Corruption Case Sharpens U.S. Policy Dilemma Towards Azerbaijan
23 September 2003
An early September indictment unsealed in a New York federal court alleges that Swiss lawyer Hans Bodmer “paid bribes and authorized the payment of bribes” to four unnamed “senior officials” in Azerbaijan in a scheme to influence the privatization of the state oil company, SOCAR.
Western media, including the Financial Times, have reported that two of the Azerbaijani officials involved in the scheme were President Heidar Aliyev, and his son, Ilham, who is a former deputy head of SOCAR and is currently the ruling New Azerbaijan Party’s candidate for president in the upcoming 15 October election. Azerbaijani government officials have vigorously denied that either Aliyev received illicit payments from Bodmer.
Opposition media outlets in Azerbaijan have seized on the indictment, hoping the bribery probe can boost the electoral chances of opposition presidential candidates. So far though, the response to the case in Azerbaijan has been somewhat muted. State-run media has largely ignored news about the indictment. Meanwhile, the limited reach of opposition-controlled media hampers their ability to spread their message.
In Washington, the indictment hasn’t generated much concern over the near-term policy implications. Zeyno Baran, a Caucasus expert and the director of international security and energy programs at the Nixon Center, said the corruption allegations cannot be considered a shocking development. “The United States knows that Azeri officials are corrupt,” he noted. Indeed, Transparency International ranked Azerbaijan as among the most corrupt countries in the world in its 2002 Corruption Perceptions Index.
Realpolitik ensures that the Bush administration will largely maintain its current policy course. Azerbaijan has emerged as a key ally in the strategically important Caucasus region. More importantly, the country is the central player in U.S.-backed efforts to export Caspian Basin energy via the Baku-Tbilisi-Ceyhan pipeline. Washington built a close working relationship with President Heidar Aliyev, and top Bush administration officials have sought to foster similar ties with Ilham, who is widely perceived as the likely presidential election winner.
The main consequence of the indictment could be that U.S.-Azerbaijani relations, while remaining strong, will assume a lower profile. Some observers in Washington dub this phenomenon as “Nazarbayevization,” a reference to Kazakhstani President Nursultan Nazarbayev, who is reputedly linked to an ongoing corruption probe involving New York merchant banker James Giffen. Under Nazarbayevization, U.S. leaders effectively maintain a policy status quo while distancing themselves from a leader tainted by allegations of impropriety.
An indicator that U.S.-Azerbaijani relations may be undergoing Nazarbayevization is that while Ilham Aliyev received a warm reception from Bush administration officials during a recent visit to Washington, both President George W. Bush and Vice President Dick Cheney refrained from meeting with the Azerbaijani heir apparent. According to a source familiar with the Bodmer investigation, the White House had advance knowledge of the pending indictment against the Swiss lawyer.
As is the case in the U.S. corruption probe reportedly involving Nazarbayev, legal and political experts in Washington expressed doubt that prosecutors in New York would seek to reveal the identities of the bribe-taking Azerbaijani officials. David Rivkin, a former White House and Justice Department official during the former Reagan and first Bush administrations, said there was no legal basis to prosecute Azerbaijani officials for accepting illicit payments. “As they cannot be prosecuted, they should not be named,” he said. “That’s why we have a category of unindicted co-conspirators.”
In general, U.S. officials would prefer that the Bodmer case not receive wide publicity. The mere allegations of corruption have the potential to alienate Azerbaijani leaders, prompting them to downgrade US relations. Such a trend is noticeable in Kazakhstan, where Nazarbayev in recent months has taken steps to improve relations with Russia and China in what he has described as a “multi-vectored” policy.
Ultimately, the Bodmer indictment brings into sharper profile a conundrum that surrounds U.S. policy towards Azerbaijan. Washington’s immediate interests appear to clash with its long term preferences.
Over the near term, Bush administration officials are convinced that maintaining strong ties with the Aliyevs is in the best interests of the United States--both in strategic and economic terms. The Aliyevs are widely seen in Washington as offering the best option for the maintenance of stability in Azerbaijan in the coming months and years.
Over the longer haul, however, the Aliyevs’ association with corruption, which has been enhanced by the Bodmer indictment, can prove a liability for U.S. goals. The United States remains interested in promoting the democratization of the countries of the former Soviet Union, and many American observers believe civil society, the development of which can be painstakingly slow, is the best guarantor of stability in any given country. Ongoing Bush administration support for the Aliyevs may be undermining Azerbaijan’s gradual democratization process, some policy analysts believe.
Opposition leaders in Baku have sharply criticized recent U.S. behavior, saying that the overt Bush administration preference for Ilham Aliyev is tantamount to meddling in the election outcome. Some observers believe that such a perception could prompt the opposition to embrace confrontational methods if they feel the presidential election is rigged. Others suggest that Washington’s embrace of Ilham could encourage vote rigging by conveying the impression that the United States is not prepared to take punitive action in response to a falsified election tally.
While visiting Baku to monitor election preparations, Andreas Gross, the head of a Council of Europe Parliamentary Assembly (PACE) delegation, expressed concern about the possibility of fraud. At the same time, Gross expressed hope that authorities would take action to rectify current electoral shortcomings.
“Azerbaijan needs strong leaders and a strong president,” Gross was quoted as saying by the Ekho newspaper on 17 September. “However, the strength of the president lies not in his authoritarianism, but in his legitimacy. It is the legitimacy of power that makes the statesman strong.”
By Ariel Cohen, Ph.D., research fellow at the Heritage Foundation.