Israeli Weapons Fuel Armenia-Azerbaijan Conflict and Grease Palms of Corrupt Elite

It’s common knowledge that Israel is one of the world’s largest arms exporters. As I reported in Jacobin Magazine, it exports to the most genocidal regimes on the planet, and fuels ethnic conflicts from South Sudan to the Phillipines.

Less known is the role Israel is playing the Nagorno-Karabakh conflict between Armenia and Azerbaijan. In fact, the latter’s largest cargo planes are landing several times a week at an Israeli military air base, loading up on Israeli weapons and ferrying them back to Azerbaijan, sometimes with stops along the way in Turkey, another Azeri military ally.  Nor is this a recent development.  Israel has been selling advanced weapons systems to the Azeris for years. And the deals haven’t stopped at weapons systems. Because of Azerbaijan strategic location sharing a long border with Iran, it becomes a major intelligence asset for Israel as it seeks ways to surveil its arch-enemy Iran and understand its military capabilities.

News reports have indicated that the Azeris have permitted Israel to refurbish an old Soviet-era airfield thus permitting Israeli drones and aircraft to fly reconnaissance missions directed at Iran.  If Israel ever mounted an air assault on Iran and its nuclear facilities, such a base would prove invaluable given how difficult it would be for its war planes to fly directly from Israel to Iran.  The Mossad has also opened a station in Baku in order to monitor Iran.

A nation as steeped in corruption as Azerbaijan doesn’t offer these “favors” cheaply. They come with a steep price tag.  As you’ll see below, the price of a huge Israeli arms deal was nearly 10% in kickbacks to regime cronies. Access to an entire airfield on Iran’s border? As the commercial says: Priceless!

In another odd development, Israeli drone manufacturer, Aeronautics, sent technicians to Azerbaijan to demonstrate the capabilities of their products. The military officials then demanded that the Israeli drone handlers actually attack an Armenian military encampment to seal the deal. The technicians rightfully protested and refused to comply.  They refused to become players in a conflict not of their making.

But the company was so desperate to complete the transaction that a corporate executive accompanying the mission himself flew the drone and attacked the Armenians. Though soldiers were injured, no one was killed. The drone operators filed a complaint with the defense ministry.  The company was sanctioned for its behavior.  But the Israeli military censor, seeking to avoid exposing an embarrassing moment in which Israelis directly intervened in a foreign military conflict, suppressed the identity of the Israeli company (though I reported it here).

Perhaps most alarming of all is Uri Blau’s expose for Haaretz revealing that another Israeli arms exporter, Israel Aerospace Industries, signed a huge $1.6-billion deal with Azerbaijan several years ago, one of the largest foreign contracts ever signed by an Israeli weapons maker.  Now those weapons are likely killing Armenians on the battlefield and constitute a major advantage for Azerbaijan in Nagorno-Karabakh.

How did the Israeli company seal the deal?  Did it offer the best quality product?  Did it offer the lowest price?  None of these.  It offered a cash bonanza to the Azeri government officials and their cronies who approved the deal. $155-million, or nearly 10% of the entire value of the deal was paid into offshore accounts controlled by members of the Azeri elite.  Before reaching those shell company accounts, the Israelis transferred the funds to Russian banks, in one of which oligarch Mikhail Prokhorov, the former owner of the Brooklyn Nets NBA team, has a majority interest.

As an aside, it seems that buying major sports teams is one of the preferred ways for dirty Russian oligarchs to launder their ill-gotten gains (cf. Abramovich, Gadaymak, Prokhorov, Rybolovlev, etc.)

Which indicates that the seamy trail of corruption which begin in Israel, meanders through dirty Russian oligarchs and ends in the hands of Azeri crooks,  who use it to buy luxury cars and jewels for their mistresses, or villas on the French Riviera.  Not to mention the role these transactions play in laundering the money so that it is moves from the dark and into the light of legitimate commerce.

Somehow, while Ben Gurion once rejoiced that the new Jewish State could even have its own Jewish crooks, thus achieving the ‘normalcy’ of any other nation, I’m not sure he had this in mind.

While the amounts spent on armaments by many of these purchasing nations are astronomical; and the enormous sums spent prove too enticing for the buyers to control their venality; nevertheless, Israel has proven to be a master of the bribe. Not only have arms exporters paid such bribes, but Israeli oligarchs seeking to pillage the natural resources of African countries have paid enormous bribes to kleptocratic rulers in order to gain commercial mining concessions.

Though Israeli officials will claim that there are regulations in place to monitor corporate behavior and constrain such corrupt dealings, the truth is that the defense ministry takes a hands-off approach to arms deals.  These are huge money-makers for the Israeli economy. The prevailing attitude is: why mess with the goose that lays the golden eggs?  As long as arms dealers are raking in the cash and fueling the country’s export boom, why complicate things by introducing foreign concepts like ethics and transparency?

In the case of the mining magnates, it wasn’t Israel that stepped in to restrain the rapaciousness of oligarchs like Dan Gertler.  It was the U.S. Treasury which sanctioned him and embarrassed Israel by doing so.

There is little likelihood a foreign government will act against corrupt Israeli business practices in this region.  So the killing will continue and Israeli weapons will play a major role in heightening the lethality of the conflict.

As Yossi Melman wrote about Israeli rockets destroying Armenian homes in Nagorno-Karabakh:

It’s hard to expect that Israel, which always decries rockets launched against civilians by Hezbollah and Hamas, will change its ways. Another country may have declared a suspension of shipments, even temporarily. In anything related to the Holocaust, to historical memory and to the sale of weapons, the hypocrisy of Israeli governments over the years is nothing new. The government’s current silence on the matter speaks volumes.

One final word: Israel is by no means the most corrupt country in the world; but it surely is one of the most corrupt among those western democracies to which it is so fond of comparing itself. Massive bribery may fuel growth and bring in contracts in the short run.  But in the long run, major companies based in large western countries will steer clear of engaging in commerce with Israel in these fields. It will at some point have to crack down on such rampant venality if it wants to join the ranks of major western exporters of goods and services.  In fact, studies show that economies overall suffer from such corruption, which tends to enrich the elite and bypass the rest.  Israel, with one of the largest wealth disparities between rich and poor among OECD countries, makes this worse through its rampant corruption.