A top Norwegian business executive has been arrested in Oslo on corruption charges relating to a multimillion-dollar bribery case involving the ruling Karimov family of Uzbekistan.
The detention ramps up the pressure from international investigations into alleged bribery by multinationals of Gulnara Karimova, the disgraced daughter of Uzbekistan’s President Islam Karimov, to gain a foothold in the country’s lucrative telecoms market.
Jo Lunder, former chief executive of embattled Russian-owned telecoms company VimpelCom, was arrested as he flew into Oslo airport late November 4, a public prosecutor told Norwegian media the following day.
“He has been charged in connection to the VimpelCom case. It is a corruption charge,” Marianne Djupesland said in remarks quoted by Stockholm-based newspaper The Local, declining to reveal further details.
Lunder’s lawyer Cato Schiotz says the accused believes he is innocent, the newspaper reported.
The arrest comes three months after the U.S. Department of Justice won a ruling in a New York court to have $300 million dollars frozen as part of an investigation into what it described as an “international conspiracy to launder corrupt payments.”
The lawsuit alleges that illicit payments were made by two telecoms companies, Russia’s MTS and Amsterdam-based VimpelCom, which is majority owned by Russian billionaire Mikhail Fridman, to curry influence and secure favorable decisions to operate in Uzbekistan’s telecommunications sector.
An International Crisis Group report on Kyrgyzstan published on September 30, only days ahead of parliamentary elections, paints a grim portrait of the political situation and warns that the entire region could suffer from failure to adopt urgently needed reforms.
ICG identifies persisting ethnic tensions, corruption, unchecked nationalism and the surge of political Islam, fuelled by disaffection at self-interested party clans, as key and pressing problems facing Kyrgyzstan.
Despite those potential looming threats, ICG sees little likelihood of an imminent change in direction.
“Parliament and the presidency seem unwilling and institutionally incapable of addressing these issues,” the report said. “Few expect the 4 October parliamentary elections to deliver a reformist government.”
Kyrgyzstan bucks the overall trend in the region with its often rowdily competitive political system. Billboards up and down the country testify to the abundance of choice being offered to voters as they head to the polling stations to pick the 120 deputies that will represent them in parliament.
For all that political diversity, the picture on the ground appears bleak, ICG said in its report.
The ethnic Uzbek community, which accounts for 14.5 percent of the population, has been thoroughly marginalized on the political scene and remains subject to harassment from an almost homogenously ethnic Kyrgyz police force.
That trend has been coupled with the ascendancy of virulently nationalist and conservative groups.
In what will come as a surprise to nobody, a pre-election poll conducted in Kyrgyzstan by the International Republican Institute has revealed corruption to be near the top of a list of the country’s greatest perceived burdens.
The theme has been part of the background noise during campaigning season, which will culminate with a vote on October 4.
IRI’s poll revealed that 46 of respondents saw graft as the most important problem facing Kyrgyzstan. Corruption was sandwiched between the 59 percent that see unemployment as a pressing issue and the 35 percent concerned at rising prices.
Parties vying for ballots have sought in various ways to address these concerns, albeit in often less than specific details. That has not deterred voters, however, according to the IRI survey.
IRI said its research showed 77 percent of its 1,500 respondents declared their intent to participate in the election.
IRI’s Eurasia regional director Stephen Nix said in a statement accompanying the release of the survey that the poll results indicate a strong mandate to tackle graft.
"The parliamentary elections are a great opportunity for the Kyrgyz government to demonstrate its commitment to the fight against corruption,” Nix said.
So what are all the parties offering on corruption?
President Almazbek Atambayev’s Social Democratic Party (SDPK), which is expected to easily outpace its rivals, this past week unveiled its Taza Koom, or Clean Society, program, which it says will prevent the theft of 30 billion Som ($434 million).
Baku’s Court for Grave Crimes found 39-year-old Ismayilova guilty of tax evasion, illegal business activity, embezzlement and abuse of power — the types of alleged crimes which, ironically, she herself investigated in covering senior government officials and the family of President Ilham Aliyev.
"It is not a coincidence that these charges were brought against me. After all, I have talked and written in detail about these very same crimes myself," Ismayilova said in her final statement, as published by Radio Free Europe/ Radio Liberty, one of her employers.
