Friends with Benefits
On January 11, 2021, YDA Group’s chairman, Hüseyin Arslan, touched down in Albania. Though largely unknown in the country, he quickly made headlines when he announced that his company would build a hospital not far from Vlora.
“We … were ordered by our president, Mr Recep Tayyip Erdoğan, last week during the visit of [Albania’s] honorable prime minister to Turkey,” Arslan said in a video posted on Rama’s Facebook page. “We were instructed that we have to finalize, deliver the hospital in three months. There is a big bet on this.”
Building work kicked off soon after, with Rama publishing regular updates on the hospital’s progress on his Facebook page. Throughout, his office described the hospital as “charity” from Erdoğan’s government, with no hint that YDA Group is one of the largest conglomerates in Turkey.
Turkish President Recep Tayyip Erdoğan gives YDA Group Chairman Hüseyin Arslan a plaque of appreciation at the Radio and Television Journalists Association awards in 2018.
At home, YDA Group is well known for its relationship with Erdoğan’s government. Arslan has longstanding ties to the AKP Party through his sister, who is married to the uncle of the man who co-founded the party with Erdoğan in 2001.
Arslan publicly praised Erdoğan after an attempted coup in 2016, describing him and Turkey’s then-prime minister as caretakers of “our democracy, our future, and our national will.” Erdoğan, in turn, awarded Arslan a plaque of appreciation two years later.
It was not until after the new hospital had been inaugurated, with Erdoğan in virtual attendance, that Rama announced the consortium led by Paccoli, which included YDA, had won the tender to build Vlora International Airport.
YDA Group and Erdoğan’s office did not respond to requests for comment.
🔗The Home of Air Albania
"We discussed with Mr. Ayci the project … to establish a new Albanian airline, which has started to be designed thanks to the special support of President Erdoğan and the technical assistance of the Turkish Airlines team," Rama announced after the meeting.
More than a year after Rama’s first announcement, and after several more meetings with Ayci, Albania’s government established Air Albania.
The new airline is owned by Turkish Airlines, Albanian government-owned aviation entity Albcontrol Sha, and MDN Investiment Shpk, a private company set up just nine days before the government announcement. MDN was created by Sinan Idrizi, an Albanian businessman who worked in Turkey for many years before returning in 2014, becoming co-owner of the Flamurtari Football Club in Rama’s constituency.
Idrizi, who claims to have “known Erdoğan for 25 years,” told OCCRP he created MDN at the request of Albania’s government on behalf of troubled Turkish airline Atlas Global, which went bankrupt in 2020.
But within weeks of Air Albania’s birth, Ibrizi started offloading his stake to his wife and daughter. Idrizi said he decided to transfer his shares to them after receiving criticism in the Albanian press.
“They started saying that I am not an Albanian citizen, they came and asked me how many passports I have,” he said, describing the transfer to his wife and daughter as “an agreement within the family.”
Rama’s office did not respond to requests for comment.
Mabetex Group’s owner, Pacolli, was a more familiar face in Albania than Arslan. The construction magnate is one of the wealthiest people in neighboring Kosovo, with a fortune of close to 800 million euros. Over the years he has been Kosovo’s deputy prime minister, foreign minister, and, for a brief period in 2011, its president.
Mabetex became embroiled in a major corruption scandal in the late 1990s over accusations that company executives had paid bribes to win a contract to work on the Kremlin. A Russian probe was later dropped after the lead investigator was fired over a bizarre sex-tape scandal. A related investigation for money laundering and bribery was also dismissed in Switzerland, where Pacolli is now a citizen.
known to have ties to alleged organized crime figures, including Milan Radoičić, an alleged gangster and powerful figure in Kosovo’s largest Serbian party, and Jose Enrique Rais from El Salvador.
Rais was indicted for fraud in his home country in 2013, and accused of “significant corruption” for bribing public officials by the U.S. After years of appeals, the case was eventually thrown out. Authorities in Switzerland, where Rais is also a citizen, investigated him for a related charge of money laundering, but the probe was later dropped and a court ruled he should be paid compensation.
