Back in April, Der Spiegel broke a big story which found that Deutsche Bank may have been used by the recently deceased Turkmenistan dictator Saparmurat Niyazov to funnel hidden proceeds from gas deals to the tune of hundreds of millions of dollars a year. The Turkmenbashi preferred to bank in Germany The Spiegel report noted:
One stark example of just how much is contract no. 14/404, dated May 14, 2001. The nine-page document defines the terms of Turkmen gas deliveries to Ukraine over a five-year period. The treaty was expected to generate revenues of $1.68 billion for 2002 alone, a princely sum for Turkmenistan, a country where about half the population lives in poverty. But the deal contains one important detail of which the Turkmen people are probably unaware — information about the transaction bank account. This little nugget of critical information can be found at the bottom of the last page: “Central Bank of Turkmenistan, Acc. No. 949 924 500 DEUTSCHE BANK AG, Frankfurt am Main, Germany, Taunusanlage 12-21…Swift: DEUTDEFF.”
Following the death of the Turkmenbashi, a document was leaked to the Financial Times, proving that Deutsche Bank manages billions of dollars in accounts for Turkmenistan, provoking calls for an official probe among the exile community.
Turkmen exiles seek Deutsche probe By Hugh Williamson in Berlin and Isabel Gorst in Moscow Deutsche Bank, the German bank, was on Friday under pressure over claims it was holding billions of dollars in accounts formerly controlled by Saparmurat Niyazov, the autocratic president of Turkmenistan who died suddenly on Thursday. In a document obtained by the Financial Times, the German bank is shown to hold an account for a $1.68bn Turkmenistan government contract, signed in 2001, to export gas to Ukraine. The document says the account is managed by the bank for the Turkmenistan central bank. Much of the country’s central bank funds were under the personal control of Niyazov, according to finance experts. A report in June stated that the European Bank for Reconstruction and Development had warned that funds in the Turkmen central bank were under the “discretionary control of the president without appropriate regulation and transparency”. Niyazov, whose funeral is to be held tomorrow, maintained a personality cult that impoverished his country and oppressed opposition groups. Leaders of a Vienna-based opposition group wrote on Friday to Angela Merkel, the German chancellor, demanding an “official investigation” into Deutsche Bank’s role. The letter from the exiled Republican party of Turkmenistan cites an estimated $3bn (€2.3bn) held by Deutsche Bank and other foreign banks. It said there “are further questions about money-laundering” [and] “violations of European Union banking standards on transparency”. Deutsche Bank in Frankfurt declined to comment. Speculation over Deutsche Bank’s involvement with Niyazov has been circulating for months in Turkmenistan, according to oil industry workers in the region. Global Witness, a London-based non-governmental group that reported this year on Deutsche Bank’s involvement in Turkmenistan, last night said: “Deutsche Bank should come clear on the Niyazov funds it holds, and if necessary freeze the accounts to ensure the money is not stolen.” Alexander Zhadan, Niyazov’s private secretary, controlled his financial affairs. Mr Zhadan has not been seen since the the day before Niyazov died, according to unconfirmed reports. Andrei Grozin, an expert on central Asia in Moscow’s Institute of the CIS, said it was “naive” to think European banks would return the funds to Turkmenistan. He added that Russian officials set to attend Niyazov’s funeral, including Mikhail Fradkov, the prime minister, and Alexei Miller, the head of Gazprom, the gas monopoly, were expected to remain for talks about gas supplies and revenues.