By Harut Sassounian
Last year, I wrote an article reporting that the Silk Way Airlines of Azerbaijan made 350 secret flights to transport hundreds of tons of weapons from Bulgaria to ISIS terrorists in Syria and other Middle Eastern countries between 2014 and 2017. We now have a new surprising revelation that Silk Way received $419.5 million of loans from the U.S. Export-Import Bank (EXIM) to buy three 747-8 cargo planes from Boeing to continue its sinister operations.
The disclosure was made by a reporter for the Organized Crime and Corruption Reporting Project (OCCRP) by filing a Freedom of Information Act (FOIA) request with the U.S. government in 2016. It is noteworthy that Silk Way, “owned by a company with past ties to Azerbaijan’s Aliyev family, won some lucrative contracts from the U.S. military,” according to FOIA documents. In fact, “Silk Way was given contracts worth more than $400 million with the U.S. Defense Department’s Transportation Command for more than decade,” according to Devansh Mehta of OCCRP. Silk Way transported “ammunition and other non-lethal materials” to Afghanistan as of 2005. “In addition to its relationship with the U.S. government, Silk Way Airlines has also worked as a subcontractor for the Canadian Department of National Defense, the German armed forces, and the French army,” Mehta revealed.
In April 2017, Silk Way increased its purchases from Boeing, signing a $1 billion deal for 10 new 737 MAX passenger planes, according to reporter Mehta. However, it is not known how the new acquisition was financed. Last October, Silk Way announced plans to buy two more 747-8 cargo planes.
Mehta disclosed that “the airline is owned by Silk Way Group, which, at least at one point, was closely associated with Azerbaijan’s ruling Aliyev family (which has used its planes for private trips) and has benefited from benevolent state deals. Information obtained through FOIA shows that Silk Way Airlines took steps to conceal its owners’ identity, perhaps to improve its chances of winning the valuable U.S. loan guarantees and military contracts.”
Mehta added that “Azerbaijan ranks 122nd out of 180 countries in Transparency International’s corruption perception index, while President Ilham Aliyev’s family owns luxury properties around the world worth over $140 million. The Panama Papers and other leaks have implicated the country’s first family as being involved in nearly all sectors of the Azerbaijani economy, from luxury hotels to mining to banking.”
According to the terms of the Export-Import Bank’s $419.5 million loan to Silk Way, in case of default the loss would be repaid by the state-owned International Bank of Azerbaijan (IBA). The problem is that IBA has been “implicated in the Azerbaijani Laundromat, a massive scheme that pumped nearly $3 billion out of the country through various shell companies,” Mehta wrote. Furthermore, IBA is not in a position to guarantee the Silk Way loan, as the IBA itself declared bankruptcy in 2015, unable to pay its $3.3 billion debt!
Nate Schenkkan, project director of the Nations in Transit report at Freedom House, a US-based nonprofit that monitors democracy and human rights around the world, questioned the wisdom of EXIM Bank’s loan to Silk Way: “In Azerbaijan, where one family dominates economically and politically, and is then using state institutions to back its economic projects, there’s an obvious conflict of interest.”
Arzu Aliyeva, Pres. Aliyev’s 21-year-old daughter in 2010, was one of the three owners of Silk Way Bank, the financial arm of Silk Way Holding. Since 2017, her name is no longer mentioned as an owner. “Silk Way Holding, also referred to as Silk Way Group (SW Group) on its website, is a conglomerate that has currently listed 11 companies in its portfolio, including the airline,” according to Mehta. Silk Way Holding dominated Azerbaijan’s aviation sector after the state carrier AZAL airlines was privatized in a highly secretive manner without any bids and tenders. Mehta wrote that “a similar privatization of the telecom sector ended up with the [Aliyev] family earning about $1 billion in bribes in cash and share value, according to an earlier OCCRP story. The investigation also found that the money was funneled to the first family through various secret offshore companies. These companies have enabled the Aliyevs to control stakes in gold mines, telecommunications and construction businesses in Azerbaijan.”
According to a filing in 2006, Silk Way Airlines was owned by IHC (International Handling Company), an offshore entity based in the British Virgin Islands. In a 2017 filing, Silk Way Airlines stated that 40% of the company was owned by IHC, while 60% was owned by SW Holding, “effectively controlled” by Zaur Akhundov, an Azerbaijani citizen. Mehta stated that “IHC is linked to the Aliyev family through its director Jaouad Dbila who reportedly served as a proxy for the first family’s business interests in the past.”
In 2011, a Russian-born manager, Grigory Yurkov, was given power of attorney for both Silk Way Holding and IHC, according to Luxembourg’s official gazette. This appointment was used as a means to conceal the true owners of IHC.
Meanwhile, Zaur Akhundov had mysteriously become the 100% owner of the entire Silk Way Group in 2014. By that time, the firm and its many holdings were already worth billions of dollars, Mehta declared, based on the company’s loan guarantee application. Akhundov, 50, had held several official positions in Azerbaijan. “It is unclear how Akhundov became the owner of a billion-dollar conglomerate with more than 10 aircrafts, an insurance company, a construction company and an aircraft maintenance company, to name a few of the enterprises in the Silk Way Group,” Mehta wondered.
