Skip to content
December 25, 2010 / joninews

Norwegian and US Credit Scandals Larger than Expected in Azerbaijan

“Everyone looks bad, so everyone looks the other way.’

RE: Based on documents received December 25, 2010

Corruption in ACDI/VOCA programs,  Azerbaijan and Georgia

Dear Norwegian Embassy, USAID:

RE:  Normicro’s vision is to be a sustainable and leading organization in alleviating poverty through providing broad access to credit in Azerbaijan. Normicro promotes viable enterprises for internally displaced and low-income Azerbaijanis by providing sustainable lending services.

URGENT REQUEST:

I think we need to compare some notes as there is “organized looting” of credit associations in Azerbaijan. It also seems that several Norwegian banks have also been involved, and some suspect that this corruption was a joint venture with locals (and there was some kind of inside collaboration with foreign representatives).

As shared with investigators, US, Norwegian government and the US State Department.  A package of document was shared with Jeffrey K. Silverman, December 25, 2010.

Nb. Jeffrey is the former editor in chief of Azerbaijan Today and Georgian Times, and who now resides in Georgia.

The letter is part of the package of documents which outlines allegations of corruption, as addressed to USAID, United States Agency for International Development, Office of Inspector General.  However, no date was on this letter but it appears to be very recent.

Key elements – and allegations are as follows:

You are being approached by a group of former employees of CreditAgro, a NGO based Credit Organization set up under a US government funded grant … and notwithstanding the [apparent] indifference of the organization that set up this association, ACDI/VOCA, which we have applied to several times in written form, no measures have been taken in response. Now you can take the facts listed below into consideration and provide assistance to CredAgro and its former employees (a total of 6 were listed at the end of the correspondence, and their many years of service to the association).

Screaming Foul or NOT?

These contentions and allegations go beyond what appears to be a group of disgruntled former employees screaming foul:

“Everybody is fully aware that Credit Agro was set up with funding provided by the US taxpayer, [in USAID doublespeak, the American People]. Hence we request that the various organizations that we have applied to assist in bringing about justice with fairness, both for CredAgro and its employees.”

Claims made:
1)    Falsification of reports (ones addressed to the incorporator, investors, AMFA and the Central Bank of Azerbaijan).
2)    International exposure of credit risks on a massive scale, and their removal (writing off) from the balance and the [subsequent] misappropriation of such credits, a list of provided of the amounts involved and the years involved. Moreover, the main culprit-perpetrator is listed as J. Jafavrov, the head of the network of credit unions.
3)    Description of how big rigging and amounts for land purchases were exaggerated, jacked up for the “cash purchase of land plots for the construction of branch offices, and even how one construction company may have had unfair advantage in the process
4)    “Transferring of 6 to 7 branch buildings to a single construction company as an entity, which participated in rigged tenders for the construction of branch offices.” NB. Special notice in the correspondence is made of how this person, who was the president of the construction company, hanged himself, or at least that is what it may be officially claimed in the police report.
5)    More mundane, “agreements/contacts for various things were concluded outside the tender process. Moreover, other mechanisms were used to misappropriate funding and many organizations were involved “tenders” in the sphere of Information Technologies;
6)    Furthermore, it is alleged that that the actual costs of repairs and construction was at least doubled, and examples given:
7)    Two hundred and eighty thousand USD allocated for the construction of an administrative building in Guba, a branch office for that city, and how this amount was fully prepaid. Another example is the cost for the purchase of the administrative building for the Khachmaz branch, and exact amounts provided. In total, 242,000 AZN, 320, 000 AZN for the building and 100,000 for the land plot.  The former employees claim that this is an unheard of amount in the history of Khachmaz.
8)    Eldar Jafar, director, established several micro credit organizations [keeping it in the family] directly on his mother’s name with the mother that he had misappropriated (for example, “Invest Credit” and BOKT).
9)    Not in keeping with acting legislation, transport facilities were [confiscated, foreclosed] … taken back from clients and then sold illegally at bargain prices “too cheaply” to others for what is referred to as “front money.”
10)    Moreover, and perhaps some of the most serious of charges made by this group of former employees: ” E. Jafarov, used a “pyramid” scheme in order to artificially decrease credit risks and used a variety of tricky schemes to cover such activities.  Also, human resources, at least those on the books were used as a way to siphon off money, and payments were diverted to cover debts and these were not done in accordance with normal operating procedures.  Specifics are given and these are not provided here as so not to hinder any possible investigation, so not to give the opportunity to cook the books in light a criminal investigation.
11)    It is also charged that there is a great disparity between the salaries, as for those on administrative boards and regular employees, which indicates a possible kickback scheme with salaries.
12)    The diversity of employees is also worth mentioning:  each and every month. 8,000 (eight-thousand) was paid to one Vusal Eynullayev, acting in the capacity of the supervisory board, vice director and current employed as consultant to CredAgro.  Nobody, at least those who shared this information, understand what this person actually does and why he is being paid for doing nothing.  As the commentary provides. “it is a riddle for all of us, paying a person who does not assist the organization … and we note another case in regard to this person, [more about how Eldar Jafarov uses people in realizing his ‘dirty purposes’ and how loans are made with 12 percent APR, and how can you provide loans to a person working as a consultant, and this is [but the tip of the iceberg] – and the same person is working on the books as an assistant accountant to the Abseheron Brach, and the highest salary is paid, even higher than what is paid to others.  Moreover, it is claim that these benefits are attributed to having “rightly” supported the director when he was a member of the supervisory board.
13)    Perhaps the most central theme to various chain of correspondence, including this most recent one, is that of how employees are fired from their jobs under various excuses and with penalties and keep from being able to freely get on with their lives. They are blacklisted and prevented from finding other suitable employment.
14)    Much is written between the lines of the listed recriminations and criminal charges, and the central theme is how the director acts unprofessionally and not in accordance with local or higher permitted authority, especially in terms of dealing with the head office, and these things are discussed among those working in the organization as common knowledge – and one question is how best to make the responsible management aware of what is going on?
15)    It is in the opinion of those that shared this letter, that those working for E. Jafarov, and based on this “cadre policy” are in their positions illegally, and they are those closest to him. Even the qualification of employees is highly suspect, and for instance, AzruAsqerov who acts as the director of the Absheron branch was given a position and his diploma was a fake.  Employees state that one only needs to look at his pay stubs to fully understand.  Moreover, you briefly determine how this person without any experience is paid such a high salary. Another example is given how a person with only a high school diploma is appointed as a top employee in one branch.
16)    Other more local and administrative rules are listed among the complaints.  That the labor books of some of the terminated employees are not being returned to their rightful owners and outstanding legal payment of their wages not being paid out, as in the case of (ex-directors of Lankaran and Zagatala branches).
17)    All and all, and the bottom line: using such a combination of schemes and circumventing the law, the network of the director of the credit association has increased his personal wealth by millions of dollars, which was looted from not only those that provided grants and seed money for the association. How the money is spent is rather specific with details.
•    All these properties are registered under the mother’s name (for instance) … 4 to 5 Mercedes with license number 10 AA 315, two flats in a new building with more than 300 square meters each, and located in the Yasamal district,  also under the mother’s name – and these examples is just  a partial listing of what the employees are aware of.
•    Much more can be listed and discussed but for the sake of brevity, not in the form of this letter, as to the falsification/fraud committed by E. Jafarov, and we have the facts to support such claims. All that is needed is the opportunity to meet with the persons that this letter and early statements and documentation has been provided, and we believe that we will be in the position to present such facts.
•    As the letter concludes, “Dear Persons, which we apply to, we beg you to consider the above-mentioned circumstances and help the organization carryout a full-fledged “strong” audit … and if this unbridled “out-of-control” person is not soon brought under control, he will continue to pervert the lives of many individuals.”

