that had to be followed in their use. But he added: “While there is generally strict adherence to these protocols, and internal oversight guides agents’ actions, any time large amounts of drugs and money are involved in the same operation, the possibility of corruption exists.”</p> <p>“Agencies could benefit from independent post-ICD oversight to ensure transparency,” he said.</p> <p><strong><em>Research was provided by OCCRP ID. Antonio Baquero (OCCRP), Daniela Castro (OCCRP), Brian Fitzpatrick (OCCRP), and Aubrey Belford (OCCRP) contributed reporting.</em></strong></p>OCCRPhttps://www.occrp.org/Leaked Documents Provide Fresh Evidence About the Source of Payment to Journalist’s Assassin2023-12-11T00:00:00+01:002023-12-11T00:00:00+01:00https://www.occrp.org/en/cyprus-confidential/leaked-documents-provide-fresh-evidence-about-the-source-of-payment-to-journalists-assassin<p>In October 2008, a motorbike packed with explosives detonated in a parking lot outside the Zagreb office of Nacional, a weekly magazine known for its sensational headlines and exposés of political and business scandals. The scooter had been placed next to a car used by the publication’s founder, Ivo Pukanić. He was killed instantly when it exploded, along with a colleague.</p><p>In October 2008, a motorbike packed with explosives detonated in a parking lot outside the Zagreb office of Nacional, a weekly magazine known for its sensational headlines and exposés of political and business scandals. The scooter had been placed next to a car used by the publication’s founder, Ivo Pukanić. He was killed instantly when it exploded, along with a colleague.</p> <p>Two years later, a Croatian court convicted six men of Pukanić’s murder, sentencing them to a total of 163 years in prison. Prosecutors said organized crime figures from across the Balkans had been involved in planning and executing the assassination.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/shutterstock-editorial-7924129b-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="" data-img="/assets/cyprus-confidential/shutterstock-editorial-7924129b.jpg" /></a> <img src="https://www.occrp.org/assets/cyprus-confidential/shutterstock-editorial-7924129b.jpg" class="hidden" id="aside-img-9063" alt="cyprus-confidential/shutterstock-editorial-7924129b.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Str/EPA/Shutterstock </small> Ivo Pukanić’s car after the explosion that killed him in 2008. </div> </aside> <script>$(window).load(function() {$("#aside-img-9063").remove();});</script> <p>The court found that the “key middleman” in organizing the murder was Slobodan Ðurović, a man born in Montenegro but living in Serbia, who Interpol and several other regional police agencies described as a major organized crime figure known in the criminal underworld as “The Cardinal.” He was jailed for 23 years, but it was never established who ordered and paid for the murder.</p> <p>Prosecutors had alleged that cash from a mysterious 780,000-euro transfer into Ðurović’s personal bank account in Montenegro had been used to pay some of the assassins, but the money trail seemed to end there. The payment came from a company called General Pioneer Inc., but it had been registered in the British Virgin Islands, whose strict corporate secrecy rules make it difficult to determine the owners of companies. The person behind General Pioneer has remained a mystery.</p> <p>But now, thanks to leaked documents from Cypriot corporate service provider MeritServus, reporters from OCCRP’s partners KRIK in Serbia and BIRD in Bulgaria finally managed to identify the company’s owner: a Bulgarian businessman named Ognian Bozarov.</p> <p>Reporters found no direct evidence that Bozarov ordered or played any role in the assassination of Pukanić, but the leaked documents — combined with information gleaned from corporate documents and court records by KRIK reporters — offer new insights into Ðurović’s business dealings with Bozarov in the lead-up to the murder.</p> <p>Files from the murder trial and corporate records show that Bozarov had employed Ðurović for at least a year before the murder through another company he owned, this one registered in Serbia. Ðurović left his role at this company, Karizia DOO, three days before Pukanić was assassinated.</p> <p>Newly leaked documents also reveal for the first time that General Pioneer paid Ðurović 255,000 euros five months before the 780,000-euro transfer.</p> <p>KRIK asked Croatian prosecutors whether they had looked into the ownership of General Pioneer, but the questions went unanswered. It is not clear whether prosecutors were aware of or investigated the earlier 255,000-euro payment.</p> <p>In a written statement to OCCRP, Bozarov said he “most certainly did not arrange for [Pukanić’s] murder” and had never threatened or harmed anyone. Bozarov said that any payments made through his companies “were purely for business purposes.”</p> <p>Throughout his trial, Ðurović maintained that the large payment he received was related to a land deal in Belgrade, Serbia’s capital. But the new documents and records obtained by reporters raise questions about whether the criminal’s business dealings with Bozarov made economic sense, and whether the payments to him were actually connected to a legitimate land deal.</p> <p>The leaked MeritServus files were obtained by the pro-transparency group Distributed Denial of Secrets and initially shared with OCCRP and the Guardian. This investigation is part of Cyprus Confidential, a global investigative collaboration led by the International Consortium of Investigative Journalists (ICIJ) and Paper Trail Media.</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-about-the-cyprus-confidential-project"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-about-the-cyprus-confidential-project">🔗</a>About the ‘Cyprus Confidential’ Project </h3> <div class="subheader"> <p>Cyprus Confidential is a global investigation examining Russian influence in Cyprus, and how local service providers helped oligarchs and billionaires structure their wealth over the years preceding the 2022 full-scale invasion of Ukraine. The project is based on more than 3.6 million documents leaked from six different Cypriot service providers, as well as a Latvian firm.</p> </div> <input type="checkbox" id="occrp-inset-box-control-about-the-cyprus-confidential-project" /> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p>The Cypriot firms are DJC Accountants, ConnectedSky, Cypcodirect, MeritServus, MeritKapital, and Kallias and Associates. Additional records came from a Latvian company, Dataset SIA, which sells Cypriot corporate registry documents through a website called i-Cyprus.</p><p>The MeritServus and MeritKapital records were shared with OCCRP, ICIJ and other media outlets by Distributed Denial of Secrets (DDoS). OCCRP has previously reported on these firms, and the current project builds upon this work. ICIJ also shared the leaked records from Cypcodirect, ConnectedSky, i-Cyprus, and Kallias and Associates that were obtained by Paper Trail Media. In the case of Kallias and Associates, the documents were obtained from DDoS who shared them with Paper Trail Media and ICIJ. OCCRP shared the DJC Accountants leaked records with media partners after previously obtaining them via DDoS.</p> </div> </div> <label for="occrp-inset-box-control-about-the-cyprus-confidential-project"><span>More</span><span>Less</span></label> </div> </div> </div> <h2 id="in-the-crosshairs">In the Crosshairs</h2> <p>Pukanić was not short of enemies. Blunt and unapologetic, he used his extensive network of political, business, and underworld contacts to dig up fodder for the scandalous headlines and pictures he splashed across the pages of Nacional, which he had co-founded in 1996.</p> <p>His colleagues publicly criticized him for his friendly connections with controversial businessmen and criminals, but he also produced major investigative stories about powerful figures. His reports on the wealth of the former Croatian Prime Minister Ivo Sanader garnered widespread attention. So did a series of stories on connections between the then-President of Montenegro, Milo Djukanović, and the controversial Serbian businessman Stanko Subotić. Pukanić wrote extensively about Subotić and Djukanović’s alleged ties to cigarette smuggling. When Italian prosecutors launched a case against Djukanović in 2002, the journalist was one of their witnesses (Djukanović invoked diplomatic immunity to get the charges in Italy dropped.)</p> <p>After a first attempt on Pukanić’s life in April 2008, he was given police protection. But despite this, it emerged after his death that he had been surveilled for three months before his killing in 2008, and that the murder had been planned so carefully that a Serbian sniper was waiting on the roof of a neighboring building to shoot him in case the bomb didn’t detonate, or the explosion didn’t kill him.</p> <p>While the mastermind of Pukanić’s assassination was never identified, an organized crime figure was tried in Serbia for orchestrating the killing: Sreten Jocić. Known as “Joca Amsterdam” due to his base in the Netherlands, Jocić is a Serbian drug lord and infamous criminal.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/joca-amsterdam-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/cyprus-confidential/joca-amsterdam.jpg" id="img-6459" /> <img src="https://www.occrp.org/assets/cyprus-confidential/joca-amsterdam.jpg" class="hidden" id="aside-img-6459" alt="cyprus-confidential/joca-amsterdam.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> RTS </small> Slobodan Ðurović (right) and Sreten Jocić, also known as Joca Amsterdam, at the Palace of Justice in Belgrade. </div> </div> <script> $(document).ready(function() { let rand_6459 = $("#aside-img-6459").prop("naturalWidth"); if(rand_6459<750){$("#img-6459").attr("src","/assets/cyprus-confidential/joca-amsterdam.jpg");} $(window).load(function() {$("#aside-img-6459").remove();}); }); </script> <p>A 2008 Interpol report from Serbia, in coordination with Dutch and French authorities, described Ðurović as Jocić’s “right hand,” and said that he managed Jocić’s business and bought companies on his behalf. According to another report from Interpol Montenegro from the same year, Ðurović was Jocić’s “kum” (a Slavic expression for a very close relationship) in the 1990s.</p> <p>Serbian prosecutors indicted Jocić in 2009, alleging that he organized Pukanić’s assassination, but he was eventually acquitted after a judge ruled that the prosecution did not present sufficient evidence of his connection to the murder.</p> <p>Jocić’s lawyer did not respond to written questions. Ðurović did not respond to a request for comment.</p> <h2 id="an-extremely-urgent-payment">An ‘Extremely Urgent’ Payment</h2> <p>During Jocić’s trial in Serbia, Ðurović was pressed about the 780,000 euros he had received in his bank account. He insisted that the money had been paid “by my Bulgarian friends” in exchange for his help filing paperwork to the Belgrade city administration for a land deal. When asked why he was paid such a large sum for a simple task that “everyone could … do,” he did not have a clear answer.</p> <p>Montenegrin anti-money laundering investigators also questioned the explanation for the wire transfers at the time of the trial, and told Croatian investigators that Ðurović withdrew 60,000 euros from his Montenegrin account the day after the transfer from General Pioneer. Croatian authorities shared the findings with Serbian counterparts, who later said in an indictment that this cash withdrawal was part of how Ðurović paid the other conspirators in the assassination.</p> <p>Records from the trial and the leaked documents provide additional evidence that Ðurović and Bozarov had been working together for many months before Pukanić was killed.</p> <p>When police arrested Ðurović six days after Pukanić was killed, they confiscated two phones from him. Although police and prosecutors did not make note of this at the time, KRIK journalists trawling through the old court records found telephone numbers for Bozarov in Bulgaria and Cyprus among Ðurović’s contacts.</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-who-is-ognian-bozarov"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-who-is-ognian-bozarov">🔗</a>Who Is Ognian Bozarov? </h3> <div class="subheader"> <p>The 76-year-old Bozarov has maintained a relatively low profile, even in his native Bulgaria. One of the few public references to him is found in a 2011 book by Christo Christov, a Bulgarian researcher and journalist. Christov wrote that Bozarov worked for the Communist-era intelligence service during the dictatorship of Todor Zhivkov, who was in power for 35 years until the fall of communism in 1989.</p> </div> <input type="checkbox" id="occrp-inset-box-control-who-is-ognian-bozarov" /> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p>While reporters were unable to confirm Bozarov’s connections to the Bulgarian state, U.S. Department of Justice documents show that the Bulgarian embassy in Washington, D.C., came to his aid when he was arrested there in the 1980s for allegedly trying to send computer technology to Bulgaria in violation of export controls. Paperwork shows that the embassy covered the costs of a law firm for Bozarov and another Bulgarian national.</p><p>The charges were eventually dropped, according to U.S. court records, but a Bulgarian member of parliament later questioned who had footed Bozarov’s $250,000 bail.</p><p>Bozarov did not respond to questions about whether he was in the intelligence service.</p> </div> </div> <label for="occrp-inset-box-control-who-is-ognian-bozarov"><span>More</span><span>Less</span></label> </div> </div> </div> <p>The earliest evidence of Ðurović and Bozarov working together comes from November 2007, when Ðurović transferred a Serbian company called Karizia to another company <span class="expand">ultimately owned <span class="expandright"> Ðurović sold Karizia to another Serbian company in November 2007. This company was owned by Tymara Holding SA in Luxembourg. While Tymara’s ownership is not made public in Luxembourg records, leaked emails show Bozarov’s daughter saying her father owned 50 percent of the company, and in another email she said Karizia belongs to them. <i></i> </span> </span> by Bozarov for the nominal fee of 500 euros, covering the funds Ðurović had injected when setting up Karizia.</p> <p>Ðurović had used the company to apply to the Belgrade Land Development Public Agency for a 99-year lease to a land plot. The award was approved in September 2007, and the contract was signed on November 5, 2007 — three days after Karizia was transferred to Bozarov’s company.</p> <p>On December 1, 2007, shortly after transfering Karizia to Bozarov, Ðurović signed a contract with General Pioneer to help secure an increase in the area on which Karizia was allowed to construct. His fee for this was to be 255,000 euros, even though securing permission to expand the construction area simply required paying a higher lease. General Pioneer had <span class="expand">no formal relationship <span class="expandright"> General Pioneer did not own Karizia, but it did loan the Serbian company 5 million euros, released in several installments, under the terms of a January 2008 contract. The contract said the loan was for covering the rent of the Belgrade land plot. <i></i> </span> </span> with Karizia, and it is unclear why Bozarov used this company to pay Ðurović.</p> <p>It is also unclear why this side agreement was made at all, since Ðurović remained Karizia’s general director after transferring ownership of the company, meaning that he continued to work for the company as Bozarov’s employee.</p> <p>In May 2008 the request was granted by the Belgrade city administration, and the 255,000 euros were paid into Ðurović’s Serbian account.</p> <p>A second contract between Ðurović and General Pioneer, dated September 19, 2008, set out the terms for the second additional payment of 780,000 euros for having successfully increased the size of the buildings permitted on the plot. Ðurović was still employed by Karizia at the time of the second payment.</p> <p>Leaked correspondence suggests the 780,000-euro payment was made in a hurry. In an email to a Cypriot service provider that helped manage General Pioneer, sent the day before the transfer was made, Bozarov’s daughter wrote that the payment to Ðurović was “extremely urgent” and needed to be sent “tomorrow morning, first thing if possible.”</p> <p>Then, just three days before the assassination of Pukanić, Ðurović resigned as a director of Karizia and left the company, whose ownership was simultaneously transferred to a Cypriot firm.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/zapusteno-gradjevinsko-zemljiste-na-novom-beogradu-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/cyprus-confidential/zapusteno-gradjevinsko-zemljiste-na-novom-beogradu.jpg" id="img-3607" /> <img src="https://www.occrp.org/assets/cyprus-confidential/zapusteno-gradjevinsko-zemljiste-na-novom-beogradu.jpg" class="hidden" id="aside-img-3607" alt="cyprus-confidential/zapusteno-gradjevinsko-zemljiste-na-novom-beogradu.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> KRIK </small> Đurović was hired to file paperwork to obtain building permits for land in Belgrade, but, years later, nothing has been constructed there. </div> </div> <script> $(document).ready(function() { let rand_3607 = $("#aside-img-3607").prop("naturalWidth"); if(rand_3607<750){$("#img-3607").attr("src","/assets/cyprus-confidential/zapusteno-gradjevinsko-zemljiste-na-novom-beogradu.jpg");} $(window).load(function() {$("#aside-img-3607").remove();}); }); </script> <p>Bozarov’s daughter did not respond to a request for comment. Bozarov did not respond directly to questions about his business with Ðurović, but said any payments from his companies were supported by “valid contractual documentation,” and he and his lawyers shared copies of General Pioneer’s contracts, signed with Ðurović, related to the land deal.</p> <p>Yet more than 15 years after those documents were signed, nothing has been built on the plot of land. When KRIK reporters visited the site last month, they found it empty, overgrown with vegetation and scattered with litter.</p>OCCRPhttps://www.occrp.org/How Lax Oversight and War Thwarted Efforts to Hold Yemen’s Oil Polluters to Account2023-12-06T00:00:00+01:002023-12-06T00:00:00+01:00https://www.occrp.org/en/investigations/companies-get-comfortable-how-lax-oversight-and-war-thwarted-efforts-to-hold-yemens-oil-polluters-to-account<p>When the oil rigs arrived in central Yemen three decades ago, Sheik Salem Saeed Alhowtally’s community did not know what to expect.</p><p>When the oil rigs arrived in central Yemen three decades ago, Sheik Salem Saeed Alhowtally’s community did not know what to expect.</p> <p>“Otherwise we would have protected ourselves,” the tribal dignitary, who lives in an agricultural zone surrounded by oil wells, told reporters in an interview.</p> <p>Over the years, he recalled, he watched workers for a foreign oil company dump barrels of what looked like drilling waste into open pits near where his tribe lives.</p> <p>Birds and animals would come and drink the water, he recalled, but when they started dying the company put up a fence around the pits. This has done little to stop heavy rains from sweeping the contents down the valley into Raseb, where Alhowtally’s community lives in the heart of one of the country’s oil-producing regions.</p> <p>“When flash floods hit, we see a blackness in the water that resembles oil,” Alhowtally said.</p> <p>Like other communities living near Yemen’s oil fields, his tribe has paid a high price while private and state companies have made billions of dollars. Since oil was discovered in Yemen in the 1980s, attempts to hold polluters to account have floundered amid war and the fracturing of political power.</p> <p>An unpublished 2014 report commissioned by Yemen’s parliament, obtained by OCCRP, describes over 30 environmental violations carried out by more than a dozen oil and gas companies and their affiliates between the boom days in the early 2000s and the country’s descent into civil war in 2014.</p> <p>Delivered to lawmakers as the conflict was erupting, the 2014 document has been gathering dust ever since. While many of the foreign oil companies have left, state companies that took over the industry have allegedly continued the devastation, according to oil industry experts, environmental officials, and Yemenis who live in oil-producing regions. In one case, the former head of the country’s environmental agency is suing a state oil company over the ongoing health impacts on people in the region.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/OilFieldMap-03-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/investigations/OilFieldMap-03.jpg" id="img-3420" /> <img src="https://www.occrp.org/assets/investigations/OilFieldMap-03.jpg" class="hidden" id="aside-img-3420" alt="investigations/OilFieldMap-03.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Edin Pasovic </small> Yemen's oil lands. </div> </div> <script> $(document).ready(function() { let rand_3420 = $("#aside-img-3420").prop("naturalWidth"); if(rand_3420<750){$("#img-3420").attr("src","/assets/investigations/OilFieldMap-03.jpg");} $(window).load(function() {$("#aside-img-3420").remove();}); }); </script> <p>“When regulatory oversight in a country is weak, companies get comfortable,” Derham Abu Hatim, the Ministry of Oil’s director of security, safety, and the environment, told OCCRP, referring to the lax supervision he said prevailed when oil companies first arrived in Yemen.</p> <p>The 147-page report was written by an environment professor who was commissioned in the face of growing complaints about the oil and gas sector. Citing photographs, analyses of water and air samples, inspections, and citizens’ complaints, it describes incidents involving over a dozen international energy firms, local companies, and contractors.</p> <p>The Canadian oil company Nexen — which until 2015 operated near Alhowtally’s community and has since been bought by China’s CNOOC — is accused of “recklessness and wilful negligence in polluting the environment with drilling fluids” in the parliamentary report. CNOOC did not respond to multiple requests for comment on the report.</p> <p>The scale and repetition of the pollution “indicates intentional persistence in committing crimes against the environment,” the report concluded. Images of rig sites operated by Nexen at the time, located close to where Alhowtally lives in an area known as Block 51, show large amounts of dark liquid pooling across the desert sands.</p> <p>Instead of properly treating the drilling waste, the Canadian company chose the “cheap and easy” option of simply mixing it into the soil and leaving it in open pits, Abdulghani Gaghman, a geological expert who worked for Yemen’s Oil Ministry in the early 2000s, said after reviewing details in the report.</p> <p>“Nexen was careless about the way they disposed of or treated the drilling fluids,” said Gaghman, who monitored the work of oil companies during his time at the ministry. “And it is not only Nexen, but other companies working in Yemen.”</p> <p>Ali Dabhani, the chief of the environment ministry’s hazardous waste department, who reviewed the report before it was submitted to parliament, told OCCRP it showed not only the “recklessness and negligence” of the oil companies, but also the failure of Yemeni authorities to properly enforce regulations.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/Yemeni-oil-2-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/investigations/Yemeni-oil-2.jpg" id="img-4019" /> <img src="https://www.occrp.org/assets/investigations/Yemeni-oil-2.jpg" class="hidden" id="aside-img-4019" alt="investigations/Yemeni-oil-2.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Report on oil and gas pollution submitted to Yemen’s parliament </small> Images from the parliamentary report showing the pollution of drilling fluids in the Nexen-operated Block 51. </div> </div> <script> $(document).ready(function() { let rand_4019 = $("#aside-img-4019").prop("naturalWidth"); if(rand_4019<750){$("#img-4019").attr("src","/assets/investigations/Yemeni-oil-2.jpg");} $(window).load(function() {$("#aside-img-4019").remove();}); }); </script> <p>The country’s civil war has further complicated efforts to clean up the industry, said Yasmeen al-Eryani, who researched the topic in a 2020 report for the Sana’a Centre for Strategic Studies.</p> <p>“Today conditions to enact accountability mechanisms are even more challenging, she told OCCRP.</p> <p>After propping up Yemen’s government for decades, oil profits are now a source of revenue for the country’s warring factions. Those like Alhowtally are still living with the fallout. Like many in the region, he blames oil pollution for falling crop yields in his area and a rise in illnesses such as cancer and kidney disease.</p> <p>“Our land has never been like this,” he lamented. “It was fruitful and now it has become barren and is of no use.”</p> <p>Yemen’s Oil Ministry and Environment Protection Authority did not respond to requests for comment.