According Schenkkan of Freedom House, “Azerbaijan can be described as a centralized, vertical pyramid where the benefits go to one family that collects rents throughout the economy. This includes all sorts of transactions, not only official state transactions that might involve taxes and public funds, but also things that involve what we normally consider the private sector: import-export, consumer goods, transport—any area of the economy, the family has a stake in it and receives a cut on what takes place.”
The U.S. Congress should hold a hearing to investigate the appropriateness of EXIM Bank’s $419.5 million loan guarantee to Silk Way Airlines, its arms shipments to terrorist groups in the Middle East, and its hidden ownership by the ruling Aliyev family. After all, why should Azerbaijan, a country with billions of petrodollars, be given a U.S. loan?
Last week, South Florida Congressman Ted Deutch (D-FL) became the latest cosponsor of H. Res. 220, a resolution expressing the sense of the House of Representatives regarding past genocides.
The resolution states that “the lessons of past genocides should be applied to help prevent future war crimes, crimes against humanity, and genocide.” It reaffirms the 2016 resolutions passed in the House and Senate that recognized the ISIS killings of “Christians, Yezidis, and other religious and ethnic minorities in Iraq and Syria” as genocide, as well as the decades-long U.S. record on the Armenian Genocide.
In a series of tweets announcing his support for the legislation, Congressman Deutch stated that “Over 100 years after Armenian Genocide, it is our responsibility to continue to learn from this dark moment in history.”
“Over 100 years after the Armenian Genocide, it is our responsibility to continue to learn from this dark moment in history which caused unimaginable devastation and irreparable pain to the Armenian people,” Rep. Deutch told FLArmenians.com. “As we’ve learned from survivors of the Holocaust, keeping alive the memory of those lost and retelling the story of this genocide is essential in working to prevent history from repeating itself. Unfortunately, the recent genocide against the Yazidis by ISIS reminds us that we still have far to go,” he said.
Deutch, a member of the House Foreign Affairs Committee, is only the second Florida lawmaker to cosponsor H. Res. 220. Armenian Caucus Vice-Chair Rep. Gus Bilirakis (R-FL) led the effort in the introduction of H. Res. 220 back in March. It currently has 52 cosponsors and has been referred to the House Foreign Affairs Committee. A date has not yet been set for a committee vote on the bill.
Armenian Caucus Members are Successful
WASHINGTON, D.C. – After a long, close, and hard fought presidential race, Republican nominee Donald J. Trump, early Wednesday morning, surpassed the requisite number of Electoral College votes needed to win the presidency over Democratic nominee Hillary Clinton, reported the Armenian Assembly of America (Assembly). In addition to the White House, Republicans retained their majorities in the U.S. House of Representatives and the U.S. Senate although by smaller margins.
“We congratulate president-elect Trump and his running mate Mike Pence, and we commend American Armenians who participated in the election process throughout the country,” stated Assembly Co-Chairs Anthony Barsamian and Van Krikorian.
“In his victory speech, president-elect Trump’s call for national unity was gracious and is welcome. During the campaign, president-elect Trump recognized Turkey’s ties to ISIS, as well as its increasingly authoritarian regime. In addition to Turkey, President Trump will also need to address Azerbaijan’s sharp deterioration and its links with ISIS. Both countries pose a threat to stability in the region,” Co-Chairs Barsamian and Krikorian added.
“In view of the insecurity in the region, it is vitally important that Christians and minority communities at risk be protected and we urge the new Administration and new Congress to take steps to safeguard these vulnerable communities,” the Co-Chairs continued.
Congressional Caucus on Armenian Issues
In the House of Representatives, the Members of the Congressional Caucus on Armenian Issues had a strong showing with the overwhelming majority of those seeking re-election winning, including Co-Chairs Frank Pallone, Jr. (D-NJ), Jackie Speier (D-CA), David Valadao (R-CA) and Vice Co-Chairs Adam Schiff (D-CA) and Dave Trott (R-MI). Armenian Caucus Co-Chair Robert Dold (R-IL) facing a re-match with Democrat Brad Schneider did not win, nor did his Senate colleague Mark Kirk (R-IL). Meanwhile, Armenian Caucus Member Chris Van Hollen (D-MD) handily won his election to the United States Senate having defeated Turkish Caucus Congresswoman Donna Edwards in the Maryland primary. In addition, Caucus Member Janice Hahn (D-CA) won her bid for Los Angeles County Board of Supervisors.
“We congratulate the Members of the Armenian Caucus on their victories. We are proud to have two Members of Armenian descent in the House of Representatives, namely Anna Eshoo and Jackie Speier. Armenian American Danny Tarkanian, however, did not prevail in Nevada,” stated Armenian Assembly Executive Director Bryan Ardouny. “We also appreciate the strong support of our friends who will not be returning to Congress and wish them every success.”
In addition to a strong showing on the House side, pro-Armenia candidates also won in the Senate. Apart from Van Hollen, Armenian Genocide resolution cosponsors Senators Michael Bennet (D-CO), Marco Rubio (R-FL), and long-time supporter of Armenian issues Chuck Schumer (D-NY) were all re-elected.
Established in 1972, the Armenian Assembly of America is the largest Washington-based nationwide organization promoting public understanding and awareness of Armenian issues. The Assembly is a 501(c)(3) tax-exempt membership organization.