Sincerely,

A list of six employees with many years of professional experience,

Listed and years of experience actually provided:

Commentary and History:

In the meantime, I am providing some information that may be useful for your investigators, as I suspect the same mechanism and players are involved as with Normico, especially on higher levels, as to what has gone before with US Government money. It is highly suspected that all efforts to reform the rural and micro credit sector on the policy level have been stonewalled at the higher levels of government.

This may be our smoking gun. I  have been investigating this for some years, dating back to 1991, when ACDI/VOCA, a US funded development organization appears to have covertly used funneled financial support to support Chechen and foreign fighters holed up in the Pankisi Valley of Georgia. Similar mechanisms have been used for years in Azerbaijan, as with MEGA oil and Taliban fighters. It is interesting how the same players (aid workers) and funding mechanisms have been used in other parts of the world, including Georgia and Afghanistan.

Most recently, aside from the squandering of about six million from one USG program, I have heard from several confidential sources that at least 10 million of Norwegian funds have been siphoned off in another credit scheme. Moreover, the corruption may reach to official levels of the Azeri government, and out of expediency, perhaps because of Statoil, a “blind eye” is being turned by the Norwegian government.

Please find some related information as how such mechanisms work, as reported to USAID OIG, Office of the Inspector General, and Criminal Investigative Wing of United States Agency for International Development.

Credit Agri, the same organization, on the American side has been implicated in providing material support to Chechen terrorists, and has been involved in high level corruption in Azerbaijan, and this too was never investigated by USAID and other USG organizations.

To make a long story short, there also appears to be a massive cover up in process, and not only involving the USG but other providers of funding for what would have been otherwise worthwhile credit activities – and EU  countries are also involved, and even money provided by IFC, the financial arm of the World Bank.

I am willing to set up meetings with those involved, who can provide insight and actionable intelligence as to these schemes. I think this can lead to criminal convictions and the cleaning up of the rural credit sector in Azerbaijan.

I will be looking forward to hearing from you as soon as possible. Incidentally, Roddy Scott, a British Journalist and I were investigating funding mechanisms via Azerbaijan some years back, he ended up dead, and coincidence or not, a few days later I was beaten and ended up with a brain concussion in Baku.

I was chasing the money via Azerbaijan that was being used to support Chechen fighters in Georgia, and learning the routes that Chechens were using to carry out operations against the RF, and how the Georgian government was a state-sponsor of terrorism, providing them weapons and transport – and the bulk of the funding came from the US government during the period of former president Eduard Shevardnadze. This process was in close connection with a group of Afghan War Veterans, Javi – a NGO set up by the Georgian National Security Council in order to help justify the 64 million dollars US train and equip program and to carry out a war of destabilization in various regions of the Russian Federation.

History of ACDI/VOCA in Azerbaijan

ACDI started a rural credit SME program funded by USAID about 2001 in Azerbaijan. It was the largest of the USAID funded credit projects. About $4 million was in loans. They made loans to rural enterprises, farmers, etc. They had offices in most areas of the country (Lenkoran, Imishli, Ganja, etc.) ACDI/VOCA, an international development organization dedicated to empowering people worldwide, and it has had its problems in a number of countries.

The ACDI system in Azerbaijan was established to provide local control and a local company was set up to run all the local offices. The company was called CreditAgro This system was unlike that in Georgia, where credit associations were formed. This was more centralized, with offices reporting to a central office in Baku. However, the same propensity to hand the operation over to corrupt locals was observed. In this case, ACDI/VOCA hired a man called Eldar Jafarov, initially as credit officer, but he eventually became head of CreditAgro. Soon problems developed between Eldar and the ACDI/VOCA Chief of Party and other expatriates, who considered that Eldar was taking too much power and hiring cronies for every position in CreditAgro. Despite numerous attempts by ACDI/VOCA expatriate staff to remove Eldar Jafarov these attempts were consistently blocked by ACDIVOCA Washington. An internal audit proved many allegations against Eldar.
Still, ACDI/VOCA refused to fire Eldar or change human resource personnel practices. In 2005, however, enough was enough and ACDI decided to fire Eldar. Then Eldar told all managers of Creditagro to go on strike in his support. As a result, ACDI/VOCA Washington completely caved in (ACDI’s VP Dennis DeSantis), and gave the position back to Eldar. The fallout was immediate and the ACDI/VOCA Country Director resigned in disgust, [check out this source] and Eldar, now much more powerful, personally fired the other principal expatriate himself, cleaning up loose ends. The impression was that Creditagro was now a private enterprise of Eldar.