</p> <h2 id="polluted-waters">Polluted Waters</h2> <p>After oil was discovered in Yemen in the mid 1980s, a flurry of foreign companies descended on the country to scoop up concession areas carved out by the government. These “blocks” were handed out under production-sharing agreements which gave the companies rights to explore for oil on the condition they share royalties with the state.</p> <p>At the peak of production in the early 2000s, Yemen was pumping 450,000 barrels per day. Before the war broke out, oil and gas revenues accounted for about three quarters of the state budget.</p> <p>Nexen, which was previously known as Canadian Occidental Petroleum, was one of the first companies to find oil in 1991 and by the early 2000s was operating two blocks in the province of Hadramawt. It wasn’t long before locals started to feel the effects.</p> <p>The parliamentary report details how, in March 2008, an estimated 4,500 barrels of oily water leaked out of a drainage well on Nexen’s main concession area, Block 14.</p> <p>Tribal leader Omar Saeed Ba’abaad remembers the spill. The polluted waters kept flowing for four days, and covered multiple farms, the 75-year-old told OCCRP during a visit to the area. The land has never been the same, he said.</p> <p>“We used to produce 40 to 50 bags of wheat per season. Now we only produce 10 and buy the rest.”</p> <p>Pictures in the parliamentary report show a slick black substance seeping across a tree-speckled valley. The authors describe it as “produced water” — liquid which is pumped to the surface alongside oil and is often contaminated by hazardous chemicals, some of them radioactive.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/Yemeni-oil-3-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/investigations/Yemeni-oil-3.jpg" id="img-990" /> <img src="https://www.occrp.org/assets/investigations/Yemeni-oil-3.jpg" class="hidden" id="aside-img-990" alt="investigations/Yemeni-oil-3.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Report on oil and gas pollution submitted to Yemen’s parliament </small> Images from the parliamentary report showing the leak of produced water in Nexen’s Block 14 in March 2008. </div> </div> <script> $(document).ready(function() { let rand_990 = $("#aside-img-990").prop("naturalWidth"); if(rand_990<750){$("#img-990").attr("src","/assets/investigations/Yemeni-oil-3.jpg");} $(window).load(function() {$("#aside-img-990").remove();}); }); </script> <p>Companies across Hadramawt committed “flagrant environmental violations” when disposing of this type of waste, the report noted.</p> <p>Produced water can be disposed of by reinjecting it back into the reservoir it came from, but this must be done carefully to avoid contaminating groundwater sources, explained Gaghman, the geology expert. The risk is particularly grave in Hadramawt, which sits above Yemen’s largest aquifer.</p> <p>“Produced water is poisonous, it cannot be used for humans or animals or agriculture unless [it has been through] major treatment, which oil companies avoid because it’s costly,” Gaghman said.</p> <p>After Nexen left Block 14 in 2011, the state-run company that took over found the site in disarray, according to an arbitration case that Yemen’s oil ministry filed against the Canadian company and its partners in Paris two years after Nexen’s departure.</p> <p>Yemen accused the firms of carelessly reinjecting produced water and failing to monitor if it had contaminated groundwater. Nexen admitted it had pumped the wastewater just below a freshwater aquifer for five years in the 1990s, but said it caused no environmental damage.</p> <p>The ministry also described finding dangerous and deficient wells, waste dumped or burned in the open, and a broken incinerator that hadn’t been fixed for years. Though Yemen’s environmental laws were weak, the oil ministry argued in the International Court of Arbitration, a Paris-based institution which resolves commercial disputes, that Nexen and its partners had failed to meet the basic standards set out in its contract.</p> <p>While some of the accusations were dismissed — the claim about causing pollution with produced water was deemed beyond the statute of limitations — the tribunal ordered Nexen to pay nearly $10 million to fund the replacement of the failing waste incinerator, other faulty equipment, and the costs of an environmental impact assessment it had failed to carry out before leaving the block.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/4-_2_gas_flares_from_afar-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/investigations/4-_2_gas_flares_from_afar.jpg" id="img-4655" /> <img src="https://www.occrp.org/assets/investigations/4-_2_gas_flares_from_afar.jpg" class="hidden" id="aside-img-4655" alt="investigations/4-_2_gas_flares_from_afar.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Ahmed al-Waseai </small> An oil facility in Yemen flares off gas. </div> </div> <script> $(document).ready(function() { let rand_4655 = $("#aside-img-4655").prop("naturalWidth"); if(rand_4655<750){$("#img-4655").attr("src","/assets/investigations/4-_2_gas_flares_from_afar.jpg");} $(window).load(function() {$("#aside-img-4655").remove();}); }); </script> <p>For Yemenis who live near the country’s oil fields, the impact of pollution can be measured in more than dollars. Scientific studies have shown living near petroleum fields is associated with an increased risk of certain cancers.</p> <p>Data from the Hadramawt Cancer Foundation — in the region where Nexen operated — show cancer cases nearly tripled between the early 2000s and 2015. Its director, Dr. Walid Abdullah Al-Batati, said that while no studies prove oil pollution caused the spike, the areas near the oil blocks “have the highest rates of cancer in comparison to other governorates.”</p> <p>Ba’abaad, the tribal leader whose land was tainted, blames oil pollution for the cancer that killed his brother a few years ago.</p> <p>“Our health and our lands are all destroyed because of the [oil] companies,” he said.</p> <h2 id="state-company-takes-over">State Company Takes Over</h2> <p>In Yemen’s other main oil-producing region, roughly 35 kilometers from the city of Marib, sits Block 18, where Dallas-based Hunt Oil Company discovered the first oil in Yemen in 1984.</p> <p>The parliamentary report describes various violations during Hunt’s 20-year tenure, from the emission of dangerous levels of nitrogen oxides in the air to the improper storage of hundreds of barrels of expired chemicals. Hunt was also found to have buried chemicals in a hole in the desert alongside drilling waste, and allegedly attempted to bury a “not insignificant volume of excavation waste products” at another site before being halted by local officials.</p> <p>Hunt declined to comment on the report.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/investigations/Yemeni-oil-4-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="" data-img="/assets/investigations/Yemeni-oil-4.jpg" id="img-2641" /> <img src="https://www.occrp.org/assets/investigations/Yemeni-oil-4.jpg" class="hidden" id="aside-img-2641" alt="investigations/Yemeni-oil-4.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Report on oil and gas pollution submitted to Yemen’s parliament </small> Images from the parliamentary report showing the improper storage of chemicals in the Hunt-operated Block 18. </div> </div> <script> $(document).ready(function() { let rand_2641 = $("#aside-img-2641").prop("naturalWidth"); if(rand_2641<750){$("#img-2641").attr("src","/assets/investigations/Yemeni-oil-4.jpg");} $(window).load(function() {$("#aside-img-2641").remove();}); }); </script> <p>Hunt exited Block 18 in 2005 after parliament refused to renew its lease for the concession. But the state-run Safer Exploration and Production Operations Company that took over is accused of carrying on its legacy.</p> <p>In 2018, Abdulqader al-Kharraz, then-chairman of the Environment Protection Authority (EPA) received a complaint that the state company had buried dangerous chemical waste from one of its processing units in the desert. Less than a year later, the EPA received another complaint that the company had been improperly storing chemicals, leaving them exposed to the elements, in a threat to the surrounding area.</p> <p>After multiple efforts to seek cooperation from Safer failed, Kharraz filed a lawsuit in 2020 accusing the company of burying hazardous chemical products and drilling waste, and seeking compensation on behalf of dozens of cancer patients.</p> <p>The scientist backs his claims with an analysis of 65 soil samples he took from various landfill and trash sites in Safer-run Block 18 and two neighboring blocks over the course of several years. Lab tests revealed they contained volatile hydrocarbon particles and metals that can cause cancer — such as chromium, copper, nickel, and lead — at levels above international limits.</p> <p>In one of the samples, the level of lead was more than 120 times higher than the international standard used in the laboratory, while zinc was 32 times higher.</p> <p>Kharraz also distributed a 2020 questionnaire to a random sample of 51 people in Harib, a city near the blocks he sampled, and found nearly two thirds suffered from cancer and more than 17 percent had chest and respiratory diseases. The incidence of brain cancer was highest among children.</p> <p>In comments to OCCRP, Safer denied burying any dangerous material in its site or violating Yemen’s environmental law, which punishes intentional pollution that damages the environment with up to 10 years in prison. The company also denied that its operations were harming the population’s health, though it declined to comment on Kharraz’s lawsuit specifically.</p> <p>The company said that since taking over Block 18, it has taken measures to protect the environment, such as lining waste pits and protecting water supplies with better cementing of underground pipes.</p> <div class="occrp-inset-box vertical " id="occrp-inset-box-resuming-operations"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-resuming-operations">🔗</a>Resuming Operations </h3> <div class="subheader"> <p>While most foreign companies left Yemen or paused production after civil war broke out, some have resumed operations. In October 2021, OCCRP reporters visited one area known as Block 9 in Hadramawt, which is operated by Calvalley Petroleum Cyprus.</p> </div> <input type="checkbox" id="occrp-inset-box-control-resuming-operations" /> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p>Abdullah Mubarak bin Badr, a tribal leader who lives nearby, recalled how, a few months earlier, flash floods had carried wastewater from the oil site down into the valley. “When it rains, a black substance accumulates under the date trees,” he said.</p><p>A Calvalley spokesperson acknowledged the incident and said the company paid compensation through an official government-led process to residents who were affected by the spillage, which came from the open pits of drilling debris that overflowed under the heavy rains. The spokesperson said the incident was due to the “exceptional flood.”</p><p>During the visit, reporters saw a separate earthen pit of produced water inside Calvalley’s site that lacked any liner. The contents were trickling out to the surrounding earth through a collapsed wall.</p><p>The company spokesperson said this pond was constructed before a 2010 regulation in Yemen that now requires liners for produced water, and is unrelated to the most recent leak. Calvalley added that plans to remediate the pit have been disrupted by the war.</p><p>“This will be done once the company is able to restore production and the security situation in Yemen allows international service companies to return to Yemen,” the spokesperson said.</p> </div> </div> <label for="occrp-inset-box-control-resuming-operations"><span>More</span><span>Less</span></label> </div> </div> </div> <h2 id="oil-industry-a-red-line">Oil Industry a ‘Red Line’</h2> <p>Kharraz’s legal proceedings against Safer have stalled in Yemen’s courts since 2020, with the company’s lawyers challenging technical details. The original judge on the case recused himself that year, and other judges have refused to reopen the case.</p> <p>In September 2019, a few months after Kharraz made his second complaint to Safer, he was replaced as chairman of the EPA. When he brought the case against Safer the following year, the company’s lawyer requested the prosecution investigate him for disturbing the peace and harming the public interest.</p> <p>The scientist says he eventually fled Yemen after threats that started as “advice” from friends escalated to verbal intimidation, including from a government official who spoke to his father.</p> <p>After Kharraz left the country, a Yemeni army tank shelled his home. Kharraz, who was compensated for the damage, believed he was targeted for standing up to the government. The army confirmed the compensation, but OCCRP could find no evidence he was specifically targeted.</p> <p>“Powerful people in government and oil companies protect their interests by preventing effective scrutiny of the sector,” said Kharraz, who now spends time moving between countries.</p> <p>Mohamad Salem Mojawar, another former senior EPA official who led the agency’s operations in the oil-rich governorate of Shabwa, said he too was replaced after trying to expose pollution in his region.</p> <p>In 2020, his office started documenting contamination carried out by both foreign and local oil companies operating in the area. These included failure to stop, and properly remediate, frequent and large oil leaks from a pipeline operated by the state-run Yemen Company for Investment in Oil & Minerals (YICOM). YICOM did not respond to requests for comment.</p> <p>Mojawar’s office was soon “warned by some authorities [against exposing] pollution, which has stayed for many years as a red line, shielded from scrutiny,” his agency wrote in a statement in April 2022.</p> <p>Two months later, Mojawar penned two letters to the region’s governor alleging that his envoy had instructed the EPA not to pursue legal action against oil companies or damage their reputations. Later that month, Mojawar was fired. Shabwa’s governor did not respond to requests for comment.</p> <p>Meanwhile, “the problem of oil pollution has not been solved,” Mojawar told OCCRP in March. “The polluted soil is still there and when rain falls, floods move it to agricultural land.”</p>OCCRPhttps://www.occrp.org/Episode 7: How Did Venezuela’s Oil Riches End up in Swiss Banks?2023-12-05T00:00:00+01:002023-12-05T00:00:00+01:00https://www.occrp.org/en/dirty-deeds-podcast/episode-7-how-did-venezuelas-oil-riches-end-up-in-swiss-banks<style> .sub-buttons { display: flex; flex-direction: row; justify-content: space-evenly; align-items: center; max-width: 900px; margin-left: auto; margin-right: auto; } .image-link { max-width: 250px; margin-left: auto; margin-right: auto; box-shadow: none !important; } .image-link:hover { box-shadow: none !important; } .image-link img { border-radius: none !important; width: auto !important; max-width: 100%; max-height: 50px !important; } </style><style> .sub-buttons { display: flex; flex-direction: row; justify-content: space-evenly; align-items: center; max-width: 900px; margin-left: auto; margin-right: auto; } .image-link { max-width: 250px; margin-left: auto; margin-right: auto; box-shadow: none !important; } .image-link:hover { box-shadow: none !important; } .image-link img { border-radius: none !important; width: auto !important; max-width: 100%; max-height: 50px !important; } </style> <p><strong>Repressed by Venezuela’s government on one side. Muzzled by Swiss banking secrecy laws on the other. Yet against these odds, a team of reporters exposed how corrupt Venezuelan elites stashed stolen oil profits in Credit Suisse accounts.</strong></p> <style> .iframe {height:180; margin-top:24px; margin-bottom:30px; max-width:100%; width:100%;} @media (max-width: 800px) {.iframe {max-width:96%; width:96%;margin-left: 2%;margin-right: 2%;}} </style> <div class="iframe"> <iframe width="100%" height="100%" src="https://embed.acast.com/64ccda2a1c49bf0011363c35/6564627485f70b00121ce80c" frameborder="0" allowfullscreen=""></iframe> </div> <div class="inset-caption" style="width: 100%;max-width: 100%;"></div> <div class="sub-buttons"> <div class="occrp-teaser-big"> <div class="image-link" style="width:100%;height:100%;box-shadow: rgba(0, 0, 0, 0.14) 0px 2px 2px 0px, rgba(0, 0, 0, 0.2) 0px 3px 1px -2px, rgba(0, 0, 0, 0.12) 0px 1px 5px 0px;"> <a href="https://podcasts.apple.com/gb/podcast/dirty-deeds-tales-of-global-crime-and-corruption/id1705212699" target="_blank"> <img src="https://www.occrp.org/assets/dirty-deeds-podcast/apple-podcasts.png" style="width:100%;height:auto;border-radius:5px;" /> </a> </div> </div> <div class="occrp-teaser-big"> <div class="image-link" style="width:100%;height:100%;box-shadow: rgba(0, 0, 0, 0.14) 0px 2px 2px 0px, rgba(0, 0, 0, 0.2) 0px 3px 1px -2px, rgba(0, 0, 0, 0.12) 0px 1px 5px 0px;"> <a href="https://open.spotify.com/show/6CwZCVyMDNo1pG1VMbJPCt?si=udZz2L9OTL2sOn_B6GnD4A" target="_blank"> <img src="https://www.occrp.org/assets/dirty-deeds-podcast/spotify-smaller.png" style="width:100%;height:auto;border-radius:5px;" /> </a> </div> </div> <div class="occrp-teaser-big"> <div class="image-link" style="width:100%;height:100%;box-shadow: rgba(0, 0, 0, 0.14) 0px 2px 2px 0px, rgba(0, 0, 0, 0.2) 0px 3px 1px -2px, rgba(0, 0, 0, 0.12) 0px 1px 5px 0px;"> <a href="https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5hY2FzdC5jb20vcHVibGljL3Nob3dzL2RpcnR5LWRlZWRz" target="_blank"> <img src="https://www.occrp.org/assets/dirty-deeds-podcast/google-podcasts.png" style="width:100%;height:auto;border-radius:5px;" /> </a> </div> </div> </div> <h2 id="in-this-episode-of-dirty-deeds">In this episode of Dirty Deeds…</h2> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/dirty-deeds-podcast/podcast-episode7-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="" data-img="/assets/dirty-deeds-podcast/podcast-episode7.jpg" /></a> <img src="https://www.occrp.org/assets/dirty-deeds-podcast/podcast-episode7.jpg" class="hidden" id="aside-img-7293" alt="dirty-deeds-podcast/podcast-episode7.jpg" /> <div class="image-caption"> </div> </aside> <script>$(window).load(function() {$("#aside-img-7293").remove();});</script> <p>In this episode, Nick Wallis interviews OCCRP editor Nathan Jaccard and Armando.Info editor-in-chief Valentina Lares on how a leak of Credit Suisse customer data sparked a global investigation that revealed how Venezuelan oil officials convicted of corruption stashed their millions in Switzerland’s notoriously secretive banking sector.</p> <p><strong>Read the investigation:</strong></p> <p><a href="/en/suisse-secrets/black-gold-in-swiss-vaults-venezuelan-elites-hid-stolen-oil-money-in-credit-suisse">Black Gold in Swiss Vaults: Venezuelan Elites Hid Stolen Oil Money in Credit Suisse</a></p> <h2 id="host-nick-wallis-talks-to">Host Nick Wallis talks to…</h2> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/common/staff/Nathan-Jaccard-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Nathan Jaccard" data-img="/assets/common/staff/Nathan-Jaccard.jpg" /></a> <img src="https://www.occrp.org/assets/common/staff/Nathan-Jaccard.jpg" class="hidden" id="aside-img-9389" alt="common/staff/Nathan-Jaccard.jpg" /> <div class="image-caption"> Nathan Jaccard </div> </aside> <script>$(window).load(function() {$("#aside-img-9389").remove();});</script> <p><strong>Nathan Jaccard - <a href="https://twitter.com/NJaccard" target="_blank">@NJaccard</a></strong></p> <p>Nathan is an OCCRP editor for Latin America and edited this investigation as part of the Suisse Secrets project.</p> <div class="occrp-inset-box quotebox" id="quote"> <div class="inner occrp-container-inner"> <div class="quote-text"><div class="quote-line"></div><div>“The secrecy laws made it impossible for anyone in Switzerland to work with us because it was too risky. And several lawyers asked us to be really careful with that, because it could mean that we could not go back to Switzerland.”</div></div> </div> </div> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/dirty-deeds-podcast/valentina-lares-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Valentina Lares" data-img="/assets/dirty-deeds-podcast/valentina-lares.jpg" /></a> <img src="https://www.occrp.org/assets/dirty-deeds-podcast/valentina-lares.jpg" class="hidden" id="aside-img-6047" alt="dirty-deeds-podcast/valentina-lares.jpg" /> <div class="image-caption"> Valentina Lares </div> </aside> <script>$(window).load(function() {$("#aside-img-6047").remove();});</script> <p><strong>Valentina Lares - <a href="https://twitter.com/valentinalares" target="_blank">@valentinalares</a></strong></p> <p>Valentina is editor-in-chief of Venezuelan journalism website Armando.Info and helped investigate the many Venezuelan clients listed in the Credit Suisse leak.</p> <div class="occrp-inset-box quotebox" id="quote"> <div class="inner occrp-container-inner"> <div class="quote-text"><div class="quote-line"></div><div>“The only way we have been actually able to write stories about corruption is working globally with partners around the world because the information in Venezuela, it’s very, very hard to reach.”</div></div> </div> </div> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/dirty-deeds-podcast/steven-bodzin-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Steven Bodzin" data-img="/assets/dirty-deeds-podcast/steven-bodzin.jpg" /></a> <img src="https://www.occrp.org/assets/dirty-deeds-podcast/steven-bodzin.jpg" class="hidden" id="aside-img-5368" alt="dirty-deeds-podcast/steven-bodzin.jpg" /> <div class="image-caption"> Steven Bodzin </div> </aside> <script>$(window).load(function() {$("#aside-img-5368").remove();});</script> <p><strong>Steven Bodzin - <a href="https://twitter.com/guacamayan" target="_blank">@guacamayan</a></strong></p> <p>Steven is a journalist specializing in Latin American financial fraud and the energy sector. He works for REDD Intelligence, a financial news service focused on high-yield debt in emerging markets.</p> <div class="occrp-inset-box quotebox" id="quote"> <div class="inner occrp-container-inner"> <div class="quote-text"><div class="quote-line"></div><div>“You find a rich country, you will find companies in that country that made money in Venezuela and quite often made money in really dodgy ways.”</div></div> </div> </div> <h2 id="show-notes">Show Notes</h2> <ul> <li>[0:00] Introduction</li> <li>[1:56] Nathan Jaccard explains how OCCRP obtained the Suisse Secrets leaks</li> <li>[4:54] Valentina Lares gives a crash course on Venezuela’s state oil sector</li> <li>[8:45] Nathan on Swiss banking secrecy and why corrupt elites have used Swiss bank accounts</li> <li>[13:58] Why did Credit Suisse fail to vet its customers properly?</li> <li>[17:21] Valentina on the dangers of reporting in Venezuela</li> <li>[20:24] Nathan explains how Swiss banking secrecy laws makes reporting difficult</li> <li>[25:03] Valentina explains why she and other editors at Armando.Info have been forced to leave Venezuela</li> <li>[26:09] The consequences of the article for Venezuela, the corrupt elites and Credit Suisse</li> <li>[29:58] Steven Bodzin explains the implications of OCCRP’s reporting on Venezuelan elites and Credit Suisse</li> <li>[34:06] How can Venezuela exit its current crisis?</li> <li>[36:23] Who is to blame for the corruption in Venezuela?</li> </ul> <p><strong>Check out other episodes on the <a href="/en/dirty-deeds-podcast/">Dirty Deeds main page</a>.</strong></p> <p><strong>Follow The Money — and Our Investigations:</strong> <a href="https://mailchi.mp/occrp/subscribe-newsletter?campaign=footer" target="\_blank">Get our weekly newsletter</a>.</p> <p><strong>Support investigative journalism in the public interest.</strong> <a href="https://occrp.fundjournalism.org/donate/?campaign=701EY0000009gGGYAY" target="_blank">Donate to OCCRP</a>.</p> <h2 id="transcript">Transcript</h2> <p><strong>Nick Wallis:</strong> Coming up, the link between the collapse of Venezuela’s state oil producer, Credit Suisse bank, and powerful nations exploiting unstable governments.</p> <p><strong>Valentina Lares:</strong> What you have in Venezuela, mostly it’s a scenario of fear. You can just be jailed for saying your opinion or by pointing out something wrong in the system.</p> <p><strong>Nathan Jaccard:</strong> The secrecy laws made it impossible for anyone in Switzerland to work with us because it was too risky. Several lawyers asked us to be really careful with that, because it could mean that we could not go back to Switzerland.</p> <p><strong>Steven Bodzin:</strong> You find a rich country, you will find companies in that country that made money in Venezuela and quite often made money in really dodgy ways.</p> <p><strong>Nick Wallis:</strong> My name is Nick Wallis and this is Dirty Deeds: Tales of Global Crime and Corruption, a podcast from the global journalism network, the Organized Crime and Corruption Reporting Project, or OCCRP, as it’s known. In 2022, OCCRP published a piece about banking corruption in Europe and how it facilitates crime in South America. Two journalists, Nathan Jaccard from OCCRP and Valentina Lares from Armando.info, worked as part of a team investigating a leak from the Swiss bank Credit Suisse. When OCCRP started examining the data, they found the names of more than 20 former executives of the collapsed Venezuelan state oil company known as PDVSA. Between them they’d stashed away more than $270 million. Many of the people involved had either been convicted, indicted on corruption charges, or are on the run. But what interested OCCRP and their partners was how a European bank could help facilitate the corruption. In an interview recorded before Credit Suisse was absorbed by the Union Bank of Switzerland, I started our conversation by asking Nathan how OCCRP got hold of the leaked information.