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November 1, 2024

Greetings From Amsterdam,

In anticipation of this year’s most important climate change conference, COP29, OCCRP is digging into how host country Azerbaijan is using the event to burnish the image of its authoritarian government.

In this edition of OCCRP Weekly, we’ll also share new developments from our recent project, “The Crime Messenger,” unpack the ties between two men linked to Trump Media insider trading and Florida’s cannabis oversight system, explore how two prolific global data stealers were brought to their knees, and more. Let’s start with Azerbaijan.


** Know Your Host: Why It Matters That Azerbaijan Is Hosting the COP29 Climate Summit
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World leaders will soon converge on the Caspian Sea to discuss the Earth’s future at the #COP29 climate change summit, hosted this year by Azerbaijan ([link removed]) .

But underneath the surface is an uglier story: how the country’s authoritarian regime is using the conference to boost its credibility on the world stage.

Azerbaijan is the most authoritarian country to ever host the event, surpassing even Egypt and the United Arab Emirates, according to rankings by human rights group Freedom House.

For years, OCCRP has worked with local journalists to expose how the country’s small elite, led by the ruling Aliyev family, has enriched itself at the expense of its people. Whether it’s mining, banking, hospitality, or construction, there is hardly a major industry in Azerbaijan they have not dominated.

As a result, the Aliyevs and their inner circle have built up staggering wealth, much of it held overseas or tied up in property abroad. Even the president’s 11-year-old son owned a London office building.

Now, the conference known as COP29 is expected to advance one of the Aliyev regime’s main goals: boosting its credibility and standing on the global stage. It is also boosting the profile of regime-linked businesses: As the names of the event’s “official partners” have been released over the last month, reporters found that nearly all of them are linked to the family of President Ilham Aliyev or their inner circle.

His daughter’s ex-husband, for instance, won a $5.2-million government contract to host 5,000 COP29 guests at his luxurious Sea Breeze Resort on the Caspian Sea.

Other corporate partners include:
* PASHA Holdings, one of the biggest companies in Azerbaijan, which owns many of the host city’s top hotels and has extensive interests in tourism, construction, insurance, and banking. Pasha belongs to Aliyev’s two adult daughters.
* Azersun Holding, the event’s “Sustainable Growth Partner,” which is chaired by the uncle of a man who set up three companies in the British Virgin Islands for the Aliyeva sisters.
* Silk Way West Airlines, which is responsible for transporting materials and supplies to the conference. It’s owned by a former state official, but has been previously linked to one of the Aliyeva daughters through a sister company, Silk Way Bank.
* GILTEX, a firm that controls nearly three quarters of the local textile market and until last year was part of a conglomerate in which the president’s daughters held a majority stake. ([link removed]) (The conglomerate has now been dissolved, and since corporate ownership information is not made public in Azerbaijan, reporters could not determine who now owns GILTEX.)

Several of these newly named partners have issued press statements touting their environmental bona fides, and claiming that COP participation will help them become even more sustainable. But experts say corporate partnerships at COP events are a new development — and seem more likely to serve business interests than environmental progress.

Read the full story ([link removed])

OCCRP has been reporting on Azerbaijan — and exposing corruption, human rights abuses, and self-dealing — for over a decade. We’ve put together a comprehensive list of our best investigative reporting on Azerbaijan here ([link removed]) .

Highlights include:
* How the ruling Aliyev family profited from a currency collapse ([link removed]) , how it sought to buy Kyrygz gold fields ([link removed]) , and how it appeared to siphon off a staggering $1 billion from the acquisition of a telecom company ([link removed]) .
* A 2016 investigation from data in the Panama Papers that revealed how the family ([link removed]) used offshore structures and multiple layers of ownership to secretly hold a fortune.
* The jailing earlier this year of a group of independent journalists on trumped-up charges ([link removed]) ahead of February’s presidential election.
* How American lobbyists have promoted and taken money from the regime ([link removed]) , and how the “Azerbaijani Laundromat ([link removed]) ” was used to funnel billions of dollars out of the country on behalf of its elite.

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** More Investigations & News
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** The Crime Messenger Investigation Keeps Unfolding
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This week, we’ve added a half a dozen new cases to our interactive map ([link removed]) marking how law enforcement used decrypted Sky messages to crack some of this decade’s biggest drug and organized crime cases.

