Eurasia Insight:
AZERBAIJANI MINISTER FIRED, ALLEGEDLY ARRESTED FOR COUP ATTEMPT
Rovshan Ismayilov: 10/19/05

In a surprise move, President Ilham Aliyev has fired Economic Development Minister Farhad Aliyev from his post. Law enforcement agencies sources have told EurasiaNet that both Aliyev and his brother, president of the Azpetrol oil company, have been arrested under suspicion of preparing a coup against the government.

In Farhad Aliyev’s place, President Aliyev has appointed Heydar Babayev, head of the State Securities Committee of Azerbaijan, and a longtime political rival of the former economy minister.

Law enforcement agency sources, who requested anonymity, report that investigators suspect that Farhad Aliyev was working with opposition members to take control of Baku’s airport upon the return of exiled Democratic Party of Azerbaijan Chairman Rasul Guliyev to Azerbaijan, originally scheduled for October 17. The government argues that Aliyev planned to then overthrow President Ilham Aliyev’s administration and build a coalition government with the opposition Azadlig alliance, the country’s largest opposition election bloc. [See the EurasiaNet archive.] Guliyev, a leader of the Azadlig alliance, remains in Ukraine pending an extradition request from Azerbaijan to stand trial on charges of embezzlement.

The charges against Aliyev are allegedly based on testimony by Fikret Yusifov, a former finance minister who was arrested the night of October 16/17 [See the EurasiaNet archive], on the eve of Guliyev’s planned return, and charged with arranging financing for opposition clashes against the police. Investigators allegedly also claim that documents detailing Farhad Aliyev’s cooperation with the opposition were found in Yusifov’s apartment.

Nijat Guliyev, a former minister of foreign economic relations, is also reportedly being asked to provide testimony to the national security ministry, and has been sentenced to 15 days’ imprisonment on unclear charges.

Some law enforcement sources also report that representatives of Azen, a Turkish company with which Azpetrol, the firm run by Aliyev’s brother, signed a production sharing agreement earlier this year, have also been placed under arrest. The agreement, ratified by parliament, concerned the management of one of Azerbaijan’s largest onshore oil fields, Binagadineft.

Aliyev’s arrest was carried out by Hilal Asadov, head of the anti-terrorism department of the Ministry of National Security. According to law enforcement sources, both Aliyev and his brother are being held in cells within the ministry.

The Ministry of National Security so far has made no official statements about the reported arrests. A statement is reportedly planned for October 20.

Representatives of the opposition Azadlig alliance, however, have denied that they have received any support from Farhad Aliyev or Fikret Yusifov. “This is idiocy. We have nothing to do with this case,” said Fuad Mustafayev, deputy chairman of the Popular Front Party, one of the members of the tripartite Azadlig bloc.

Mustafayev instead put the allegations down to an inner government struggle between Farhad Aliyev and other members of President Ilham Aliyev’s administration. “One group defeated another. Farhad Aliyev tried to gain an image as a reformer in the government. But he did nothing to really change the situation in the economy. What we have seen today is a culmination of struggle between oligarchs,” Mustafayev said.

The conflict between Heydar Babayev and Farhad Aliyev has been long in the making, most frequently in the form of a fierce media battle. Babayev is not considered an unpopular member of government, and has a reputation as a brilliant finance expert due to his experience working at one time as deputy to Russian media mogul Vladimir Gusinsky. His responsibilities frequently intersected with those of Aliyev, after the latter took on responsibility for privatization.

Allegations about Babayev’s true role in the government have become common currency of late. Some observers believe that he advises the country’s top leaders about their personal property portfolios; a recent article in one of the last issues of the independent Monitor magazine charged – without naming official sources -- that the company managing the State Oil Fund’s assets belonged to Babayev.

Despite the acrimony between Aliyev and Babayev, however, one source in the economic development ministry, who asked not to be named, said that there will be no radical changes to the ministry’s structure and work plan as a consequence of Aliyev’s removal. The newly appointed minister reportedly has already assured employees in his first staff meeting on October 19 that their jobs will remain secure.

But Babayev was not Farhad Aliyev’s only cause of worry. In early September, Aliyev made repeated statements that his life was under threat because of the economic reforms he advocated. At the time, Aliyev was responsible for privatization, investment promotion, poverty reduction, regional development programs, and chaired the Tariffs Council. While speaking with journalists in the regional town of Ganja on September 2, Aliyev said that he had appealed to law enforcement agencies to take measures to ensure his safety. Law enforcement agencies, however, have refused to state whether or not they responded to Aliyev’s request.

Though Aliyev never named the source of the threat against him, local media reports have hinted that the minister was targeted because of his stance against monopolies and because of his ongoing struggle with another powerful government official, Kamaladdin Heydarov, head of the State Customs Committee, who allegedly played a key role in the crackdowns that followed President Aliyev’s 2003 election.

In autumn 2004, Aliyev launched an anti-monopoly campaign, naming customs impediments for imports as a main tool relied on by monopolies to preserve their business domains. The campaign divided members of parliament from the ruling Yeni Azerbaijan Party into two camps. One group called for parliamentary hearings, demanding that the head of government and Heydarov appear for questioning. The second group backed Kamaladdin Heydarov, affirming that there are no monopolies in Azerbaijan. The same divide was duplicated in the pro-government media.

Different media outlets claimed that both men control large business holdings, exercising monopolies in those sectors. Rafik Aliyev, the brother of Farhad Aliyev, as president of Azpetrol Oil Company, controls 90 percent of Azerbaijan’s gas stations. Farhad Aliyev is widely believed to control companies dealing with cement and aluminum production, electricity distribution and telecommunications. Kamaladdin Heydarov, also frequently named as one of the country’s richest oligarchs, is alleged to control banks, part of the construction sector, fisheries, and part of the mobile communications market. Both men allegedly invest in TV companies, newspapers and even news agencies.

Ilham Aliyev froze the conflict between the pair by urging the ministers to avoid politicizing the issue, but the spat surfaced again in the summer of 2005 when the National Confederation of Entrepreneurs, patronized by Farhad Aliyev, blamed several state agencies, including the Customs Committee, for running monopolies.

A sign that the political tide was beginning to turn against Aliyev, however, came on September 16, when President Ilham Aliyev re-created the State Property Committee, placed it in charge of privatization, and appointed another rival of the economy minister, Kerem Hasanov, as its chairman. The presidential decree de facto deprived Farhad Aliyev of a large part of his duties – overseeing state property and the privatization process. The ministry had already lost responsibility for regulating industry and housing.

At the same time, with the parliamentary election campaign under way, accusations began to mount that the economy minister, a close friend of the president, was, in fact, supporting the opposition. Eynulla Fatullayev, editor-in-chief of Realniy Azerbaijan, a publication believed to be sponsored by Kamaladdin Heydarov, published a series of articles that charged Farhad Aliyev with corruption and financing the opposition. Aliyev denied the allegations, though his failure to invoke the name of the late President Heydar Aliyev, widely seen as the founding father of modern-day Azerbaijan, was taken by many experts as a sign of the minister’s estrangement from the presidential administration. Ilgar Mammadov, an independent political analyst and candidate for parliament, says that Farhad Aliyev’s departure from government or transfer to the opposition was just a matter of time. “His interests had been endangered and he demonstrated independence. During his recent speeches he was speaking about loyalty to the state system, but never to Heydar Aliyev’s heritage, and never praised Ilham Aliyev’s policies.”

As a result of Aliyev’s dismissal and reported arrest, State Customs Committee Chairman Kamaladdin Heydarov’s role in the economy will go unchallenged, experts believe.

Meanwhile, in Farhad Aliyev’s hometown in southeast Azerbaijan, Jalilabad, news of the minister’s arrest was discussed in every teahouse, shop and public place, according to one EurasiaNet correspondent who visited the area on October 19. Local residents discussing the news reacted critically to President Aliyev’s decision to dismiss Farhad Aliyev, arguing that progress made in furthering regional development had been jeopardized.

Editor’s Note: Rovshan Ismayilov is a freelance journalist based in Baku.