The United States Agency for International Development, USAID was well aware of this scandal but decided to turn a blind eye, and often sided with Eldar in subsequent criticism of ACDI/VOCA. However, they still made a grant of the USAID funds (about $4 million) to ACDI/VOCA/Credit Agro. ACDI continues to be the owner of CreditAgro, yet it forced into a curious position where they are telling all potential investors and lenders to stay clear of CreditAgro because of the above-mentioned shenanigans, and not to taint their reputation more than it is already.

It was obvious that ACDI/VOCA had really mishandled the project, setting up a private company serving one individual. Still, even though USAID was for a very long time aware of the problems, never penalized ACDI/VOCA, but instead, in 2005, rewarded ACDI/VOCA with a major rural enterprise development project in Azerbaijan, which is now employing the old second in command fired by Eldar.

Sordid track Record, Georgia

This is not the first incidence of ACDI/VOCA incompetence in running credit projects. The Georgia ACDI rural credit project was a well-known complete disaster, as local credit associations created by ADCI and funded fully by USAID and USDA were taken over by the local managers selected by ACDI/VOCA and turned into a private money making racket with accountability to none. A later USAID project to assist these entities found out later that the managers had illegally fleeced the associations of most of their funds. Most of the funds disappeared as “dividends” to the local project managers, who normally had been selected due to their power within the local community (for example, some of them were heads of the local tax inspectorate and well known bandits, including members of state security, and not because of any credit or relevant knowledge.

Professional skills are not the decisive factor. The result is that senior local bureaucrats, politicians, and businessmen gain positions. This was part of the problem with the credit unions set up by ACDI/VOCA in 1993 and funded by the US government.

ACDI/VOCA hired these people ostensibly because their muscle could be used to guarantee repayment from poorer farmers. Even as far back as 1998 the then Georgian Agriculture Deputy Minister Nugzar Duchidze had remarked that ACDI/VOCA’s setup was a “rich farmer’s club designed to help these well connected individuals. The Georgia operation was obviously even worse than the Azerbaijan setup. Still, USAID encouraged the Azerbaijan operation was to be patterned after Georgia by the USAID program officers who controlled aid programs in both countries. However, now it appears that Azerbaijan has exceeded all levels of fraud and corruption that was demonstrated by the Georgian project.

One International TV network producer wrote an email dealing with accountability in international organizations ‘Ahh – there is the problem. Nobody is interested in corruption. Western agencies would be very embarrassed to be seen dealing with a bunch of second-rate crooks. After all, you must remember that it looks bad if your program which is funded by the US or Europe has no correct oversight. “
“Everyone looks bad, so everyone looks the other way.’

The “total” lack of accountability NGOs (including a host of international organizations) continues when receiving grants and cooperative agreements from international organizations. These NGOs can do what they want, and are “assumed” to be doing well, because they are “fellow travelers” with USAID.

They all claim to be helping in improving the livelihood of local farmers, small business, etc.

Best regards,

Joni Simonshvili, Jeffrey K. Silverman, Tbilisi Georgia 

Advertisements

47 Comments

Leave a Comment
  1. lleol / Jan 4 2011 9:05 am

    Headline or title of topic along with some contents should be unambiguously claimed and objected to. It is because that somebody tried generalize issues and draw out topic from main issue as from power of abuse by the concrete persons as CEO of Kredit AgroA. Why here Embassy, ACDI/VOCA, USAID, other official Organizations and why here in Azerbaijan and other countries, when there is concrete person who should bear responsibility.

    Note from blog manager, all these questions should be addressed to Norwegian, US and various international organizations. KFW,, EBRD TripleJump, BlueOrchard, Oikocredt, Cyrano-managemetm Smybiotics, Infofin – and especially the criminal investigative wing of the Office of inspector General, US State Department. Many think that Scot Taylor personally profited in the widespread corruption, He is the Country Coordinator for USAID/Azerbaijan. The same things happened in Georgia some years ago, USAID/ACDI./VOCA and also a massive coverup.

    • joninews / Jan 22 2011 4:56 pm

      What would you suggest and do you have any insight into the situation in Azerbaijan?

  2. joninews / Jan 7 2011 8:48 am

    Still more information is needed – and yes some people are directly responsible but it will likely be difficult to get to those, as they are too well placed and to go after them would not be politically wise, especially in a country as Azerbaijan when corruption is endemic to the system.

  3. rahman / Mar 24 2011 1:30 pm

    Surprising thing is that why , ACDIVOCA (founder) , USAID still is tolerate occurence described on press, abuse by Chief of CredAgro , and no any investigation provaided by them , to prevent using they name ( ACDIVOCA and USAID) as umbrella for own, private interest.

    • Joni Simonishvili / Mar 25 2011 2:11 pm

      ACDI/VOCA is only an instrument, and it is too late to do anything in Azerbaijan as too many people are involved, those corrupted and those more corrupted by allowing the crimes to go on unchecked. USAID and other names, like NED, National Endowment for Democracy are used for many dirty things. Money from the credit unions have been used for many illegal things in the region, which includes weapons and drugs.

  4. Galyusha / Jun 22 2011 7:25 pm

    Does ACDIVOCA feel responsibility to respond to allegations which is described inpress, webpage and etc. being founder of CredAgro?
    How ACDI VOCA tolerates such fraud through the years, and allows using its name as umbrella under US based organization?

    • joninews / Jun 24 2011 1:20 am

      No, there is a case coming up in DC court – and ACDI was involved in such scandals in Georgia and Afghanistan as well. I have much of the history and ACDI has been used as mechanism to supply money to various illegal operations, including providing material support for Chechens. In the case of Azerbaijan, the corruption is even more widespread, CreditAgro. As one source wrote, “it is necessary to approach what is written below carefully and investigate this issue if you don not want to see CredAgro living Normicro forture in another form.” You cannot steal anything in Azerbaijan unless you have high level support.

    • joninews / Jun 24 2011 1:26 am

      Because it was part of the cover up and the money to pay their salaries had been stolen by a person Eldar Jafarov and regional officers of credit unions. Much of this network of credit unions was set up by a USAID grant – and the entire system was operated as a Pryamid scheme, and new loans made to cover old loans and some written off. All information on the corruption is well known to the Untied States and Norwegian Embassies. It was a wholesale looting of funds intended to be used for micro-finance. Contact Seth McDonagh and BIll Polidoro – as they know all the details too, and this is not the first time ACDI.VOCA has been involved in high level corruption. 50 F Street NW, Suit 1075 Washington DC
      http://www.acdivoca,org

  5. Elya / Jun 23 2011 7:31 am

    Why more 100 workers left “Kred-Aqro” in 2009-2010 year?

