Trump Tower in Azerbaijan Showed Conflict Risk in Strategic Area

  • Ending deal is part of ‘housekeeping’ in advance of presidency
  • Initial deal was with son of the country’s transport minister

The Trump Organization’s announcement that it’s ending licensing deals for projects in Brazil and Azerbaijan suggests it is moving to fend off wide concerns about conflicts of interest in advance of Inauguration Day. 

Alan Garten, the organization’s executive vice president and general counsel, said Thursday that said the moves are “housecleaning,” and the organization is “assessing the future of various transactions.”

Trump Tower in Baku

Photographer: Michael Steele/Getty Images for BEGOC

President-Elect Donald Trump had promised to hold a news conference on Thursday to announce a full plan for separating himself from his businesses but delayed it until January.

Any of Trump’s properties across more than 20 countries, if they remain in his family’s control, could be seen to influence his policies toward those countries. They also could cause embarrassment. In Brazil, for example, Trump’s name was removed from a beachfront hotel in Rio de Janeiro following the opening of a criminal probe into investments in the hotel. 

But in few places are the links between his partners and the government as direct and deep as in Azerbaijan, a strategically situated oil-producing nation on the Caspian Sea dominated by Shiite Muslims. The nature of the potential conflict is especially stark. Trump Tower looms large over Baku, the capital of the oil-rich former Soviet republic sandwiched between Russia and Iran. Sail-shaped and 33 stories, the skyscraper was built last year but has never opened, a victim of the country’s troubled economy.  

Branding Deal

An official close to Trump’s business partner in Baku said this week that the project is two-thirds finished and would open soon, while a security guard at the tower said it probably will be ready by February. Trump continued to receive money from the branding deal -- nearly $3 million since mid-2014, according to his financial disclosures -- though the project disappeared from his website last year.

A central issue in Azerbaijan was Trump’s partners. Trump’s initial deal there, signed in 2012 and announced in 2014, was with Anar Mammadov, the 35-year-old founder of Garant Holding, with more than 30 companies in construction, transportation and telecommunications. Mammadov is the son of Azerbaijan’s transportation minister, Ziya Mammadov, a close ally of President Ilham Aliyev, who has ruled since he took over from his father in 2003. Trump’s recent fees came from a company set up by Ziya’s brother, Elton Mammadov, a member of parliament until last year.

Troubling Loyalties

“These types of partners who are linked to the political regimes in various countries create loyalties that can be very troubling when the president needs to make foreign-policy decisions,” said Richard Painter, President George W. Bush’s chief White House ethics lawyer.

Richard Kauzlarich, a former U.S. ambassador to Azerbaijan and now an adjunct professor at George Mason University in Fairfax, Virginia, said there was concern the government would seek to win over Trump by helping to finance the completion of Trump Tower in Baku or making sure the payments continued flowing even if the tower remains closed.

“The Azeri government would see this business as an advantageous project to go forward and have an even bigger Trump sign in the middle of Baku as a signal that the U.S. and Azerbaijan are close,’’ Kauzlarich said. “They would see that financing chain as one more example of an easy way to expand Azerbaijani influence with an incoming Trump administration.”

Anar Mammadov didn’t respond to emails, social-media messages, phone calls and messages passed to business associates. Elton Mammadov didn’t respond to requests for comment.

Oil and Policy

Oil will play a big role in U.S. foreign policy. Exxon Mobil Corp., whose chief executive officer, Rex Tillerson, will be Trump’s secretary of state, has an 8 percent stake in Azerbaijan International Operating Co., a consortium of global oil producers with the State Oil Company of Azerbaijan to develop deposits in the Caspian Sea. The Baku-Tbilisi-Ceyhan pipeline remains a key transit route for oil from the Caspian to the Mediterranean Sea via Turkey.

Azerbaijan will look to the U.S. for support in its bid to secure natural-gas export routes to Europe, which Russian President Vladimir Putin has sought to undermine, according to Matthew Bryza, a former U.S. ambassador to Azerbaijan. Russia, he says, is “offering” to flood Turkey with natural gas via Turkish Stream, a proposed pipeline that would connect Russia and Turkey under the Black Sea, thereby undermining the development of Azerbaijan’s next generation of gas fields. Trump has vowed to forge closer links with Putin, which worries Azerbaijan, he said.

The U.S. State Department has highlighted concerns about elites profiting from government connections in Azerbaijan.

Anar Mammadov, who at age 20 bought a seven-bedroom mansion in London, landed major contracts from the transportation ministry during his father’s tenure there. The contracts enabled him to expand and create a holding company that once had headquarters in Baku, London, Geneva and Dubai. From 2011 to 2015, Mammadov spent $12.8 million on lobbying in the U.S. through his group, the Azerbaijan America Alliance, meeting with more than 50 members of the U.S. Congress.

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