Money and Politics

Investigations

Paul Radu about how he and his home organisation the RISE Project have exposed shady business dealings by Azerbaijan’s First Family; an assassination network in Eastern Europe; and high-level corporate corruption in Romania.

Through its investigative reporting, the RISE Project has exposed shady business dealings in Azerbaijan’s First Family, an assassination network in Eastern Europe, and high-level corporate corruption in Romania. In this chapter we look closely at these cases and see the direct results of information activism.

How would you define investigation for reporting?

Investigation for reporting is very deep research, and the ability to present and visualise that research so that people understand it.

What is the role of this deep research in a social context? Why is it important?

Deep research is important because it brings to light things that are hidden, information that can be used by society, by the public.

How did the story about the Azerbaijani first family come about?

This story exemplifies how cooperation between journalists and hackers from different countries can work. We uncovered hidden businesses and interests belonging to family of Azerbaijan's president, Ilham Alyev. We approached the story from two angles: first, starting in a village called Çhovdar in Azerbaijan, where the villagers were very unhappy because a corporation had started exploration to assess the gold reserves in the region, because geological studies had shown there was lots of gold there.

The exploration company cut one of the pipes supplying water to the village; the villagers blamed this on the Inglis – the Englishmen – because they knew that one of the companies that was operating there was from Great Britain. What they did not know was who was behind this company: this is where we came in with investigative skills, and we were able to track down this company's ownership. It’s called Globex International LLP (Limited Liability Partnership) and it’s registered in the United Kingdom.

However, if you look more closely at the ownership of this company, you find out that the company is owned by three other companies, from Panama. Then, if you search further along this ownership chain, you find out that these Panamanian companies are owned by the two daughters of the President of Azerbaijan, Leyla Aliyeva and Arzu Aliyeva. What’s more, by investigating locally we found out that the Çovdar gold field was awarded to this consortium of companies, of which the British company is only a part, by the President himself. He himself signed the decree awarding that land, and the right to explore and exploit the gold there, to these companies.

Image - azericaseinfographic.jpg

In this case, information obtained from various databases shone a light on the hidden dealings of the first family and the way the President uses his power to reward his own family with private businesses.

But this investigation was also tackled from another angle. There are three Panamanian companies owned by the President’s daughters – these companies own the British company and some other assets in Azerbaijan. This means that there’s a possibility that there are other concealed business interests here. This is where the hackers come in.

The Registry of Companies of Panama is public and free of charge – you log in and you can access it. But, you can only search for the names of companies, so you need already to know those names before you begin. Usually, investigative reporting starts with the name of the people who are in power: the President of the country, Members of Parliament and so on. Dan O'Huiginn, a hacker who works for us, scraped the Panamanian Registry of Companies and created a new interface, a very simple website. Using this website, if I search for the family name Aliyev, I will get several hits, showing that a number of people by that name are involved with companies in Panama. The people we’re interested in are Leyla Aliyeva, Arzu Aliyeva, and Mehriban Aliyeva, who is the President’s wife, but also a member of the Parliament – which means that legally, she’s not supposed to have private business interests.

If we search this database, we discover that not only did the Azerbaijani first family establish the three companies that have already been identified as being involved in gold exploitation, but that there are no less than ten companies linked to their names, and all of these companies have some interests back in Azerbaijan; for example, some of them are providers of mobile phone services.

Previously, there had been two well-established companies, with many subscribers, in the Azeri mobile phone market. Then, suddenly, a third one cropped up in this market – this is fairly normal, because you get new arrivals in any commercial market. But the problem was that this new arrival was given the upper hand in the market; for example, they were the only ones allowed to supply 3G services. The other two better-established companies, which had a much broader subscription base, weren’t allowed to provide that service. And if you look at the ownership of that third company, you discover that again the President’s daughters are involved, via Panamanian companies, in the ownership of this mobile operator.

When we started this investigation the Azeri government lied to us. They told our correspondent in Azerbaijan, Khadija Ismayilova, that the company was owned in part by Siemens, and by the Azeri state. Our reporter in Azerbaijan then contacted Siemens, who replied, “No, we do not own any such asset. We do not have any shares in this company.” They told us an out-and-out lie, and they lied to us officially. Our correspondent in Azerbaijan had received a signed letter from the state, which read: “the mobile operator is owned by Siemens”. This story demonstrates how well cooperation between hackers and the Investigative Dashboard can work. The former are able to re-index and reshape information, giving people better access, and the latter makes the company data available to anyone who needs help obtaining them. However, local knowledge is the first step in exposing wrongdoing, and that’s what brought this investigation to life. It seems pretty simple, but actually a lot of work was involved in order to gather all these facts and tie everything together.