</p> <p><strong>Nathan Jaccard:</strong> Originally, the data was provided to the German newspaper Süddeutsche Zeitung by an anonymous source more than a year before we published, so that’s in 2019. The person just left a message saying that the Swiss banking secrecy laws were immoral.</p> <p><strong>Nick Wallis:</strong> Did you know whether the source was internal or external to the bank?</p> <p><strong>Nathan Jaccard:</strong> We don’t know much and we really can’t say anything more about the source. What we know is that this person somehow had access to some internal data about bank accounts. So what we got as journalists was a massive amount of information. We started working on that and organizing and identifying. So we first had a couple of months of really boring work.</p> <p><strong>Nick Wallis:</strong> And what was this data formatted in? Was it electronic or were you given thousands and thousands of paper documents? And did it come directly from the newspaper, the German newspaper, after they’d done their own verifications, or did you have to go through your own verification process to prove to yourself that the data was what it purported to be?</p> <p><strong>Nathan Jaccard:</strong> It was electronic data, but it was still in a really raw format.</p> <p><strong>Nick Wallis:</strong> When the raw data came to you, you said it was in a very disorganized state. What are we talking about? Are we talking about spreadsheets? Are we talking about lists of numbers? Are we talking about letters? How much data were you actually handling?</p> <p><strong>Nathan Jaccard:</strong> So the data all in all is more than 18,000 Credit Suisse accounts with 30,000 account holders, but really basic information that gave us dates when the accounts were created, how much money was in the account, but we had to really start diving into the different countries. We had more than 160 nationalities from 120 different jurisdictions.</p> <p>Aleph, this tool that we use, enables us to filter so we can start filtering by nationalities. For instance, Venezuela was one of the countries that was most represented in the leak. We had 6,000 names just for Venezuela, but before we really started diving into the names, we had to spend three months working on organizing the information we got, uploading it, checking that it was accurate so we had enough information to tell us that we had legitimate documents.</p> <p><strong>Nick Wallis:</strong> You mentioned Venezuela, and we’re going to focus on Venezuela because that was the subject of your brilliant article, “Black Gold in Swiss Vaults: Venezuelan Elites Hid Stolen Oil Money in Credit Suisse,” and listening patiently to what you’ve been saying is Valentina Lares. Hi Valentina.</p> <p><strong>Valentina Lares:</strong> Hi.</p> <p><strong>Nick Wallis:</strong> First of all, just tell us a little bit about Venezuela as a country. Where is it located for those who’ve never seen it on a map before or who’ve never been there? And how does the economy function?</p> <p><strong>Valentina Lares:</strong> Well, we are talking about a beautiful country that is in the north of South America, between Colombia, Brazil to the south and the Caribbean Sea. We’re talking about a country with roughly 30 million people and it has lived through oil exploitation the last 50 years. It’s the main source of wealth of the country.</p> <p>It reached, 15 years ago, three million barrels per day and it was the fifth-largest oil producer in the world. Those levels have fallen dramatically over the last decade because of misconduct, bad administration, and also corruption. And now it’s barely recovering oil production, which has fallen down to 400,000 barrels per day. That has provoked a huge wave of poverty, unfortunately, and also a big exodus.</p> <p><strong>Nick Wallis:</strong> Why is it that so many Venezuelans ended up with bank accounts at Credit Suisse? Because that obviously became a source of considerable interest to you when you received this data.</p> <p><strong>Valentina Lares:</strong> Well, actually, that was a big surprise for OCCRP, and that’s why they reached out to some Venezuelan journalists, me included. They needed a pair of coached eyes to see through so many names that were coming from Venezuela as clients of Credit Suisse. So we started digging up these names.</p> <p>Venezuela has the biggest proven reserves of oil in the world and many of the names we were looking at were linked to the oil industry and they were not new names for us. It was mostly names that we’ve heard, read, and known that were linked to schemes of corruption, but we found that many of the names that were already indicted or under some legal procedures had their money in Credit Suisse. So the bell rang very loud for us and we started digging because PDVSA, which is the state oil company…</p> <p><strong>Nick Wallis:</strong> Yes, that stands for Petroleos de Venezuela S.A. but everyone knows it as PDVSA, right. So basically the state-owned oil company.</p> <p><strong>Valentina Lares:</strong> Yes. Well, it’s no secret that it has been looted almost to the ground.</p> <p><strong>Nick Wallis:</strong> Does it still exist? Because I got the sense that at this point it barely exists because it’s essentially been hollowed out by the corruption within it.</p> <p><strong>Valentina Lares:</strong> It barely exists, but it does [exist]. It’s sort of recovering now with the help of Iranians and Russians. But it used to be the fifth-largest oil producer in the world, and it fell down on its knees, practically. You can go to any infrastructure of PDVSA’s in Venezuela and you will find rusty structures, and some of the refineries or the oil drills are almost abandoned.</p> <p><strong>Nick Wallis:</strong> Nathan, just explain to people who may have not come across Credit Suisse before and the way that Swiss banking works, why would a corrupt Venezuelan oil executive want to open a Swiss bank account?</p> <p><strong>Nathan Jaccard:</strong> Credit Suisse was one of the biggest banks in Switzerland, hence in the world, so we are really talking about a major banking player. And we know that during the most corrupt years in Venezuela, where oil prices were really high, there were lots of corrupt schemes around PDVSA and in general in the country around a lot of different aspects: food, drugs imported for the pharmacies, for the hospitals. So it’s not like your average $10 million corrupt guy. We’re talking about corruption schemes that are in the billions of dollars.</p> <p><strong>Nick Wallis:</strong> How do these corruption schemes actually manifest themselves? Is it someone saying: “I’ll tell you what, I’ll give you a contract if you add an extra $5-10 million on for me and just deposit it over here.” Is it that simple?</p> <p><strong>Nathan Jaccard:</strong> The more classical schemes that we are talking about [are] contracts. So I give you 10% if you give me the contract. So some guys that were giving money in exchange for public funds to do oil contracts that are worth huge amounts of money, but also more complicated schemes because Venezuela at that time had a control on the bolivar, the national currency. So they would control the exchange rates.</p> <p>And it’s a bit complicated, but basically, if you had access to U.S. dollars and the exchange rates, you could make a lot of money because you were getting really, really, really cheap U.S. dollars. And then instead of paying 100 bolivars for $1, you would pay ten bolivars for $1. So you could get a lot of dollars really cheap through government access and through government contacts. And then you could get these dollars that you bought really cheap and then go to international markets or resell them back in the black market in Venezuela, so making a lot of money this way and really looting the country.</p> <p><strong>Nick Wallis:</strong> But surely Credit Suisse as a responsible banking organization, had a duty to inquire as to where their client’s wealth was coming from?</p> <p><strong>Nathan Jaccard:</strong> Yeah. So at that time you could see several international banks and several Swiss banks, private ones, smaller ones, but also bigger ones like Credit Suisse, [were] present in Venezuela with brokers that were trying to get and lure clients into the banks. And wealthy people, corrupt people, knew where to go or with whom to work where it was easier to get your money to a Swiss bank.</p> <p>Why would you want to get money into a Swiss bank? Because once it’s in the Swiss system, it’s money that’s almost clean. You can then go and buy a mansion or buy a yacht or whatever, and no one’s going to ask anything. It’s already coming from a Swiss bank account. Supposedly the banks have to do a lot of verification, know your client, due diligence, but we realized that this was something that was not done.</p> <p>We found a document that came from Spanish prosecutors that showed us one of the main clients. This guy is called Nervis Villalobos. He already had tried to open a bank account with Credit Suisse and they did due diligence on him at that time. We had some of the documents from the due diligence and they were raising a lot of red flags and saying: “This guy used to be a vice-minister of energy. This guy is linked to these schemes.” But nevertheless they accepted him and they opened more and more accounts in his name and on his behalf.</p> <p><strong>Valentina Lares:</strong> Something which was like a eureka [moment] for us when we were investigating was one of the addresses he submitted in Caracas, not that it didn’t exist, it was a mix between his address in Maracaibo and something in Miami. He made a Frankenstein address he said was in Caracas. We are from Caracas, and we saw this and said: “This place is fantasyland, completely.”</p> <p><strong>Nick Wallis:</strong> Well as you say, it’s a massive red flag and it’s another intriguing part of your investigation. One of the things that strikes me about this is that you published the investigation in February last year. Now, after the financial crash in 2008-2009, world banking was supposed to have cleaned up its act, and yet from what you’re saying, Credit Suisse were at the very least not doing due diligence on the customers that they were attracting over the last decade and may well have been involved in corrupt practice, which suggests that at least this bank within the system hasn’t cleaned up its act since the banking crisis. What was your interpretation of it?</p> <p><strong>Nathan Jaccard:</strong> This bank has been going through a lot of different crises and scandals, and they’ve always said: “We’re sorry, this was a mistake. It’s not systematic. We are cleaning up and we are trying to make an effort.” But what we can see, and it’s clear in the data, is that even after they made a public announcement saying that they were pulling their things together, organizing, they were still accepting dirty money, or very toxic money at least, that they should have known about.</p> <p>So we also tried to compile enough cases to show that this was a systematic practice that was happening in the bank. Some internal sources were also interviewed and one of the stories in the Suisse Secrets series includes their testimonies, and they all say that there was internal pressure to get big money into the bank, partially linked also to to the 2008 crisis because that’s when they also decided to expand to new markets and to get more clients from from new markets.</p> <p>So we’re talking about Venezuela, but we’re also talking about the Middle East, South Asia, so other countries where they decided strategically to expand after the crisis. If you have poor money for them, like $1 million, $5 million, you will go through the whole due diligence process and it’s going to be tough and they will verify. If you have $20 million, $40 million, it’s going to be easier for you and they won’t verify.</p> <p><strong>Nick Wallis:</strong> You mentioned you spoke to some insiders, but how do you actually make contact with people inside a bank and persuade them to give you a comment like this?</p> <p><strong>Nathan Jaccard:</strong> There was a team that was mostly focused on why the bank was accepting these kinds of clients. They started talking with former employees, that connected them to current [employees]. And it’s interesting because after the publication, more people have come forward trying to reach us. Of course, it’s really difficult because it’s not only that you can lose your job or get a bad reputation in the industry for coming forward, but it’s also a legal issue in Switzerland. Swiss laws are really tough on bank secrecy.</p> <p><strong>Nick Wallis:</strong> We’ll come back to Switzerland’s banking secrecy laws in a moment. But first, Valentina, what was the situation on the ground in Venezuela? Because you quote people anonymously who are still in fear.</p> <p><strong>Valentina Lares:</strong> Well, in Venezuela, let’s say the ecosystem of media and freedom of speech is severely damaged because we’re living under a dictatorship that prosecutes people at their work. Also you can be jailed for saying your opinion or by pointing out something wrong in the system. So what you have in Venezuela, mostly it’s a scenario of fear of speaking.</p> <p>So we wanted with the article to explain how these kind of processes really affect the industry and the lives of people. So that’s why we wanted to go to what once was the jewel of oil production in Venezuela, which is Maracaibo, specifically Lago de Maracaibo, to see the effects of that corruption. And we found, of course, most of the oil workforce diminished and exhausted and poor, but also we found infrastructure abandoned and we wanted to describe as vividly as we could how the jewel of Venezuela, the main motor of wealth of the country, was looted to the ground. And we started talking with the people and watching the places. It’s a place where you can actually step on oil, it’s coming out of the soil, but you don’t have anywhere to process it.</p> <p>All the pipes and tubes are rusty. You don’t have the navy fleet that used to transport the workers. And then when you talk to people about how they feel, how their life used to be when they had that job, you have a real sense of how in so little time — we are talking about five to 10 years — someone that has life insurance, middle-class workers, because working for PDVSA in Venezuela was like an objective of life, a goal for your life, if you had a job in PDVSA you were set because you had a good job for all your life. But now it’s almost a guarantee of poverty, and that changed completely in a very small amount of time.</p> <p><strong>Nick Wallis:</strong> And you have oil shortages don’t you in Venezuela?</p> <p><strong>Valentina Lares:</strong> It’s incredible for us to actually process that information, because we have always been the country that not only has gasoline for everybody, but also the cheapest gasoline in the world.</p> <p><strong>Nick Wallis:</strong> And you’ve been describing the corruption and the poverty that it engenders in Venezuela, and Nathan, you touched on the corruption in the banking system in Credit Suisse, or at least the turning of blind eyes to where money is coming from. But the theme that actually connects them both for me is the fact that the government makes it very, very difficult for anyone to speak out against this. And Nathan, you touched on this in particular. The Swiss secrecy laws around banking actively discourage or indeed punish whistleblowers, which perpetuates the problem.</p> <p><strong>Nathan Jaccard:</strong> Yes. So that’s a really big part of the whole issue. It’s forbidden by the law in Switzerland to hold banking information. So when we started working on this we were all taking a risk, a legal risk that could have legal consequences and eventually end up in a prison sentence for holding and just seeing this data.</p> <p>I’m Colombian-Swiss and I was one of the people who was thinking, “Okay, maybe I won’t be able to go back to Switzerland because it’s going to be an issue for me.” I have my family in Switzerland and my grandmother, so maybe I couldn’t see my grandmother again, or at least in Switzerland, because maybe we could have really strong legal problems. That also was a problem for potential Swiss partners or for even going to Switzerland to investigate, because we couldn’t really tell Swiss journalists to help us on this because we knew that they would have massive consequences.</p> <p><strong>Nick Wallis:</strong> That’s crazy because you’ve got a country which is right in the middle of Europe, right in the middle of Western democracy, which effectively muzzles its own journalists from investigating corruption within its borders.</p> <p><strong>Nathan Jaccard:</strong> Switzerland is very proud of being this country where you can speak up, but at the same time, they have these kinds of laws. It’s more than an elephant in the room, it’s like a thousand elephants in the room.</p> <p><strong>Nick Wallis:</strong> Are these secrecy laws that exist in Switzerland part of the reason why you weren’t able to partner up with a Swiss media company in order to publish your story, in order to work on the investigation yourself?</p> <p><strong>Nathan Jaccard:</strong> Yes, these secrecy laws made it impossible for anyone in Switzerland to work with us because it was too risky. Several lawyers went through it and they said that it was not possible, and they asked us to to avoid going to Switzerland and to to be really careful because it could mean that we could not go back to Switzerland. I was hesitant about putting my name on the investigation, being in the credits and everything.</p> <p><strong>Nick Wallis:</strong> What was it like Valentina working across continents with people and trying to make sure that you actually were motivated to keep digging into these incredibly obscure documents to get the information you needed?</p> <p><strong>Valentina Lares:</strong> It’s been quite a breakthrough for me and also for Venezuelan journalism in general. The only way we have been actually able to write stories about corruption is working globally with partners around the world because the information in Venezuela, it’s very, very hard to reach. Venezuela doesn’t have practically any laws that protect freedom of speech or access to information.</p> <p>So the opportunity to work with a platform like OCCRP that had access to this leak and so many others, it’s the only way practically to have access to a story this powerful and this full of data. It’s very hard and dangerous to find this kind of information inside Venezuela. So we are digging into what is outside.</p> <p><strong>Nick Wallis:</strong> You’re speaking to me from Spain at the moment. Are you at risk if you go back to Venezuela? Are journalists in general at risk?</p> <p><strong>Valentina Lares:</strong> I also work for a website of investigative journalism called Armando.info. We have some journalists in Caracas, but some of us are outside because our editors were prosecuted by the state for cracking another story and they had to flee the country.</p> <p>It’s permanently blocked by the state communication company from the Internet. So people have to go through a VPN to have access to our content. But yes, the situation of journalists inside Venezuela is very tough. I don’t like to use the word, but they are actually very brave warriors. They are reporters that are inside and still doing their work.</p> <p><strong>Nick Wallis:</strong> You obviously work very closely as a team. What was it like seeing the story published and seeing the effect that it had?</p> <p><strong>Valentina Lares:</strong> Fortunately, we had the chance to see some repercussions, but especially in the case of Venezuela, the repercussions were among or between the people and the very few media [outlets] that still exist there and are independent. It was a big discussion and it was very important because we know in Venezuela that we’ve been robbed for the last few decades.</p> <p>But this particular article and whole [Suisse Secrets] series allowed us to know how. Who are the enablers that allow them to move their money from one place to another, to wash it, to make it good for their financial system? So it created public discussion. Sadly, in the case of Venezuela, it hasn’t reached the judicial levels. There’s no one prosecuted.</p> <p><strong>Nick Wallis:</strong> Well this is the thing, in your article you talk about one Venezuelan who’s sitting pretty in a villa just outside Madrid with $2 million who’s been fingered in your article for potential corruption charges, but still evading the law.</p> <p><strong>Valentina Lares:</strong> Yeah, well most of the people we mentioned in that article were prosecuted in the United States or in Spain. But the case of the guys that are in Spain, particularly this one, it’s amazing how sometimes the law is so reluctant to pursue or go after white collar criminals. This guy is connected to almost every scheme that we have worked on in corruption in Venezuela, in the States, in Andorra, in Spain. But still, he has some sort of parole. But he walks free. Money talks and talks loud, apparently.</p> <p><strong>Nick Wallis:</strong> What have Credit Suisse said?</p> <p><strong>Nathan Jaccard:</strong> It was so huge that it became a national scandal. So it was difficult for [Swiss prosecutors] to go after the press and the journalists. So far, I haven’t been back to Switzerland, so I can’t really tell if I will get into more trouble. But we’ve been working with Swiss journalists. And I think that the pressure that we made with all this media [coverage] from around the world really protected us.</p> <p><strong>Nick Wallis:</strong> Nathan Jaccard from OCCRP and Valentina Lares from Armando.info talking about the corruption within PDVSA and how it appears Credit Suisse bank was happy to take money which had been looted from Venezuela.</p> <p>During our interview, Valentina hinted that the political situation in Venezuela is difficult at the moment and there’s a climate of fear within the country. The current president, Nicolás Maduro, is not recognised by many Western countries, including the United States, which under Donald Trump imposed severe sanctions. These have been partially lifted by the Biden administration in exchange for the Maduro regime committing to release 200 political prisoners and hold a fair presidential election in 2024. Economically, a number of factors, including rampant corruption, have caused widespread poverty in Venezuela and an exodus of many working-age people unable to find jobs.</p> <p>Stephen Bodzin is a writer and journalist specializing in Latin American financial fraud and the energy sector. He currently works for REDD Intelligence, a data and research provider focused solely on emerging markets. I started by asking him what Nathan and Valentina’s report says about the relationship between Venezuela, powerful nations, and global institutions.</p> <p><strong>Steven Bodzin:</strong> What the OCCRP report shows about Credit Suisse, the conclusions should not be limited to Credit Suisse. I think it’s really important to remember that Credit Suisse got unlucky in the sense that their data got leaked, but they are not alone. The number of companies in the U.K., in the United States, in Canada, Switzerland as well, France.</p> <p>You find a rich country, you will find companies in that country that made money in Venezuela and quite often made money in really dodgy ways. And the information is out there. It’s well-known, the authorities know about it, but it’s much easier to go after the Venezuelans who are involved, to complain about PDVSA.</p> <p><strong>Nick Wallis:</strong> And Venezuela, as a country right now by any reading, is in serious trouble. I’m very interested because I know you’ve got a passion for that part of the world and you lived in Venezuela yourself. I was very interested in your reading on it. Where do you see the country as being now? And what about the geopolitical risk factors involved in trying to turn it into a functioning economy that can feed its own citizens, that can take advantage of the oil that is so close to the surface?</p> <p><strong>Steven Bodzin:</strong> It’s pretty tough because there are a lot of different directions things could go as far as whether to recognise the current de facto government in Venezuela, which is Nicolás Maduro’s government. He is the president there. He has control. The United States and several allies a few years ago decided that they would make this really all or nothing gambit of recognizing an interim government, an alternative head of state, Juan Guaidó, who was an elected legislator but he was never elected president.</p> <p>But he took over the presidency in his mind and in the minds of the United States and some other countries. Unfortunately for the United States and for Guaidó, that didn’t work out. Fortunately for Maduro, that didn’t work out.