The additions include major busts from Belgium, Ecuador, Italy, and Albania. We also highlight a case in which Sky messages reveal alleged drug kingpin Edin “Tito” Gačanin’s ambitions to influence politics in his native Bosnia — in one message, “Tito” said he wanted to “take over the state” by getting friendly politicians appointed to positions of power.
Explore the map ([link removed]) and read our full investigation from last week on the inner workings of the Canadian start-up ([link removed]) that not only enabled organized crime but also relied on those very criminals to distribute its products.


** A Man Convicted of Insider Trading Had Ties to a Firm Holding State Cannabis Contracts
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Two men recently penalized for insider trading during a company merger with Trump Media were also linked to BioTrack ([link removed]) , a software company that Florida and several other states have tasked with ensuring marijuana is handled legally from “seed-to-sale.”

A year after BioTrack signed its contract with Florida, it was bought by Alleaves Inc. Corporate registry documents in Delaware show that Michael Shvartsman and Eric Hannelius were at different points in time listed as CEO of Alleaves.

Within months of Alleaves purchasing BioTrack, federal prosecutors unveiled an indictment against Shvartsman, whom they accused of being the central figure in an insider trading ring that brought in $40 million in well-timed investments in the company that took Trump Media & Technology Group Corp public.

Trump Media is not accused of any wrongdoing.

Shvartsman pleaded guilty and forfeited his $18.2 million in profits. Hannelius, meanwhile, settled a civil suit with the U.S. Securities Exchange Commission, paying roughly $336,000 plus interest and closing the case without admitting or denying charges.

Alleaves said neither man has any role with the company. However, Hannelius was listed as one of Alleaves’ directors on corporate records filed in Delaware and Florida earlier this year, and is currently listed as a director of Alleaves in the Florida corporate registry.

An Alleaves spokesperson said the discrepancy was the result of “an administrative error.”

In the meantime, Floridians are weighing whether to expand legal access to marijuana beyond those with certain medical conditions. Nationwide, the marijuana industry is predicted to generate sales worth $43 billion this year.

Read the full story ([link removed])


** Romania Probes Austria’s Kronospan for Alleged Hazardous Waste Violations
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Romanian authorities are investigating ([link removed]) whether Kronospan, one of the world’s leading producers of wood panels, has illegally transported hazardous waste into Sweden and falsified environmental emissions reports.

Prosecutors and police raided the company’s Romanian facilities last week. Investigation documents obtained by OCCRP indicate that formaldehyde emissions data reported by the company often used identical figures on different days, raising doubts about whether they were authentic. During other periods, no data at all was collected. Studies show that formaldehyde exposure can lead to cancer.

Documents also reveal that the company is accused of violating EU environmental regulations by labeling 24 tons of hazardous waste it was shipping to Sweden as “non-hazardous” — likely in an effort to expedite the transfer process.

No charges have been brought against Kronospan.


** Servers Seized, Suspect Charged in Global Infostealer Takedown
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This week a yearlong investigation came to a head as a coalition of international law enforcement agencies successfully dismantled two infostealers ([link removed]) responsible for stealing the sensitive data of millions globally.

Authorities gained “full access” to three servers in the Netherlands crucial to operations by RedLine and Meta infostealers and two domains, exposing the scheme spanning more than 1,200 servers across multiple countries. They also recovered a database of thousands of clients of the two entities, which are being used to detain and charge conspirators, including one in the U.S.

(The infostealers have nothing to do with the parent company of Facebook, Instagram, and WhatsApp, authorities clarified.)


** Reporting Impact
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OCCRP member newsroom The Kyiv Independent’s documentary about Russian sexual abuses during the occupation of Ukraine, “He Came Back, ([link removed]) ” served as the basis for charges this week ([link removed]) against Russian soldier Mykola Seneko over the rape of a woman in Kherson Oblast in 2022. The Independent passed its findings to the prosecutor’s office, which earlier this year recorded roughly 300 cases of sexual violence committed by Russian forces since the start of the war.

OCCRP also published a feature in June based on the Independent’s reporting ([link removed]) on sexual violence.

More from us next week.
P.S. Thank you for reading the OCCRP newsletter. Feel free to reply with any feedback.

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