Gold mines for Azerbaijan’s presidential offspring, an ex-Georgian leader’s offshore company, a key Armenian official’s questionable income, the grounds for a clamoring public outcry in the South Caucasus over the Panama Papers were all there. But, so far, it hasn’t come.
Details about the Azerbaijani presidential family’s alleged control over Azerbaijan’s goldmines and its supposed business alliance with Tax Minister Fazil Mammadov hit on April 4, a day before a ceasefire which more or less ended three days of fighting with Armenian and separatist Karabakhi forces.
A 2012 report by RFE/RL, an OCCRP partner, had found that Aliyev’s daughters had stake in the goldmines; a revelation that OCCRP believes cost RFE/RL investigative journalist Khadija Ismyailova her freedom.*
Russia on April 7 swiftly took charge as a conciliator in the Armenia-Azerbaijan fight, with Russian Foreign Minister Sergei Lavrov on the ground in Baku, Prime Minister Dmitry Medvedev on his way to Yerevan and President Vladimir Putin sending his “warmest greetings.”
“At every level, from president to prime minister, to foreign ministry, to defense ministry, to joint chiefs of staff, we did everything to help the sides arrive at a ceasefire agreement,” Lavrov said on April 7, as he met Azerbaijani President Ilham Aliyev in the Azerbaijani capital. The trip was announced in March, before the latest violence began.
While calling for a lasting Armenia-Azerbaijan peace, Lavrov used the opportunity to emphasize Moscow's special role in the affairs of its former Soviet republics and to draw lines for the West's involvment. Russia, “as a country with close ties to both” Armenia and Azerbaijan will stay involved to make sure that the truce holds in the Nagorno-Karabakh conflict, Lavrov said.
Although saying that Moscow is supportive of peace initiatives of the conflict's two other international mediators, the United States and France, Lavrov claimed than Russia is more interested in a peaceful resolution of the 28-year-old Caucasus conflict than anybody in the West.
A photo released by the de facto Nagorno Karabakh armed forces, which they said is an Azerbaijani ThunderB drone that they shot down.
The recent surge of violence in Nagorno Karabakh has brought attention to Azerbaijan's increased reliance on arms from Israel, including two types of drones not previously known to be in Baku's arsenal.
In one case, Azerbaijan was reported to have used a "Harop" loitering munition, known somewhat fancifully as a "kamikaze drone" because it is itself the bomb. According to Armenian media, on April 4 the Harop hit a bus carrying soldiers to the front and killed five or six of them. It was believed to be the first ever combat use of the system anywhere, reported Jane's Defence Weekly. Azerbaijan sources claim to have used the Harop in other attacks, as well.
In another episode, the armed forces of Nagorno Karabakh released photos of a ThunderB surveillance drone that they claimed to have shot down on April 2.
And in a third episode, Azerbaijani sources claim that their side destroyed "six enemy tanks" using an Israeli-made Spike missiles.
None of these weapons were previously reported to be operated by Azerbaijan. (While it was known that Azerbaijan bought the marine version of the Spike missiles, it's not clear whether it somehow used those for this attack or had secretly also purchased the land forces version, as well.)
The hostilities between Azerbaijan and Armenia between April 2 and April 5 have not just been on the military front; hackers from Armenia and close Azerbaijani ally Turkey have been exchanging deadly cyber-fire over the past few days, too.
Declaring that it had “sided with Azerbaijan against Armenia, the aggressor,” HackRead reported, a group with the nom de guerre of Turk Hack Team claimed on April 3 to have shut off access to sites for Armenia’s government administration and the National Security Service, National Bank and Ministry of Economy. Another band, Aslan Neverler Tim, alleged that it knocked offline the websites for Armenia’s defense, agriculture, energy ministries.
Some Armenian observers confirmed DDOS (Distributed Denial of Service) attacks, a targeted congestion of service, on gov.am sites. Cyber-security expert Samvel Martirosian told Armenian media that the attackers failed, though, to hack into the websites.