</p> <p>And at this point, it’s really tough to see exactly what direction things go. As far as this, all these issues of corruption, I think that the Venezuelan situation is deeply, deeply problematic right now. Going back decades, the way that business has been done there has included corruption, and unraveling that, unwinding that, is going to be really challenging.</p> <p>But it’s clear that the current method of trying to do it, which is that the United States and other powerful countries have imposed sanctions on Venezuela and are just leaning on the country, that doesn’t seem to be having all that much of an effect. It’s mostly just shifting things into more and more opaque structures. At some point it would probably be good to get Venezuela back into the international system where we can at least see what’s happening a little bit better.</p> <p><strong>Nick Wallis:</strong> Is part of Venezuela’s problem that it has so much in terms of natural resources, it has so much oil, it is always going to be a player whoever has control of that oil, whether it’s the country itself and the executives who are running PDVSA or the foreign companies coming in looking to exploit it?</p> <p><strong>Steven Bodzin:</strong> That’s absolutely true. It’s an oil-rich place. It’s a small country. And because of the general ideology in Venezuela, and really in much of the world, that the state should be the main player in the oil industry, that means that you have all of the power concentrated in very few hands.</p> <p>If you become the president of Venezuela, you not only get control of the armed forces, the public safety agencies, import-export, these kinds of things that a normal head of state in any country would be in charge of. You also get to be in charge of by far the biggest company and biggest industry in the country. As long as those two are traveling together, it’s a little bit like having church and state traveling together in medieval times where the most important institutions are all in very few hands and it’s a really winner-takes-all system with very few checks and balances.</p> <p><strong>Nick Wallis:</strong> It strikes me in your analysis of the situation that nothing is going to improve in Venezuela until either the Maduro government is recognized or the opponent government actually takes proper control and is properly recognized by the international community. Is that where you say the beginning of any solution starts or are there other things that need to be done or could be done more quickly, either internally or externally, to stop Venezuela from continuing as a failed state?</p> <p><strong>Steven Bodzin:</strong> Yeah, I think that there are a lot of people who’ve made good suggestions about how to take quicker steps than full recognition of the Maduro government. For example, there have been some efforts on the part of many countries to work with the Maduro government on humanitarian relief for people in Venezuela.</p> <p>The Colombian government is working with Venezuela on issues of basic person-to-person connections. The fact that the Colombian government has recognized the Maduro government, that’s going to allow a lot easier travel back and forth for the many Venezuelans who’ve moved to Colombia, for the many Colombians living in Venezuela.</p> <p>So it’s not that the United States specifically needs to immediately re-recognize Maduro. There are many countries involved that can do their part. The United States could also start letting companies do more humanitarian work and even oil work in Venezuela. That seems to be happening little by little.</p> <p><strong>Nick Wallis:</strong> And is Maduro defiant in the face of these sanctions or are there back channels open? Do you sense a softening or changing of position since Trump imposed the more stringent sanctions when he was in power?</p> <p><strong>Steven Bodzin:</strong> I think that the main change we’ve seen since the Trump administration put in maximum pressure policies is that the Maduro government has cracked down harder and harder on people, made it ever-harder for people to resist within Venezuela, and you’ve seen millions more people leave the country, including many of the kinds of people who you’d want to have there in order to help the country recover. So I think that’s why I personally see that policy as having failed and they didn’t have a plan B.</p> <p><strong>Nick Wallis:</strong> I just wonder, as a final question, whether you could possibly even call it as to whether Venezuela’s messed itself up or is the fault of foreign governments and foreign businesses enabling corruption and putting political pressure which has caused the situation in Venezuela?</p> <p><strong>Steven Bodzin:</strong> People are really good at being corrupt and I think everyone has it in them to take more than their share, given the opportunity. And one of the things we try to do as a civilization is set up systems where that doesn’t happen. Venezuela has had better and worse systems at times in its history.</p> <p>Other countries have had better and worse systems. But it was in a lot of people’s interest to dismantle those systems during the oil boom starting in 2003. That included politicians in Venezuela, it included companies in other countries, it included banks like the ones that we’re looking at in this investigation. There were a lot of people making money and a lot of people gaining power, a lot of people eating well. It was a good time. So I don’t think that the blame should fall on any one individual or any one political party. There were a lot of people at fault for the sacking of Venezuela, and it’s going to take a lot of people working together to bring things back from where things are now.</p> <p><strong>Nick Wallis:</strong> My thanks to Steven Bodzin from REDD Intelligence. And before that Nathan Jaccard from OCCRP and Valentina Lares from Armando.info. We contacted Credit Suisse before they were acquired by UBS and put to them the allegations in this podcast the allegations in this podcast. They said: “As a matter of law, Credit Suisse cannot comment on potential client relationships, including closed relationships. Credit Suisse is committed to operating its business in strict compliance with all applicable laws, rules and regulations within the markets in which it operates, and we have stringent control mechanisms in place to combat financial crime-related activities, with a series of significant measures taken over the last decade in line with financial market reforms. Our strategy puts risk management at the very core of our business.”</p> <p>We tried to contact Nervis Villalobos’ lawyer for comment but we were unable to reach him. When he was previously approached by OCCRP, he declined to comment. If you’d like to read the OCCRP report in full, it’s called “Black Gold in Swiss Vaults: Venezuelan Elites Hid Stolen Oil Money in Credit Suisse.”</p> <p>Thank you for listening to Dirty Deeds. If you like what you hear, please leave us a review and give us a rating. This will help us bring these important stories to more people, and make a better podcast for you.</p> <p>If you want to continue to hear incredible stories from OCCRP journalists and about the work they do, be sure to follow this podcast on your chosen podcast platform. That way you won’t miss future episodes and series.</p> <p>You can support the difficult and often treacherous work OCCRP journalists do, so they can continue to expose the corruption and crime that would otherwise go unseen and unheard - to donate to the OCCRP, please go to occrp.org/donate.</p> <p>Dirty Deeds: Tales of Global Crime and Corruption was produced by Lindsay Riley, with research by Phoebe Adler-Ryan and Riham Moussa at Rethink Audio.</p> <p>And check out the growing number of OCCRP podcasts, which you can find on your favorite podcast platform. My name is Nick Wallis, and this has been a Little Gem production for the Organised Crime and Corruption Reporting Project.</p>OCCRPhttps://www.occrp.org/Businessman Who Bought Dominica Passport and Funded U.K. Tories Now Under Investigation in India2023-12-01T00:00:00+01:002023-12-01T00:00:00+01:00https://www.occrp.org/en/dominica-passports-of-the-caribbean/businessman-who-bought-dominica-passport-and-funded-uk-tories-now-under-investigation-in-india<p>Back in the early 2010s, Gursamarjit Singh was thriving. His start-up company, IndiaHomes, was promising to “revolutionize” India’s real estate market by offering tech-led, online-only property sales services. As the business prospered, Singh himself amassed a property portfolio in India and the U.K. worth millions of dollars.</p><p>Back in the early 2010s, Gursamarjit Singh was thriving. His start-up company, IndiaHomes, was promising to “revolutionize” India’s real estate market by offering tech-led, online-only property sales services. As the business prospered, Singh himself amassed a property portfolio in India and the U.K. worth millions of dollars.</p> <p>But in April 2015, Singh stepped down as the firm’s operational managing director during a property market crash. The next year, IndiaHomes went out of business, leaving scores of customers out of pocket. Singh then resigned as the company’s registered director.</p> <p>By that point, Singh had given up his Indian citizenship and purchased a passport from Dominica, a Caribbean island nation that sells its citizenship around the world. With the global access offered by his new nationality, Singh left his former life behind, and moved to the U.K. He started using his nickname, “Sam” Singh, became a major Conservative party donor, and bought a mansion now on sale for about $10 million.</p> <p>OCCRP has obtained a cache of documents detailing Singh’s business affairs, including bank statements, company documents, and invoices. Together with newly available legal and corporate records, they show how transnational elites can use so-called “golden passports,” coupled with financial tools such as offshore trusts, to move money, travel, and build a new life abroad.</p> <p>Last year, Indian police issued a so-called “Look Out Circular” against Singh, following a complaint alleging fraud filed by his sister-in-law in India. The circular requires authorities to watch for him at border crossings and arrest or detain him for questioning if he enters the country, according to two Indian lawyers. Police have not formally filed charges, but online records show the complaint is still open.</p> <p>In a response to a request for comment, a Delhi-based lawyer for Singh denied the allegations and told OCCRP that “the Look Out Circular relates to an unfortunate private familial dispute between our client and his sister-in-law who has personal enmity against him.”</p> <p>Meanwhile, scores of IndiaHomes customers have banded together online for years to complain that the company short-changed them. No legal action has been taken against Singh or the company over the complaints, which Singh denies.</p> <p>Singh has long since been set up in the U.K., where he has bought high-end property and established companies using his new nationality, and mingled among high society.</p> <p>Singh’s lawyer told OCCRP that IndiaHomes was “a successful venture” and “all the decisions were taken by the executives / board of the Company and not by our client.” The lawyer added that IndiaHomes was “a multi-investor and multi-director company and the [sic] all the decisions were taken by the executives / board of the Company and not by our client.”</p> <p>The lawyer said “there is no doubt or lack of clarity” as to whether Singh had “the financial ability to buy properties or invest in any other businesses and there is no legal restriction on the same.” The lawyer said that Singh’s Dominica citizenship was acquired “with the purpose of easing business travel and avoiding lengthy delays for cumbersome visa restrictions.”</p> <aside class="box-side "> <h3 class="occrp-section ">About the Project</h3> <div class="text"> <p style="padding-top: 0 !important;">Singh's name was among roughly 7,700 reviewed as part of Dominica: Passports of the Caribbean, an international collaboration between OCCRP and partners. The project examined a system that British authorities say has involved “clear and evident abuse”. (<a href="https://www.occrp.org/en/dominica-passports-of-the-caribbean/">Read more about the project here</a>.)</p> </div> </aside> <h2 id="on-your-side">‘On Your Side’</h2> <p>Singh’s online real estate agency, IndiaHomes, framed itself as a tech-driven innovator in the country’s rapidly expanding property market. One TV advertisement opened with quickfire shots of unscrupulous real estate agents laughing menacingly into the camera while waving wads of cash. Unlike those crooks, the <a href="https://www.youtube.com/watch?v=oW5xwXvGVi4" target="_blank">ad assured viewers</a>, IndiaHomes was “on your side.”</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/dominica-passports-of-the-caribbean/india-homes-reception-delhi-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="The lobby of the building that housed IndiaHomes in Delhi" data-img="/assets/dominica-passports-of-the-caribbean/india-homes-reception-delhi.jpg" id="img-4531" /> <img src="https://www.occrp.org/assets/dominica-passports-of-the-caribbean/india-homes-reception-delhi.jpg" class="hidden" id="aside-img-4531" alt="dominica-passports-of-the-caribbean/india-homes-reception-delhi.jpg" /> </a> <div class="inset-caption"> A photograph showing the lobby of the building that housed IndiaHomes in Delhi. </div> </div> <script> $(document).ready(function() { let rand_4531 = $("#aside-img-4531").prop("naturalWidth"); if(rand_4531<750){$("#img-4531").attr("src","/assets/dominica-passports-of-the-caribbean/india-homes-reception-delhi.jpg");} $(window).load(function() {$("#aside-img-4531").remove();}); }); </script> <p>IndiaHomes worked by getting discounts from construction companies — usually between one and 2.5 percent of the property’s value — and promising to pass the savings on to customers. In one case, the company promised a discount of about $2,500, one percent of the value of a roughly $250,000 property sale. However, the buyer said he never received the discount. (Singh’s lawyer said that: “During his tenure (at the firm), IndiaHomes never issued any passback or discounting payments to anyone.”)</p> <p>When customers bought their homes, they received “credit notes,” which IndiaHomes pledged to redeem. But, crucially, the customers needed to pay the full price up-front before claiming the discounts.</p> <p>Scores of customers have said that, once the money was paid, they were not able to get their money from IndiaHomes. Extensive complaints against the company appeared on India’s National Consumer Complaint forum, while homebuyers banded together informally in WhatsApp groups and online forums to try to get their discounts.</p> <p>One customer, Sumit Gautam, made a complaint to the Ministry of Consumer Affairs, writing that “after more than five years and consistent follow up… we have still not received this brokerage discount.”</p> <p>“My humble request [is] to please take appropriate action against IndiaHomes,” he wrote.</p> <p>No legal action has been brought against IndiaHomes over the accusations, which Singh’s lawyers said he “categorically denies.” Singh’s India-based lawyers said that the accusations — which were <a href="https://www.opendemocracy.net/en/dark-money-investigations/top-tory-donors-failed-property-firm-left-hundreds-out-of-pocket-in-india/" target="_blank">reported extensively in openDemocracy in 2021</a> — were “baseless and denied in toto.”</p> <p>Singh’s lawyers said openDemocracy was subject to an ongoing investigation by New Delhi police over the article. The publication said it had received no notice of the investigation.</p> <p>OCCRP obtained nine credit notes dated between 2011 and 2015, which had either been posted online or provided to reporters by customers who said they had not been paid the money they were owed. One note, dated Jan. 20, 2015, said that IndiaHomes’ parent company, India World Technologies Pvt. Ltd., “reserves the right in its absolute discretion to amend the terms and conditions any time without prior information.”</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/dominica-passports-of-the-caribbean/india-homes-website-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="A screenshot of the India Homes website" data-img="/assets/dominica-passports-of-the-caribbean/india-homes-website.jpg" /></a> <img src="https://www.occrp.org/assets/dominica-passports-of-the-caribbean/india-homes-website.jpg" class="hidden" id="aside-img-3007" alt="dominica-passports-of-the-caribbean/india-homes-website.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> IndiaHomes.com </small> An archived screenshot of the IndiaHomes website, which is now offline. </div> </aside> <script>$(window).load(function() {$("#aside-img-3007").remove();});</script> <p>By 2014, India’s property market had slowed down. As IndiaHomes started struggling, Singh was spending. A document outlining the company’s response to a due diligence report commissioned by shareholders showed that auditors flagged several of Singh’s expenditures that year. The document indicates the auditors had found “unsatisfactory supportings” for payments worth around $160,000 to a life coach, the online retailer Amazon, as well as travel, hotel, and entertainment expenses.</p> <p>The same report stated that IndiaHomes “uses Marketing Agencies to disburse and manage passbacks and discounting payments.” It added that around $700,000 worth of discounts were “pending disbursal post collection” at the end of 2014, indicating IndiaHomes was in possession of funds that were due to be paid out. It is not clear how much of this money was ever paid out.</p> <p>In April 2015, Singh stepped down as managing director of the company but retained his shareholding.</p> <p>IndiaHomes announced in April 2016 that it had stopped business activities. The company was not closed down, however, but instead was placed under the ownership of successive offshore companies in Mauritius and the United Arab Emirates. Corporate registries do not say who owns these companies. Singh still held his shares in IndiaHomes as recently as 2019, according to Indian company filings.</p> <h2 id="legally-dominican">Legally Dominican</h2> <p>While at IndiaHomes, Singh had been laying the groundwork for a life beyond India.</p> <p>On March 27, 2013, Singh paid $104,765 to legally obtain a Dominican passport — which required him to give up his Indian nationality under Indian law prohibiting dual citizenship. The new Dominica passport allowed travel to 130 countries without a visa or with a visa on arrival, as well as the possibility of obtaining a 10-year U.S. visa.</p> <p>Singh had also been buying properties in the U.K. In 2012, property records show, he bought a house in Buckinghamshire in the U.K. for about 3.1 million British pounds (around $4 million) via a British Virgin Islands company, Linkfield Group Ltd, with part of the cost covered by a mortgage from ABN Amro bank in the Channel Islands.</p> <p>The offshore company Linkfield also held an investment portfolio of stocks and bonds, through a Barclays Bank account in Singapore, worth nearly $5 million, bank statements obtained by OCCRP show. (Reporters cross-referenced foreign exchange rates during the dates mentioned in the statements and checked the Buckinghamshire property investment against public records.)</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/dominica-passports-of-the-caribbean/hinwick-house-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Hinwick House" data-img="/assets/dominica-passports-of-the-caribbean/hinwick-house.jpg" id="img-4750" /> <img src="https://www.occrp.org/assets/dominica-passports-of-the-caribbean/hinwick-house.jpg" class="hidden" id="aside-img-4750" alt="dominica-passports-of-the-caribbean/hinwick-house.jpg" /> </a> <div class="inset-caption"> In 2015 Sam Singh added Hinwick House, pictured here, to his portfolio. </div> </div> <script> $(document).ready(function() { let rand_4750 = $("#aside-img-4750").prop("naturalWidth"); if(rand_4750<750){$("#img-4750").attr("src","/assets/dominica-passports-of-the-caribbean/hinwick-house.jpg");} $(window).load(function() {$("#aside-img-4750").remove();}); }); </script> <p>In 2015, using his Dominican citizenship, Singh added Hinwick House — an 18-bedroom home modeled on the original Buckingham Palace — to his property portfolio for another 4 million pounds (about $6 million at the time).</p> <p>As well as the U.K. property, Singh also began integrating himself into elevated British social circles. Between 2014 and 2019, he donated a little over 270,000 pounds to the ruling Conservative Party, <a href="https://search.electoralcommission.org.uk/?currentPage=1&rows=10&query=gursamarjit%20singh&sort=AcceptedDate&order=desc&tab=1&et=pp&et=ppm&et=tp&et=perpar&et=rd&isIrishSourceYes=true&isIrishSourceNo=true&prePoll=false&postPoll=true&register=gb&register=ni&register=none&optCols=Register&optCols=CampaigningName&optCols=AccountingUnitsAsCentralParty&optCols=IsSponsorship&optCols=IsIrishSource&optCols=RegulatedDoneeType&optCols=CompanyRegistrationNumber&optCols=Postcode&optCols=NatureOfDonation&optCols=PurposeOfVisit&optCols=DonationAction&optCols=ReportedDate&optCols=IsReportedPrePoll&optCols=ReportingPeriodName&optCols=IsBequest&optCols=IsAggregation" target="_blank">financial disclosures show</a>. He has not donated anything since then.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/dominica-passports-of-the-caribbean/singh-with-camilla-instagram-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Sam Singh is seen with now-Queen Camilla" data-img="/assets/dominica-passports-of-the-caribbean/singh-with-camilla-instagram.jpg" /></a> <img src="https://www.occrp.org/assets/dominica-passports-of-the-caribbean/singh-with-camilla-instagram.jpg" class="hidden" id="aside-img-4186" alt="dominica-passports-of-the-caribbean/singh-with-camilla-instagram.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> Sam Singh/Instagram </small> Sam Singh is seen with now-Queen Camilla at an event for the wildlife charity, Elephant Family. </div> </aside> <script>$(window).load(function() {$("#aside-img-4186").remove();});</script> <p>In 2016, Singh was named a trustee of the Elephant Family, a wildlife charity that counts King Charles and Queen Camilla as its so-called Royal Presidents.</p> <p>Queen Camilla’s nephew, the recently knighted Sir Ben Elliot, became a director of Singh’s newly-formed British business, <span class="expand">Real World Technologies Ltd, <span class="expandright"> Renamed Propertech AI Ltd. in April 2023. <i></i> </span> </span> in April 2017. Elliot was chairman of the Conservative Party for three years between 2019 and 2022. Former Conservative member of parliament Baroness Kate Rock was also on the Real World board of directors. (Elliot and Rock did not respond to requests for comment.)</p> <p>The business said it would use artificial intelligence to offer state-of-the-art online real estate services. As of last year, the company had just 20 pounds in cash assets, and was owed just over 10,000 pounds, company financial statements show. Its books say it has zero employees.</p> <p>Elliott resigned from his position in 2019, and the baroness stepped down early the next year. The company’s subsidiary now does business as an online estate agent operating in Dubai named “Memorable.”</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/dominica-passports-of-the-caribbean/singh-number-10-downing-st-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Sam Singh outside 10 Downing Street" data-img="/assets/dominica-passports-of-the-caribbean/singh-number-10-downing-st.jpg" id="img-9644" /> <img src="https://www.occrp.org/assets/dominica-passports-of-the-caribbean/singh-number-10-downing-st.jpg" class="hidden" id="aside-img-9644" alt="dominica-passports-of-the-caribbean/singh-number-10-downing-st.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Sam Singh/Instagram </small> Sam Singh is seen outside 10 Downing Street in this social media photo. </div> </div> <script> $(document).ready(function() { let rand_9644 = $("#aside-img-9644").prop("naturalWidth"); if(rand_9644<750){$("#img-9644").attr("src","/assets/dominica-passports-of-the-caribbean/singh-number-10-downing-st.jpg");} $(window).load(function() {$("#aside-img-9644").remove();}); }); </script> <p>After making his UK move, the IndiaHomes founder collected photos of himself pheasant shooting, standing outside 10 Downing Street, and smiling alongside Theresa May and Boris Johnson, two Tory party leaders who would both later become prime ministers. Johnson even signed the visitors book at Hinwick House, according to a photo Singh posted on his now-private Instagram account.</p> <p>May and Johnson did not respond to requests for comment.</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-singh-s-capo-di-capi"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-singh-s-capo-di-capi">🔗</a>Singh’s ‘Capo di Capi’ </h3> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p><strong>Singh also had joint business interests with Arvind Khanna, an Indian politician and businessman who was charged in India this year with profiting from an allegedly corrupt military aircraft deal involving a research agency of the Indian Defense Ministry. (The case has not yet gone to trial.)