Ex Top Officials from ICT Ministry Stand Trial in Corruption Case

December 5th, 2016

vidadi

Key facts about the case:

Several former employees of the ICT Ministry have been ordered to stand trial on charges of corruption and abuse of power in a multi-million corruption case. On 2 November, Judge Afgan Hajiyev ruled that prosecutors had presented sufficient evidence to warrant a trial for 11 officials from the Ministry of Information and Communication Technologies (ICT) and its affiliates who were arrested and detained in November 2015. The defendants are being charged under Articles 179.3.2 (misappropriation, in a large amount), 308.2 (abuse of official powers), and 313 (service forgery) of the Criminal Code.

Main defendants are Vidadi Zeynalov and Beytualla Huseynov.

• Vidadi Zeynalov a former Chief of Staff of the ICT Ministry.

Beytulla Huseynov, a former Director General of Baku Telephone Communications Production Association (BTCPA). The BTCPA is a structure under ICT Ministry, also known as Baktelecom. Notably, Baktelecom is involved in another high profile corruption scandal – this time, at the international level. As such, Milano Public Prosecutor office has established that telecommunications company Baktelekom has tranfered funds to the accounts of the company LGV and Novae Terrae Foundation that belong to Italian politician, former Counci of Europe Parliamentary Assembly (PACE) member Luca Volonte. According to the indictment, then- the Vice-chairman of PACE and a member of the Italian Council Volonte, has received millions of US dollars to ensure the vote in favor of Azerbaijan, i.e. to support “political positions of a foreign state.” Volonte is scheduled to stand trail in Italy on charges of corruption and money laundering.

Other defendants are:

Emin Mammadov,former Director of Communications Repair & Construction No.3 LLC and Repair & Supply Service LLC,
Anar Mustafayev, former Chief Account of Communications Repair & Construction No.3 LLC and Repair & Supply Service LLC,
Mahammad Mammadov, former Director General of Aztelekom LLC, a largest state telecommunications company
Oktay Rustamov, former Chief Accountant of of Aztelekom LLC
Jalil Jafarov former General Director of AzInTelekom LLC, a structure under ICT Ministry
Gambar Baybalayev, former General Director of Azerpost LLC, a state-run postal service
Namazali Mammadov, formal Director of Optical Communications, Construction and Installation LLC
Sahrab Humbatov, formal Chief Accountant of Optical Communications, Construction and Installation LLC
Bayram Valiyev, formal Director of Baku Communications Repair & Construction LLC and Repair & Supply Service LLC.

The defendants are charged under Articles 179.3.2 (misappropriation, in a large amount), 308.2 (abuse of official powers), and 313 (service forgery) of the Criminal Code. The investigation has established that Vidadi Zeynalov and Beytulla Huseynov set up a criminal network which, through sham tenders and money-laundering misappropriated 163 million AZN (approximately 88 milion in euro) from the state budget.

According to the investigation, Beytullah Huseynov received 35-45 % of a total value from each contract he arranged through murky tenders.. Furthremore, the investigation has established that Huseynov issued forged documents, confirming that the tender works (i.e. installation of the fiber-optic lines) were carried out by subcontractors while in reality, these works had been done by local telephone networks. The investigators suspenct that former Chief of Staff of the ICT Ministry Vidadi Zeynalov has participated in a murky deal.

The trial started on November 8, 2016. So far, four hearings have been held. IRFS researchers have been observing the proceeding since day one and reporting from each hearing.

Summary: Hearing 4 (30 November)

  • The questioning of defendant Beytulla Huseynov was resumed. It transpired that in his statement taken by investigators, Huseynov named former ICT Minister Ali Abbasov as the person from whom he had received the orders and instructions;
  • Defendant Anar Mustafayev testified. He claimed that the investigation had been conducted in a prejudiced way. Mustafayev said the figures mentioned in the indictment bill were inflated, and he had not been given a chance to even glance at the criminal case materials at the end of the investigation.

At today’s hearing, the court took up where it left off with the questioning of defendant Beytulla Huseynov, a former Director General of Baku Telephone Communications Production Association (BTCPA).

