How Berisha’s Inner Circle Profited from Multi-Million Euro Land Deals
Former Albanian premier Sali Berisha’s decision to
transform worthless marshland into prime real estate helped his family
and controversial friend Damir Fazlic earn millions of euros, classified
documents obtained by BIRN reveal.
Lindita Cela and Lawrence Marzouk
BIRN
Tirana, London
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| Landscape of Porto Romano. | Photo by Dave Wyatt |
Porto Romano, an impoverished hinterland of Albania’s second city,
Durres, is home to the rusting hulk of a communist-era chemical factory,
a sprawling rubbish dump and a smattering of industrial units.
Still recovering from decades of unfettered pollution, the marshland
encircling the harbour is an unlikely setting for a real estate boom
fuelled by the country’s political and business elite.
Yet back in November 2006, that’s exactly what happened when
Berisha’s daughter, lawyer Argita Malltezi, and her colleague Flutura
Kola, began to snap up land at 10 euro per square metre – more than
double the market rate.
Some 14 hectares edging a small ‘energy park’ connected to the port
were secured for their client, controversial Bosnian businessman and
Berisha election adviser Damir Fazlic, who paid his lawyers, directly or
indirectly, more than four-times the market price – 18 euro per square
metre.
Soon after the transactions were completed, Berisha made a
prime-ministerial decision to move the energy park boundary to include
Fazlic’s new holdings, instantly transforming worthless marshland into
prime real estate, and pushing up its value at least eight-fold.
Berisha’s
daughter, her partner in the law firm and their hired middleman may
have made almost 1.2m euro from selling land to Fazlic at four-times the
market rate. Previously unpublished files obtained by BIRN document
430,000 euro of profit. A further 740,000 euro was earned in cash and,
as such, cannot be traced.
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| Berisha's decision to extend energy park brought huge profit to his daughter, Argita Malltezi, and his friend, Damir Fazlic. | Photos by European People's Party and Club de Madrid |
Bosnian businessman Fazlic saw the value of his land, held in two
Albanian firms, soar by 1.7m euro to 4.2m euro after Berisha’s
decision. If his plans to develop the site into a 70m euro petrol
terminal go ahead, he will earn tens of millions.
In 2008, the transactions attracted the attention of Albanian
anti-money laundering investigators, alarmed at Fazlic’s use of “shell
companies” in Albania, the number of cash-only sales at inflated prices
and involvement of offshore firms based in Cypriot and Caribbean tax
havens.
The case against Fazlic was dropped in 2009 after
officials were unable to secure key documents from Bosnia and Cyprus or trace the origin of the funds. Fazlic was never formally charged with any offences and he strongly denied any wrongdoing.
But
a cache of official documents obtained by the Balkan Investigative
Reporting Network, BIRN, now raises fresh questions about the central
role Malltezi and her firm Malltezi & Kola played in buying and
selling land, the value of which increased dramatically as a result of
her father’s official decision to include it in the energy park.
And
BIRN’s tracking of official company documents from St Vincent and the
Grenadines in the Caribbean to Moscow, has also revealed that Serb
energy mogul Vojin Lazarevic was at the heart of the deal, funnelling
2.5m euro into Fazlic’s private bank account in Albania via a network of
offshore companies. The controversial businessmen hope to develop the site into major energy facilities.
Neither BIRN nor the prosecution uncovered any evidence to suggest
Lazarevic funded Fazlic improperly, but the energy mogul has never
spoken about his use of offshore havens or why the transactions took
place largely outside the banking sector. He declined our request to be
interviewed on the matter and did not respond to specific questions.
Fazlic, a close friend and adviser to Sali Berisha with powerful
friends in Washington, London and across the Balkans, has always denied
any wrongdoing.
Sali Berisha, Argita and Jamarber Malltezi and Flutura and Florenc
Kola refused to be interviewed by BIRN or respond to our detailed
questions.
Real estate boom
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| Locals were eager to sell the land at the price of €9.8. | Photo by Dave Wyatt |
From a quayside shack at Porto Romano, Abdyl Mukaj ekes out a living selling fresh fish to tourists in the summer months.
His has been a life on the breadline, so when a local man, Kujtim
Shahini, asked him to sell a hectare of marshland in 2007 at double the
market rate, he seized the chance.
The land had been given to Mukaj by the state when he, along with
many of his neighbours, had received plots in Porto Romano as
compensation after it had forced them from their ancestral lands in
northern Albania to make way for a new hydropower plant.
Offered large sums of cash for land with little financial or emotional value, the villagers didn’t ask who was buying or why.
Malltezi, her law firm partner Flutura Kola and their husbands –
Jamarber Malltezi and Florenc Kola – sought land close to the existing
energy park in Porto Romano for their client Fazlic and his firms, Crown
Acquisitions and Alpha Shpk.
The husbands searched for suitable plots and employed a local
middleman – Shahini - to conduct cash-only purchases in person from
November 2006 through to September 2007.
Shahini and Florenc Kola first helped to secure nine hectares of land
from villagers for Crown Acquisitions, almost all of which was bought,
according to the contract, for 18 euro per square metre. The document is
among more than a 1,000 pages of official material secured by BIRN.
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| Fazlic's properties in Porto Romano are marked in red. |
But villagers have told BIRN that they were paid just 1,200 lek [9.8
euro]. It is not clear who benefited from the 700,000 euro difference
between the contract and real price. Shahini has admitted to taking a
cut while Fazlic, in an exclusive interview with BIRN, said his
negotiators were entitled to their share.
Two out of the nine plots sold to Crown Acquisitions, had, in fact,
already been purchased by Shahini and Kola to be sold to Fazlic at a
profit.
