Company Consulted by Kalin Mitrev Involved in Azerbaijani Budget Drain Scheme Mind the horns!

In April 2016, the Baku Court on Grave Crimes sent the former Deputy Minister of Defense of Azerbaijan, Mehman Salimov, behind bars for eight years. The charges were embezzlement and abuse of power. A few months earlier, the owner of the company Legenda-Co, Agamirza Mamadov, appeared before the judges as a witness in Salimov’s case. The investigation had found that Selimov had appropriated large sums from construction contracts with the Ministry of Defense through Legenda-Co.

Mahmadov’s explanations before the court made it clear that he is a classical straw person:

“Whoever did sell, they did sell, I did not know anything, I just signed the papers,” Mamadov claimed.

Mamadov had received AZN 200 (about EUR 100 at the current exchange rate of the Azerbaijani currency) for each signature.

Avuar-Co is registered in an apartment in this panel building together with some other companies. Photo: http://www.panoramio.com/photo/80758708

Legenda-Co was registered in apartment 26 in a panel apartment building on 60 Rustam Rustamov Blvd in Baku on October 4, 2010. Three more companies were registered in the same apartment and on the same day, all of them with a capital of EUR 10. One of them was Avuar-Co, the company Kalin Mitrev claims to have hired him as consultant against EUR 425,000 paid through other companies from the Azerbaijani Laundromat.

The Magnificent Four

None of these companies have or have had a website, their own office, or even a public phone number. However, there has been booming business activity in the overcrowded apartment 26. As early as the next year, the companies registered there earned over 100 public contracts for a wide range of activities – from organizing official celebrations to street repairs. For 2011, the amount of contracts reached AZN 12 million. At that time, the exchange rate of the Azerbaijani currency was nearly at parity with the euro, with a significant depreciation occurring only in 2015.

For Avuar-Co, the initiation into the sacrament of public procurement began modestly – AZN 15,000 for “delivery of printing services” for the Sumgayit State University. The previous and next tenders for the same university were won by the infamous Legenda-Co company, which earned an enviable balance of government contracts since the beginning of 2011. After that, Avuar-Co began to win tenders for equipment supply for the construction of a new metro line in Baku, where it crossed paths with Atribut-Co, another company from the magnificent four. Avuar and Atribut have won two consecutive tenders for the same item. For the whole of 2011, the Metropolitan paid Avuar EUR 410,000. Another large contract was concluded with the Ministry of Interior for the supply of furniture for EUR 273,070.

For the period 2011 – 2014, the four companies – Avuar-Co, Legenda-Co, Atribut-Co and Forvard-Co won a total of 361 public contracts* for over EUR 33 million.

Avuar-Co: 34 tenders for AZN 1.782418

Legenda-Co: 186 tenders for AZN 17.672631

Atribut-Co: 22 tenders for AZN 731,547

Forvard-Co: 119 tenders for AZN 13.093450

In 2015, however, the investigating authorities became interested in Legenda-Co in the case against Mehman Salimov. From then on, the public orders stopped suddenly and forever for all companies registered at this address.

Mitrev’s account of the facts

Elated by the success in the first months of Avuar-Co’s creation, its owner Agasalim Seidov decided to enter the deep waters of international business. He searched for the super-qualified international consultant, Bulgarian Kalin Mitrev and, according to Mitrev, in May 2011 he signed an EUR 425,000 contract for “ a wide array of activities and required coordination of large number of public and private entities, both from the country and from abroad, as well as multilateral financial institutions and donors “. Mitrev also told The Guardian that the consulting activities had been related to the fact that the company worked with Azerbaijan’s Ministry of Emergency Situations to limit the consequences and prevent catastrophic floods in the basins of the rivers Kura and Aras.

This is how Mitrev explains the payments received in his Swiss bank account from three companies related to the Azerbaijani Laundromat in trying to convince the public that this was an honest deal.