During cross-examination, Vidadi Zeynalov’s lawyer Jeyhun Yusifov asked Huseynov who had given him orders to overstate the figures. “I did what the management of the Ministry of Communications told me to do. I do not want to give names. I confirm my statement and do not want to speak about it anymore. Do not ask me any questions,” Huseynov said.

Lawyer Jeyhun Yusifov asked for Huseynov’s investigation statement to be read out.

The judge announced Huseynov’s statement. It emerged that, according to Huseynov’s statement, the orders and instructions had been given by former minister Ali Abbasov.

Beytulla Huseynov once again confirmed his statement.

Next, defendant Anar Mustafayev, former Chief Account of Communications Repair & Construction No.3 LLC and Repair & Supply Service LLC, testified. “The investigation has been conducted in a prejudiced way. The figures have been exaggerated. They even did not allow me to familiarise myself with the case materials at the end of the investigation. The investigating authority has portrayed me as a mastermind. Allegedly, it was me who set up the criminal network. If I really was the mastermind, then why, according to the investigative agency, did I give 10 million to Beytulla Huseynov and Vidadi Zeynalov each and take (only) 567,000 manat for myself? I do not mean that I am innocent. I admitted my guilt from the day one. But it says that I received monthly “envelope” (under-the-counter) payments amounting to 7,000 manat from the money gained by overstating the figures. This is not true. I received 2,000 manat per month in addition to my official salary. Mr. Beytulla [Huseynov] gave me 8,000, 5,000 and 4,000 manat when I underwent surgery. If I actually received 7,000 manat per month, why then did I take the money given by Mr. Huseynov? Yes, they were giving me 7,000 manat per month, but it was only 2,000 manat left for my needs. The rest was spent on various issues, from medical treatment of employees to their children’s education, holiday events and so on.

While answering the public prosecutor’s questions, Anar Mustafayev said, “I took the funds obtained by overstatement of expenses to the Ministry. I knew that the packages I took to the Ministry contained money, but I did not know how much. I gave those packages to Mr. Vidadi [Zeynalov].”

The next hearing was set for December 2, 10 am.

Summary: Hearing 3 (28 November)

  •  Public prosecutor Farid Nagiyev announced the concluding part of the indictment bill with regard to defendants Jalil Jafarov, Sahrab Humbatov and Gambar Alibalayev, all of whom are pleading not guilty to the charges;
  •  The lawyer for Vidadi Zeynalov, Jeyhun Yusifov, filed another motion requesting that Vidadi Zeynalov testify last among the witnesses. The public prosecutor suggested that the evidence be examined in the sequence specified in the legislation. The court denied the lawyer’s motion and decided to examine the evidence in the order determined by the legislation. The judge first asked the persons pleading partially guilty to testify. Defendant Emin Mammadov said that he was not yet ready to give testimony. Defendant Anar Mustafayev’s lawyer Gulshan Salmanova filed a verbal motion requesting that her client testify after the other witnesses. The motion was granted;
  • Defendant Beytulla Huseynov, who had pleaded partially guilty, gave his testimony, rejecting the figures given in the indictment as exaggerated. Huseynov said the indictment bill had not been written correctly.

At the hearing, public prosecutor Farid Nagiyev announced the concluding part of the indictment bill, pertaining to defendants Jalil Jafarov, Sahrab Humbatov and Gambar Alibalayev, all of whom pleaded not guilty to the charges.

Defendant Vidadi Zeynalov’s lawyer Jeyhun Yusifov once again filed a motion requesting that Vidadi Zeynalov testify after all of the other witnesses. The public prosecutor suggested that the evidence be examined in the sequence specified in the legislation. The court denied the lawyer’s motion and decided to examine the evidence in the order determined by the legislation. The judge first asked the persons pleading partially guilty to testify. Defendant Emin Mammadov said he was not yet ready to give testimony. Defendant Anar Mustafayev’s lawyer Gulshan Salmanova filed a verbal motion requesting that her client testify last; the motion was granted.

