Bulgaria probes $3bn Azerbaijan Laundromat claims

This file photo shows Kalin Mitrev (L) and Irina Bokova (2nd L) taking a photo with Chinese President Xi Jinping (2nd R) and his wife Peng Liyuan (R) in Beijing.

Bulgaria’s chief prosecutor has launched an investigation into allegations of money laundering by the country’s representative to the European Bank for Reconstruction and Development (EBRD).

Kalin Mitrev has been accused by media of laundering money for an Azerbaijani slush fund which used the illegal funds to pay off European politicians and journalists.

"Following the media reports of payments from Azerbaijani companies wired into accounts of Kalin Mitrev, Bulgaria's representative at the EBRD, the chief prosecutor has ordered a probe ... into whether there is evidence of tax crimes or money laundering," the chief prosecutor's office said on Thursday.

A group of European newspapers reported on Tuesday that Mitrev, 65, who is also the husband of UNESCO chief Irina Bokova, allegedly received at least 425,000 euros ($508,000) for private consulting work from an Azerbaijani company linked to a massive scheme nicknamed the "Azerbaijan Laundromat."

Mitrev acknowledged receiving payments from the firm. However, he claimed he was paid by the Azeri firm to manage a government program to prevent flooding of two rivers.

Mitrev added that he had duly reported this income and paid taxes on it.

"The campaign against me is pointless speculation ... aimed at harming me and my family," Mitrev told Nova television in an interview on Thursday.

His wife, Irina Bokova, has largely avoided commenting on the issue, saying earlier this week that her name was "wrongly implicated" and she "has nothing to do with this case."

The Strasbourg-based Council of Europe, Europe's top human rights watchdog, said Tuesday an internal probe was underway into whether parliamentary members had accepted bribes from Azerbaijan in exchange for favors.

Bulgarian Finance Minister Vladislav Goranov said Thursday he would consult the EBRD on the issue before deciding on whether to take action against Mitrev.

He added that only the bank had the authority to terminate Mitrev's appointment. 

Since 1996, Mitrev has had several stints on the EBRD board of directors, with his latest starting in 2014.

'Azerbaijan Laundromat'

The "Azerbaijan Laundromat" scheme operated from 2012 to 2014 through four shell companies registered in the UK, according to the investigative report published in several media outlets.

Media reported the 2.5-billion-euro secret slush fund was linked to Azerbaijan's ruling elite led by President Ilham Aliyev.

The money was used to pay off European politicians and journalists to take sides with the former Soviet state and ignore the government crackdown on the opposition, reports said.

Authorities in Azerbaijani described the reports as "biased, unfounded and provocative."

Media outlets covering the report included the Organized Crime and Corruption Reporting Project, The Guardian and Le Monde.