</strong></p><p>Company records from the Indian business registry show that, in 2006, Singh jointly invested in a company that developed a Delhi hotel with an investment company majority owned by Khanna. The company was sold in 2012.</p><p>In an email exchange with his sister-in-law, Priyanka Singh, that was used as part of her civil complaint, Singh also said that Khanna’s portfolio was among “various pools of investments” that were managed at the time by his office staff.</p><p>Singh publicly posted a birthday message for Khanna on Instagram in 2020, calling him “Capo di Capi,” an Italian mafia term meaning boss of bosses. Singh’s lawyers have described the comment as “a private joke between old friends.”</p><p>In March 2018 — after IndiaHomes had ceased trading and Singh had stepped down as director but remained a shareholder — its parent entity bought a loss-making aviation company owned by Khanna that had no operating profit and no fixed assets for $300,000, the Indian business registry shows.</p><p>Singh’s India-based lawyers said that Singh did not have a business relationship with Khanna, who was known to Singh as a friend “amongst his hundreds of other personal friends.”</p><p>Khanna did not respond to requests for comment.</p> </div> </div> </div> </div> </div> <h2 id="winning-in-india">‘Winning in India’</h2> <p>At a glamorous launch event in May 2014 for his book “Winning in India” — a compendium of business lessons by India’s top entrepreneurs, including Singh himself — Singh talked of the importance of family. His presentation included a sign stating, “family is the raison d’etre for Indians.”</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/dominica-passports-of-the-caribbean/sam-singh-winning-in-india-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Sam Singh at the launch of Winning in India" data-img="/assets/dominica-passports-of-the-caribbean/sam-singh-winning-in-india.jpg" id="img-1594" /> <img src="https://www.occrp.org/assets/dominica-passports-of-the-caribbean/sam-singh-winning-in-india.jpg" class="hidden" id="aside-img-1594" alt="dominica-passports-of-the-caribbean/sam-singh-winning-in-india.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Winning in India/Facebook </small> Sam Singh seen at the launch of “Winning in India.” </div> </div> <script> $(document).ready(function() { let rand_1594 = $("#aside-img-1594").prop("naturalWidth"); if(rand_1594<750){$("#img-1594").attr("src","/assets/dominica-passports-of-the-caribbean/sam-singh-winning-in-india.jpg");} $(window).load(function() {$("#aside-img-1594").remove();}); }); </script> <p>At the same time, Singh was engaged in financial dealings with his own family that would eventually lead to a heated legal dispute.</p> <p>In 2021, his brother’s wife, Priyanka Singh, filed a civil lawsuit against Singh in the Delhi High Court, seeking the equivalent of about $2.3 million in damages. In her complaint, she said she had transferred around $1.4 million to three of his companies in 2013. Priyanka became a director in all three firms. But she had little control over the companies and was “merely made to sign some documents,” she said in her complaint.</p> <p>Priyanka declined to comment.</p> <p>In her claim — which includes bank statements, emails from Singh, and his legal response — Priyanka said that Singh had told her that her money would be put into a “safe investment” of property for around seven or eight years. She said she was told her money would triple in that time, but in reality received nothing besides one payment in May 2019 and lost her original stake. Priyanka accused Singh of “seeking to fritter away” her assets “by parking them in shell companies, some of them on foreign soil.”</p> <p>Priyanka said in her claim that Singh paid her 5 million rupees, worth roughly $70,000 at the time of payment in May 2019, but nothing else.</p> <p>By the time she launched legal action against him, Singh had cut her off, an email exchange submitted as an exhibit in the case shows. In one message to Priyanka the year before, as the two were arguing over the return of her investment, Singh had described her allegations as “naive and ludicrous.”</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/dominica-passports-of-the-caribbean/boris-and-singh-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Sam Sing with former U.K. Prime Minister Boris Johnson" data-img="/assets/dominica-passports-of-the-caribbean/boris-and-singh.jpg" /></a> <img src="https://www.occrp.org/assets/dominica-passports-of-the-caribbean/boris-and-singh.jpg" class="hidden" id="aside-img-7583" alt="dominica-passports-of-the-caribbean/boris-and-singh.jpg" /> <div class="image-caption"> Sam Singh pictured with former U.K. Prime Minister Boris Johnson. </div> </aside> <script>$(window).load(function() {$("#aside-img-7583").remove();});</script> <p>In a legal response to her complaint, Singh said her allegations were “wrong, frivolous and misconceived.” He admitted he has not returned her money to her, but blamed a downturn in the property market.</p> <p>The lawyer for Singh denied that the email exchange submitted as part of the court case was real, and said the emails were part of a “smear campaign” launched by his sister-in-law.</p> <p>The case is ongoing and no judgment has been issued. Priyanka has also filed a criminal complaint to Indian police. That complaint remains open, though police have not filed formal charges.</p> <p>Singh currently splits his time between the U.K. and United Arab Emirates, according to his LinkedIn profile. He is running a new property venture focused on artificial intelligence and styles himself as a “serial entrepreneur.”</p> <p>Before the U.K. move, Singh’s book had offered pearls of wisdom, including “flamboyance is admired, but rarely rewarded.” He is now trying to sell Hinwick House, which is listed for nearly 8 million pounds.</p>OCCRPhttps://www.occrp.org/Sanctioned Businessman Denied Financial Ties to Kremlin-Linked Oligarch Roman Abramovich — But Leaked Documents Say Otherwise2023-11-28T00:00:00+01:002023-11-28T00:00:00+01:00https://www.occrp.org/en/cyprus-confidential/sanctioned-businessman-denied-financial-ties-to-kremlin-linked-oligarch-roman-abramovich-but-leaked-documents-say-otherwise<p>A businessman who launched a legal case against the U.K.’s decision to sanction him over his ties to Kremlin-linked billionaire Roman Abramovich argues he never received any “financial or material benefit” from the relationship. But leaked documents reveal that Abramovich’s companies lent him hundreds of millions of dollars –– and then effectively turned that debt into a gift.</p><p>A businessman who launched a legal case against the U.K.’s decision to sanction him over his ties to Kremlin-linked billionaire Roman Abramovich argues he never received any “financial or material benefit” from the relationship. But leaked documents reveal that Abramovich’s companies lent him hundreds of millions of dollars –– and then effectively turned that debt into a gift.</p> <p>Last year, the U.K. government sanctioned Eugene Shvidler, a Soviet-born former oil executive, for profiting from his business ties to Abramovich, a tycoon the E.U. says has “long and close ties to Vladimir Putin.”</p> <p>In February, Shvidler launched a High Court case challenging the sanctions against him, arguing that he “does not accept that he received financial or material benefit from Mr Abramovich” and that the sanctions were disproportionate and discriminatory.</p> <p>In August, his case was dismissed, and last month, the Court of Appeal approved Shvidler’s application to appeal the judgment. He is currently awaiting a hearing date.</p> <p>But despite Shvidler’s insistence that the sanctions against him are without merit, leaked documents obtained by OCCRP and its media partner The Bureau of Investigative Journalism reveal that Shvidler garnered substantial financial benefit due to his relationship with Abramovich. The files come from Cypriot corporate service provider MeritServus, which helped administer parts of Abramovich’s offshore empire. Offshore secrecy rules would have kept elements of the arrangements hidden were it not for the leak.</p> <p>The documents show that Abramovich’s companies issued loans to Shvidler worth at least $637 million over a 12-year period from 2006 to 2018. The loans were often issued on friendly terms, sometimes interest-free. And in 2021 Abramovich’s trust appears to have gone even further, using multiple agreements to effectively transform more than $500 million in debt into a gift to the Shvidler family.</p> <p>If Shvidler’s appeal is successful, it could set a precedent and encourage Russian oligarchs to try to overturn sanctions and unfreeze assets worth billions of dollars, said Helen Taylor, a senior legal researcher at the U.K. transparency campaign group Spotlight on Corruption.</p> <p>“If Shvidler wins on appeal, then I think it means there is everything to play for and we’ll see a lot of oligarchs trying to bring challenges,” Taylor said. “People are watching for indications of how the courts will handle this area of policy –– all those with challenges in the pipeline must be nervously watching on.”</p> <p>The leaked Meritservus files were obtained by the pro-transparency group Distributed Denial of Secrets and initially shared with OCCRP and the Guardian. This investigation is part of Cyprus Confidential, a global investigative collaboration led by the International Consortium of Investigative Journalists (ICIJ) and Paper Trail Media.</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-about-the-cyprus-confidential-project"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-about-the-cyprus-confidential-project">🔗</a>About the ‘Cyprus Confidential’ Project </h3> <div class="subheader"> <p>Cyprus Confidential is a global investigation examining Russian influence in Cyprus, and how local service providers helped oligarchs and billionaires structure their wealth over the years preceding the 2022 full-scale invasion of Ukraine. The project is based on more than 3.6 million documents leaked from six different Cypriot service providers, as well as a Latvian firm.</p> </div> <input type="checkbox" id="occrp-inset-box-control-about-the-cyprus-confidential-project" /> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p>The Cypriot firms are DJC Accountants, ConnectedSky, Cypcodirect, MeritServus, MeritKapital, and Kallias and Associates. Additional records came from a Latvian company, Dataset SIA, which sells Cypriot corporate registry documents through a website called i-Cyprus.</p><p>The MeritServus and MeritKapital records were shared with OCCRP, ICIJ and other media outlets by Distributed Denial of Secrets (DDoS). OCCRP has previously reported on these firms, and the current project builds upon this work. ICIJ also shared the leaked records from Cypcodirect, ConnectedSky, i-Cyprus, and Kallias and Associates that were obtained by Paper Trail Media. In the case of Kallias and Associates, the documents were obtained from DDoS who shared them with Paper Trail Media and ICIJ. OCCRP shared the DJC Accountants leaked records with media partners after previously obtaining them via DDoS.</p> </div> </div> <label for="occrp-inset-box-control-about-the-cyprus-confidential-project"><span>More</span><span>Less</span></label> </div> </div> </div> <p>The U.K. government sanctioned MeritServus and its founder, Demetris Ioannides, in April following <a href="/en/investigations/credit-suisse-banked-abramovich-fortune-held-in-secret-offshore-companies">an OCCRP report</a> that the firm appears to have continued working for Abramovich even after Moscow attacked Ukraine in February 2022. MeritServus did not respond to questions sent earlier this year about whether it continued to provide services to Abramovich after he was sanctioned.</p> <p>Following August’s ruling, Shvidler’s lawyer told OCCRP’s media partner the Guardian that the case raises “very important issues” and said Shvidler “hopes to have a hearing before the Court of Appeal at the earliest opportunity,” though he did not respond to subsequent questions.</p> <p>Shvidler and Abramovich did not respond to emailed questions.</p> <p></div> <!-- .occrp-story --></p> <div class="occrp-full-width"> <div class="image" style="background-image: url('/assets/cyprus-confidential/meritservus-cyprus-headquarters.jpg'); min-height: 80vh;"></div> <div class="caption"> <small class="image-credit"><strong>Credit:</strong> ZUMA Press/Alamy </small> The Cyprus headquarters of Meritservus, which managed legal entities on behalf of Roman Abramovich. Meritservus was sanctioned by the U.K. government earlier this year over its relationship with the Russian billionaire. </div> </div> <div class="occrp-story"> <h2 id="old-friends">Old Friends</h2> <p>A Soviet-born graduate of the Moscow Institute of Oil and Gas who later obtained dual American and British citizenship, Shvidler was the president of Abramovich’s oil firm, OAO Sibirskaya Neftyanaya Kompaniya –– better known as Sibneft –– when it was sold for $13 billion to Russian state-owned industrial giant PJSC Gazprom in 2005.</p> <p>The Sibneft deal made Abramovich one of the world’s richest people. Shvidler’s own wealth peaked at $1.9 billion in 2021, according to a Forbes estimate. But Shvidler’s friendship with Abramovich dates back almost 40 years, to the beginning of Soviet decline, according to the August judgment in his High Court case.</p> <p>The two future billionaires met in the mid-1980s, but while Abramovich remained in Moscow as the Soviet Union lurched towards collapse, Shvidler pursued a business degree in the U.S. He then worked for the international consultancy Deloitte & Touche in New York.</p> <p>By the mid-1990s, Shvidler was back in Russia as a finance executive at Sibneft. He became a key figure at Abramovich’s side as Sibneft acquired vast oil assets at cut prices amid the mass privatizations that transformed the Russian economy that decade. Sibneft’s lucrative acquisitions were thanks in part to the close ties that Abramovich and his business partner Boris Berezovsky cultivated with the Russian president at the time, Boris Yeltsin, according to a U.K. court judgment in a later case between Abramovich and Berezovsky.</p> <p>Shvidler became a director or manager at several other Abramovich-owned companies, including Evraz Plc, a U.K.-listed steel multinational operating mainly in Russia, and the asset management firm Millhouse Capital. After Abramovich bought Chelsea FC in 2003, Shvidler briefly became a director at the soccer club and settled near London.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/shvidler-abramovich-chelsea-fc-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Roman Abramovich and Eugene Shvidler" data-img="/assets/cyprus-confidential/shvidler-abramovich-chelsea-fc.jpg" id="img-8333" /> <img src="https://www.occrp.org/assets/cyprus-confidential/shvidler-abramovich-chelsea-fc.jpg" class="hidden" id="aside-img-8333" alt="cyprus-confidential/shvidler-abramovich-chelsea-fc.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Neal Simpson/Alamy </small> Roman Abramovich and Eugene Shvidler watch Chelsea FC’s first ever Premier League match under the Russian billionaire owner in August 2003. </div> </div> <script> $(document).ready(function() { let rand_8333 = $("#aside-img-8333").prop("naturalWidth"); if(rand_8333<750){$("#img-8333").attr("src","/assets/cyprus-confidential/shvidler-abramovich-chelsea-fc.jpg");} $(window).load(function() {$("#aside-img-8333").remove();}); }); </script> <p>Two weeks after Russia’s full-scale invasion of Ukraine, the U.K. government sanctioned Abramovich, describing him as “one of the few oligarchs from the 1990s to maintain prominence under Putin.” The E.U. said Abramovich had “privileged access” to Putin and that “this connection with the Russian leader helped him to maintain his considerable wealth.”</p> <p>Tom Mayne, a research fellow at Oxford University and expert in anti-corruption, said it was likely that Abramovich had maintained his position in part through proximity to Putin.</p> <p>“The only way you can hold on to significant capital in Russia is through fealty to that regime,” Mayne said. “If you’re involved in one of the major oil companies, as both Abramovich and Shvidler were, it’s unquestionable that you only get to retain these positions and wealth through loyalty to Putin.”</p> <p>Just days after sanctioning Abramovich, the U.K. government sanctioned Shvidler too, because of his association with Abramovich and his former non-executive directorship at Evraz. The U.K. noted that Evraz operates in a “sector of strategic significance” to the Russian government.</p> <p>Following this blacklisting –– which included a worldwide freeze on his assets –– Shvidler launched his case against the sanctions at the High Court in London.</p> <p>Shvidler said he “is not in any sense ‘associated’ with Mr Abramovich, and in particular he has not received a financial benefit from him (directly or indirectly),” according to a statement submitted in court. He argued that “my wealth is derived from my own investments.”</p> <p>Shvidler also argued that he had no influence over Russian government policy, and said the effect of the sanctions had been “extreme.” He submitted two witness statements telling the court that his private jets had been grounded, he could no longer employ several household staff, and his children had been excluded from their fee-paying schools.</p> <p>“My reputation has been enormously damaged and my ability to conduct business has been destroyed,” he said.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/shvidler-grounded-private-jet-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Eugene Shvidler's grounded private aircraft" data-img="/assets/cyprus-confidential/shvidler-grounded-private-jet.jpg" id="img-2694" /> <img src="https://www.occrp.org/assets/cyprus-confidential/shvidler-grounded-private-jet.jpg" class="hidden" id="aside-img-2694" alt="cyprus-confidential/shvidler-grounded-private-jet.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Gareth Fuller/Alamy </small> Eugene Shvidler’s grounded private aircraft after the U.K. government imposed sanctions against him. </div> </div> <script> $(document).ready(function() { let rand_2694 = $("#aside-img-2694").prop("naturalWidth"); if(rand_2694<750){$("#img-2694").attr("src","/assets/cyprus-confidential/shvidler-grounded-private-jet.jpg");} $(window).load(function() {$("#aside-img-2694").remove();}); }); </script> <h2 id="when-loans-become-gifts">When Loans Become Gifts</h2> <p>Contrary to Shvidler’s claims in court that he had received no “financial or material benefit” from Abramovich, leaked documents suggest Shvidler’s investments were financed by substantial loans provided by Abramovich’s companies over more than a decade, beginning shortly after the 2005 windfall sale of Sibneft.</p> <p>The first two loans, for $300 million and $48 million, were issued in 2006 by a British Virgin Islands firm owned by Abramovich. This company later transferred rights to the $300 million debt to another of his British Virgin Islands firms, Sonora Capital Investments, according to loan agreements obtained by OCCRP.</p> <p>On the same day he received the $300 million loan, Shvidler acquired shares worth that amount in the holding company that owned Evraz, Abramovich’s steel company, the leaked documents reveal. Shvidler did not respond to questions about whether the loan was to finance his investment in Evraz.</p> <p>In 2014, another Abramovich company agreed to loan up to $5 million for Shvidler to invest in Raine Partners II LP, a fund created by U.S. merchant bank Raine Group. That loan was unsecured, meaning it was granted without collateral that the lender could seize if it was not repaid. The debt was later transferred to the British Virgin Islands firm Sonora Capital Investments.</p> <p>In 2016 — the same year Shvidler separated from his wife, according to his witness statement filed in the case against the U.K. government — a different British Virgin Islands-based company owned by Abramovich loaned him $100 million to finance a postnuptial agreement, the leaked files show. The loan was issued interest-free.</p> <p>And in 2018, Sonora Capital Investments granted Shvidler two additional unsecured loans, together worth $323 million. The loans were “for such purposes as he decides in his sole discretion.”</p> <p>Mayne, the anti-corruption expert, said the agreements were “very favorable to the loanee.”</p> <p>“It seems to be a loan to somebody who is close to the beneficial owner of the loaning entities,” he said.</p> <p>Taken together, these agreements mean that by 2019, Shvidler had accumulated some $637 million in debt to a single one of Abramovich’s offshore companies.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/cyprus-llama-infographic-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.png" alt="Infographic showing which companies lent Shvidler money and when" data-img="/assets/cyprus-confidential/cyprus-llama-infographic.png" id="img-9971" /> <img src="https://www.occrp.org/assets/cyprus-confidential/cyprus-llama-infographic.png" class="hidden" id="aside-img-9971" alt="cyprus-confidential/cyprus-llama-infographic.png" /> </a> <div class="inset-caption"> </div> </div> <script> $(document).ready(function() { let rand_9971 = $("#aside-img-9971").prop("naturalWidth"); if(rand_9971<750){$("#img-9971").attr("src","/assets/cyprus-confidential/cyprus-llama-infographic.png");} $(window).load(function() {$("#aside-img-9971").remove();}); }); </script> <style> #img-9971 { box-shadow: none; } </style> <p>Shvidler received an even bigger favor from Abramovich in 2021, when Abramovich’s trust promised to transfer the company holding rights to most of this debt to Shvidler’s children through a complicated restructuring process revealed in the leaked files.</p> <p>First, Abramovich’s Sonora Capital Investments signed four substitution agreements by which it swapped ownership of $545 million worth of debt, including interest, for promissory notes — legal documents in which the signatory, in this case, Shvidler, pledges to repay the lender. (While the agreements seen by OCCRP were only signed by Sonora Capital Investments and not by Shvidler, a subsequent agreement that depended on the substitutions being executed was signed by both parties.)</p> <p>Next, the notes were transferred to a company in the British Virgin Islands called Brick Lane Holdings Limited, which was owned by Abramovich’s Zeus Trust Settlement.</p> <p>All this had simply shuffled the debt between Abramovich’s firms, but an additional series of manoeuvers appeared to, in effect, turn this debt into a gift to Shvidler’s family, Mayne said.</p> <p>In a legal document called a “deed of gift,” Zeus Trust promised to transfer the shares in Brick Lane Holdings — which by now owned the rights to the debt worth $545 million (including interest) — to Shvidler’s children. The transfer meant they would eventually inherit a company worth over half a billion dollars at the time of the pledge — and if the debt was still outstanding by then, they would have the right to collect on it or to forgive it.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/cantley-shvidler-loan-screengrab-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Screengrab showing the agreement to loan $3000 million" data-img="/assets/cyprus-confidential/cantley-shvidler-loan-screengrab.jpg" id="img-5765" /> <img src="https://www.occrp.org/assets/cyprus-confidential/cantley-shvidler-loan-screengrab.jpg" class="hidden" id="aside-img-5765" alt="cyprus-confidential/cantley-shvidler-loan-screengrab.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Cyprus Confidential </small> Roman Abramovich’s British Virgin Islands-based Cantley Investments Limited agreed to loan $300 million to Eugene Shvidler in 2006. </div> </div> <script> $(document).ready(function() { let rand_5765 = $("#aside-img-5765").prop("naturalWidth"); if(rand_5765<750){$("#img-5765").attr("src","/assets/cyprus-confidential/cantley-shvidler-loan-screengrab.jpg");} $(window).load(function() {$("#aside-img-5765").remove();}); }); </script> <style> #img-5765 { box-shadow: none; } </style> <p>Abramovich’s trust also handed over the management of Brick Lane Holdings to a company managed by Shvidler. According to a document called a “deed of appointment,” Zeus Trust “irrevocably” appointed the Delaware-based S6, LLC, whose managing member was Shvidler, as its proxy and attorney, authorizing the firm to exercise shareholder powers and voting rights “in any manner [it] sees fit.”</p> <p>These moves appeared to turn the original loans into a gift, suggesting “a very close personal relationship between the beneficial owner of the companies loaning the money and Shvidler,” Mayne told OCCRP after reviewing the documents.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/cyprus-shvidlers-debt-infographic-2-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.png" alt="Infographic showing how the debt was forgiven" data-img="/assets/cyprus-confidential/cyprus-shvidlers-debt-infographic-2.png" id="img-613" /> <img src="https://www.occrp.org/assets/cyprus-confidential/cyprus-shvidlers-debt-infographic-2.png" class="hidden" id="aside-img-613" alt="cyprus-confidential/cyprus-shvidlers-debt-infographic-2.png" /> </a> <div class="inset-caption"> </div> </div> <script> $(document).ready(function() { let rand_613 = $("#aside-img-613").prop("naturalWidth"); if(rand_613<750){$("#img-613").attr("src","/assets/cyprus-confidential/cyprus-shvidlers-debt-infographic-2.png");} $(window).load(function() {$("#aside-img-613").remove();}); }); </script> <style> #img-613 { box-shadow: none; } </style> <h2 id="offshore-opacity">Offshore Opacity</h2> <p>It is unclear if U.K. authorities were aware of the information about the loans in the leaked files obtained by OCCRP, but they appear to contradict Shvidler’s claim in court that he did not financially benefit from his relationship with Abramovich.