  6. Elya / Jun 23 2011 7:48 am

    Why more 100 workers left “Kred-Aqro” in 2009-2010 year?

    • joninews / Jun 24 2011 1:30 am

      Money was stolen, no money to pay employees and they were fired too to keep them from talking.

    • joninews / Jul 19 2011 11:59 am

      The money to pay them disappeared and they wanted to destory them financially to shut them up so that they would not give evidence about the massive corruption within these credit unions, and to be more specific “Eldar Jafarov” – and Credit Agro evolved into an institution were all layers were highly corrupt, the board of directors were totally clueless what was going, and even if they knew, they understood that nobody steals anything in Azerbaijan unless it is done in cooperation with corrupt officials of the government, including police and Ministry of Internal Affairs. The court system is also corrupt. The US government does not want to uncover the corruption of what happened to its share of the money as it might again be technically guilty of providing material support to international terrorist organizations that find safe haven in Azerbaijan. Where did all the money go from the loans that were written off, as in one instance a 3.2 million dollar loan, and good loans were written off as bad loans and the money soon disappeared.. This corruption all started with a USAID project with the intention of setting up a sustainable credit organization that would provide a sustainable credit institution – but it reality it because a milk cow for the corrupt and well-connected.

    • joninews / Jul 22 2011 9:24 am

      Send me all the information that you have, jeffreys@collents.eu

      My name is Jeffrey K. SIlverman, I have been investigating the corruption in ACDI/VOCA for almost 10 years. It is very big and the US government is involved.

  7. Ibrahim / Jul 5 2011 7:09 pm

    Just in newdays disclosed that , besides of Construction, Contracts ,( including bank service contracts) Procurements, lease,and insurance firld, CredAgro has same partner even in court process. By another word, like CredAgro directed not by supervisory Board, but by local owner who is owner of landlord, insurance company, bank and etc.
    All these was possible by Eldar’s “management”

    • joninews / Jul 18 2011 11:29 am

      Would you be able to provide copies of those contacts, and all details, the US and Norwegian Embassies would be very interested, as well and IFC and EBRD, among others.

  8. Ibrahim / Jul 7 2011 8:34 am

    Today Elmaddin Imanov won CredAgro in Supreme Court. Because he was right. Eldar Djafarov will be lose the game in all law-court. I congratulate you Elmaddin.

    Note from Blog Editor
    Eldar Jafarov will bring down many big people, and I think he will escape Azerbaijan soon, otherwise he will have a serious accident – as dead men tell no tales, as he knows too much, his mother too. As provided in earlier correspondence from those impacted by this massive corruption in Azerbaijan, “the reason that we are bringing all this to your attention is that CredAgro is an instituion established by the US government and now all these activities are connected with fraud and corruption – financial pyramid, kicks-backs, bribes to governmental officials, incompetent US government hired financial managers and monitors – the list goes on and on!!! As do the allegations and recriminations – the crap is going to hit the fan soon.

    • joninews / Jul 18 2011 11:26 am

      Dear Ibraham,

      I have been busy and am not back on the case of ACDI.VOCA. Tell me all details.

  9. Ibrahim / Jul 14 2011 8:38 pm

    I want to say about Khacmaz branch of CredAgro. The second floor of the office was made by cartoon. When the cars pass near the office is shaking. Eldar paid but 420000 AZN(500.000$) amount was paid for this office. It is fantastic amount

    • joninews / Jul 18 2011 11:24 am

      Please write me up and send me all details and I will send to the US Embassy and Norwegian government, and include details in a future article.

  10. Anar / Jul 18 2011 5:27 pm

    http://pia.az/index.php?l=az&m=news&id=10847

    I am sorry. I donn know English vell. But look at it

  11. Xayyam / Jul 21 2011 12:32 pm

    http://pia.az/index.php?l=az&m=news&id=10945

    ACD/VOCA do not want to see it for what it is?

  12. Wowu / Jul 21 2011 7:28 pm

    http://pia.az/index.php?l=az&m=news&id=10945

    KredAqro gave credit to those who died. This is a crime. Sinner is Eldar Djafarov of cource.
    Thanks X

    • joninews / Jul 22 2011 9:25 am

      Send me the name of those that died, picture of their grave-sites, and any documents that show their loans.

    • joninews / Jun 28 2012 1:00 pm

      I hope they enjoyed spending money that they did not have to pay back. I wish I could have done more. I paid a high price for this investigation, beaten and almost killed. Jeffrey

  13. Anar / Jul 22 2011 8:34 pm

    One official officer in Credagro took bribes (hush-money) as 10.000 USD to work as branch manager. At the present time with giving this money he works in Credagro as manager.

  14. Anar / Jul 22 2011 8:42 pm

    Mr. Fred Smith also knew that Eldar Jafarov is built new Restaurant (House of celebrations) in Tovuz. Cost of this building about 1.000.000 USD.

  15. Anar / Jul 22 2011 8:51 pm

    The ex director of Barda branch Qasimov Elnur. The Ganja branch was bought during his ruling period. He was dismissed without any reason after objection to insurance premiums in the meeting of branch directors, because the credit payments of died clients have not been realized so as CredAgro has a big interest in Alfa insurance.

  16. joninews / Jul 22 2011 10:55 pm

    Keep sharing, these details will force the US government to investigate, espeically since some of this money may have been used to supply weapons to international terrorists.

  17. Anar Aliyev / Jul 27 2011 5:09 pm
    • joninews / Aug 2 2011 5:18 pm

      Bill Polidoro <BPolidoro@acdivoca.org

      Send a summary of all what went on to this email, and make sure you send same to me, either in Russian or English. I will have it translated. Be as specific as possible – as the case against ACDI/VOCA and Eldar is growing. Share this email with everybody who has been cheated by ACDI/VOCA. I can also share with you the email for the US Ambassador in Azerbaijan.