“I received just 1200 lek per m2 – That was the deal,” villager Mukaj
said. “Kujtim [Shahini] brought the money to my house in a black
off-road car.
“1200 lek per square metre is the price that all the villagers sold the land for - you can ask all of them.”
In the second phase, the Malltezis and Kolas acquired five hectares
of land from villagers at the same price – just under 10 euro per square
metre – which they immediately resold to Fazlic’s Alpha Shpk at 18
euro, netting profits of 430,000 euro. A further 150,000 euro was paid
to Florenc Kola related to land purchases, although it is not clear from
documents what deal this is connected to.
Bizarrely, during the transactions, Flutura Kola was sometimes
simultaneously acting as the seller of the property, as she owned the
land with her husband, and buyer, as Damir Fazlic’s legal
representative. Having withdrawn funds from Fazlic’s personal account
she was, in effect, paying herself and her business partner, Argita
Malltezi, for the land.
Crown Acquisitions was eventually sold in June 2007 for 1.7m euro to
Altaria Research Limited, a company registered in Cyprus and controlled
by Lazarevic.
Alpha Shpk was sold to Cyprus-based Irongold Ltd, also controlled by
Lazarevic, for 1.25m euro. Fazlic was left with a 300,000 euro profit.
Fazlic initially claimed Altaria Research Limited was his “holding
company in Cyprus” in his only television interview since the affair
erupted in October 2008. As a result, he said, he had made no profit as
he was selling Crown Acquisitions – and its land holding – to himself.
When questioned the following year by prosecutors, he refused to name
the owner as, he said, it could harm his business.
But when pressed by BIRN in his first interview in seven years in
June, he said he had a joint 50-50 stake in Crown Acquisitions and Alpha
Shpk with Lazarevic via Altaria Research Limited.
This is not reflected in the official paperwork in Cyprus and Fazlic
was unable to explain whether he had made any profit from selling part
of his stake to Lazarevic.
Berisha shielded Fazlic
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| Berisha's daughter and son-in-law sell land to Damir Fazlic. |
When the money laundering investigation was announced in October
2008, Berisha went to extraordinary lengths to shield Fazlic from
possible prosecution, including spiriting him out of the country by
private jet.
According to a leaked US Embassy memo, justice ministry inspectors
were sent to seize case material for the prosecution, and prosecutors
were subjected to public smear campaigns by Berisha and even threatened
with legal action by the interior ministry.
In July 2009, just one month after Albanian prosecutors dropped the
money laundering investigation, Berisha approved plans that incorporated
Fazlic’s plots of land into the nearby energy park in Porto Romano.
While the land wasn’t particularly valuable when purchased back in
2007, Fazlic successfully applied to construct a huge petrol terminal,
increasing its value eight-fold from the original market value.
Called to account for his role in the scandal, Berisha held a press
conference in support of Fazlic, claiming the investigation was
orchestrated by “the mafia”, and insisting neither Fazlic nor his family
had benefited from his political office.
He argued, accurately, he had not declared Porto Romano an energy
park, as a small zone had been designated as such in 2001. He failed,
however, to add he had extended it to include his friend’s land.
Argita Malltezi was never interviewed and her role in the buying and
selling land had remained secret until today. Speaking on condition of
anonymity, sources close to the prosecution team told BIRN they were
simply too scared at the time to summon the premier’s daughter for
questioning.
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| Argita Malltezi, Berisha's daughter. | Print screen TV Klan YouTube |
Argita, her husband Jamarber and brother Shkelzen, were linked to a
number of corruption scandals during Berisha’s tenure, but were never
formally included in any probe. They have always denied any wrongdoing.
In interviews with prosecutors seen by BIRN, lawyer Flutura Kola and
Jamarber Malltezi reveal they were well aware of Porto Romano’s
potential at the time they began buying up the land.
Jarmarber Malltezi said: “I had information regarding the development
of that area so I thought it was a good business [opportunity].”
After berating the prosecutors for their “politically motivated
investigation”, he explained Fazlic just happened to be the first person
to offer to buy his land.
Kola,
on the other hand, explained how she, her husband and the Malltezis had
worked together to snap up land for Fazlic in order to make a profit. She
admitted having “information that this area was approved…by the
government as an area for building petrol deposits and hydrocarbons”.
Fazlic told BIRN he had no advance information from Berisha but was
“100 per cent sure” the area would be included in the new energy park.
“Was I 100 per cent certain? Yes, because it was very, very logical,”
he said. “But Sali Berisha calling me and saying; ‘oh, you should do
this and that’ is just a movie scenario.”
He also admitted the land had increased in value as a result of the
premier’s decision, but insists that the extension of the energy park
was inevitable.
Villagers, on the other hand, told BIRN they “knew nothing of the plan”.
With a change of government in 2013, and the departure of Berisha,
some believed Fazlic’s plan would be scuppered at the hands of his
detractors in the now ruling Socialist Party.
But the Bosnian says its business as usual and has even met the new PM, Edi Rama, and some of his ministers.
“Berisha was my personal friend, still is my personal friend, but I
never got anything from his government and I never made any deals,
public or private, with his government.”
He told BIRN he “had no qualms cooperating with” Rama and his team, despite the barbs he has faced from them.
“I hope your article is not going to jog their memory,” he joked.
Will
the ghost of Porto Romano come back to haunt him and the Berisha
family? For the moment, neither the ruling party nor prosecutors appear
interested in looking again at investigation into the deals.
http://www.balkaninsight.com/en/article/how-berisha-s-inner-circle-profited-from-multi-million-euro-land-deals
