A new report slams a leading German bank for allowing Turkmenistan's former president, Saparmurat Niyazov, to stash billions of dollars in state earnings in a personally controlled account.
The report, titled Undue Diligence, was released march 11 by the watchdog organization Global Witness. It asserted that Deutsche Bank, while not breaking any laws, was complicit in propping up Niyazov's brutal dictatorship. [For background see the Eurasia Insight archive].
Niyazov, operating through Turkmenistan's central bank, squirreled away up to $3 billion in energy revenues at Deutsche Bank between 1995 and his death in December 2006, according to evidence gathered by Global Witness. "Deutsche Bank assisted the late president Niyazov of Turkmenistan, a notorious human rights abuser, to keep billions of dollars of state gas revenues under his personal control and off the national budget," the report said. The Global Witness report quotes former Turkmen officials as saying Niyazov used the Turkmen Central Bank account at Deutsche Bank like a personal automated teller machine.
"Turkmenistan is the only country that Global Witness has ever come across where none of the natural resource wealth appeared to be making it on to the government's budget," the report stated.
Global Witness has long sought explanations from Deutsche Bank about its dealings with Niyazov. The Undue Diligence report alleged that bank officials worked closely with the Turkmen dictator. "This was not a hands-off relationship," the report stated.
Following Niyazov's sudden death in late 2006, Global Witness called on Deutsche Bank to freeze the assets in suspect Turkmen accounts until safeguards were in place to assure that the funds would not be used illicitly. "Global Witness has asked Deutsche Bank what happened to the accounts following the death of Niyazov, and whether any special measures were put in place to ensure that the money was not being used for corrupt ends in the changeover to a new regime," the report said. "It also asked whether Deutsche Bank holds or has accounts for members of Niyazov's family, or for senior Turkmen government officials. Deutsche Bank declined to answer."
The report recommended that "banks should be required to be transparent about central bank accounts they hold for other countries, so that populations of those countries know where their national wealth is being held."