The Organized Crime and Corruption Reporting Project (OCCRP) sent an email to the company address provided by Mitrev and received a response from the owner and director of Avuar-Co, Agasalim Seidov, where he claimed that his company performed work against the drying up of the Kura River. Seidov’s name is unique in Azerbaijan and OCCRP reporters tracked down his Facebook profile. OCCRP correspondent Khadija Ismayilova then contacted him through the Facebook messenger voice service. The same Seidov confirmed that he was director and owner of the company but could not remember any of the works, and denied having sent the e-mail in response to the OCCRP inquiry.

A reference to Azerbaijan’s Public Procurement Register shows that in 2011 there was no sign of contracts with Avuar-Co with the Ministry of Emergency Situations. On the other hand, the Legenda-Co swindler company had a contract with this Ministry in 2011 for food supplies in the mount of EUR 1. 8 million. This is the costliest public procurement contract awarded by the Ministry of Emergency Situations for the entire period 2010-2017.

Avuar had won three tenders of the Ministry of Emergency Situations, but only in 2013. Their subject is far from activities requiring complex “international donor coordination” and has nothing to do with activities against the drying up of the Kura River. Avuar was supposed to deliver a mobile kitchen for EUR 240,000 and various equipment for another EUR 100,000.

The total amount of public procurement by the Ministry of Emergency Situations for Avuar-Co is significantly lower than what Mitrev was paid, while the payments to him started as early as the end of 2012. Avuar may have been subcontractor of Legenda-Co in the big public procurement contract for food deliveries intended for those affected by floodings caused by the Kura River in 2010. Nevertheless, such a “consulting instead of food” scheme seems to be reeking.

Agaselim Seidov: Director and owner of Avuar-Co MMC. Photo: personal Facebook Profile

The mysterious Agaselim Seidov, who explains in flawless English sophisticated projects and manages millions, dresses in jogging suits, speaks Azerbaijani in a heavy Mashtaga village accent and does not remember the works that his company has done, investigative journalists from OCCRP were able to establish. His father is the owner and director of Alfa Construction Supply, which shares one apartment with another 147 companies. Obviously, the family does not live on millions from public procurement, but from the straw-man business that is so well-known in Bulgaria. After the breakthrough in the case against former Minister Salimov and the revelations about the paper company Legenda-Co and its director, a straw person like Seidov, those behind the millions are no longer such a secret.

To sum it up: Avuar-Co is a link in a system of paper companies, registered by straw persons that drain budget money through contracts with State institutions. The company has not won a tender of the Ministry of Emergency Situations to tackle the drying up of the Kura River. If there is such a contract, it would be illegal under local law and its funding unknown. There are no traces of Kalin Mitrev’s consultancy, neither a publication nor a report, not even a reference to Avuar Co’s contribution in the numerous documents on hydrostrategic activities in the Kura-Aras river basin. To top it all off, someone has falsified the emails sent to confirm Mitrev’s account.

All this, plus the fact that the money from Avuar-Co for Mitrev was not paid directly but passed through companies from the Azerbaijani Laundromat, rather points to a scheme of illegal financing and money laundering than to a regularly funded consultancy, regardless of what the Bulgarian Minister of Finance Vladislav Goranov says.

As journalist Khadija Ismayilova noted in an opinion published in The Guardian, one of the things that the Azerbaijani Laundromat shows is how the regime robs its people to feed itself. Another significant revelation is that the stolen money is paid to politicians and journalists to polish the image of Aliyev’s dictatorship. The example with Kalin Mitrev, who is the husband of Bulgarian politician and Director-General of UNESCO, Irina Bokova, is symbolic – three days after the exhibition “Azerbaijan – Land of Tolerance” opened at UNESCO, Mitrev received yet another “consultancy” payment in his Swiss account.

*The publication used public procurement data from the tender.gov.az site for the 2010-2017 period. These are available yearly in tabular form from the menu Information about competitions held.

Collage of the headline photo: Valdes Rade

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