      Joninews

  18. Ramil MAmmadov / Aug 12 2011 2:04 pm
  19. Rahim / Sep 19 2011 9:17 am

    I believe that USAID finally will prevent further development of violations and manipulations at CredAgro leading by current CEO of Non-banking Credit Organization, and Supervisory Board will not allow to Eldar to use further their name for his unfair activity at CredAgro

  20. Rahim / Sep 19 2011 9:27 am

    I belive that USAID finally will prevent further development of such kind ov violations at CredAgro and Supervisory Board will not further allow to Eldar to use others name as roof for his infair activitity at CA.

    http://www.pia.az/index.php?l=az&m=news&id=12167

  21. Joni Simonishvili / Oct 4 2011 12:47 pm

    Jeffrey Silverman has a mechanism where he can be contacted by email, look up his CV and link to a site where you can send an email message, he is investigating how the government was involved in stealing this money as nothing can be done in Azerbaijan on this level without the cooperation of the goverment.

    • joninews / Oct 10 2011 11:46 pm

      I am having what you sent me translated. Here is some information for you.

      Statement and Response:
      S: Credit Agri, which was first set up by ACDI/VOCA has been running a Pryamid scheme – and writing off performing loans as good and giving loans to people that exist only on paper, first to bankrupt the credit union – make money in the process – and then for the same players that were involved a long time ago with USAID (back in 2004/5 to take it over).

      R: That is the point. Credit Agri is separate from the new training and support program that ACDI has. There is no question that Credit Agri is a fiasco and they should be penalized for allowing it to get off track as it has. It was a mess when it was originally proposed. I tried to make the USAID mission director aware of the problems but they refused since ACDI is considered to be one of the ‘good guys’ since they are a non-profit (at least according to the Birkenstock wearing USAID types). The new project has no lending connections and ACDI has no ability to either set up or enter into any loan programs, only to facilitate existing micro-lenders. In that regard Credit Agri could not have done the damage they have done if they had been a micro lender. It is pretty hard for a micro lender to enter into the kind of corruption that CreditAgri did because the loans are so much smaller and the total portfolios smaller as well. Most micro lenders have total country portfolios under a million or two, that doesn’t even cover the overhead for a regular ag credit project like ACDI’s project.

      S: The Norwegian government has been screwed and the WB is in for one in the not so distant future. This all follows the same MO as what happened in Georgia with Rusty and team – and I have the documents and letter to ACDI/VOCA by former employees of CredAgro. I was speaking with a Norwegian a few hours ago and I am told tell me that I can do a great service in cleaning up this scam in Azerbaijan – and perhaps even get rid of Eldar Jafarov, and do a service to those obtaining micro credit. Would you by chance have the email, in confidence for Scot Taylor, Country Manager for USAID/Azerbaijan.

      R: I think he is the Mission Director. I don’t have his address, and I’ve actually never met him, though I understand from a couple of folks that he is not a bad guy. All USAID addresses follow a standard protocol as do those for the State Department. So, for instance, if you look at USAID addresses in Georgia and they are AndersonG3@usaid.gov or AndersonGerald2@usaid.gov they are following a standard format that are used throughout the organization.

      S: See attachment – file on ACDI/VOCA and what is brewing. This all is a very tricky scheme and some high level players are involved (governmental). What do these players all mean to you?

      R: What do you mean? Do you mean ACDI and the government players or the financial organizations mentioned below??

      S: KfW. IFC, EBRD, DWM, Triplejump, BlueOrchard. Oikocredit. Cyrano-managment, Symbiotic, Incofin.

      R: If you were referring to the financial organizations, the first three as you know are multilateral donors. The others are all investment banks created to service the new hot button growth industry of MFI (microfinance institutions) acting as the investment bankers to the microfinance organizations (mainly NGO’s). In the same way Credit Suisse First Boston or Merrill Lynch puts together IPO financing or new offerings for fortune 500 firms these guys make huge fees connecting investment capital from the private sector along with consulting fees for management services going to the MFI’s. It is a big business that didn’t even exist 10 years ago.

      S: I got the staff of Credit Agro spilling the beans – and let’s see how far they will go – I am feeding it to both OIG, USAID/State and the Norwegian Embassy. I have copies of their correspondence with the US Embassy and ACDI/VOCA and it seems that things on the part of the American People is again in the damage control mood.

      Feedback from readers, ACDI/VOCA Corruption Scandal, Azerbaijan

      1) Why do you think this is a corruption scandal? Unlike some of the other ACDI projects like the ones in Georgia and Afghanistan, USAID has not provided ACDI with the authority nor the financing to actually make any loans or to be actively involved in the lending process. In this case they are nothing more than glorified seminar presenters and teachers trying to put together meetings and seminars to bring the actual lenders who do make the loans and the sources of private capital to the seminars with the hope they will talk to one another.

      They are taking credit for the fact these organizations are working together, for which they had nothing in reality to do with the actual transaction or the process, but in typical USAID fashion, they have to tout the fact that they “had successes” because people in the industry who every reason to be talking to one another anyway actually did hook up.

      The scam is that they are trying to spin the fact their “seminars” had anything to do with it, and that their $6 million from USAID therefore has a leveraging factor. Obviously they are hoping USAID will give them more money to do more of the same. These people they are inviting know more about microfinance than ACDI will ever know since they are ‘in’ the business so having ACDI doing seminars is just another way of wasting more USAID money.

      2) “Why don’t you send this to Der Speigel magazine?

      I am sure that NATO/EU did not want to agree to four more years in Afghanistan in Lisbon, for no country has the money or the voting public in favor of even four more months. To expose corruption in USAID would be like jelly beans to make the German public demand to pull out of Afghanistan.

      Then get a contract or promise of payment and write up a much more detailed and factual expose for them, not just the word “corruption” and Rusty, ACDI/VOCA over and over.”

      I am sure that NATO/EU did not want to agree to 4 more years in Afghanistan in Lisbon, for no country has the money or the voting public in favor of even four more months. It seems that the Norwegian Ministry of Foreign Affairs has been milked by the same players, along with credit associations.

      Normicro’s vision is to be a sustainable and leading organization in alleviating poverty through providing broad access to credit in Azerbaijan. Normicro promotes viable enterprises for internally displaced and low-income Azerbaijanis by providing sustainable lending services.