What was the reaction of the local media and the first family?

The problem in Azerbaijan is that the first family usually does not reply in any way. They just let things flow over them. Nevertheless, it is still important to expose their misdeeds, because the Azerbaijani government and the President deal with many European countries, and with the rest of the world, so we can at least tell these people what's going on. This story also featured on social media in Azerbaijan, so some local people know about it too. None of the mainstream TV stations and newspapers published anything about it, because they are either controlled by the government itself, or by people who are in cahoots with the government.

As for the new mobile operator, there were two outcomes. First, the government had to open up 3G licenses to the other two operators, which was a good thing. The other result was that companies operating in Azerbaijan now choose to have mobile contracts with the new operator, because they think that they this will get them the approval of the President. Sometimes the outcomes of our stories are quite interesting and unexpected!

Read the Investigation here: Azerbaijan's President Awarded Family Stake in Gold Fields

This story was a good example of how you can use new media and hackers to access databases and expose complex stories. Could you tell us about your investigation into hired killers?

We almost always follow the money, no matter what we are investigating. In Egypt, for instance, we investigated the hidden assets of Hosni Mubarak. In this case, we investigated a group of killers for hire. It turned out that this was also about following the money and the companies, but it all started with interviews that we conducted in Moldova, and with information gathered by Moldovan reporters who worked with us.

In this case, we were able to prove through records that there were connections between a number of hired killers who had attempted assassinations in the previous few years, or who had actually killed various businessmen and other people. The investigation started with a log that was provided to us; it came from from Board of Police sources in Moldova. This log detailed all the comings and goings across Moldovan borders of one man who is now under arrest in Moscow. This man was allegedly a hired killer, who had tried to assassinate a Russian banker in London; he had also shot an innocent person in Bucharest seven times with a Kalashnikov because he mistook him for a criminal he had been ordered to kill.

We got these travel logs, and we found out that before and after the assassination attempts and the killings, he would always use public transport. But the rest of the time, he was a bit reckless and used private cars; we knew the number plates of these private cars, and we were able to track down the names used to register ownership of these cars. It was not direct, because the cars were owned by companies, but we were able, again, to track the companies, and we found out that these companies were owned by other killers. This established connections between various people who had not previously been linked by law enforcement agencies.

Image - assasins.jpg

Some of these men were wanted for various crimes: murder, cigarette-smuggling, etc., but nobody had ever been able to show that they were working together. We used information from Moldova and from Romania, because they were operating out of Ia?i, in northern Romania. They travelled from there to kill people in other cities or countries. We started with some bits of information, and then we were able to map their comings and goings in and out of Moldova and Romania, and then, by following the money, we were able to connect them together.

Which countries were involved?

This group of killers was not only involved in assassination attempts and killings, they were also involved in extortion, smuggling cigarettes and drugs, and other criminal activities. They were operating in Moldova, Romania, Italy, the UK, and Ukraine, and they also had connections with Russia, so they were operating across Europe – and this is only what we know about! Naturally, we don’t know everything about these men; they may have been operating in other countries as well, and they may have been involved in other killings that we have no idea about.

What was the outcome of this investigation?

As soon as this investigation was published, we were contacted by law enforcement agencies from several countries, who wanted us to pass them the relevant data. Each time this happened, we’d direct them to our website, where we had posted all the data, including company records and court records from several countries. Now we hope that the law enforcement agencies will act on this information.

What was your biggest surprise when you were visualising this investigation?

Looking at the main character of the story, Vitalie Proca, who is now under arrest in Moscow. What was interesting about him was that he was able to move freely across borders between 2010 and 2013. Some of these men were able to get Romania citizenship, even after they had killed people in the Republic of Moldova. This is interesting, because they were able to operate under the noses of the authorities in several countries, and the authorities had no clue about their movements, or about the crimes they were involved in. Our visualisation highlights these facts: in 2010, Proca had just been released from a jail sentence for several murders that he’d committed in the past, but he was able to move across borders without any trouble. The assassination attempt in London took place in spring (2012), and the innocent bystander here in Bucharest was shot at the end of 2012.

Read the investigation here: "A Murderer's Trail."

Tell us more about the Proxy Platform investigation.

