Damir Fazlic [left] with Lulzim Basha, former Albanian transport and communications minister, today Mayor of Tirana and Democratic Party leader [right].

Two American businessmen who launched a joint business venture with British-Bosnian Damir Fazlic claim they handed him one million dollars to pass onto Albania’s Democratic Party in return, they say, for government approval of the deal.

As Albania prepared to open its Voice over Internet Protocol (VoIP) market back in 2006, Fazlic and his US partners had already formed Meridian Telecommunications, and sat poised to take full advantage by being the very first firm to offer the service in partnership with state-owned provider Albanian Telecom.

Indiana based company Meridian is jointly owned by Fazlic, Ginn and Altavilla. Click here to see the document and related email

Meridian, based in Indiana, USA, is jointly owned by Fazlic, who holds 50% of its shares, and Americans Tim Ginn and Tony Altavilla, according to records held by the Federal Communications Commission (FCC), the US state body responsible for regulating telecoms firms operating abroad.

The firm was hoping to rake in at least $3m in profits during 2007 alone, company documents show, but there was just one sticking point: The US partners would have to make two ‘investment payments’ of $500k to the ruling Democratic Party before December 15, 2006 to net the deal.

Click here for the official minutes of a Meridian Telecoms meeting.

Fazlic, a close associate of the then Albanian prime minister, Sali Berisha, told his US partners they needed to make the payments because ‘though the current PM is set for another three years, we

The Basha connection The brother-in-law of the Albanian Democratic Party leader Lulzim Basha withdrew 56,000 euro in cash from a company owned by controversial businessman Damir Fazlic, leaked bank documents reveal. Click here to read the full story

really need the right local govt people to win. This helps that cause before the end of the year elections,” according to meeting minutes taken by Meridian in September 2006 and seen by BIRN.

“He [Fazlic] said that all we have to do is invest a million dollars for buying off the politicians over there because at the time, I guess, [local] elections were taking place. He claimed that we had to fund the coffers of the winning party so we could, in fact, have our [telecoms] box turned on over there. So, Tim and I provided that million dollars,” claims Altavilla.

Fazlic has strongly denied claims he passed money to the Democratic Party, which has refused to respond to BIRN’s questions.

$1m deposited in Fazlic’s personal accounts

Ginn and Altavilla claim they transferred one-million-dollar to Fazlic’s personal HSBC bank accounts in the US and British tax haven island of Jersey.

Ginn and Altavilla told BIRN during separate interviews that they took out a joint one-million-dollar loan and transferred the money to Fazlic’s personal HSBC bank accounts in the US and British tax haven island of Jersey.

Neither BIRN nor the US business partners have been able to confirm whether any money was then sent to the Democratic Party and while Fazlic acknowledged some ‘investments’ were made, he declined to give any details on how it was spent and strongly denies promising to funnel funds to the party in exchange for approval of the deal.

Lulzim Basha signed off the deal between Meridian and Albanian Telecom. Click here to see the document

However, the deal between Meridian and Albanian Telecom was signed off in October 2006 by Lulzim Basha, then transport and communications minister in Berisha’s Democratic Party government who is now Mayor of Tirana and Democratic Party leader, according to an email from Fazlic seen by BIRN.

Basha declined a request for an interview and did not respond to written questions.

The contract granted Fazlic and his US partners access to Albanian Telecom’s internet infrastructure for their Albanian VoIP venture for six months.

The deal with Albanian Telecom started off well enough, with Meridian earning at least $150k within the first six months of 2007. All of which, say Ginn and Altavilla, was used to repay some of the bank loan.

At one point, Fazlic stopped returning calls and emails and responding to his US business partners. Click here to see the document

However, technical problems disrupted the service as the telecoms box used to route their VoIP calls regularly shut down. Fazlic, the contact on the ground in Albania, initially worked to iron out difficulties but, the US partners claim, he suddenly stopped returning emails and calls.

In October 2007, Albanian Telecom was bought by two Turkish companies following a lengthy privatisation process.

Contract ‘forged’

Steve Slavin, Meridian’s administrator, claimed his signature on the Albanian Telecom contract had been forged. | Photo by Thinkpanama/Flickr

Ginn and Altavilla discovered that the contract between Meridian and Albanian Telecom was forged. Click here to see the email

As their fledging Albania venture began to unravel, Ginn and Altavilla also discovered that the signed contract held by Albanian Telecom listed different prices and charges to those in the contract presented to them by Fazlic.