      Here are points of contact that know all the details, and much effort has been made on the part of the Norweigan government to clean up another Eldar Jafarov mess, and he seems to have some rather high level corruption from the first family.

      SC Chair: Nils Atle Krokeide

      CEO: Bahman Asgarov
      E-mail: bahman@normicro.az

      CFO: Babek Shabazov
      E-mail: babek@normicro.az

      COO: Nizami Shafiyev
      E-mail: nizami@normicro.az

      We need to get all the information that they have and this is bigger than what I first thought, and not only USAID corruption but organized corruption on the highest level – and it is clear that NATO countries are aware of the corruption and they have turned a blind eye to many criminal acts.

      Jeffrey K. Silverman, Tbilisi Georgia
      Update Latest and “on-going” ACDI/VOCA Corruption Scandal in Azerbaijan,
      In follow up:
      Name:” E. G. wrote by email today: Content: “I read your article from 7th September 2010. I agree with you in all you wrote and want to give you some facts about corruption among Eldar Jaffarov, ACDI/VOCA and USAID in Azerbaijan. Also materials about wheeler-dealer finance of Eldar Jafarov. Do you speak Russian? […]” 23.10.10.”
      As provided a few days ago:
      Dear Joni:
      “Here is something you might want to look into, and how can I get in contact with you to give you more information. I was provided documents yesterday from Azerbaijan of a major fraud case involving USAID and credit unions, (perhaps some World Bank money too), involving approximately 3.5 million dollars.
      The information consist of a letter to Scot Taylor, Country Coordinator, USAID Azerbaijan, and provided by a group of former CredAgro credit employees, and related to a grant provided by ACDI/VOCA in 2005. Aside from this “official complaint” and request for an investigation as to how the money was used and allegations of wholesale corruption, specific allegations are made as much of the funding is serving the interests of one Eldar Jafarov, and is being misused under both the terms of the grant and based on acting legislation.
      I also have a copy of the letter sent to the US Embassy in Baku about this same corruption – and it is alleged that the Credit Agro, which was established with US and World Bank money operated a pyramid system and gave fake rural credits to various organizations. This will not be the first major cover up of USAID in Azerbaijan and Georgia – and they have also been active in Iraq and Afghanistan, and even some of the same human resources. You know all about these things, even better than I do.

      And finally, there is a chain of correspondence between impacted employees who were either jailed or fired – and some of the top management of ACDI/VOca, including its Project Corrdinator, Seth McDonagh and Bill Polidoro, Chief Operating Officer, Presidents’s Office, ACDI/VOCA, Washington DC. Currently Creditagro operates in 27 districts of Azerbaijan. Can you suggest how best to distribute this information – also – do you have anyone in DC that can go to ACDI/VOCA and get all the reports and complaints made under a FOIA request about alleged corruption in ACDI/VOCA for both Georgia and Azerbaijan.
      The point of contact would be Seth McDonald, Project Coordinator/Financial Services 202 469-6172 or Bill Polidoro, Chief Operating Officer, President Office.
      A complain has been made to the US Embassy in Baku but there has been no reaction on their part, only closing ranks – and this is ‘a pity, and more than 60 honest employees of the organization have been replaced as part of the cover of a massive corruption scandal.’
      Again, as with earlier complaints to ADCI/VOCA and the Office of Inspector General – the home office is telling that it is ‘a non-meritorious claim, and there needs something to be investigated – not just generalities.’ The person at the center is Eldar Jafarov, who head up this credit association, and he has organized some kind of pyramid scheme and payments for credits are made by money from the organization and not the creditors themselves. The so-called world financial crisis has also been used as a cover to write off some loans as bad when they were not. In many cases the loans were not even in arrears, and the purpose was to devalue the worth of the credit unions in order to privatize them at next to nothing.
      I will let you connect the dots, as it is possible that there are other dark forces of such schemes and various scenarios. Employees of the credit union, “Credago” suggest to you that a commission should be set up that knows credit and finance, and this body consist of independent people (those not working for CredAgro) to carry out an audit. Most of the corrupt loans were given out in the period 2007-2008, and the vast majority in the second half of 2007. It is clear that some other motivation was involved – as the change was sudden, in the credit policy, and this put forth the conditions for the above-mentioned pyramid scheme, as an effort to reduce the so-called risk and cook the books. However, in spite that the risk exposure was brought down on paper, outstanding old debts continued unabated.
      In order to try to shut up the staff of the credit unions, so to turn blind eye to illegal practices, promises were made to give some share of ownership when the credit unions were privatized. Those that did not play along were forced to resign, and in some instances, set up in cooperation with local enforcers in the government, and sent to jail on apparently bogus charges.
      Naturally it would appear that there is direct government involvement in the fraud – as few would take such a risk of sending innocent people to jail unless they were well paid. The motivation is clear, not only for the director Eldar Jafarov, to bankrupt the organization, make as much money in the process by writing off loans, pocketing the money, along with corrupted officials and then to turn around and set fresh by privatizing the credit union and then to seek fresh international funding from various organizations such as the Word Bank, German Bank for Reconstruction and Development (KFW), European Bank for Reconstruction and Development (EBRD) and others, especially the greatest milk cow of all – USAID.”
      NB: Background as earlier posted on this site:
      Corruption in USAID Azerbaijan and ACDI/VOCA
      On-going investigation of corruption in Azerbaijan and USAID
      Name:” E. G. wrote by email today: Content: “I read your article from 7th September 2010. I agree with you in all you wrote and want to give you some facts about corruption among Eldar Jaffarov, ACDI/VOCA and USAID in Azerbaijan. Also materials about wheeler-dealer finance of Eldar Jafarov. Do you speak Russian? […]” 23.10.10.”
      Here is the case file on this investigation and it has many side plots and connection with funding mechanisms in Georgia, Azerbaijan and Afghanistan.