Former General Director of Baku Telephone Communications Production Association (BTCPA) Beytulla Huseynov, who had pleaded partially guilty, gave testimony. “I do not agree with the figures mentioned in the indictment bill. They have been exaggerated. The indictment has not been written correctly. According to it, I have misappropriated public property [funds]. It is not like that. I am merely an executor. I worked in various positions before becoming the chief engineer. It had been agreed that 80 percent of the income would be given to the Ministry, and 20 percent would remain in BTCPA. BTCPA has 2,500 employees; thus 14 of that 20 percent would go to department chiefs and the remaining 6 percent to call centres. This has been confirmed by the testimonies of both Vidadi Zeynalov and former minister Ali Abbasov. Ninety-five percent of the work referred to in the indictment bill has been performed under the decrees of the president. I am ready to redress whatever damage I have caused. We have implemented state programmes, and have done a significant amount of work. I would need many hours to speak in detail about our work. We installed phone lines for martyrs’ families and people with disabilities free of charge. We donated to the orphanage in Shuvalan four times a year. We fulfilled the assignments during the European Games. The customer was Azeryolservis OJSC. We held the European Games, and we were also rewarded. I believe the court will render a fair decision. I am a Karabakh war veteran, an experienced engineer, and have been awarded presidential prizes. I ask for all of this to be taken into account,” said Beytulla Huseynov.

Beytulla Huseynov then responded to the public prosecutor’s questions. He said he had given 22-24 million AZN to the Ministry, not 10 million as stated in the indictment. The public prosecutor asked him to name the person to whom he had given the money. Huseynov said he could not give names. “There are certain things that are classified as state secrets which I do not want to disclose. I have signed [a document] that I would not reveal [this information]. We have not done anything at our own discretion. I received instructions from the management. We were not upbraided during the European Games. We fulfilled all our assignments within a short time. Each state program has an implementation period. We performed the work and they were not dissatisfied. We have not yet received the 4,600,000 AZN that we are owed. Today, there are call centres that have completed the work but have not been paid; 80 percent of the income was taken to the Ministry by Anar Mustafayev who was my accountant. The same goes for Bayram Valiyev and Emin Mammadov. I was an engineer. You should ask Anar Mustafayev about the financial aspects. I will repay 2,800,000 AZN or whatever amount of damage I have caused. I trusted, believed and completed the work accordingly,” said Huseynov.

Lawyer Jeyhun Yusifov asked the court to postpone the hearing, as they had many questions for the defendant.

The next hearing was set for 30 November, 10 am.

Summary: Hearing 2 (25 November)

  •  The presiding judge said the civil plaintiff – the Ministry of Taxes – had filed a 255,000-AZN civil claim against defendant Bayram Valiyev. The Ministry was represented at the hearing by Ismayil Abbasov;
  • Defendant Sahrab Humbatov’s lawyer Vidadi Mammadov filed a motion to replace his client’s pre-trial detention with house arrest. The motion was denied;
  • Defendant Vidadi Zeynalov’s lawyer Jeyhun Yusifov filed a motion requesting that Vidadi Zeynalov testify last among the defendants. The judge said this motion could not be filed at the current stage of the trial, as the court had not yet decided in what sequence the evidence would be examined;
  •  The public prosecutor read out the concluding part of the indictment, which dealt with each defendant separately
  •  Vidadi Zeynalov said he had not been served with the indictment bill. He pleaded not guilty to the charges.

At the beginning of the hearing, the presiding judge announced that the Ministry of Taxes had filed a 255,000 AZN civil claim against defendant Bayram Valiyev, and noted that the Ministry’s legal representative, Ismayil Abbasov, was present at the hearing.

Lawyers’ motions:

Vidadi Mammadov, the lawyer of the former chief accountant of Optical Communications, Construction and Installation LLC Sahrab Humbatov, filed a motion to replace his client’s pre-trial detention with house arrest. The lawyer argued that the pre-trial detention measure was not consistent with his client’s identity and social status. Mammadov also argued that Sahrab Humbatov was caring for his child who suffers from a serious heart condition. The lawyer noted that the charges were based on unproven assumptions, and stated that his client had not been involved in the embezzlement of state property. In addition, the lawyer argued that the case lacked reliable evidence.

Defendant Vidadi Zeynalov’s lawyer Jeyhun Yusifov filed a motion requesting that Vidadi Zeynalov testify last among the defendants. The judge said this motion could not be filed at the current stage of the trial, as the court had not yet decided in what sequence the evidence would be examined.

The other defendants and lawyers requested that the motions be granted.

Public prosecutor Farid Nagiyev commented on the motion seeking to replace the pre-trial detention measure with house arrest. He said that the serious health condition of Sahrab Humbatov’s child did not warrant a change in the pre-trial detention measure.