Turk Hack Team is known for anti-Armenian cyber-attacks. The group claimed responsibility for taking down the Vatican’s website a year ago in retaliation for Pope Francis’ description of Ottoman Turkey’s 1915 killings of ethnic Armenians as genocide, a term modern-day Turkey rejects.
Despite the ceasefires issued by Azerbaijan, Armenia and Armenia-backed separatist forces on April 5, questions still persist within the South Caucasus about what happens if the resurge of violence over breakaway Nagorno Karabakh and surrounding Armenian-occupied territories gets completely out of hand.
Azerbaijan’s defense ministry described its own ceasefire, its second since hard-core fighting broke out on April 2, as “mutual” with Armenia’s military. Baku does not deal directly with Karabakh’s separatist government, but later in the day, an unidentified Karabakhi de facto official told Reuters that the region’s forces also had been ordered to stop firing.
How long these ceasefires will last is anyone’s guess. During Baku's earlier ceasefire, Azerbaijani bombardments of Armenian and Karabakhi positions continued nonetheless, local media reported.
With the risk that a continued Armenia-Azerbaijani confrontation could prove explosive in this strategic region, a vital oil-and-gas corridor, global powers have begun making moves to bring an end to the risk for what Armenian President Serzh Sargsyan terms “all-out war.” But with what result remains unclear.
Longtime mediators in the Karabakh conflict, Russia, the United States and France, convened for an ad-hoc meeting in Vienna on April 5. The group will visit Yerevan, Baku and Karabakh “in the near future,” French Foreign Minister Jean-Marc Ayrault announced, Russia’s state-run TASS news service reported.
Yerevan already has fixed a date for these guests -- April 9, when the envoys will meet with Armenian President Serzh Sargsyan and Foreign Minister Eduard Nalbandian.
Azerbaijan has intermittently displayed interest in investing in Kyrgyzstan, but the latest set of revelations courtesy of the Panama Papers documents leak suggests that even the presidential family in Baku wanted a piece of the action.
In 2012, an obscure company called Redgold Estates Azerbaijan Ltd. became one of several international bidders hoping to snap up some out of a set of around a dozen gold concessions at an auction in Kyrgyzstan.
In the evening, the televised auction was called off when a group of demonstrators charged into a broadcast studio demanding a halt to proceedings.
As is the norm with offshore companies, tracing the line from a public company to the ultimate beneficiaries is a confusing business. Following the thread linking Redgold Estates Azerbaijan Ltd. to the family of Azerbaijan’s President Ilham Aliyev is tricky and requires some circumstantial sleuthing.
All the claims are based on documents leaked from Panama-based law firm Mossack Fonseca, which has forged a reputation for providing offshore company services to all-comers.
According to an account published on April 4 by the Organized Crime and Corruption Reporting Project (OCCRP), Redgold Estates Azerbaijan Ltd. was incorporated 20 months before the Kyrgyzstan auction, in which it submitted five bids.
The leaked Mossack Fonseca files show that another company with the same name, Redgold Estates Ltd., was created six weeks before that in the Seychelles, one of many offshore jurisdiction favored for its privacy laws. Other than the name, the two company also shared the same Baku address.
Disturbing reports of atrocities, and official claims and counterclaims continue to stream from the Armenian-Azerbaijani conflict zone as fighting enters its third day. With no international media or conflict-monitoring mission apparently yet on the ground in the breakaway Nagorno-Karabakh region, it is next to impossible to glean frontline facts from the ongoing information war.
That lack of objective information could become even more critical in the coming days. Armenian President Serzh Sargsyan, a Karabakh native, pledged on April 4 that escalation of the fighting, the worst since the signing of a 1994 ceasefire, would prompt Yerevan to recognize Nagorno Karabakh as an independent state.
An Armenian investigative news service, Hetq.am, on April 4 published photos of two elderly residents they claim were killed and maimed by Azerbaijani troops when they overran the village of Talish in northeastern Karabakh on April 2. (Warning: graphic image) The Armenian government and the Karabakhi separatist forces it supports claimed they swiftly recaptured the village and nearby heights. Hetq.am said that their photographer, Hakob Poghosian, had then gained access to the village.