</p> <p>The complexity and opacity of the arrangements meant the extent of Shvidler’s links to Abramovich could only be discovered via leaked documents. The government’s case that Shvidler derived financial benefit from Abramovich relied only on public information about his earnings at the Kremlin-linked tycoon’s companies.</p> <p>This is “indicative of the problems that investigators and law enforcement face” when looking into offshore deals, said Mayne.</p> <p>“It involves so many different jurisdictions [and] involves going to various places and trying to get beneficial ownership information which might not be forthcoming,” he said.</p> <p>Still, the High Court judge, Neil Garnham, found the government’s case sufficient to dismiss Shvidler’s lawsuit, and the sanctions against him remain –– unless he succeeds in his appeal.</p> <p>The new findings from Cyprus Confidential cannot influence the outcome of the appeal, according to Taylor of Spotlight on Corruption.</p> <p>“The court can’t look outside of what the government has put forward,” Taylor said. “The court will look at the reasons the government gave for designating Shvidler and look at whether that was a reasonable thing for a decision maker to do.”</p> <p>She added that Shvidler was not legally required to present information to the court about the loans he took from Abramovich, since the loans were outside the scope of the government’s allegations.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/putin-seated-with-abramovich-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Roman Abramovich seated next to Vladimir Putin" data-img="/assets/cyprus-confidential/putin-seated-with-abramovich.jpg" id="img-4986" /> <img src="https://www.occrp.org/assets/cyprus-confidential/putin-seated-with-abramovich.jpg" class="hidden" id="aside-img-4986" alt="cyprus-confidential/putin-seated-with-abramovich.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Kommersant Photo Agency/Alamy </small> Roman Abramovich seated next to Vladimir Putin at an event in Sochi, Russia, in 2016. </div> </div> <script> $(document).ready(function() { let rand_4986 = $("#aside-img-4986").prop("naturalWidth"); if(rand_4986<750){$("#img-4986").attr("src","/assets/cyprus-confidential/putin-seated-with-abramovich.jpg");} $(window).load(function() {$("#aside-img-4986").remove();}); }); </script> <p>Jamison Firestone, a U.S. attorney who founded the law firm Firestone Duncan in Moscow in the 1990s, said Shvidler was clearly a beneficiary of the system of oligarchy which Putin built around him.</p> <p>A Russian employee of Firestone’s firm, Sergei Magnitsky, was tortured and died in prison in 2009 after blowing the whistle on a $230 million government tax fraud. Firestone fled Russia after Magnitsky’s arrest. Since then, he has advised on sanctions regimes against kleptocratic states and how to deal with their frozen funds.</p> <p>“Here’s a guy who definitely made his money because of his relationship with Abramovich and Abramovich’s close, cozy relationship with Putin,” Firestone told OCCRP. “You don’t receive benefits from the Russian government unless you’re useful to them.”</p> </div>OCCRPhttps://www.occrp.org/Episode 6: Sanctioning an Oligarch is Not an Easy Task - Searching for Usmanov’s Millions2023-11-20T00:00:00+01:002023-11-20T00:00:00+01:00https://www.occrp.org/en/dirty-deeds-podcast/episode-6-sanctioning-an-oligarch-is-not-an-easy-task-searching-for-usmanovs-millions<style> .sub-buttons { display: flex; flex-direction: row; justify-content: space-evenly; align-items: center; max-width: 900px; margin-left: auto; margin-right: auto; } .image-link { max-width: 250px; margin-left: auto; margin-right: auto; box-shadow: none !important; } .image-link:hover { box-shadow: none !important; } .image-link img { border-radius: none !important; width: auto !important; max-width: 100%; max-height: 50px !important; } </style><style> .sub-buttons { display: flex; flex-direction: row; justify-content: space-evenly; align-items: center; max-width: 900px; margin-left: auto; margin-right: auto; } .image-link { max-width: 250px; margin-left: auto; margin-right: auto; box-shadow: none !important; } .image-link:hover { box-shadow: none !important; } .image-link img { border-radius: none !important; width: auto !important; max-width: 100%; max-height: 50px !important; } </style> <p><strong>As Russian forces escalated their war of aggression against Ukraine in 2022, Western governments scrambled to sanction oligarchs connected to Putin’s war machine.</strong></p> <p><strong>Yet the task is far from simple when Kremlin-connected tycoons hide their billions in offshore trusts and Swiss bank accounts — and even behind the names of their family members.</strong></p> <style> .iframe {height:180; margin-top:24px; margin-bottom:30px; max-width:100%; width:100%;} @media (max-width: 800px) {.iframe {max-width:96%; width:96%;margin-left: 2%;margin-right: 2%;}} </style> <div class="iframe"> <iframe width="100%" height="100%" src="https://embed.acast.com/64ccda2a1c49bf0011363c35/65575fbd0418cd0012009324" frameborder="0" allowfullscreen=""></iframe> </div> <div class="inset-caption" style="width: 100%;max-width: 100%;"></div> <div class="sub-buttons"> <div class="occrp-teaser-big"> <div class="image-link" style="width:100%;height:100%;box-shadow: rgba(0, 0, 0, 0.14) 0px 2px 2px 0px, rgba(0, 0, 0, 0.2) 0px 3px 1px -2px, rgba(0, 0, 0, 0.12) 0px 1px 5px 0px;"> <a href="https://podcasts.apple.com/gb/podcast/dirty-deeds-tales-of-global-crime-and-corruption/id1705212699" target="_blank"> <img src="https://www.occrp.org/assets/dirty-deeds-podcast/apple-podcasts.png" style="width:100%;height:auto;border-radius:5px;" /> </a> </div> </div> <div class="occrp-teaser-big"> <div class="image-link" style="width:100%;height:100%;box-shadow: rgba(0, 0, 0, 0.14) 0px 2px 2px 0px, rgba(0, 0, 0, 0.2) 0px 3px 1px -2px, rgba(0, 0, 0, 0.12) 0px 1px 5px 0px;"> <a href="https://open.spotify.com/show/6CwZCVyMDNo1pG1VMbJPCt?si=udZz2L9OTL2sOn_B6GnD4A" target="_blank"> <img src="https://www.occrp.org/assets/dirty-deeds-podcast/spotify-smaller.png" style="width:100%;height:auto;border-radius:5px;" /> </a> </div> </div> <div class="occrp-teaser-big"> <div class="image-link" style="width:100%;height:100%;box-shadow: rgba(0, 0, 0, 0.14) 0px 2px 2px 0px, rgba(0, 0, 0, 0.2) 0px 3px 1px -2px, rgba(0, 0, 0, 0.12) 0px 1px 5px 0px;"> <a href="https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5hY2FzdC5jb20vcHVibGljL3Nob3dzL2RpcnR5LWRlZWRz" target="_blank"> <img src="https://www.occrp.org/assets/dirty-deeds-podcast/google-podcasts.png" style="width:100%;height:auto;border-radius:5px;" /> </a> </div> </div> </div> <h2 id="in-this-episode-of-dirty-deeds">In this episode of Dirty Deeds…</h2> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/dirty-deeds-podcast/podcast-episode6-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="" data-img="/assets/dirty-deeds-podcast/podcast-episode6.jpg" /></a> <img src="https://www.occrp.org/assets/dirty-deeds-podcast/podcast-episode6.jpg" class="hidden" id="aside-img-1009" alt="dirty-deeds-podcast/podcast-episode6.jpg" /> <div class="image-caption"> </div> </aside> <script>$(window).load(function() {$("#aside-img-1009").remove();});</script> <p>In this episode, Nick Wallis talks with OCCRP editing duo Miranda Patrucic and Ilya Lozovsky, discussing how billionaire Alisher Usmanov concealed his fortune via secretive companies, business associates and family members — including Swiss bank accounts in his sister’s name despite her seemingly modest trade as a gynecologist.</p> <p><strong>Read the investigations:</strong></p> <ul> <li><a href="/en/asset-tracker/sanctioning-an-oligarch-is-not-so-easy-why-the-money-trail-of-alisher-usmanov-one-of-russias-wealthiest-men-is-difficult-to-follow">Sanctioning an Oligarch Is Not So Easy: Why the Money Trail of Alisher Usmanov, One of Russia’s Wealthiest Men, Is Difficult to Follow</a></li> <li><a href="https://cdn.occrp.org/projects/russian-asset-tracker/en">OCCRP Russian Asset Tracker</a></li> </ul> <h2 id="host-nick-wallis-talks-to">Host Nick Wallis talks to…</h2> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/common/staff/miranda1-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Miranda Patrucic" data-img="/assets/common/staff/miranda1.jpg" /></a> <img src="https://www.occrp.org/assets/common/staff/miranda1.jpg" class="hidden" id="aside-img-2451" alt="common/staff/miranda1.jpg" /> <div class="image-caption"> Miranda Patrucic </div> </aside> <script>$(window).load(function() {$("#aside-img-2451").remove();});</script> <p><strong>Miranda Patrucic - <a href="https://twitter.com/MirandaOCCRP" target="_blank">@MirandaOCCRP</a></strong></p> <p>Miranda is OCCRP’s editor-in-chief and worked on the investigation that exposed Alisher Usmanov’s secretive methods for storing his wealth.</p> <div class="occrp-inset-box quotebox" id="quote"> <div class="inner occrp-container-inner"> <div class="quote-text"><div class="quote-line"></div><div>“The way that oligarchs and their children are seen in the West is that they’re celebrities, that they’re very successful businessmen. But I think the question that always persists is where did their first million come from?”</div></div> </div> </div> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/common/staff/ilya-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Ilya Lozovsky" data-img="/assets/common/staff/ilya.jpg" /></a> <img src="https://www.occrp.org/assets/common/staff/ilya.jpg" class="hidden" id="aside-img-5116" alt="common/staff/ilya.jpg" /> <div class="image-caption"> Ilya Lozovsky </div> </aside> <script>$(window).load(function() {$("#aside-img-5116").remove();});</script> <p><strong>Ilya Lozovsky - <a href="https://twitter.com/ichbinilya" target="_blank">@ichbinilya</a></strong></p> <p>Ilya is a staff writer and senior editor at OCCRP and worked with Miranda on piecing together Usmanov’s vast offshore wealth.</p> <div class="occrp-inset-box quotebox" id="quote"> <div class="inner occrp-container-inner"> <div class="quote-text"><div class="quote-line"></div><div>“The reality is that criminals are so clever, they hire so many experts, some of the greatest minds are hired by criminals. And basically they can come up with new ways to launder money, commit crime.”</div></div> </div> </div> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/dirty-deeds-podcast/kevin-hollinrake-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="Kevin Hollinrake" data-img="/assets/dirty-deeds-podcast/kevin-hollinrake.jpg" /></a> <img src="https://www.occrp.org/assets/dirty-deeds-podcast/kevin-hollinrake.jpg" class="hidden" id="aside-img-7616" alt="dirty-deeds-podcast/kevin-hollinrake.jpg" /> <div class="image-caption"> Kevin Hollinrake </div> </aside> <script>$(window).load(function() {$("#aside-img-7616").remove();});</script> <p><strong>Kevin Hollinrake - <a href="https://twitter.com/kevinhollinrake" target="_blank">@kevinhollinrake</a></strong></p> <p>Kevin is a British Member of Parliament for the ruling Conservative Party who launched an “Economic Crime Manifesto” alongside an opposition MP in a bid to tackle the flow of dirty money through the UK.</p> <div class="occrp-inset-box quotebox" id="quote"> <div class="inner occrp-container-inner"> <div class="quote-text"><div class="quote-line"></div><div>“So I think what should happen is if somebody’s sanctioned, any U.K. organization that’s dealt with that individual should have to open their books to the enforcement agencies.”</div></div> </div> </div> <h2 id="show-notes">Show Notes</h2> <ul> <li>[0:00] Introduction</li> <li>[2:04] Miranda Patrucic explains why she is interested in investigating oligarchs — and Alisher Usmanov in particular</li> <li>[3:50] How did the investigation into Usmanov come about?</li> <li>[6:16] What are the FinCEN Files — and what did they reveal about Usmanov?</li> <li>[7:55] An explainer of suspicious activity reports and how they’re supposed to stop financial crime</li> <li>[10:36] How Usmanov’s family is connected to the story</li> <li>[13:04] Ilya Lozovsky explains how OCCRP told the story via the Russian Asset Tracker</li> <li>[15:36] Did Western sanctions against Usmanov work against him — and Vladimir Putin’s war effort in Ukraine?</li> <li>[19:00] Why have there been so many large-scale data leaks in recent years?</li> <li>[22:07] Kevin Hollinrake on whether tackling money laundering in the U.K. would harm the nation’s economy</li> <li>[25:45] Updates on how the U.K. is tackling flows of dirty money</li> <li>[27:33] What needs to be done to clamp down on dirty money in the U.K.?</li> <li>[33:55] Kevin Hollinrake on whether Western sanctions have been effective against the Russian invasion of Ukraine</li> </ul> <p><strong>Check out other episodes on the <a href="/en/dirty-deeds-podcast/">Dirty Deeds main page</a>.</strong></p> <p><strong>Follow The Money — and Our Investigations:</strong> <a href="https://mailchi.mp/occrp/subscribe-newsletter?campaign=footer" target="\_blank">Get our weekly newsletter</a>.</p> <p><strong>Support investigative journalism in the public interest.</strong> <a href="https://occrp.fundjournalism.org/donate/?campaign=701EY0000009gGGYAY" target="_blank">Donate to OCCRP</a>.</p> <h2 id="transcript">Transcript</h2> <p><strong>Nick Wallis:</strong> Coming up, tracking assets of the oligarchs, linking sources from multiple investigations, and dirty money in the U.K.</p> <p><strong>Miranda Patrucic:</strong> The way that oligarchs and their children are seen in the West is that they’re celebrities, that they are very successful businessmen. But I think the question that always persists is basically where did their first million come from?</p> <p><strong>Ilya Lozovsky:</strong> Two different leaks having her in them and showing that she is actually moving vast amounts of money in suspicious ways.</p> <p><strong>Kevin Hollinrake:</strong> I don’t think we’d have had two economic crime bills by now had it not been for Vladimir Putin’s illegal invasion of Ukraine.</p> <p><strong>Nick Wallis:</strong> My name is Nick Wallis and this is Dirty Deeds: Tales of Global Crime and Corruption, a podcast from the global journalism network the Organized Crime and Corruption Reporting Project, or OCCRP as it’s known.</p> <p>In this episode, we speak to Miranda Patrucic and Ilya Lozovsky, two OCCRP journalists who have been tracking Russian oligarchs, their wealth, and their assets for years. This story is a clear example of how some investigations can happen completely coincidentally. In February 2022, a massive leak from one of the world’s biggest private banks, Credit Suisse, exposed the hidden wealth of clients involved in money laundering, corruption, and other serious crimes.</p> <p>While studying the data, Miranda came across a name she’s never seen before: Saodat Narzieva. Carefully,Miranda and Ilya pieced together all the information they could find about her until they discovered she was the sister of one of the world’s richest men: a Russian oligarch, Alisher Usmanov, who’s been sanctioned since the invasion of Ukraine.</p> <p>Miranda and Ilya’s investigation is part of a wider study which led to the creation of OCCRP’s Russian Asset Tracker, an interactive web tool which links specific villas, yachts, and other expensive toys like helicopters to the wealthy people who own them. I started by asking Miranda about her interest in the Eastern European super-rich and how they control and move their wealth.</p> <p><strong>Miranda Patrucic:</strong> The way that oligarchs and their children are seen in the West is that they are celebrities, that they are very successful businessmen. They draw attention because they have so much money and such a display of wealth. But I think the question that always persists is basically, where did their first million come from? And as a journalist, for me, it’s good to see that people are now asking this question and that they see beyond the billions and the millions that these people have.</p> <p><strong>Nick Wallis:</strong> So tell me about Alisher Usmanov. Why is he so significant to you guys?</p> <p><strong>Ilya Lozovsky:</strong> To me, I would say, first of all, he’s one of the top 100 wealthiest people in the world. He’s been said to be close to Putin. He has a bit of involvement in journalism in Russia because there was a business daily called Kommersant, which is a pretty highly respected Russian publication, and he became its owner. This was years ago. And then there was a whole episode where the paper reported on election violations committed by the ruling party, and then he was fired. They’re still active in Russia and publishing at a time like this, which means that they’re toeing the line because the independent publications are not toeing the line. So Usmanov is involved in that, which for us feels very important and personal.</p> <p><strong>Nick Wallis:</strong> So how did he make his money after being fired?</p> <p><strong>Ilya Lozovsky:</strong> Gazprom, the Russian gas giant, or at least a large portion of his money. That wasn’t the only thing he did by any means. So he’s someone who is intertwined with this regime, even though he’s not really in policymaking circles, as far as I’m aware. It’s a huge fortune and it’s really hard to get at that fortune and understand where it is even once you decide to sanction him.</p> <p><strong>Nick Wallis:</strong> Miranda, you talked about Usmanov’s first millions, that basically he grew his wealth from selling off Russian state assets, built them up into becoming one of the richest men in the world, but your article is something of a scoop, not just because it looked down into how you’d managed to connect some of his extraordinary array of companies, but the way he utilized people around him, particularly his sister. Tell us, Miranda, about putting that particular investigation together. How did it come about?</p> <p><strong>Miranda Patrucic:</strong> The story came about as an accident, really. I was in Barcelona with my colleagues as we were discussing the Credit Suisse investigation and as I was going through the data, I saw a name and I saw that this person is listed as controlling 27 accounts. And some of these accounts at a certain point in time had over a billion in them. And of course, I was shocked. It was like: “Wow, what’s going on here? Who is this woman? And I’ve never heard of her before.”</p> <p><strong>Nick Wallis:</strong> Saodat Narzieva, is that right?</p> <p><strong>Miranda Patrucic:</strong> Saodat Narzieva.</p> <p><strong>Nick Wallis:</strong> So you’ve never seen this name before?</p> <p><strong>Miranda Patrucic:</strong> I’ve never seen this name before. I’ve never heard of her before. It came as a complete shock because, like a lot of these people with large amounts of money in their accounts, I knew about it because I’ve spent the past decade reporting in Central Asia, and we’re all pretty familiar with all the important people there. And yet suddenly there’s this woman and we’re like: “Who is she? What kind of business does she have?” And then we got an even bigger shock when we Googled her and it turned out to be a gynecologist from Uzbekistan. And you can imagine… [laughs]</p> <p><strong>Nick Wallis:</strong> Presumably they’re not that well paid over there or certainly not enough to have billions of pounds in accounts under their control.</p> <p><strong>Miranda Patrucic:</strong> Definitely. So that came as a little bit of a shock, and then I remember I told it to other reporters in the room and they were all like: “Wow, how is this possible?” And then after we realized who she was, I was basically obsessed with figuring out what these bank accounts were. Was this a company bank account? Which company? What I was doing was basically Googling the account number and suddenly one of them popped up in files that came in a different leak, this was a FinCEN File.</p> <p><strong>Nick Wallis:</strong> Just to interrupt for the listener, the FinCEN Files are documents from the U.S. Treasury’s Financial Crimes Enforcement Network, FinCEN, that had been leaked to BuzzFeed News and the International Consortium of Investigative Journalists in 2020, when the documents revealed how global banks were contributing to industrial scale money laundering. So you’ve got this unknown woman in the Credit Suisse leak controlling 27 accounts, and then…</p> <p><strong>Miranda Patrucic:</strong> Basically one of those accounts showed up there and it turned out to be an account that belonged to a company that is actually owned by Alisher Usmanov. And then once we knew this connection, it was obvious: “Who is she? How is she related to him?” And it turned out to be his sister.</p> <p><strong>Ilya Lozovsky:</strong> And this is a rare case when you have information coming from two very different sources that confirm [each other], because her name appeared in the Credit Suisse leak, her name was listed in the Swiss bank accounts, and in a totally separate leak of documents coming from a completely different source, her name appeared in connection with him again, and they showed some of the money moving in suspicious ways. So it’s sort of like this totally unknown person, as Miranda said, two different leaks having her in them and showing that she is actually moving vast amounts of money and her brother is this world famous billionaire.</p> <p>And it just goes to show you, when you are as big as Usmanov, you can move money all over and it actually will appear in different places. And that doesn’t necessarily mean that it’s still easy to track down or to sanction it, but it is nice in this investigation. I really like how we were able to combine different — this is kind of nerdy investigative journalism stuff — we were able to combine very different sources in one investigation to get at the same theme.</p> <p><strong>Nick Wallis:</strong> And what’s interesting about this is the denials that come from Alisher Usmanov about ever having transferred money to his sister for anything other than legitimate reasons. And yet they appear in things called suspicious activity reports, which are the documents that financial institutions and those associated with their business must file with the Financial Crimes Enforcement Network whenever there’s a suspected case of money laundering or fraud. So when does something go from being suspicious to potentially unlawful?</p> <p><strong>Miranda Patrucic:</strong> When it comes to suspicious activity reports, the banks are basically looking for certain signs of potential wrongdoing. So one of the signs can be that they see unusual, large-numbered transactions which end in “000”. So like a clean five million, 100,000, 200,000. That’s not how normal business transactions work.</p> <p>You usually have a bill and it’s going to be 500,339. There’s going to be more than zeros on the bill. And then it’s also who these transfers are made to. For example, are they made to unknown entities? Are they made to people who, when you Googled them, you cannot find an actual relationship with the person who is wiring the money? There was also another sister of Alisher Usmanov who also was receiving and sending money from him and to him.</p> <p><strong>Ilya Lozovsky:</strong> And I think even as far as this explanation [that] he’s a generous, wealthy man and he’s generous to his sister, and of course there’s nothing illegal about giving money to your sister if you are a wealthy person, it’s a separate question of how many villas one person needs, but if you look at some of the transactions that are highlighted in these suspicious activity reports, there’s stuff there that even a non-professional [would find suspicious].</p> <p>I’m not a financial analyst or accountant, but you can see that this stuff is very questionable. We’ve got one report showing Alisher Usmanov transferring $3 million to his sister and it was just marked as a gift. And then a few months later, she sends 100,000 back to him and in the explanation it says: “To the brother for current expenses.”</p> <p>There’s no way that she’s helping her brother out with expenses because he is the multibillionaire, and why is he sending her money and she’s sending money back to him? And in another case, he sent her money and then she sent it to her son-in-law who’s a director of a steel company. So it’s clearly more than just a gift going on here. And of course these are just little pinpricks of information that we have about vast movements of money, most of which we probably will never see.</p> <p><strong>Nick Wallis:</strong> But they are forensic, and you do spell these out alongside denials from Usmanov saying that his sister had any possession or control of any accounts in Swiss banks on behalf of her brother, and furthermore that she’s never had any formal or informal role in any of his businesses.