The jury declared that the motion was denied.

Announcement of indictment bill:

The public prosecutor read out the concluding part of the indictment, which dealt with each defendant separately.

According to the indictment, while working as the general director of Baku Telephone Communications Production Association (BTCPA) of the Ministry of Communications and High Technologies from April 2005 to October 2015, Beytulla Huseynov engaged in a criminal conspiracy with the following people: BTCPA chief accountant Anar Mustafayev; Director of Communications Repair & Construction No.3 LLC and Repair & Supply Service LLC Emin Mammadov (a close associate of Mustafayev); Director of Baku Communications Repair & Construction and Repair & Supply Service LLCs Bayram Valiyev, and others. The indictment notes that Baku Communications Repair & Construction and Repair & Supply Service LLCs are de facto owned by Huseynov himself. The indictment states that the accused intended to make extra money by embezzling the state property entrusted to him despite the obliged to that all tenders and service provision were based on transparent competition. Beytulla Huseynov founded legal entities (LLCs) in the names of the above private sector representatives, and subsequently fraudulently named those LLCs as the winners of the tenders held by the call centres subordinate to him. He oversaw the signing of contracts and the transfer of the specified amounts of funds to their bank accounts, and supplied monthly payments of 2,500 to 7,000 AZN to the “owners” on the condition that they should pay him – depending on the scope of work – 15, 20, 25, 30, 35 and in the last 8 months 45 percent of the funds received via the tender. The tenders included projects such as the performance of work such as the installation of new communication lines, construction or repair of buildings and equipment, etc. Group members Bayram Valiyev, Emin Mammadov and others withdrew the agreed complied with his demands, and formalized the expenditure by knowingly entering false information into their Form 2s – official documents acknowledging delivery and acceptance of work performed by them. They came to the administrative building of Baku Telephone Communications Production Association every month, met with Anar Mustafayev and paid him the money. The latter passed on the money to Beytulla Huseynov, who illegally kept the money, constituting misappropriation through abuse of office.

The indictment bill further reads that while working as the Chief of Staff of Ministry of Communications and High Technologies since 2004, Vidadi Zeynalov criminally conspired with senior officers of various agencies operating under the Ministry. These officers included Baku Telephone Communications Production Association (BTCPA) director Beytulla Huseynov, BTCPA chief accountant Anar Mustafayev, and others. Zeynalov’s intention was the misappropriation of property entrusted to him via abuse of his official powers in order to gain illegal privileges for himself and for others. At the expense of the funds transferred and later withdrawn from the follwing entities’ bank accounts as costs for allegedly performed work, [Vidadi Zeynalov] collected a total of:
• 25,800,000 AZN (200,000 AZN per month from 2009 to 2011, and 400,000 AZN per month from 2012 to October 2015) from Baku Telephone Communications Production Association;
• 20,250,000 AZN (230,000 to 250,000 USD per month from 2009 to October 2015) from International Relations and Accounting Centre (now AzInTelekom LLC),
• 810,000 AZN (8,000 to 10,000 AZN per month during those periods) from Data Processing Centre,
• 2,430,000 AZN (20,000 to 30,000 AZN per month during the above-mentioned period) from State Radio Frequencies Department,
• 1,620,000 AZN (10,000 to 20,000 AZN per month during the specified period) from Teleradio Production Association,
• 4,050,000 AZN (50,000 AZN per month during that period) from Azerpost LLC, and 16,200,000 AZN (200,000 AZN per month since 2010 and 2011) from Aztelekom LLC.

Thus Zeynalov acquired a total of 73,590,000 AZN from senior officials of these institutions from his office room in the administrative building of the Ministry of Communications and High Technologies located on 77 Zarifa Aliyev Street, Baku. Using those funds Vidadi Zeynalov illegally ensured allocation and distribution of a monthly payment of 50,000 AZN for himself, and large payments to senior officials of the Ministry and its sub-units. He misappropriated property entrusted to him on a major scale, i.e. a total of 3,190,000 AZN. He caused serious damage entailing grave consequences to the state interests as protected by law.

Vidadi Zeynalov said he had not been served with the indictment bill. He pleaded not guilty to the charges.