To many, Ismayilova's story brings to mind “One Flew over the Cuckoo's Nest” — a lone battle against an autocratic, ossified system and an inspiration for civil society kept in a straitjacket by an entrenched, ruling élite. Rights activists and many journalists alike see her conviction on spurious criminal charges as retribution for her exposes of corruption within President Ilham Aliyev’s family and circle.
Before prison, Ismayilova, who also has worked for EurasiaNet.org, faced an ugly character assassination campaign that culminated in a video of her intimate life being posted on the Internet. A pro-forma police investigation has led nowhere.
A government anticorruption agency in Tajikistan headed by the president’s son has made a move to broaden its remit by pursuing alleged Islamic extremists.
The Agency for State Financial Control and Combating Corruption said in a statement on July 13 that it has detained a group of suspected members of the Islamic Movement of Uzbekistan.
The charges being leveled _ creating a criminal group, incitement to extremism and failure to report a crime _ are notable for having little to do with financial misdemeanors as such.
It is typically the state security services that initiate such cases, which raises the suspicion that Rustam Emomali, who has been head of the Agency for State Financial Control and Combating Corruption since March, has ambitions beyond chasing down mere bribe-takers.
Emomali’s agency said a resident of the northern Sughd region was detained after he was found with video and audio recordings of the late IMU leader Tahir Yuldashev, who is believed to have been killed in a U.S. drone strike in Pakistan’s South Waziristan province in August 2009.
“It is believed that (Muhammadshod) Gafurjonov planned to use the the ‘sermons’ and ‘appeals’ of IMU amir Muhammad Tohir for extremists aims in Tajikistan,” the agency said in its statement.
The statement carries on to accuse Gafurjonov of communicating with a countryman currently engaged in fighting in Syria for advice on how to lure Sughd youths toward extremist activities. Another three people are suspected of failing to turn Gafurjonov in to the authorities, the agency said.
Since all criminal investigations and subsequent trials into Islamic radicalism in Tajikistan are shrouded in secrecy, there is no way to determine the credibility of the case.
The US government wants to recover hundreds of millions of dollars in allegedly illicit funds that American prosecutors contend enriched a “close relative” of Uzbekistan’s strongman president, Islam Karimov.
A forfeiture complaint filed in US federal court in New York seeks the recovery of $300 million in assets “involved in an international conspiracy to launder corrupt payments” made in Uzbekistan’s telecoms sector, according to a copy of the complaint sent to EurasiaNet.org by the Department of Justice, which filed the case on June 29.
It alleges that illicit payments were made by two telecoms companies, Russia’s MTS and Amsterdam-based VimpelCom, to curry influence and secure favorable decisions from Uzbekistan’s government to operate in the lucrative telecommunications sector.
The alleged beneficiary is not named, but is identified as “GOVERNMENT OFFICIAL A,” and is further characterized as “a close relative of the President of Uzbekistan.” The unnamed beneficiary “held several positions in the Uzbek government” during the period in question (2004-2011), according to the complaint.
Gulnara Karimova, the president’s eldest daughter who is under house arrest in Uzbekistan on corruption charges, has previously been named as a suspect in a money-laundering probe in Switzerland involving payments in Uzbekistan’s telecoms sector. During the period in question, she held government positions, including as deputy foreign minister and ambassador to Spain and the United Nations in Geneva.
The lawsuit names two Karimova associates, and two shell companies they allegedly operated to funnel illicit funds: Gayane Avakyan, owner of Takilant, and Rustam Madumarov, owner of Expoline.
With the World Bank and Asian Development Bank soon to decide on Tajikistan’s request for $40 million more in budget support, they may wish to consider how past donations have benefited people close to the autocratic president while doing little to solve the long-term problems they were aiming to fix.
The two banks have spent over $140 million since 2009 topping up Tajikistan’s budget. But where does the money go? In 2012 alone the government spent $145 million recapitalizing a private bank that had handed out dozens of astronomically risky loans, many of them benefitting companies owned by relatives of the then-deputy prime minister, Muradali Alimardon (a man who had been promoted after admitting he’d lied to the IMF about the country’s reserves).
