Your trusted source

Azerbaijan President Ilham Aliyev has spent billions on capturing the world’s attention to the European Games in Baku. He has spared no expense, building new roads and booking megastar Lady Gaga for the Opening Ceremonies.

The best hotels were booked solid. In its two-week run, the first-ever competition played host to and showcased 6,000 athletes and 3,000 officials and support staff from 50 countries. While taxpayers ultimately foot the bill for this, the Aliyev clan has been massively enriched by the games, Organized Crime and Corruption Reporting Project (OCCRP) writes in a story  based on the materials provided by the arrested Azerbaijani investigative journalist Khadija Ismayilova.

According to OCCRP, the Aliyevs’ hotels, sporting such well-known Western brands as the Four Seasons, Sheraton and the Marriott, sit at key points in Baku. Reporters for the OCCRP found that the Aliyevs directly own or are closely connected with six five-star hotels in Baku. One more hotel is under construction. They also own two exclusive mountain resorts, and likely have a role in a 10th hotel. Reminiscent of the palaces of Arab princes, these hotels are known to most Azerbaijanis only through TV. They are so expensive it would cost the average Azerbaijani a month’s salary to check in for a night.

As the games got underway, OCCRP checked on room availability. “Due to (the) European Games, our hotel is fully occupied,” said the receptionist at the Fairmont hotel. Follow up calls to all Baku hotels connected to the Aliyevs showed they too were booked solid through the closing ceremony.

According to OCCRP investigation, other ruling clan-connected or owned hotels, in addition to the Fairmont, are the JW Marriott Hotel Absheron Baku, a centerpiece of the futuristic skyline of the city center; the Four Seasons, a Beaux-Arts-style luxury hotel; and the Sheraton at Baku International Airport. The Aliyevs also have holdings in the boutique hotel Intourist; the Boulevard, the largest conference hotel on the Caspian; and two mountain resorts, the Pik Palace Shahdagh and the Park Chalet Shahdagh, surrounded by stunning mountain views of the Shahdagh, Azerbaijan’s most famous mountain. Another hotel under construction – the Dinamo – will open in 2016. A 10th, the Jumeirah Bilgah Beach Hotel, one of Baku's most exclusive resorts, is connected to the Aliyevs through related companies. The nine working hotels are among the most popular hotels in Azerbaijan. According to a 2014 statement by the State Statistics Committee, Azerbaijan has 30 five-star hotels.

Business partners of the Aliyevs or government officials own other major hotels in Baku. Six five-star resort hotels are owned by Ashaf Kamilov, chairman of the supervisory board of a conglomerate the ruling clan owns and a former tax ministry official. He is also the Aliyevs’ business partner. The Emergency Minister, Kamaladdin Heydarov, owns six hotels, OCCRP points.

The name-brand hotels all are less than 4 years old. The Four Seasons opened in 2012 just before the FIFA Under-17 Women’s World Cup in Baku, and the Marriott just before the Eurovision song contest in 2012. Intourist and Boulevard were opened just in time for the European Games. President Aliyev attended almost all gala openings for these hotels, OCCRP highlights.

Prices for standard rooms in the Aliyevs’ hotels start at an average US$ 286. Some rooms cost as much as US$ 1,430 per night. To compare, OCCRP brings the example of the average monthly salary for most Azerbaijanis: US$ 430. The Aliyev clan has 2,400 rooms and suites under its control. If they are fully booked during the European Games, the hotels could be bringing in more than US$ 10 million.

An Azerbaijani real-estate expert who asked not to be named out of fear of retribution told OCCRP that the high-end Baku hotels owned or closely connected to the clan are valued at US$ 10 billion. The Aliyevs came to own this profitable block of business through a web of intricate and hidden deals. The Four Seasons and Marriot are held in the name of Pasha Holding, which was established in 2006. Five more hotels – Intourist, Boulevard, the mountain resorts Pik Palace Shahdagh and the Park Chalet Shahdagh, and Dinamo (under construction) are owned in the name of Absheron Group, a subsidiary of Pasha Holding. Khadija Ismayilova, a journalist jailed by the Aliyev administration, found in a 2014 investigation that the representatives of the Aliyev clan owned Pasha Holding. A 2010 investigation by Radio Free Europe / Radio Liberty (RFERL) where Ismayilova worked showed that an Aliyev clan representative, and Zarifa Hamzayeva, the wife of the president of Azerbaijan's AZAL state airline company, are the owners of the Silkway Holding to which the Sheraton belongs.

According to OCCRP, the Fairmont is owned by Azinko Development, and Jumeirah is owned by Azinko Holding Company, both of which are real-estate construction companies. OCCRP was not able to identify the true owners of the two Azinkos. However, it indicates that the Aliyev clan is linked to Azinko Development through their employee Hassan Gozel, the general director of Azinko. According to leaked documents obtained by the International Consortium of Investigative Journalists, Gozel is director of Arbor Investments Limited and Harvard Management Limited, which are both registered in British Virgin Islands and are owned by the Aliyevs.
The similarly titled Azinko Holding Company is a Baku-based construction company. No names are associated with the company, but it follows the same pattern as Azinko Development. It was registered at the same time as Azinko and neither company show up at the registry at the Ministry of Taxes as is required by law, OCCRP points.

The OCCRP reporters note that the Four Seasons was built in a historic section of the capital despite the objections of architects. It was built on land taken from homeowners never paid fully for their losses. The hotel opened in September 2012, a few days before the FIFA U-17 Women's World Cup. The first clients were international music stars Shakira and Rihanna.

The Marriott on Freedom Square -- the place where Azerbaijanis gathered in the millions in the late 1980s to demand independence from the Soviet Union -- used to belong to the Trade Union. It was secretly sold in 2006 to Pasha Holding. The same scenario played out with the Fairmont, known as the Moscow Hotel when the government owned it. In 2006, it was sold for US$ 1 million to the clan-connected Azinko, which was much less than it was worth, according to the Turan agency. It was demolished and replaced by the Flame Towers, now being marketed as the symbol of Baku.

The Pik Palace Shahdagh and the Park Chalet Shahdagh were built on farmland where the people of Aladash and Quzan villages kept livestock. They were paid a pittance: 24 AZN (US$ 23) per plot. Eighty of them complained in court, but all their claims were rejected. Their lawyer Anar Qasimli told RFE/RL he gave the court recent sales contracts which showed that similar real estate sold for between 1,000 and 2,000 AZN.

Further OCCRP notes that the European Games are not the only events promising to help again fill the Aliyevs’ hotels. Upcoming events include the Baku Formula 1 European Grand Prix 2016; the Islamic Solidarity Games in 2017 which will bring athletes from more than 50 countries to Baku; three group stage football matches and a quarterfinal match of the UEFA European Championships 2020 at the Olympic Stadium. "Ordinary Azerbaijani people don't need any international games like (the) European Games, World Cup. … Why do people need it? People want work; people want education; people want legal civil society. Our people can’t cover their daily expenses,” said Zardusht Alizade, a political expert on Azerbaijan.

Related:
Details of TeliaSonera offshore scandal revealed: Aliyev clan stole US$ 600 million from Azerbaijanis 
OCCRP: Ilham Aliyev’s London mansion costs more than $25 million while he gets US$ 230,000 per year