The Proxy Platform is an example of a meta-investigation: we looked at money laundering across the region, because we wanted to highlight how much of it was going on. We saw so much money, and most of it – the wealth of a great many people, politicians or criminals – could not be explained in any way. We started looking at the systems that they set up, and how they injected this money into the legitimate economy. We realised that it must be possible to do this without the help of bankers, without having to set up complicated corporate structures, because there were hundreds of billions being laundered.

First, we mapped the phenomenon. We started looking at public sources and what had already been written on the issue, which was very little. Then, we highlighted the system and from there, we managed to get original records. What we found was this platform – we ended up calling it the Proxy Platform – that was used by a number of criminal groups: Vietnamese organised crime, Russian and Eastern European organised crime, Mexican drug cartels, all sorts of criminal groups that had lots of money to launder. We uncovered a platform made up of companies established in Russia, Ukraine, Cyprus, New Zealand, Latvia, and many other countries. These companies were created with the sole purpose of helping criminals to launder money.

The reason we called this project the "Proxy Platform", is that most of the laundering companies are owned by proxies, people who are not even aware that they are owners or shareholders of these companies. We identified many of these proxies, and we talked to them, but the real breakthrough was that this was a follow-up to another investigation, into offer bids. Then, we had looked at who was setting up these offer structures and our story mentioned many companies, because we always try to make as much information available as possible, to encourage crowd-sourcing. We mentioned Tormex, a company created in New Zealand, which was used by a Mexican drug cartel, the Sinaloa Drug Cartel, to launder money in Europe and elsewhere.

We then put the name “Tormex” into our parallel investigation, and a businessman from Focsani (Romania) saw it on our site and contacted us, saying “Look, this Tormex company, I am in a litigation with them. And I'd be very interested in talking to you.” So we got in touch with him, and it turned out that he was scammed out of half a million US dollars by Tormex. There was a court case in the Republic of Moldova, in Chi?in?you, and we could access the records of this case, which included all the banking records of Tormex. Although the company was based in New Zealand, it had bank accounts in Riga (Latvia). The police in Moldova subpoenaed these bank records – a few years’ worth of transactions –so they were now accessible to us, through the records of the court case. More than 600 million Euros had passed through this account: big money.

What was interesting about Tormex was that, like the other companies in the network, on paper it was owned by a person who was not even aware that he “owned” this company. By tracking through this register of one company’s transactions, we were able to discover links to other companies that were involved in crime, which is how we were ultimately able to expose the Proxy Platform, where hundreds of millions, if not billions, were laundered. 

Tormex was just one of the companies in this maze. We were also able to track down the money, working with reporters in Russia, Latvia, Ukraine – even in New Zealand – as well as in Romania and other countries. Ourselves, we only used parts of these banking records, but we posted them online so that other people would also be able to use them ¬– crowd sourcing again.

A story broke in Austria about some of those companies. Quite a few reporters from other countries are still contacting us, because they found that the names of these companies were connected to businesses in their countries. This is why such an approach is so valuable: we exposed a huge network and we published a few good stories, but the value of the information goes beyond what we were able to process, because, for example, we may not have the relevant local knowledge. I can’t tell if a company is active in Papua New Guinea; it’s up to someone from there to Google it and make the local connections.

Read the Investigation here: "The Proxy Platform."

Can you give an example of a story that came out of cross-border collaboration?

The Ericsson investigation started with a minor event: a broker had lost some of his investors’ money – his investors being some high profile Romanian politicians and people from the entertainment industry. He lost their money and fled Romania because he was afraid of potential retaliation from these people. He lost a few million, a fair bit of money. We found out that he was hiding in Reykjavik (Iceland).

Therefore, we got in touch with our colleagues in Iceland at the centre for investigative reporting there, and asked them to help us on this story. They thought they might also get a story out of it, so they managed to locate this fugitive broker, Cristiasi, and they talked to him and managed to convince him to do an interview with them.

We sent the Icelandic reporter the questions that we wanted to ask the broker. They had their own set of questions, and, finally, there was a TV interview during which the broker confessed that he hadn’t only left the country because he’d lost his investors’ money, but that there were other things going on with his company. His company was based in the British Virgin Islands. It was called WBS Holdings, and he said that this company was used by big corporations investing in Romania, as a conduit for bribes to Romanian politicians.

The Icelandic reporter insisted and asked repeatedly, “Which corporations, and who are the politicians?” The broker eventually admitted that one of the corporations was Ericsson, the Swedish telecom giant. At that point things were getting interesting, so the Icelandic reporter sent me the recording of this interview, and I got in touch with Swedish investigative reporters. We told them, “This Romanian broker said on Icelandic TV that Ericsson paid bribes to Romanian politicians. How can we verify this?”

We got in touch with Ericsson's spokesperson and asked him a few questions, among which was, “Have you ever paid bribes to Romanian politicians?” He said, “No, we never paid bribes to Romanian politicians, but this company you're mentioning, WBS Holdings, did receive some of our money. This happened without our consent, it was done by the former manager of Ericsson Romania, against whom we have an on-going court case.”

At that point things became even more interesting, and we were very keen to get the records from this court case. For our Swedish colleagues it was quite easy: they got the information in a matter of hours and sent us the documents pertaining to the case, Ericsson vs. Thomas Lundin (the former manager of Ericsson Romania). We discovered that both parties were making interesting allegations.

Ericsson claimed that Thomas Lundin stole the equivalent of about 10 million dollars from the company, and on the other side Thomas Lundin said, “No, I didn't steal this money, I gave it to decision-makers, to politicians and other people in order to create more business for Ericsson.” He argued this in court, saying, “the value of the business that Ericsson did in Romania increased under my leadership from 0 to one billion”, which was a lot. And he was naming names! He gave the names of two telecom ministers, whom he had bribed. Ericsson claimed that they were not aware of any of these bribes, and that they do not condone such behaviour.

On the other hand, Ericsson admitted that over a period of a few years they had operated a scheme in order to pay “agents” secretly, agents being people who could further the business of Ericsson in various markets, not just in Romania. And they used the words “commission scheme”, making it clear during the court case that they had set this scheme up in such a way that law enforcement agencies or the media in the countries where they operated these schemes wouldn't be able to find out what was going on.

They made it clear that the identity of these “agents” had to be kept secret, because the agents were making a difference in the market, between business going well for Ericsson or not. We got all the court records from Stockholm, and we translated them into Romanian and put them at the disposal of the Romanian authorities. We are hoping that the Romanian authorities will investigate this, because of Thomas Lundin's allegations that he paid off specific, named politicians.

We also got in touch with the politicians Lundin had named, and they said, “no, we didn't take any bribes from Thomas Lundin – we know who he is, but we haven't received bribes from him”. And then there is also the original broker, who says that his company was used to channel bribes to these people, and the fact that Ericsson admit to having put together this secret scheme to pay “agents”, these mysterious agents being the top secret characters in all this.

We think this merits an investigation by the authorities in Romania, and what's also interesting is that Ericsson’s “commission scheme” existed elsewhere as well, in other countries, so we are hoping that they will investigate, too. As we understand it, there is currently an investigation in Switzerland that touches on some of the events and relationships that I’ve described. We hope that in the end the truth will come to light.

Read the Investigation here: "Executive Alleges Bribery at Ericsson."

Interview with Paul Radu

First published on July 10, 2015

More about this topic

Follow the Money: A digital guide for tracking corruption

Investigative reporter Paul Radu reveals his methods of tracking corruption and organised crime by "...

Our Currency is Information

Our currency is Information is the first episode of the documentary film series Exposing the Invisib...

Follow The Money

Paul Radu talks about how financial evidence helps journalists expose organised crime, and how digit...

Information is Our Currency

Paul Radu about how a small group of investigative reporters can outperform a major law enforcement ...

Investigations

Paul Radu about how he and his home organisation the RISE Project have exposed shady business dealin...

Investigative Reporting on the Rise

Paul Radu about a new breed of journalists learning investigative techniques from artists and hacker...

Risky Business

Paul Radu about how information activists manage the risks and make ethical judgements.

Tackling Organised Crime

Discover how investigative reporter Paul Radu and his colleagues have engaged with criminal networks...

The Impact of Investigations

Paul Radu talks about setting goals as an investigator and measuring the impact of your work.

The Investigator's Backpack

Paul Radu talks about the Investigative Dashboard, an online resource he co-developed to fill a gap ...

The Reporter

Investigative journalist Paul Radu introduces himself and his work of tracking organised crime acros...

Things that Matter

Investigative journalist Paul Radu speaks about how investigators find the motivation to work in a c...

The Organised Crime and Corruption Reporting Project (OCCRP)

By publishing freely-accessible, groundbreaking investigative articles in English and Russian, the O...

Rise Project: Investigating corruption in Eastern Europe

A community of journalists, hackers, designers and activists dedicated to accurately depicting the r...