As I wrote for The Economist last week, the loans then disappeared but the directed lending continued. The bank is now deep in the red and Tajikistan’s whole banking sector looks on the edge of collapse.
Donors concede they struggle to piece together what is really going on. Their documents repeatedly describe Tajik bank statements as if they are purposely misleading. Internal memos say the banking sector’s structural problems stem from government resistance to reform, the lack of an independent central bank, ineffective internal controls, and ongoing fraud.
As Tajikistan’s banking crisis has snowballed over the last two or three years, donors have repeatedly seen their calls for reform ignored. So will they reward President Emomali Rahmon and his cronies for their persistent unwillingness to change the system?
A corruption scandal has engulfed a high-profile international exhibition that Astana is organizing, just as Kazakhstan enters the final stages of its bid to stage another prominent global event – the Winter Olympics.
Talgat Yermegiyayev, the chief organizer of Kazakhstan’s EXPO-2017 exhibition (which is due to be held in Astana in two years) has been placed under house arrest on suspicion of embezzlement, reports the Today.kz website.
The court ruling was issued on June 12, the day after President Nursultan Nazarbayev had fired Yermegiyayev from his position as chief executive of the Astana EXPO-2017 company, which is organizing the international exhibition. Nazarbayev’s administration has billed the event a major PR coup for Kazakhstan.
Another top EXPO official, Kazhymurat Usenov, who was in charge of the department overseeing construction of facilities for the exhibition, has also been placed under house arrest. He is suspected of embezzling 214 million tenge ($1.2 million) from the $385 million the state has allocated for the $3 billion event.
The corruption scandal has erupted as Kazakhstan enters the final stages in the race to stage the 2022 Winter Olympics, in which commercial capital Almaty is competing with Beijing to host the prestigious sporting event. A vote is due at the end of July.
The march against corruption advances undaunted in Tajikistan. Or does it?
A senior official has been felled in the trumpeted campaign to battle the country's scourge of all-encompassing graft, Russian news agency Interfax reported on June 15. Khasan Radzhabov was serving as adviser to the president on personnel affairs at the time of his arrest by the anticorruption agency.
Interfax cites a law enforcement source as saying that Radzhabov is suspected of embezzlement and bribe taking on a massive scale. No other details are yet available.
What personnel recommendations might Radzhabov have given the president?
He may learn to regret them if they included the March appointment of President Emomali Rahmon's 27-year-old son, Rustam Emomali, as head of the Agency for State Financial Control and Combating Corruption.
That nod invited immediate suggestions of high-level nepotism, although Emomali appears to have sought to dispel those thoughts by embarking on his job with gusto.
Izzattullo Azizov, an official with the state religious affairs committee, was arrested days after Emomali took up his post on suspicion of soliciting $2,000 bribes from devout Muslim hoping to go on the hajj. That detention was eagerly advertised on the evening news.
Interfax says several other senior functionaries have been arrested since.
There can be little disagreement that Tajikistan has a major corruption problem. The country ranks 152 out of 175 in Transparency International’s most recent Corruption Perceptions Index.
An investigative report provides details on alleged dirty dealings in Azerbaijan involving Stockholm-based telecom giant TeliaSonera and a company purportedly controlled by President Ilham Aliyev’s family.
The report, published May 27, was the result of a months-long investigation conducted by the Organized Crime and Corruption Reporting Project, Swedish public television SVT and the Swedish news agency TT. It alleges that TeliaSonera, a former majority shareholder in Azerbaijan’s largest telecommunications company, Azercell, facilitated the takeover of a large Azercell stake by an entity believed to be associated with President Aliyev’s family via offshore companies. The transaction cost Azerbaijani taxpayers an estimated $600 million, according to the report.
The cost to TeliaSonera investors, who are now demanding the details, is reckoned at roughly $709 million.
The report was based on work initially undertaken by now-jailed Azerbaijani investigative reporter Khadija Ismayilova. In December 2014, Ismayilova, whose work has appeared on EurasiaNet.org, was arrested on criminal charges several months after releasing a story that examined the connection between Azercell and Aliyev’s two daughters, Leyla and Arzu. Ismayilova remains in official custody pending trial.