In 2016, two of Rais’ planes were seized for suspected drug trafficking in Florida. A petition to the court from a local sheriff said Rais was a “priority target” of the U.S. Drug Enforcement Agency, and his company was “subject to international investigation” for links to organized crime groups, cartels, and corrupt politicians.
The sheriff later withdrew the complaint, however, and no charges were filed. Rais denied he was involved in any criminal activity.
Corporate records show Pacolli was a manager of Rais Group as of late 2011, while the company was being investigated.
Pacolli denied any involvement in corruption, pointing out that he had “never been the subject of any kind of indictment or trial” in either Russia or Switzerland.
Pacolli admitted that he knew Rais, but denied he had been a manager of Rais Group. “I know Jose Enrique Rais as a businessman who has operated in the world of aviation and as a Swiss citizen,” he said. “I rented a plane from the company he owned for a few months, but I had no knowledge that he was a drug trafficker.”
Behgjet Pacolli, Kosovo's foreign affairs minister at the time, speaks at a press conference in Prague in 2019.
SOPA Images Limited/Alamy Stock Photo
Despite Pacolli’s murky associations, Rama counts him as a close friend. The prime minister has spoken publicly of his “love and respect” for Pacolli, whom he refers to as “Baca” Behgjet, an affectionate term often used for older male family members in northern Albania.
A year after a major earthquake hit Albania in November 2019, killing 51 people and causing widespread destruction, the Behgjet Pacolli Foundation signed an agreement to rebuild an entire neighborhood in the city of Fushë-Krujë for an estimated 1 million euros. A few months later, in January 2021, the government opened the tender for Vlora International Airport.
Pacolli said when he made the donation he had no knowledge that the tender would take place so soon, or his company would bid for the contract.
The winning consortium’s representative, Lluka, is also an associate of Pacolli. Kosovo’s Serious Crimes Prosecution Section has investigated him twice, for abuse of office and fraud, both related to his role as an executive of the Economic Bank in Pristina, which is owned by the Pacolli family.
The first case, for abuse of an official position, was dropped in 2019 after a judge ruled it had exceeded the statute of limitations. Lluka was acquitted in the second case last year due to lack of evidence.
Lluka said he had never been found guilty of any crime. “In my life I have never been convicted by any court. I do not even have sentences for violating traffic rules, not to mention any other criminal offense,” he said in a statement sent to OCCRP.
And the Winner Is…
Today, legal troubles continue to swirl around the Vlora International Airport consortium.
The decision to award the concession to the YDA-Mabetex-2A consortium is being challenged by a U.K.-based rival bidder, AL-DE Corporation Ltd, which was disqualified from the tender for not submitting the proper paperwork. AL-DE is suing Albania’s minister of Infrastructure and Energy for defamation, saying the paperwork claim was just an excuse to favor the rival consortium.
AL-DE has also lodged a complaint with the Special Prosecution Office of Anticorruption and Organized Crime, accusing the Public Procurement Agency of illegal decision-making and fabricating documents. The Special Prosecution Office confirmed it had opened an investigation, but declined to comment further.
Tender documents seen by OCCRP show that, after repeated delays, the Ministry of Infrastructure and Energy suddenly changed the criteria for bids just four days before the December 2020 deadline. The changes reduced the amount of experience and technical expertise required, allowing the Turkish-Kosovar consortium to qualify.
Initially, companies needed to show they had designed, built, and operated an airport with an annual capacity of more than 10 million passengers, including two control towers, in the previous decade. They were also required to prove they had designed, constructed, and managed another with a capacity of more than 5 million in the past five years.
The amended criteria lowered the threshold to proving the bidder had experience building and managing one airport with a capacity for 2 million passengers and one control tower.
These extracts from a document put together by Albania’s Ministry of Infrastructure and Energy show how some of the experience requirements for bidders to build Vlora airport were changed.
