State crime researchers expose role of Western companies in Uzbek corruption scandal

London, 8 August 2017: Evidence in a new research report pub­lished today shows that the gov­ern­ment of Uzbekistan act­ed as an organ­ised crime net­work, with state agen­cies con­duct­ing rack­e­teer­ing activ­i­ty that ben­e­fit­ed polit­i­cal heiress Gulnara Karimova, the elder daugh­ter of Islam Karimov, the leader of Uzbekistan from 1989 to his death in 2016.

The find­ings are pub­lished by the International State Crime Initiative, based at Queen Mary University of London (QMUL), in a report called “A Dance with the Cobra’: Confronting Grand Corruption in Uzbekistan.”

The report finds that the gov­ern­ment helped solic­it bribes from telecom­mu­ni­ca­tions firms owned by Swedish, Norwegian, Russian, and German inter­ests. Assets derived from the telecom­mu­ni­ca­tions pro­tec­tion rack­et, total­ing over $850 mil­lion, are cur­rent­ly the tar­get of U.S. Department of Justice for­fei­ture pro­ceed­ings ini­ti­at­ed in 2016.

Professor Penny Green, Director of the International State Crime Initiative at QMUL, said: “This report reveals the transna­tion­al nature of cor­rup­tion and the inti­mate role Western juris­dic­tions play in sup­port­ing and pro­tect­ing some of the worst state organ­ised crime rack­ets oper­at­ing today.”

The report details how for­eign cor­po­ra­tions and banks includ­ing Citibank, Coca-Cola, Standard Chartered, Lombard Odier, and oth­ers were impli­cat­ed in the rack­e­teer­ing scheme, which led to sig­nif­i­cant sums of mon­ey being laun­dered through proxy com­pa­nies – typ­i­cal­ly incor­po­rat­ed in British Overseas Territories. The researchers describe how these off­shore cor­po­ra­tions han­dled sus­pi­cious trans­ac­tions worth tens of mil­lions of dol­lars for Karimova, even after Karimova’s illic­it activ­i­ties were first exposed in 2003 and 2004.

Professor Kristian Lasslett, author of the report and Executive Board mem­ber of the International State Crime Initiative said: “Evidence strong­ly sug­gests that Karimova over­saw a high­ly-organ­ised syn­di­cate whose rack­e­teer­ing oper­a­tions were enact­ed through Uzbekistan’s exec­u­tive, judi­cia­ry, and nation­al secu­ri­ty branch­es, each of which act­ed as the syndicate’s teeth. The Uzbek gov­ern­ment remains sys­tem­i­cal­ly cor­rupt, and the evi­dence in this report sug­gests that cer­tain Western actors, were aware of, if not whol­ly com­plic­it in, the ugly real­i­ty of Karimova’s schemes.”

The report illus­trates that state cor­rup­tion in Uzbekistan was not lim­it­ed to a few top gov­ern­ment offi­cials – but rather that the cor­rup­tion is sys­temic and sys­tem­at­ic, run­ning through every lev­el of gov­ern­ment. The researchers argue that many of the fix­ers, envoys, advis­ers and man­agers in G. Karimova’s crim­i­nal syn­di­cate were senior offi­cials in the state polit­i­cal and secu­ri­ty appa­ra­tus, and have con­tin­ued to be appoint­ed to top posts with­in the Uzbek gov­ern­ment since the scan­dal became public.

DOWNLOAD the full report here.

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