      Earlier Article from September 7, 2010 with all the sorted history.
      Rats everywhere, can you fill in the gaps?
      Intercepted correspondence from USAID, OIG
      RE: Everyone looks bad, so everyone looks the other way.’
      “Can you please advise a telephone number and let me know of a few convenient times, which I may try to contact you in reference to the information about USAID programs and activities?”
      Thank you,
      KC Smith
      Special Agent
      USAID Europe & Eurasia
      RIG Frankfurt, Germany
      OFFICE: 49-69-7535-7845
      FAX: 49-69-7535-7841
      SmithKC2@state.gov
      A source under contract to USAID, as employed business development expert, Mr. X, who may be the source on ADCI corruption with good access states the following: ACDI started a rural credit SME program funded by USAID about 2001 in Azerbaijan. It was the largest of the USAID funded credit projects. About $4 million was in loans. They made loans to rural enterprises, farmers, etc. They had offices in most areas of the country (Lenkoran, Imishli, Ganja, etc.) ACDI/VOCA, an international development organization dedicated to empowering people worldwide.4
      However, regardless if this source will be forthcoming, he can give more information about the basis of Azerbaijan Business Assistance and Development Program (ABAD), and how things were flawed (how there was bid rigging, and how it was the contract was awarded to a group with weak organizational credentials in business development at best. You just need to look into how the project was solicited, and it may not have been a RFP, and the winner did not win in full and open competition, and thus USAID participated in corruption and did not acquire the services of the most capable technical assistance provider.
      The ACDI system in Azerbaijan was established to provide local control and a local company was set up to run all the local offices. The company was called CreditAgro This system was unlike that in Georgia, where credit associations were formed. This was more centralized, with offices reporting to a central office in Baku. However, the same propensity to hand the operation over to corrupt locals was observed. In this case, ACDI/VOCA hired a man called Eldar Jafarov, initially as credit officer, but he eventually became head of CreditAgro. Soon problems developed between Eldar and the ACDI/VOCA Chief of Party and other expatriates, who considered that Eldar was taking too much power and hiring cronies for every position in CreditAgro. Despite numerous attempts by ACDI/VOCA expatriate staff to remove Eldar Jafarov these attempts were consistently blocked by ACDIVOCA Washington. An internal audit proved many allegations against Eldar. Still, ACDI/VOCA refused to fire Eldar or change human resource personnel practices.

      In 2005, however, enough was enough, and ACDI decided to fire Eldar. Then Eldar told all managers of Creditagro to go on strike in his support. As a result, ACDI/VOCA Washington completely caved in (ACDI’s VP Dennis DeSantis), and gave the position back to Eldar. The fallout was immediate and the ACDI/VOCA Country Director resigned in disgust, [check out this source] and Eldar, now much more powerful, personally fired the other principal expatriate himself, cleaning up loose ends. The impression was that Creditagro was now a private enterprise of Eldar.
      The United States Agency for International Development, USAID was well aware of this scandal but decided to turn a blind eye, and often sided with Eldar in subsequent criticism of ACDI/VOCA. However, they still made a grant of the USAID funds (about $4 million) to ACDI/VOCA/Credit Agro. ACDI continues to be the owner of CreditAgro, yet it forced into a curious position where they are telling all potential investors and lenders to stay clear of CreditAgro because of the above-mentioned shenanigans, and not to taint their reputation more than it is already.
      It was obvious that ACDI/VOCA had really mishandled the project, setting up a private company serving one individual. Still, even though USAID was for a very long time aware of the problems, never penalized ACDI/VOCA, but instead, in 2005, rewarded ACDI/VOCA with a major rural enterprise development project in Azerbaijan, which is now employing the old second in command fired by Eldar.
      Successful Track Record
      This is not the first incidence of ACDI/VOCA incompetence in running credit projects. The Georgia ACDI rural credit project was a well-known complete disaster, as local credit associations created by ADCI and funded fully by USAID and USDA were taken over by the local managers selected by ACDI/VOCA and turned into a private money making racket with accountability to none. A later USAID project to assist these entities found out later that the managers had illegally fleeced the associations of most of their funds. Most of the funds disappeared as “dividends” to the local project managers, who normally had been selected due to their power within the local community (for example, some of them were heads of the local tax inspectorate and well known bandits, including members of state security, and not because of any credit or relevant knowledge.
      Professional skills are not the decisive factor. The result is that senior local bureaucrats, politicians, and businessmen gain positions. This was part of the problem with the credit unions set up by ACDI/VOCA in 1993 and funded by the US government.
      ACDI/VOCA hired these people ostensibly because their muscle could be used to guarantee repayment from poorer farmers. Even as far back as 1998 the then Agriculture Deputy Minister Nugzar Duchidze had remarked that ACDI/VOCA’s setup was a “rich farmer’s club designed to help these well connected individuals. The Georgia operation was obviously even worse than the Azerbaijan setup. Still, USAID encouraged the Azerbaijan operation was to be patterned after Georgia by the USAID program officers who controlled aid programs in both countries.
      One International TV network producer wrote an email dealing with accountability in international organizations ‘Ahh – there is the problem. Nobody is interested in corruption. Western agencies would be very embarrassed to be seen dealing with a bunch of second-rate crooks. After all, you must remember that it looks bad if your programme which is funded by the US or Europe has no correct oversight. Everyone looks bad, so everyone looks the other way.’
      Nonetheless, it does appear that the US government and the Bush Administration were a bit concerned about the “total” lack of accountability NGOs (including a host of international organizations) have when receiving grants and cooperative agreements from USAID. These NGOs can do what they want, and are “assumed” to be doing well, because they are “fellow travelers” with USAID. They all claim to be helping in improving the livelihood of local farmers, small business, etc.
      No noise was made of this incredible debacle of ACDI/VOCA in Georgia because none other than Rusty Schultz a very close friend of Gerry Anderson, high-ranking USAID official in Tbilisi, ran the ACDI/VOCA project in Georgia. Many sources (including those close to a Chemonics run project of assistance to credit organizations) confirm that Anderson did everything in his power to protect Rusty and his corrupted minions. And finally because of their disastrous management, Jim Holderbaum, ACDI Country manager was lost as what to do. Many claim that working in NGOs only a good way to come to Georgia in order to get laid regularly, something Rusty was good at arranging. Then visiting experts had access to the Rusty castle where they could be entertained, and the rest is history.
      Gerry Anderson, USAID Georgia, directly instructed even those visiting experts that were involved in proposal writing when he was in Georgia in mid-2001 that they needed to hook up with ACDI. Now that is interesting and what authority would Gerry have in making such recommendations? He was proposing to work with a specific group and the instructions were outlined in such a way in terms of value chains, and that the only clear choice was that ACDI as the company that they he needed to work with. A month or so later on other business, same instructions were provided to visiting experts to make sure that there was a connection with ACDI.
      It should also be noted that ACDI/VOCA has a policy of putting on its payrolls mainly old USAID hands. That is why ACDI/VOCA is a favorite in all parts of USAID’s world. Others need not apply. Financially ACDI/VOCA is a disaster, but it is doubtful that any of the board members have the brass to go against the entrenched senior employees, for whatever reason, and AgVantage is doing well as can be expected. SAVE, the original project in Georgia, which was renamed AgAdvantage and this project was doomed from the start because of the problems with ACDI. First their money problems: Then there was a lack of any clear direction or focus, other than to pander to Gerry Anderson and USAID.
      It is clear that what happened is Azerbaijan and Georgia is par for the course; Gerry Anderson had gone to great pains to cover up USAID scandals and to protect his friends. What is less clear is the motivation. He has made sure that many project evaluations are stacked with the people that will come back with results that conform that all went well and program objectives were achieved. In one instance, he had bumped off a person from an evaluation that may not have brought back the desired results. Allegations of his morals are well documented, and there is a large age difference between him and his Asian mail order bride, and there are still allegations of sexual harassment of staff of USAID floating around Tbilisi (he demanding that some USAID staff works share in housekeeping responsibilities, such washing his plates).
      Eventually it is known, as part of damage control Rusty Schultz, the program coordinator in Georgia, was sent to head up a high profile ACDI/VOCA operation in Iraq. It was clear that criminal activity had proliferated unchecked in the Georgia project and the cover up was complete. And still, with similar noise filtering out of the Azerbaijan project and still USAID does nothing other than praise a bankrupt project and continue to dole the pork to an incompetent but rich organization.
      Moreover, there are serious allegations of money being used to support the trafficking of weapons. One source shares the following: “If there was money going to arms I rather suspect it would have been more likely to have been connected to Rusty’s sidekick, the New Zealander mercenary who had been all over Africa and Asia soldiering in places they would pay. I heard lots of stories about how he and Rusty got hooked up, but I suspect all of them were at least partial fabrications just to make both of them look good.”
      There are many stories in Tbilisi about how he and Rusty got hooked up, but in all likelihood most of them were at least partial fabrications just to make both of them look good. The bottom line, Rusty needed the soldier of fortune (he may have officially been his deputy but it is difficult to say if he had that title) because he made the parties and the stories so much more fun for Rusty to use to encourage people like Gerry that he wanted to co-opt the parties. Gerry is all about spin and control and the soldier wanted everyone to know that though he was in the background it was he who was still the one carrying the entire buzz.
      The most notorious corruption in Georgia involved Micro and SME Credit activities in the South Caucasus countries of Georgia and Azerbaijan. It is hardly accidental that such programs have been so unsuccessful that there is even doubt if they were even intended to be effective from the very start.
      How long can USAID continue to support an organization with such a record of negligence and criminal malfeasance as ACDI/VOCA and others? ACDI/VOCA continues to win all the contracts it wants and nobody brings their record to the public light. ACDI/VOCA works in approximately 40 countries and claims to foster vibrant communities, organizations and enterprises that can manage and finance themselves.
      See acdivoca.org for more information. All this is a matter of record with USAID, OIG, Office of Inspector General.
      This information connects many dot, and what is going on today, and what has gone on – where did the money come from and where did it go – and while the wool was being pulled over the eyes of the American People as they try to help Georgia and Azerbaijan develop. It is also clear that one local operator cannot function with a sense of impunity when so many allegations have been lodged, and how these have already been proved true in many instances with internal audits.