A screenshot of a video released by the de facto "defense ministry" of Nagorno Karabakh purporting to show the wreckage of an Azerbaijani helicopter shot down by Armenian forces. (source: https://www.youtube.com/watch?v=NqatFUgMFxM)
Azerbaijan's military claims to have "liberated" some territory in Nagorno Karabakh after the heaviest fighting in years broke out between Azerbaijani and Armenian forces over the disputed territory.
Fighting that broke out overnight April 2 has already resulted in an unprecedented death toll, with Azerbaijan confirming 12 of its soldiers killed and Armenia 18 of its soldiers, as of Saturday night local time. That makes this by far the deadliest outbreak of fighting since the two sides signed a ceasefire in 1994 (the previous worst episode was in 2014 when ten soldiers were killed over a three-day period).
Beyond that, there were claims and counterclaims from the opposing sides of many more enemy soldiers killed and various equipment destroyed. The fog of war, dense in any conflict, is particularly impenetrable in Karabakh, where there are no independent sources of information.
The most dramatic claim was the Azerbaijan Ministry of Defense's announcement that it had "liberated" some territory previously held by Armenian forces, naming the areas of Aghdere, Tartar, Aghdam, Khojavend, and Fuzuli.
"In a short period of time, as a result of a rapid counterattack by the Azerbaijani armed forces the front line of the enemy, built up for years, was penetrated in several sections, and several strategic heights and populated areas with strategic significance were cleansed of the enemy," the MoD said.
Azerbaijan's government has for the first time addressed an apparent dispute with Russia over arms shipments, blaming it on Moscow sending inadequate equipment.
Earlier this month, Russian Deputy Prime Minister Dmitry Rogozin (who holds the portfolio of defense industry issues) made an unannounced trip to Baku. Both Russian and Azerbaijani press reported, citing unnamed sources, that the visit was aimed at sorting out Azerbaijan's failure to pay for part of $4 billion in arms deals due to the financial crisis the country is suffering as a result of falling oil prices.
This week, Azerbaijani Foreign Minister Elmar Mammadyarov gave an interview to Russian newspaper Kommersant (which broke the news originally about the alleged payment problems). In it, Mammadyarov says that Baku has no problems paying, but that Azerbaijan was dissatisfied with what it had received:
There is no problem with payments, reports about unsolved financial issues between Russia and Azerbaijan are incorrect. We are paying everything in accordance with the contracts. There are problems in their implementation, in that the weapons arriving in Azerbaijan have to correspond to the technical parameters specified in the contracts. Dmitry Rogozin came to Baku to learn what were the problems connected to those parameters, he got a full explanation and there are no more problems....
Georgia is one sad post-Soviet place, according to the World Happiness Report, which for the second year running rated the Caucasus nation as the most downbeat country in the former Soviet Union. Out of this bunch, the Central Asian autocracy of Uzbekistan, ranked 49th out of 157 countries, is apparently having the most fun.
Judging by the report, Georgia has gone a long way from being the fun-in-the-sun spot of the USSR. American writer John Steinbeck once recalled that the Russians and Ukrainians he had met during his late 1940s travels to the Soviet Union all yearned for “magical” Georgia. “People who had never been there, and who possibly could never go there, spoke of Georgia with a kind of longing and admiration,” Steinbeck observed in his 1948 Russian Journal. “They spoke of Georgians as superman, as great drinkers, great dancers, great musicians, great workers and lovers. And they spoke of the country in the Caucasus and around the Black Sea as a kind of second heaven.”
Soviet media propaganda helped cultivate Georgia’s role as the place for happiness and abundance. In movies, female collective farmers in straw-hats picked tea leaves and warbled cheerful songs in piercing sopranos. News presenters on national TV were prone to smile when sharing news from what they persistently referred to as cолнечная Грузия, “sunny Georgia. “
Were Georgians faking it, then? Or have the economic struggles, civil turmoil and loss of territories of the post-Soviet era just ruined their mood?