</p> <p>And yet the evidence seems to point in the other direction and in fact when this article came out, it was before she was sanctioned and shortly after this article was published she was sanctioned by Western governments, which does suggest that they think at least there’s something suspicious going on here. You obviously have to be very careful about what conclusions you can draw from the evidence that you’re bringing out, but there’s a pattern here, isn’t there?</p> <p><strong>Miranda Patrucic:</strong> We see that there is a pattern and we see even in his responses that, if you think about the 600 million yacht that everybody in the world knew was his…</p> <p>And that turned out to belong to a trust [whose] beneficiaries are his sisters. So that basically shows you that the family members are very much connected to the business empires of the people. And very often they’re the holders of significant wealth.</p> <p><strong>Ilya Lozovsky:</strong> It doesn’t mean that the sisters are going around deciding what to do with the money. It could just be that their names are held there as beneficiaries or for whatever reason. So it’s not that we can allege that they are personally deciding how that money will be moved around or what’s going to happen to it.</p> <p>But their names do appear there and even something like, he’s got an estate in England called Sutton Place, which is a historic estate in the countryside, and it’s a Tudor manor house, and even if you look at the Wikipedia page of this estate, you’ll see that Usmanov is the owner, there’s no question, as with the yacht that bears his mother’s name. And yet it’s very hard to actually sanction these things once a government makes the decision to do so, because it’s very hard to connect it, because it’ll go back to that trust which goes back to families.</p> <p>Another example, a helicopter that appears on that yacht. We made a goal in this project of trying to identify every asset that these various oligarchs own, and we were looking at this helicopter and it was connected to some offshore company that we couldn’t trace to him. The only reason we could trace it to him is because it kept sitting on his yacht.</p> <p><strong>Nick Wallis:</strong> I must admit I’m having great fun looking at the Russian Asset Tracker as we speak, which has informed me that the superyacht is called Dilbar, is that right, the mother’s name?</p> <p><strong>Ilya Lozovsky:</strong> Yes, that’s his mother.</p> <p><strong>Nick Wallis:</strong> And it’s actually a very smooth and fun website to have a play with. How conscious and aware do you have to be that you’ve got to tell an entertaining story when you’re putting all this together?</p> <p><strong>Ilya Lozovsky:</strong> I’m always thinking about the storytelling, I often lead trainings for various investigative journalists on how do you actually tell a story that makes sense, how do you make it not only interesting, but how do you just make it coherent and have meaning? You can list companies and accounts all day, but for an audience, I want my buddy in the bar to understand my story. I want my grandmother to understand my story.</p> <p>You sometimes have to pull your head out of the spreadsheets and ask yourself of all the thousands of pieces of data and lines of spreadsheets and documents I’ve read, what is it that actually made my heart beat faster when I read it? When you’re writing the story you’re only putting down on paper a tiny, tiny fraction of all the information you find, so you put in the information that conveys the facts, but you remember those moments that made your heart beat faster and you make sure that those are what’s stringing the story together.</p> <p>And I think that’s why my collaboration with Miranda that’s been going on for years now has been so successful because between the two of us, we really have covered all the sides of this that make both for something substantive but also something that has emotional impact and can convey to casual readers, non-expert readers, why this is important and why we’re telling these stories in the first place.</p> <p><strong>Miranda Patrucic:</strong> I remember when we were covering the angle of the Italian coast and all these properties, it was so fun to watch drone footage of the place.</p> <p><strong>Ilya Lozovsky:</strong> It’s such a rush when you see somebody’s Facebook photo and there’s a corner of a building or a certain outline of a mountain or rock in the background, and then you match it with a drone that drone footage that your colleague took or with a Google map or something. And it’s really fun. They’re having so much fun posting their Dolce & Gabbana outfits and their multiple villas, so why shouldn’t we have some fun connecting that to their offshore companies?</p> <p><strong>Nick Wallis:</strong> Yeah, you know you’re going a bit mad don’t you? I picked up a journalist on Twitter the other day, I was interested in the work that they were doing and I got their profile photo up. The first thing I looked at was the building behind her to see if I recognized it and where exactly that photo was meant to be taken.</p> <p><strong>Ilya Lozovsky:</strong> Yeah, I think we’re all becoming open source investigators soon, so it’ll be an interesting world.</p> <p><strong>Miranda Patrucic:</strong> If you have a collection of dresses that you would like somebody to identify, I can see Dolce & Gabbana prints in my dreams.</p> <p><strong>Nick Wallis:</strong> I guess it’s the untouchability of these people, isn’t it? The fact that even though Alisher Usmanov has been sanctioned, I’m sure he’s still living a very nice life, and the authorities in Germany can’t even impound his superyacht named after his mother.</p> <p><strong>Miranda Patrucic:</strong> With the amount of money that these kinds of people have stashed offshore, I don’t think we need to be worried about them being poor.</p> <p><strong>Ilya Lozovsky:</strong> Just as an example, the villas that we found in Italy, I think it was six that we identified for sure as connected to Usmanov, and he only owns one of them directly. His sister Gulbakhor owns another two and the rest are owned through various corporate structures, and our Italian colleagues actually did a whole separate investigation into some of the people who provide the security, who provide the really secure Internet access to this compound of villas.</p> <p>And there’s a whole industry of lawyers and accountants and everybody else you can think of who will set up these companies for you, set up these bank accounts, who will move this money for you. So it’s kind of a self-perpetuating industry that’s part of what makes these people so untouchable.</p> <p>This topic has been on the world agenda much more since the Panama Papers came out in 2015 and there have been repeated investigations since then. So I think the public understands this problem better than in the past and there is more pressure. And whenever I’ve ever spoken with members of the European Parliament or anyone like that, they always say the thing that helps us the most [to] keep this on the agenda and push for reforms is when there are more investigations that come out.</p> <p><strong>Nick Wallis:</strong> Are the sanctions actually hurting, Ilya? Not just Alisher Usmanov and his family, but as a whole, do they make a difference to Putin’s war effort?</p> <p><strong>Ilya Lozovsky:</strong> Well, I think there’s a somewhat naive view that the oligarchs control Putin and once you sanction the oligarchs, that will cripple him. I think that Putin has effectively cleared the field at home, so the only oligarchs that are left at home are those that are willing to not interfere with him politically. As far as the oligarchs specifically, I don’t think it’s so much about forcing Putin’s hand in some way as it’s about what we were just talking about, about making sure that the corruption they represent does not continue to infect or even exacerbate the corruption that we already find in our societies.</p> <p>As far as the whole separate question of sanctions on Russia itself and whether that affects the war. I think it’s slow-moving. I think the Russian economy is accruing more and more damage, and that’s a slow process, and I think for Ukraine, it’s not fast enough. But I think that in the long term, this is clearly not going to be a short war. So the pressure hopefully will grow more and more on the Russian side relative to the Ukrainian side so that time will be on Ukraine’s side, essentially.</p> <p><strong>Nick Wallis:</strong> Where do you see this going? What will Putin listen to?</p> <p><strong>Ilya Lozovsky:</strong> Oh boy, if I could answer that question. I think nobody really knows what can convince him because so far nothing has. I think his ability to wage war has to be degraded and that is affected by ability to import high tech components from the West and the ability to evade the technological sanctions that are in place. And I think that’s another aspect of this work of when you have bank transactions where the true purpose isn’t indicated or ships where the true nation that is behind that ship or the true cargo isn’t being indicated, that is corruption, but that also can lead to actual evasion of sanctions that are meant to stop the war machine.</p> <p><strong>Nick Wallis:</strong> Just one final thought on the source of a lot of this information coming from leaks, large-scale leaks, whether it be the Credit Suisse leak, the Panama Papers, the FinCEN Files, whatever. Does there seem to have been a rash of them recently because they all come from quite mysterious sources.</p> <p>Given that you wouldn’t have been able to pinpoint exactly Saodat’s relationship with her brother without being able to triangulate from the various leaks that are coming on, where do you see all that going? Do you see more and more people hacking into foreign states or foreign banks for for political gain? Or do you see more whistleblowers coming forward? How easy or hard is it getting to get information out there for someone who has a conscience about this or thinks it’s an important thing to do?</p> <p><strong>Miranda Patrucic:</strong> We definitely see we’re in the golden age of leaks and with the Russian invasion, one of the things we’ve noticed is that there have been so many attempts to hack different governmental bodies and agencies in Russia and even companies in Russia, and so many new leaks have come that it’s almost impossible to keep up with them and go through them and figure out what the stories are there.</p> <p>So we can see that there is more and more of that, and I think whistleblowers have been encouraged by the Panama Papers whistleblower. I think what is different is that the collaborations in the media sphere have really shown the power of journalism and the power of how we can change the world if we work together.</p> <p>I think in global law enforcement, there’s so much corruption, there’s so much lack of interest sometimes to prosecute different powerful companies or individuals, that basically people are seeing that they need to turn to the media to bring something to the attention of the public. And we are seeing even individually people reaching out to journalists and basically sending different documents, reports, confidential information that otherwise would not see the light of day.</p> <p><strong>Ilya Lozovsky:</strong> And of course leaks can be very damaging as well. If they’re just released and without a process of working through them and double-checking everything, making sure it’s legitimate, leaks can also be very powerful in a dangerous way. So I think there is a need for the media to play this kind of, no pun intended, mediating role of interpreting the data and understanding it and applying professional standards of journalism to the leaks that are pouring out of all these secretive places.</p> <p><strong>Nick Wallis:</strong> It does feel like a decent journalistic active cohort is a functioning bellwether of democracy, but at the same time it’s also depressing that the law enforcement authorities are effectively delegating the job to journalists to do what they should be doing in the first place.</p> <p><strong>Miranda Patrucic:</strong> The reality is that criminals are so clever, they hire so many experts, some of the greatest minds are hired by criminals, and they can come up with new ways to launder money, commit crime than law enforcement can keep up [with].</p> <p><strong>Ilya Lozovsky:</strong> And they pay a lot better than we get paid.</p> <p><strong>Nick Wallis:</strong> OCCRP’s Miranda Patrucic and Ilya Lozovsky. After my discussion with Miranda and Ilya, I spoke to the British Member of Parliament Kevin Hollinrake. who has launched a non-partisan economic crime manifesto aimed at stemming the flow of dirty money through the UK.</p> <p>The City of London has long been seen as a place where rich people with illegitimate wealth from all over the world can launder their cash or use it to buy assets and influence.. Kevin joined forces with a senior opposition party member, Dame Margaret Hodge, to launch their economic crime manifesto. In a piece for The Times newspaper, Kevin said the UK has a $100 billion money laundering problem. I asked him if it were eradicated, what the consequences might be for the UK economy.</p> <p><strong>Kevin Hollinrake:</strong> Well, frankly, I think that’s probably the tip of the iceberg to businesses where there’s various estimates [but] nobody really knows how big the problem is. Quite frankly, I don’t care if it affects the UK economy or not, I don’t want dirty money here and I don’t think anybody else should want that money here.</p> <p>We know the scale of the problem internationally, roughly, it’s just frightening. The amount of money that’s stolen from Africa by kleptocrats and corrupt politicians is twice the amount of the international aid budget for Africa. All this money’s coming in, you can say it’s coming in at one end and going back out the other twice as fast. So I think whatever the benefits to the UK in terms of this dirty money, I don’t care, we’ve got to clamp down on it. I do not think it will hurt the economy.</p> <p>I think our economy, one of the reasons people invest in the U.K. is it’s got a trusted system and we observe the rule of law and property rights and our courts are world renowned. So I think for us to clean up our act I think ultimately is a good thing. And the thing about all this is any dirty money, if the wider British public think that we’re willing to countenance a system that tacitly endorses dirty money within that system, I think they lose faith in the entire system.</p> <p>And that’s really bad for the economy. It’s really bad for politics. It’s really bad for the U.K. PLC generally. The devastating consequences of dirty money, because we know this stuff funds all the most nefarious activities on the planet, be it drug dealing, be it people trafficking, be it terrorism, be it the destruction of states. Look at Russia. Their entire economy has been torn apart by people stealing money out of their economy and also it’s funded Putin’s war efforts in Ukraine.</p> <p><strong>Nick Wallis:</strong> To what extent are we reaping what we sow when it comes to the war in Ukraine with the way that we’ve essentially welcomed a lot of Putin’s cronies into the U.K. and their money?</p> <p><strong>Kevin Hollinrake:</strong> I think we have played a part in it, there’s no doubt. We’ve done this for decades and it isn’t a political point, it shouldn’t be. I think we thought “Russian money, it’s not for us to decide whether that money is ill-gotten or not,” and some of it won’t be, and it’s very difficult I think for anybody to say, “that money has been stolen” or “that money has been extorted,” or whatever else it is if it’s in a foreign jurisdiction, but nevertheless I think we know so much more now about the whole Russian system that it’s time to act.</p> <p><strong>Nick Wallis:</strong> What’s the difference between the Economic Crime Act and the more recent Economic Crime and Corporate Transparency Act? How much further does it go and how much more effective could it be?</p> <p><strong>Kevin Hollinrake:</strong> It goes a fair bit further, it does some things we all want, particularly around the transparency of a company. So we know that lots of money is moved around the world by using shell companies, just companies that are layered like one of those Russian dolls, layers upon layers upon layers, and the money’s hidden in these companies.</p> <p>The actual ownership of those companies is uncertain so it means you can move money around. Money’s no good if you can’t spend it, and dirty money, because of money laundering rules, is more difficult to spend, so they have to clean it up. If you’re gonna show how this stuff works, just watch a program on Netflix called Ozark, which explains exactly what all this is about.</p> <p><strong>Nick Wallis:</strong> A good drama, that.</p> <p><strong>Kevin Hollinrake:</strong> Fantastic, but it really is an eye-opener in terms of how the world of money laundering works and what it’s there for. So you need to hide the money, you use these shell vehicles, but also you need advisors and a regime that facilitates and the U.K. does that pretty successfully for a number of reasons.</p> <p>It’s got a huge expertise here in terms of financial services, the ease of setting up corporate vehicles, and it’s got all these crown dependencies and overseas territories where you pay very little tax if you move your money into them. So if you see a lot of money, you don’t want to pay tax on that money, so A) you don’t want that money to be tracked and B) you don’t want to pay tax on it. So we kind of make the perfect destination to launder the money through the U.K. from foreign jurisdictions and indeed from the U.K. itself out into other jurisdictions, tax-free jurisdictions, and then that money can be spent on yachts, villas, whatever else these rich people want to spend it on.</p> <p><strong>Nick Wallis:</strong> What is the one thing you would do if you had the opportunity that would change things at a stroke?</p> <p><strong>Kevin Hollinrake:</strong> If I can say two things, one thing is what we know happens, and there’s phenomenal examples of this, Danske Bank is a case you’ll be aware of, but there was money laundering of around £200 billion through Danske Bank.</p> <p><strong>Nick Wallis:</strong> This is a Danish operation, isn’t it.</p> <p><strong>Kevin Hollinrake:</strong> A Danish operation. Money coming out of Russia, out through these Danish banks, the money comes out clean and then can be spent. £200 billion. Now, you cannot tell me that somebody within Danske Bank didn’t know what’s going on at a senior level. It went through a relatively small outpost of Danske Bank, I think actually it was in Estonia, the actual bank, the branch that dealt with this, and you could see that that bank made huge profits from Estonia.</p> <p>So somebody knew about this and when they knew about it, instead of just turning a blind eye and taking the money — because the banks make a huge amount of money on this — they should have reported it and they should have stopped it.</p> <p>What I think we need is a “failure to prevent” offense. If you should have reasonably understood what was going on in your bank and you’re at a senior level, then you personally are held to account and you personally can go to jail. So this is personal liability for some executives. It’ll send shivers up their spine, quite rightly.</p> <p>And when we did this in the construction sector in the U.K. in 1974, the Health and Safety at Work Act, and made directors personally responsible if they didn’t at least try to prevent accidents in the workplace — so giving hard hats out, like proper shoes and signage up, all this kind of stuff — and workplace accidents, serious accidents in the following year dropped by 90%.</p> <p>So you need personal culpability so they personally can have their collars felt and go to jail if they don’t do the right thing. That’s the number one thing.</p> <p>The number two thing is the regulators and law enforcement agencies will always be playing catch up because this stuff happens. Nobody goes around talking about this when it’s happening, but some people are willing to and they’re called whistleblowers. So these are people in organizations who spot something that’s going on, they’re within the organization. And this is what happened in Danske Bank, just a very middle-level branch manager saw this going on, blew the whistle on it, and this all came to light. So we should protect whistleblowers more effectively and we should compensate them for any loss they experience as a result of blowing the whistle.</p> <p><strong>Nick Wallis:</strong> What authority or what global authority is there to leverage fines on rogue institutions? Is there enough enforcement and coordinated enforcement by the likes of America, the E.U., the U.K., to actually ensure that banks do toe the line when it comes to examining where their money’s come from?</p> <p><strong>Kevin Hollinrake:</strong> The short answer is no. It’s all done at a national level. In the U.S., which is far more successful than we are at this, it’s a combination of the Securities and Exchange Commission who regulate the banks and the Department of Justice. So they work together very well and they’re very well-resourced. So even per capita I think their level of fines is something like nine times higher than the fines in the U.K., despite very similar offenses going on in both jurisdictions, both nations.</p> <p>So there needs to be more joined-up working and thinking, but also fundamentally a thing which absolutely we’ve got to get right here in the U.K., which we haven’t got right, is the resources for our enforcement agencies which are woefully underfunded, woefully. The Serious Fraud Office has a terrible record in terms of prosecuting any kind of financial crime. We need more joined-up thinking within the U.K. and more resources to tackle financial crime.</p> <p>Just generally across the U.K., financial crime makes up about 40% of all crime, yet it attracts less than 1% of the resources. There’s a fundamental mismatch in terms of the scale of the problem and the scale of the resource.</p> <p><strong>Nick Wallis:</strong> Does not looking too closely at these institutions serve independent territories or large jurisdictions? It doesn’t seem like it.</p> <p><strong>Kevin Hollinrake:</strong> Yeah, absolutely, there’s no question about it. I think that actually the situation is improving, and I think Putin’s helped drive our agenda forward. I don’t think we’d have had two economic crime bills by now had it not been for Vladimir Putin’s illegal invasion of Ukraine.</p> <p>But one thing we always come up against in politics, and the vast majority of people in politics are trying to do the right thing and trying to improve things, but you come up against vested interests time and time again. And that can be certain sectors, it can be the financial services sector. It could also be international issues such as Crown dependencies and overseas territories.</p> <p>We’d like them to stay part of the U.K. family, so if we’re too heavy-handed they’ll say: “Right, we’ll go independent, we’ll please ourselves.” And they resist it of course. So all of these powerful influences. We should be proud of the City of London and the financial services sector in the U.K., but it’s very, very powerful, and if it doesn’t like something, it pushes back and the Treasury listens.</p> <p>The Treasury does have a mandate to make sure the wheels keep turning and music keeps playing in terms of the economy and it’s bound to worry about anything. The banks come along and say: “Oh my God, we’ll stop lending, we’ll stop doing this, we’ll take our headquarters abroad.” And you can understand why people take those threats seriously. But we can’t let that deter us from doing the right thing.</p> <p><strong>Nick Wallis:</strong> How effective do you think sanctions have been?</p> <p><strong>Kevin Hollinrake:</strong> Effective to some extent. Usmanov, I think is one of his villas in a very nice part of Europe has actually been impounded, although it’s frozen, not taken off him, of course, which [is a] very difficult conversation we need to have to try and find ways of actually stripping these assets and then redistributing them. So it has had some effect, but we need to go much further.</p> <p>One thing I would really like to do, which I think could help unlock a lot of this: you can sanction an individual and it makes you feel good, but if you don’t know where their assets are, it’s pretty pointless. So you’ve got to be able to follow the money. So I think what should happen is if somebody’s sanctioned, any U.K. organization that’s dealt with that individual should have to open their books to the enforcement agencies.</p> <p>So they should have to say: “Those are all the dealings we’ve had with Mr. Usmanov over the last 20 years.” And then the authorities have got something to go on and they can look and track this money. So it’s not just a case of catch me if you can. You’ve got some actual evidence of how to track this money down, which [has] two benefits. You can find the money. Also, you can find the origins of the money to find out if it’s been stolen or ill-gotten by other means, and then you can potentially confiscate it off them completely and use it to pay reparations to Ukraine, for example.</p> <p><strong>Nick Wallis:</strong> To what extent do you think there is appetite within the British government, at the very least, to really tackle this, perhaps in light of the Ukraine war, but perhaps just because it’s the right thing to do, because this has been going on for well over a decade, hasn’t it, the issue of offshoring money and lack of transparency.</p> <p><strong>Kevin Hollinrake:</strong> Yeah, and we have made progress. I think there is appetite, but it always comes up against a vested interest. So we can’t let that deter us from doing the right thing.</p> <p><strong>Nick Wallis:</strong> The British MP Kevin Hollinrake, finishing this episode for us. My thanks to him and to Miranda Patrucic and Ilya Lozovsky for their time.</p> <p>We tried to reach Alisher Usmanov, his sisters Saodat Narzieva and Gulbakhor Ismailova, and his son-in-law Shokhrukh Nasirkhodjaev to ask them about the allegations in the podcast, but none of them responded to our emails.</p> <p>Saodat Narzieva’s spokesperson responded to OCCRP saying that she doesn’t recall the specific details of these transactions as they were many years ago, nor does she know why a suspicious activity report was sent to the Financial Crimes Enforcement Network.</p> <p>When asked about these transactions, an Usmanov representative previously denied that Mr. Usmanov has ever distributed his wealth amongst his relatives in order to conceal it from any governments and said that this allegation is baseless and unsubstantiated.</p> <p>In December 2022, Danske Bank reached final coordinated resolution with the U.S. Department of Justice, the U.S. Securities and Exchange Commission and the Danish Special Crime Unit following the investigation into failings and misconduct related to the non-resident portfolio at Danske Bank’s former Estonian branch.</p> <p>They stated: “We offer our unreserved apology and take full responsibility for the unacceptable failures and misconduct of the past which have no place at Danske Bank today. We’ve learned from our mistakes and we’ve taken the steps necessary to ensure that Danske Bank has robust measures in place to do everything possible to prevent these failures from taking place again.” That statement came from Martin Blessing, chairman of the board of directors.</p> <p>We contacted Credit Suisse and put to them to the allegations in this podcast. They said: “As a matter of law, Credit Suisse cannot comment on potential client relationships including closed relationships. Credit Suisse is committed to operating its business in strict compliance with all applicable laws, rules and regulations within the markets in which it operates, and we have stringent control mechanisms in place to combat financial crime-related activities with a series of significant measures taken over the last decade in line with financial market reforms. Our strategy puts risk management at the very core of our business.”</p> <p>If you want to read the OCCRP report into Alisher Usmanov and his sister, Saodat Narzieva, or you want to play with OCCRP’s Russian Asset Tracker, head to the OCCRP website and search “Alisher Usmanov.” The specific piece we discussed in this episode is called: “Sanctioning an Oligarch is Not So Easy: Why the Money Trail of Alisher Usmanov, One of Russia’s Wealthiest Men, Is Difficult to Follow.”</p> <p>Thank you for listening to Dirty Deeds. If you like what you hear, please leave us a review and give us a rating. This will help us bring these important stories to more people, and make a better podcast for you.</p> <p>If you want to continue to hear incredible stories from OCCRP journalists and about the work they do, be sure to follow this podcast on your chosen podcast platform. That way you won’t miss future episodes and series.</p> <p>You can support the difficult and often treacherous work OCCRP journalists do, so they can continue to expose the corruption and crime that would otherwise go unseen and unheard. To donate to OCCRP, please go to occrp.org/donate.</p> <p>Dirty Deeds: Tales of Global Crime and Corruption was produced by Lindsay Riley, with research by Phoebe Adler-Ryan and Riham Moussa at Rethink Audio. Check out the growing number of OCCRP podcasts which you can find on your favorite podcast platform. My name is Nick Wallis, and this has been a Little Gem production for the Organized Crime and Corruption Reporting Project.</p>OCCRPhttps://www.occrp.org/Abramovich Signed Football Players to “Modern Slavery” Deals that May Breach FIFA Rules2023-11-17T00:00:00+01:002023-11-17T00:00:00+01:00https://www.occrp.org/en/cyprus-confidential/abramovich-signed-football-players-to-modern-slavery-deals-that-may-breach-fifa-rules<p>Slovenian football player Emir Dautović was once considered one of his country’s brightest prospects. In 2012, at just 16 years of age, he was invited to train with English giants Manchester City. The young defender from the Slovenian team NK Maribor Branik thought he had the world at his feet.</p><p>Slovenian football player Emir Dautović was once considered one of his country’s brightest prospects. In 2012, at just 16 years of age, he was invited to train with English giants Manchester City. The young defender from the Slovenian team NK Maribor Branik thought he had the world at his feet.</p> <p>After his try-out in Manchester, he was taken to a meeting with the sporting director of NK Maribor, he told Der Standard and Paper Trail Media, OCCRP’s media partners. Also present were his parents and a representative of the powerful football agent Pinhas “Pini” Zahavi, Dautović said.</p> <p>Zahavi, who had represented multiple superstar players since the 2000s, had been working closely with Russian billionaire Roman Abramovich, the owner of English Premier League club Chelsea FC. Dautović said Zahavi’s involvement made him dream that he might soon be transferred to Abramovich’s glamorous West London team.</p> <p>The player’s parents and an NK Maribor director signed a contract presented by Zahavi’s representative. Dautović said he believed the contract was a “big step” because he was told Zahavi could “arrange a transfer to Chelsea overnight.”</p> <p>Dautović’s father had wanted to think it over, but the sporting director told the family: “You sign now or never,” Dautović said.</p> <p>“It went like this: sign here, sign there, done. I didn’t even take the contract home,” said Dautović. “For me it was like getting onto the motorway in my career… Pini Zahavi would become my agent and that was the best thing that could happen to me.”</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/emir-dautovic-derstandard-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Emir Dautović" data-img="/assets/cyprus-confidential/emir-dautovic-derstandard.jpg" id="img-6949" /> <img src="https://www.occrp.org/assets/cyprus-confidential/emir-dautovic-derstandard.jpg" class="hidden" id="aside-img-6949" alt="cyprus-confidential/emir-dautovic-derstandard.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> Elias Holzknecht </small> Emir Dautović. </div> </div> <script> $(document).ready(function() { let rand_6949 = $("#aside-img-6949").prop("naturalWidth"); if(rand_6949<750){$("#img-6949").attr("src","/assets/cyprus-confidential/emir-dautovic-derstandard.jpg");} $(window).load(function() {$("#aside-img-6949").remove();}); }); </script> <p>But the contract wasn’t with Chelsea, or any other football club. Instead, Dautović’s future had been committed to Leiston Holdings Limited, an obscure company based in the <span class="expand">British Virgin Islands <span class="expandright"> The Abramovich companies in the British Virgin Islands named in this article were active up to at least August 2022, according to the Caribbean nation’s official gazette. <i></i> </span> </span> and owned by Abramovich. Leiston Holdings agreed to pay NK Maribor 1 million euros for Dautović’s <span class="expand">registration. <span class="expandright"> When a football player is transferred for a fee, what clubs or companies are actually paying for is the player’s registration, which allows them to play in competition. In typical player transfers, clubs pay each other for that registration, but in TPO arrangements companies pay to have a stake in, or 100 percent rights to, a player’s registration. <i></i> </span> </span></p> <p>Dautović’s agreement with Abramovich’s Leiston Holdings was an example of what is known as “third party ownership,” or TPO, whereby a player signs over their “economic rights” to a company. The owner of the rights can dictate where the player plays and how much they earn. The practice was banned by the English Premier League in 2007, and by FIFA at the start of 2015. UEFA General Secretary Gianni Infantino likened TPO to “modern slavery.”</p> <p>Abramovich owned a stake in multiple players through TPO agreements, <a href="https://www.theguardian.com/football/2014/jan/30/chelsea-links-third-party-ownership" target="_blank">media reports</a> in 2020 revealed.</p> <div class="occrp-inset-box quotebox" id="quote"> <div class="inner occrp-container-inner"> <div class="quote-text"><div class="quote-line"></div><div>“It went like this: sign here, sign there, done. I didn’t even take the contract home. For me it was like getting onto the motorway in my career.”</div></div> <div class="quote-author">– Emir Dautović, Slovenian football player, who as a teenager signed a third-party ownership deal with an offshore company belonging to Roman Abramovich.</div> </div> </div> <p>Now, newly leaked documents give unprecedented insight into the details and scope of Abramovich and Zahavi’s operation as they worked to snap up dozens of players — several under the age of 18 — and profit from their talents by earning money from transfer fees.</p> <p>OCCRP and its international media partners spoke to three players who signed away their rights to Abramovich’s offshore companies. Only Dautović was willing to be quoted.</p> <p>The files come from Cypriot corporate service provider MeritServus. The leaked documents were obtained by the pro-transparency group Distributed Denial of Secrets and initially shared with OCCRP and the Guardian. This investigation is part of Cyprus Confidential, a global investigative collaboration led by the International Consortium of Investigative Journalists (ICIJ) and Paper Trail Media.</p> <div class="occrp-inset-box vertical single-column" id="occrp-inset-box-about-the-cyprus-confidential-project"> <div class="inner occrp-container-inner"> <h3 class="occrp-section"> <a href="#occrp-inset-box-about-the-cyprus-confidential-project">🔗</a>About the ‘Cyprus Confidential’ Project </h3> <div class="subheader"> <p>Cyprus Confidential is a global investigation examining Russian influence in Cyprus, and how local service providers helped oligarchs and billionaires structure their wealth over the years preceding the 2022 full-scale invasion of Ukraine. The project is based on more than 3.6 million documents leaked from six different Cypriot service providers, as well as a Latvian firm.</p> </div> <input type="checkbox" id="occrp-inset-box-control-about-the-cyprus-confidential-project" /> <div class="occrp-inset-box-contents"> <div class="text"> <div class="text-inner"> <p>The Cypriot firms are DJC Accountants, ConnectedSky, Cypcodirect, MeritServus, MeritKapital, and Kallias and Associates. Additional records came from a Latvian company, Dataset SIA, which sells Cypriot corporate registry documents through a website called i-Cyprus.</p><p>The MeritServus and MeritKapital records were shared with OCCRP, ICIJ and other media outlets by Distributed Denial of Secrets (DDoS). OCCRP has previously reported on these firms, and the current project builds upon this work. ICIJ also shared the leaked records from Cypcodirect, ConnectedSky, i-Cyprus, and Kallias and Associates that were obtained by Paper Trail Media. In the case of Kallias and Associates, the documents were obtained from DDoS who shared them with Paper Trail Media and ICIJ. OCCRP shared the DJC Accountants leaked records with media partners after previously obtaining them via DDoS.</p> </div> </div> <label for="occrp-inset-box-control-about-the-cyprus-confidential-project"><span>More</span><span>Less</span></label> </div> </div> </div> <p>Abramovich did not respond to requests for comment. Zahavi declined to comment.</p> <p>NK Maribor said it could not comment on past player transfers but that the people responsible for “transfer policy, recruitment and sporting matters” at the time Dautović signed with Leiston Holdings had all left the club. The NK Maribor sporting director from that time declined to comment. The alleged representative of Zahavi did not respond to a request for comment.</p> <h2 id="unfulfilled-promise">Unfulfilled Promise</h2> <p>In the 2000s, the well-connected Zahavi was at the center of some of the most expensive player transfers in the world. Zahavi was also <a href="https://www.nytimes.com/2017/04/15/sports/soccer/premier-league-west-ham-transfer.html" target="_blank">widely reported</a> to have helped arrange <span class="expand">Abramovich’s acquisition of Chelsea FC <span class="expandright"> Abramovich sold the club last year after he was sanctioned by the U.K. government following Russia’s full-scale invasion of Ukraine. The U.K. said Abramovich was one of a small number of “Russia’s wealthiest and most influential oligarchs, whose business empires, wealth and connections are closely associated with the Kremlin.” <i></i> </span> </span> in 2003. The leaked records show they continued to work together for years afterwards as Zahavi sought out players for Leiston Holdings.</p> <p>The so-called “super-agent” has been the subject of multiple media profiles and reports that paint a picture of a well-connected dealmaker who is close to some of the most powerful people in football, including Sir Alex Ferguson, the most successful British manager in history. Zahavi helped make headlines in 2017, when he arranged the world-record 222-million-euro deal that took Brazilian forward Neymar to Paris St Germain from Barcelona.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/pini-zahavi-football-match-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="Pini Zahavi" data-img="/assets/cyprus-confidential/pini-zahavi-football-match.jpg" id="img-9286" /> <img src="https://www.occrp.org/assets/cyprus-confidential/pini-zahavi-football-match.jpg" class="hidden" id="aside-img-9286" alt="cyprus-confidential/pini-zahavi-football-match.jpg" /> </a> <div class="inset-caption"> <small class="image-credit"><strong>Credit:</strong> PA Images/Alamy Stock Photo </small> Pini Zahavi watches a football game from the stands. </div> </div> <script> $(document).ready(function() { let rand_9286 = $("#aside-img-9286").prop("naturalWidth"); if(rand_9286<750){$("#img-9286").attr("src","/assets/cyprus-confidential/pini-zahavi-football-match.jpg");} $(window).load(function() {$("#aside-img-9286").remove();}); }); </script> <p>Zahavi was also reportedly involved in deals to bring superstars to Chelsea after Abramovich bought the club. Thanks to Abramovich’s riches, the long-term underachievers spent unprecedented sums to bring talent to West London, and within two years the club won its first English Premier League championship.</p> <p>Previous media reports on TPO contracts identified Zahavi’s role with Leiston Holdings, but the new leaked documents reveal further details, including financial details of an arrangement signed by Zahavi and Leiston Holdings.</p> <p>Under the terms of the 2011 “player investment agreement,” Leiston Holdings would provide 10 million euros to buy the economic rights of players that Zahavi recommended. Zahavi could then share in the profits of future sales of the players’ rights, or earn a commission.</p> <p>While the Zahavi connection seems to have helped some of the world’s top players achieve their dreams, several of those signed up to TPO contracts ended far from the wealth and glamor of the elite European game.</p> <p>Among the leaked Cyprus Confidential files are scanned letters from the Cameroonian player Gaël Etock, who was a graduate of Barcelona FC’s world-famous academy before signing up with Leiston Holdings in 2011, when he was 18. One of the letters shows that two and a half years after Etock’s TPO contract was signed, Leiston Holdings was paying him just 25,000 euros ($34,000) per season.</p> <p>The letters show that in January 2014, while he was playing for Cercle Brugge in Belgium, Etock asked Zahavi for a 5,000-euro ($7,000) advance on his salary. Etock asked for another advance of 30,000 euros ($40,000) four months later, by which time his pay had increased to 50,000 euros per season.</p> <div class="inset-image"> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/cyprus-football-salary-advance-14b35029f95b01c7b5898718601dbb5ab3f754b837e611b7f8f2e94676005105.jpg" alt="A letter from a player asking for an advance on his salary" data-img="/assets/cyprus-confidential/cyprus-football-salary-advance.jpg" id="img-7944" /> <img src="https://www.occrp.org/assets/cyprus-confidential/cyprus-football-salary-advance.jpg" class="hidden" id="aside-img-7944" alt="cyprus-confidential/cyprus-football-salary-advance.jpg" /> </a> <div class="inset-caption"> A letter from player Gaël Etock asking for an advance on his 50,000-euro salary from Leiston Holdings Limited, an offshore company owned by Roman Abramovich. </div> </div> <script> $(document).ready(function() { let rand_7944 = $("#aside-img-7944").prop("naturalWidth"); if(rand_7944<750){$("#img-7944").attr("src","/assets/cyprus-confidential/cyprus-football-salary-advance.jpg");} $(window).load(function() {$("#aside-img-7944").remove();}); }); </script> <style> #img-7944 { box-shadow: none; } </style> <p>Etock was not willing to comment on his arrangements with Leiston Holdings, Abramovich, and Zahavi.</p> <h2 id="potential-rule-breaches">Potential Rule Breaches</h2> <p>Leaked documents suggest Abramovich’s TPO arrangements may have breached FIFA’s rules in two cases.</p> <p>When FIFA outlawed TPO deals in 2015, it allowed pre-existing contracts to remain in place until expiration or transfer to a new club. A transfer would require a new contract between that club and the player, which would replace the TPO arrangement.</p> <p>Since new TPO contracts were banned, this effectively meant third-party owners of player rights could sell them only once after 2015.</p> <p>However, balance sheets for Abramovich’s companies show they continued to list two players as assets despite those players moving between clubs multiple times after the ban came into effect. Experts said this indicates possible violations of FIFA’s TPO ban.</p> <p>André Carrillo, a Peruvian attacking midfielder, and Brazilian Armindo Tue Na Bangna, known as Bruma, were found among 25 players named in a list of “intangible assets” on 2019 balance sheets for Leiston Holdings and another Abramovich company called Conibair Holdings Ltd. Both men had been transferred multiple times between the 2015 ban and the period covered by the balance sheets.</p> <aside class=""> <a href="#" data-toggle="modal" data-target="#lightbox"> <img src="https://www.occrp.org/assets/cyprus-confidential/andre-carrillo-premier-league-9ccfa5cf5f8ffacc8d99c22ba8b8d531e066d59c82d1d69ff55cbde7ebfd6845.jpg" class="full-image" alt="André Carrillo" data-img="/assets/cyprus-confidential/andre-carrillo-premier-league.jpg" /></a> <img src="https://www.occrp.org/assets/cyprus-confidential/andre-carrillo-premier-league.jpg" class="hidden" id="aside-img-5018" alt="cyprus-confidential/andre-carrillo-premier-league.jpg" /> <div class="image-caption"> <small class="image-credit"><strong>Credit:</strong> PA Images/Alamy Stock Photo </small> André Carrillo playing a Premier League match for Watford in 2017. </div> </aside> <script>$(window).load(function() {$("#aside-img-5018").remove();});</script> <p>Samuel Cuthbert, a sports law barrister with London-based Outer Temple Chambers, told OCCRP that since transfers between parties should require new contracts, Carrillo’s status as a Leiston Holdings asset after multiple transfers “may well be … a breach of the [TPO] ban.”</p> <p>The same goes for Bruma, sports law expert Antoine Duval told OCCRP’s partner Der Spiegel. Duval said it was impossible to judge whether the TPO ban had been violated without seeing the underlying contracts and transfer documents, but that the leaked balance sheets indicated a breach of the rules may have taken place.</p> <p>“It seems difficult to envisage a situation in which a player is still legally the object of a TPO investment after having been transferred twice after the entry into force of the ban,” he said. “Once [Bruma] is transferred to a new club, a new TPO agreement would need to be signed between Conibair and the new club, which would be agreed after the entry into force of the ban.”</p> <p>Carrillo and Bruma did not respond to messages sent to their social media accounts. Two of the clubs that loaned or purchased Carrillo or Bruma told reporters they were given written assurances by the players and other football clubs involved that no TPO contracts were in force. Abramovich did not respond to questions and Zahavi declined to comment.</p> <p>Critics of TPO arrangements have raised the possibility of conflicts of interest, and a <a href="https://www.bbc.com/news/uk-54229269" target="_blank">BBC report from 2020</a> revealed that Carrillo had played for Portuguese team Sporting Lisbon against Chelsea in the 2014 UEFA Champions League, when Abramovich owned half of Carrillo’s economic rights.</p> <p>Carillo also played for Watford against Chelsea in the Premier League in October 2017, when he was seemingly still considered an asset of one of Abramovich’s firms. There is no suggestion that Abramovich’s ownership stake in Carrillo’s rights impacted his performance or the outcome of the games.</p> <h2 id="sole-discretion">‘Sole Discretion’</h2> <p>Leaked documents also show that the Abramovich firm Leiston Holdings had contractual rights to influence player transfer decisions in some cases, which might have breached FIFA’s longer-standing rules against “third party influence,” or TPI. These rules, introduced in 2008, prohibit outside companies or individuals from exerting control over football clubs’ “employment or transfer-related matters.”</p> <p>In at least three cases, contracts show that Abramovich’s company had “sole discretion” over the transfer of players. Sports barrister Cuthbert described the clauses as “troubling,” saying it was “difficult to reconcile a third party appearing to have total control over the transfer of a player” with FIFA’s ban on TPI.</p> <p>Duval said such “sole discretion” clauses were “typically contrary to FIFA’s ban on third-party influence.”</p> <p>As well as these clauses, a 2011 agreement between Leiston Holdings and Sporting Lisbon over Carrillo’s rights stipulated that the club must accept any transfer offer in excess of $6 million, or pay Leiston Holdings 45 percent of the offered amount if the club wished to reject it. (In this scenario, the club would also gain full control of Carrillo’s player registration.)</p> <p>Leiston Holdings also sent a January 2012 letter to Club Deportivo Cuenca in Ecuador informing the team that its player John Narváez would be transferred to another club during that month’s transfer window, under the terms of a prior “Purchase Agreement.”</p> <p>Duval said the letter to Club Deportivo Cuenca lacked context since the prior purchase agreement was not among the leaked documents, but added that the letter’s “tone points to a case of third-party influence under the FIFA [rules].”</p> <h2 id="i-worked-for-abramovich">‘I Worked For Abramovich?’</h2> <p>Back in Slovenia in 2012, Emir Dautović believed he had signed an agreement for Zahavi to be his representative, setting him on a path to stardom, but that he was still registered as a player for NK Maribor. In reality, his registration now belonged to Leiston Holdings, which had the right to decide where Dautović would play.</p> <p>“Never heard of [Leiston Holdings]. Who is behind it?” Dautović asked when OCCRP’s international media partners named the company. Nor did he know Abramovich owned the firm, and therefore his economic rights.</p> <p>“I worked for Abramovich? I’m taken aback by that. I swear, I didn’t know that,” he said when reporters told him the full details of the arrangement.</p> <p>Soon Dautović was on the move, but not to the star-studded Premier League or another of Europe’s major football competitions. Instead, he was transferred to OFK Beograd in Belgrade, Serbia. He had no say in the transfer, he told reporters.</p> <p>Soon after he was transferred again, this time to the Belgian team Royal Excel Mouscron. Again, he was not consulted on the deal, he said.</p> <p>“I was having coffee with my best friend when my agent rang me and said: ‘The day after tomorrow you’re flying to Belgium, we’ve arranged everything already.’”</p> <p>Dautović told reporters he had a difficult time in Belgium, failing to secure a regular spot in the Mouscron team. He was 19 years old and miserable, and ultimately decided to pay for his ticket back home to Slovenia and his family.</p> <p>Dautović’s career never took off. Partly he blames an injury he sustained in 2012. But he also feels he was not given a fair shot with Zahavi, who never even came to meet him.</p> <p>“I have never met Pini in my entire life,” Dautović said.</p> <p>“Do I think I was used? Yes. You are a commodity.”</p>