    • joninews / Jun 28 2012 12:59 pm

      What was the end result – I am not in Azerbaijan but Georgia, I am the one who started putting all the information about him on the Internet and sending letters to the US Embassy and State Department.

  22. Anar / Dec 13 2011 9:03 pm

    http://pia.az/index.php?l=az&m=news&id=14693

    Finally Great Schemer (fraud maker – former CEO, Eldar Jafarov – fraud maker , was fired , regardless this happens too late. Why too late? Because of too many professional employees forced for resignation from him. And by this way too many families suffered by former CEO’s abuse. Is the Supervisory Board able restore justice and restore previous statement of CredAgro as in 2007-2008 years with previous team? But this is another question

    • joninews / Jun 28 2012 12:57 pm

      I did all what I could but was fighting with ACDI/VOCA and the US Embassy every step of the war, they did the same thing in Georgia.

  23. lleol / Jul 15 2012 2:55 pm

    Eldar Jafarov – former CEO of ” CredAgro” run to ” Mol Bulak” MFI – to another Non Banking Credit organization. Question is: “How Eldar Jafarov will hide dark side of his activity in past in CredAgro , and how this will affect to MolBulak reputation?

  24. lleol / Jul 15 2012 3:03 pm

    Finally CredAgro change his bak service provider as “Texnikabank” to another bank. About such necessity was informed to Supervisory Board and Founder as ACDI/VOCA on time. But to such recommendation not followed by Founder at the moment of warning signal on time. But why? What was reason for ignore this recommendation?. It was too late to change bank service provider after lot of negotiated schems.

    • John Bradford / Jul 21 2012 8:00 pm

      Can you provide me all details and what foreign governments involved, USAID, Norway, etc. Who from the old ACDI/VOCA team is back in business and who is participating in the new organization. I am especially interested in knowing the fate of Eldar Jafarov and all his bad loans, how many dead people are taking out loans, etc. What about MolBulak, its current reputation?

  25. joninews / Dec 27 2010 1:37 pm

    I don’t understand the comment supplied by one of the readers! I have received other information, detailing how the documents would be provided should be “quite enough” but these are immediately needed, and it is likely a waste of time to attempt to obtain a response from ACDI.VOCA, out of the DC office, and this is nothing new, as the same was my experience many years ago with the fraud case in Georgia. I really need to get copies of that evidence that you claim that you have collected over the years and details of what you indicated as how things would turn out.

    Evidence speaks louder than words to a US District Court and a Federal Grand Jury,

Trackbacks

  1. More allegations about corruption in USAID, ACDI/VOCA Azerbaijan « geonews

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: