Azerbaijan leader linked to Dubai real-estate deals

DUBAI, United Arab Emirates — Even by the standards of a city that celebrates extravagance, it was a spectacular shopping spree: In just two weeks last year, an 11-year-old boy from Azerbaijan became the owner of nine waterfront mansions.

The total price tag: about $44 million, or roughly 10,000 years worth of salary for the average citizen of Azerbaijan. But the preteen seems to be anything but average.

His name, according to Dubai Land Department records, is Heydar Aliyev, which happens to be the name of the son of Azerbaijan's president, Ilham Aliyev. The owner's date of birth, listed in property records, is also the same as the son's.

Officials in Baku, the capital of Azerbaijan, declined to comment on how the president's son — or at least an Azerbaijani schoolboy with the same birth date and the same name as the son's — came to own mansions on Palm Jumeirah, a luxury real-estate development popular with multimillionaire British soccer stars and others with cash to burn.

Ilham Aliyev's annual salary as president is the equivalent of $228,000, far short of what is needed to buy even the smallest Palm property.

Azer Gasimov, the president's spokesman, declined to discuss the Dubai real-estate purchases.

Azerbaijan, a former Soviet republic blessed with plentiful oil and gas reserves yet blighted by widespread poverty outside its glitzy capital, has long had a reputation for corruption.

The Dubai purchases, which have not been reported before, could provide a rare concrete example of just how much money the governing elite has amassed and of the ways in which at least part of this wealth has been stashed overseas.

The transactions sharpen a dilemma that has shadowed Washington's relations with Azerbaijan for years: how to reconcile U.S. security and energy interests in the oil-rich Caspian Sea nation with what the State Department, in a report last year on human rights around the world, described as the "pervasive corruption" of its increasingly authoritarian regime.

Azerbaijan has sent troops to support U.S. democracy-building efforts in Afghanistan and Iraq, but at home has retreated steadily from democratic practices, according to diplomats and experts on the region.

Transparency International, in a 2009 survey of global corruption, ranked Azerbaijan at 143 out of 180 nations.

In addition to recording nine properties owned by Heydar Aliyev, the now-12-year-old schoolboy, Dubai's Land Department also has files in the names of Leyla and Arzu Aliyeva.

President Aliyev has two daughters with the same names and roughly the same ages. Their exact dates of birth could not be established, but various reports indicate Leyla's birthday is the same as that of the Azerbaijani woman who figures in the Land Department records.

In all, Azerbaijanis with the same names as the president's three children own real estate in Dubai worth about $75 million, property data indicate.

Dubai real-estate dealers with knowledge of some of the transactions said the purchases were made by a buyer representing Azerbaijan's ruling family. The dealers said the properties were paid for upfront.

Ali Kerimli, chairman of the opposition party Azerbaijani Popular Front, said, "We all know that our country is one of the most corrupt." But when told about the Dubai purchases, he said he was surprised at the apparent lack of effort to conceal them.

Azerbaijan's leaders, Kerimli said, "face no danger" because the judiciary, anti-corruption bodies and most of the country's media outlets are firmly under their control.

The rush to move assets overseas is a common feature of many oil-producing nations, where corrupt elites seek to ensure their wealth is safe just in case political winds at home change.

The phenomenon is part of the "resource curse," an ailment that has deformed the economies and politics of corruption-addled, oil-producing nations from Nigeria to Venezuela.

Kerimli said Washington paid too much attention to security and energy issues and thus "sent a signal to our country that democratic reform is not important."

When then-Vice President Dick Cheney visited Baku in 2008, he not only held talks with President Aliyev focused on energy but also met with executives of BP and the U.S. oil company Chevron, both of which have operations there. Azerbaijan and the United States, Cheney said, "have many interests in common."

The Obama administration has also focused on strategic issues in its relations with Azerbaijan.

On a visit to Baku in February, William Burns, undersecretary of state for political affairs, praised Azerbaijan for supporting the United States in Afghanistan and trumpeted the role of a U.S.-backed oil pipeline from Baku to Turkey that broke Russia's stranglehold on energy exports from the Caspian Sea.

Burns avoided direct criticism of Azerbaijan, noting only: "We also believe that the strengthening of democratic institutions, rule of law and respect for human rights will have a positive effect on the future of this country."

The Aliyev government and its supporters, meanwhile, have tried to burnish their image, sponsoring trips to Baku by prominent foreigners and hiring lobbyists to trumpet the country's achievements.

David Plouffe, President Obama's former election-campaign manager, visited Baku last year to deliver a paid-for speech; a few months later came former British Prime Minister Tony Blair, who also received a fee to speak. Plouffe declined to comment about his trip.

Azerbaijan, which became an independent nation with the collapse of the Soviet Union in 1991, has been ruled almost continuously by the same family. Aliyev took over from his father, Heydar Aliyev, president from 1993 until his death in 2003.

The family's long grip on power has provided a measure of stability and energy-fueled economic growth in a country that shares borders with Iran and Russia. But it has also left Azerbaijan riddled with graft and a culture of impunity.