A corruption scandal involving payments running into millions of euros has rocked the Council of Europe. But details are still hard to come by and the organisation seems unwilling to delve deeper into the matter. EURACTIV’s partner Der Tagesspiegel reports.
The biggest scandal in the history of the Council of Europe would probably have never come to light if two suspicious bank transfers hadn’t been noticed in a Milanese money house.
Those six-figure transfers were made through banks in the Baltic by shell companies based in the United Kingdom and the Marshall Islands. Milan’s public prosecutor took on the case and what emerged was politically explosive.
Officially, the company that received the money belonged to the wife of an Italian politician. Luca Volontè received a total of €2.39 million between the end of 2012 and the end of 2014.
Investigators established that the money was being sent by Azerbaijan and Volontè is due in court next month to answer charges of money laundering.
Prosecutors are also looking into if those payments are linked at all to Volontè’s work as a member of the Council of Europe’s parliamentary assembly (PACE).
The Council of Europe is the guardian of human rights and democracy for its 47 member states, which include Russia and Turkey. Each country appoints representatives to PACE, which meets four times a year in Strasbourg.
Many Western European states show little interest in the institution but Azerbaijan has expended a lot of effort trying to prevent the Council from condemning its human rights situation.
Its politicians celebrated a small victory in January 2013 when a resolution by German Christoph Strässer about political prisoners in Azerbaijan was surprisingly voted down by the Council.
For years, there have been indications that it isn’t just lobbying that has played a role and that “caviar diplomacy” has been at play.
But in Volontè’s case, the problem goes deeper than just fish eggs and expensive carpets. The Italian has admitted to receiving €2.39 million but denies that the money was connected to his activities with the Council.
Volontè told Italian broadcaster RAI that the money originated from Azerbaijani politician Elkhan Suleymanov.
It all started for Luca Volontè with a trip to Azerbaijan in July 2011. His secretary told Der Tagesspiegel that he flew business class because Suleymanov was footing the bill. On his return, he wrote an email of thanks to his Azerbaijani colleague, lauding their “growing” friendship and “precious gifts”.
They stayed in contact and Volontè even shared his thoughts on how to improve Azerbaijan’s image on the world stage. When in May 2012 the European Stability Initiative (ESI) published a report about “caviar diplomacy”, causing a stir in the Council of Europe, Volontè stressed in an internal note that there was “no evidence of corruption”.
In December 2012, a few weeks before the vote on the resolution, Volontè sent an email to Azerbaijani lobbyist Muslum Mammadov, detailing which “friends” they could count on when it came to the debate.
The people mentioned spoke unusually positive about the South Caucasus republic, including current PACE President Pedro Agramunt.
In December, Volontè received his first payment from a company headquartered in the UK, via an Estonian bank account. Effort had clearly been spent to conceal the fact the money came from Azerbaijan.
After the Strässer-resolution was defeated, Volontè seemed to fear that the lucrative friendship was at an end. “So you’ve forgotten me after your victory…”, he wrote to Suleymanov. A short time later he proposed a new resolution on political prisoners, which he promptly withdrew a few days later.
“Every wish from you is a command”, he later wrote to middleman Mammadov. Further talks were then held in Baku with Suleymanov and Russian politician Alexei Pushkov.
The friendship paid off for Volontè. By his own account he received €10 million over the course of ten years. So far though the money has been frozen by Milanese prosecutors. But Volontè will not stand trial on corruption charges, instead, he will appear in court accused of money laundering.
The story could have petered out there, if it was just a matter of alleged misconduct by politicians. But deputy leader of Germany’s Council delegation Frank Schwabe (SPD) fears that the scandal may go far deeper.
“There is the suspicion that the corruption has a larger scope and it is not just Volontè involved,” he warned. “The Parliamentary Assembly has to do everything possible to clarify this.”
According to research carried out by Der Tagesspiegel, there is evidence that only a part of the scandals have been unearthed. Payments to Volontè were from 2014 handled by Hilux Services LP, an offshore company based in Glasgow.
Its owners are two companies based in the Virgin Islands. The same people that registered the company in March 2013 set up at least 12 other offshore firms with the same address at the same time.
The Estonian account of Hilux Services received nearly €1 billion between the end of 2013 and end of 2014 from Azerbaijani company Baktelecom. This sum and the company network suggest that a largest apparatus is in place, which serves to do more than just pay one politician.
But efforts to shine light on this matter have been sluggish at best. Only politicians from Azerbaijan’s neighbour and rival, Armenia, have tried to raise the issue in plenary. Council President Agramunt cut them off though.
But in January, cross-border and cross-party support was secured at the Strasbourg plenary session and 64 lawmakers called for an independent investigation into the scandal.
There are now concerns about the credibility of the Council. “The Parliamentary Assembly of the Council of Europe is there to stand up to those who abuse human rights,” said Estonian politician Eerik-Niiles Kross, one of the 64 that supported the resolution. “If this organisation is discredited, then it is not just bad for the Council of Europe, it is bad for the entire European idea,” he warned.
And it’s not just Azerbaijan that is implicated. “In the meantime, a network in the Council has sprung up, of countries with authoritarian tendencies, that protects them from critical opinions,” Schwabe said. A debate on the human rights situation in Turkey already fell by the wayside because of this.
ESI Chairman Gerald Knaus hopes that the Volontè affair will cause waves: “If an MP can wire hundreds of thousands of euros without there being an independent investigation, then the Council of Europe is just a bazaar.”
Now there is evidence of what he and his organisation have been warning about for some time. “It now shows how corrupted the organisation has been for a number of years.”
Those in the Council seeking answers have been met with resistance though. Agramunt is looking to downplay the matter and has spoken about “unlawful attacks on the honour and reputation of a person”.
The PACE president has already deferred a decision on an independent investigation. Now the Council’s group leaders will have to submit a proposal.
A crucial role is being played by the leader of Germany’s delegation, Axel Fischer (CDU), because he is also chairman of the EPP group, to which Volontè belonged.
But Fischer is not among those that are actively seeking clarity on the matter and has been sympathetic to Volontè’s version of events.
After learning of the allegations of corruption, he called for a register of non-governmental organisations, which would detail their finances. This initiative, which clearly targets outfits like the ESI, resembles Russia’s much-criticised “foreign agents” law.
When asked by Der Tagesspiegel about the Volontè affair, Fischer declined to comment, insisting that he does not want to prejudice the outcome of the case.