Instead of needing to be certified by both the European Aviation Safety Agency and the International Civil Aviation Organization, the new rules also only required bidders to be certified by their national Civil Aviation Authority.
The Albanian Center for Economic Research’s Preçi said the last-minute changes show the government had “tailored the terms of reference” to allow the favored companies to “win the bidding even before it had taken place.”
“The public announcement of the bid was only a formality,” he said after reviewing the changes to the tender documents.
Rama’s office and the Ministry of Infrastructure and Energy did not respond to requests for comment. Lluka, the consortium’s representative, denied it had won the contract to build and manage Vlora airport through manipulating the tender process.
“Our company has nothing to do with the tender conditions and has accepted them from the beginning,” he said. “We have respected, without any interference, all the conditions.”
Pacolli also dismissed the allegations, claiming that there was “no evidence of any deviation, change of tender conditions or other aspects [of the process] that would put the consortium of winning companies led by Mabco Construction SA in a favorable position.”
Eleven days after the new criteria were announced, another rival bidder, Albanian company Global Technical Mechanics, requested clarification on the new details. The government accepted, delaying the deadline for submissions until February 2021. The Turkish-Kosovar consortium entered the race, and AL-DE was disqualified.
AL-DE claimed in its submission to the Special Prosecution Office that Global Technical Mechanics was a Trojan horse used to manipulate the tender process, pointing out that the company never submitted a bid for the airport.
“The Public Procurement Commission should have refused to review the ‘request for clarification,’” AL-DE said in a legal document filed with the Special Prosecution Office.
Government records show the Turkish-Kosovar consortium submitted their bid on March 1, 2021. They were announced as the winners four days later. Rama attended the signing ceremony of the contract with the consortium the following month.
Despite the fact that a court ruling said the signed contract should be made public, the government has refused to do so, saying it was a trade secret. OCCRP has challenged this decision in court.
A ‘High-Risk’ Investment
In the months since the opening ceremony, there seems to have been little progress on building Vlora International Airport. When OCCRP visited the site in May 2022, a reporter saw little activity.
Building is projected to take several years, but after two years of operating, the airport is expected to have an annual capacity of 600,000 passengers. Eventually, the government expects it to handle close to 1.2 million travelers a year.
Yet even the government admits its figures are unreliable. The procurement documents describe the project as “high risk,” noting that it is being built in a “green zone” with little data to indicate how many passengers to expect. It “is impossible to foresee the traffic,” they say.
Despite the uncertainty, Albania’s government has guaranteed the consortium’s revenue. If, by the fourth year of operation it has not made 9.6 million euros in profit, the government will pay the difference. This increases annually to 18.7 million euros by year 13. In total, the guarantee could reach up to 138.2 million euros, around a third more than the cost of construction.
Sinan Idrizi, an Albanian businessman who was part of Rama’s original negotiations to build Vlora International Airport in 2017, said the first Turkish consortium to be awarded the contract backed out because it would have been too expensive to build the runway.
“Their surveys showed that the area was a swamp, which created a lot of technical problems for the construction of the airport,” he told OCCRP. “The number of passengers must reach one million, otherwise the airport will have a difficult journey.”
A study by environmental NGO Build Green Group came to the same conclusion, saying the environmental costs of Vlora airport outweigh the potential economic benefits. “This airport will bring more social and environmental damage than economic revenue,” said the report.
Taulant Bino, the head of the Albanian Ornithological Society, said the airport’s opponents will continue to fight against the development, through the courts if necessary.
“We still believe that justice works in this country, and we will follow the legal road till the end,” he said.
Besnik Poletini and Aidan Iusubova contributed reporting.
CORRECTION: This story was amended to clarify the length of time Behgjet Pacolli served as Kosovo’s president, and changed to indicate that Pacolli’s family owns the Economic Bank in Pristina. Further details of the outcome of investigations into Jose Enrique Rais were also added.
Fact-checking was provided by the OCCRP Fact-Checking Desk.