Not only that, Steve Slavin, Meridian’s administrator, claimed his signature on the Albanian Telecom contract had been forged, his name misspelt and his title incorrectly described as ‘president’.

In emails seen by BIRN, Albanian Telecom argued that the box was turned off because Meridian had not paid its bills, disputed by the Americans on the basis of the contract they believed they had signed. Albanian Telecom told Meridian that they did not know who had provided them with the contract and that they held no record of an alternative document. Fazlic declined to comment.

The pair eventually brought in Obrad Kesic, an influential Washington DC lobbyist of Serbian origin, to track down Fazlic and revive the Albanian Telecom deal, without success.

Ginn says they eventually decided to cut their losses.

“Given the amount of money involved I would have expected him [Fazlic] to have seen it through… Tony and I just didn’t have the money to pursue it,” he told BIRN.

Fazlic first met the American businessmen in 2006 after his wife, Bosnian American Amra Fazlic, introduced them via a mutual business contact.

Impressed with Fazlic’s connections in Albania, the trio worked up plans to exploit the soon to be opened VoIP market.

“The opportunity was there because of Damir’s political connections in Albania. He was good friends with the premier [Berisha] and could get a telecom box over in Albania and we would be able to sell minutes,” Altavilla told BIRN.

Fazlic: ‘Democratic Party got nothing’

Fazlic claims that no money was transffered to Albanian Democratic Party.

When BIRN asked Fazlic about his dealings with Albanian Telecom via email, he initially denied ever doing business with them.

Equally coy about his involvement with Meridian, Fazlic eventually told BIRN during an interview in June he had “worked with” the company but attempted to cast doubt over whether he was a shareholder by refusing to directly answer questions about ownership, simply asking: “How was I a partner?”

Fazlic holds 50 per cent of Meridian through Cyprus based company, Cleone ed. Click here to see the document and related email

However, records from the US state regulator FCC show Fazlic owned half of Meridian Telecommunications via Cyprus-based Cleone Limited. According to Cypriot documentation, Fazlic is listed as the director of Cleone while its sole shareholder is London-based firm Morewig Limited.

Morewig is a shell company set up in London by Cypriot tax and registration firm Ergoserve.  It is also listed as the sole shareholder of another Cyprus-based firm, Kelena Limited, in official records from the Mediterranean island. According to a legal letter filed at the Albanian business registry, Kelena’s ultimate owner is Fazlic.

When quizzed by BIRN on why he advised Ginn and Altavilla to pay $1 million, Fazlic denied ever intending to transfer funds to Berisha or the Democratic Party.

“They [Ginn and Altavilla] had to make investments and all of that – I’m just saying nothing was given to me to give to Berisha or the Democratic Party – that is the statement,” he said.

“I think you will find that this [the deal] is one of those things that didn’t work out.”

Fazlic asked for all profits from Meridian business operations to be routed to his bank account in the British Virgin Islands. Click here to see the minutes from the meeting

Fazlic also argues he didn’t make any money from the Meridian-Albanian Telecom deal because it collapsed, although emails exchanged between him and his US partners Ginn and Altavilla make it clear he certainly expected to.

In these emails, seen by BIRN, Fazlic asked for all profits to be routed to his bank account in the British Virgin Islands.

Fazlic: Political access ‘legitimate’

Fazlic became a close adviser to Berisha (in the photo) and other prominent members of the Democratic Party during their successful 2005 general election campaign. | Photo by European People’s Party/Flickr

The cache of emails and documentation obtained by BIRN during its investigation into the Meridian-Albanian Telecom deal sheds further light on how Fazlic used his access to Berisha and the political elite to broker deals and gain information from politicians.

Fazlic told his US partners that the deal with Albanian Telecom was signed by the Minister for Transport and Telecommunications. Click here to see Fazlic’s email

In one email, Fazlic tells his US partners he has ‘had the Meridian deal signed off by the Minister for Transport and Telecommunications’.

Meridian employee summarises a telephone conversation with Fazlic during which the Bosnian talks of meeting the Albanian PM to discuss an energy deal that Meridian was preparing to bid for. Click here to see the email

In another, one Meridian employee summarises a telephone conversation with Fazlic during which the Bosnian talks of meeting the Albanian PM to discuss an energy deal that Meridian was preparing to bid for.

Fazlic was a close adviser to Berisha and other prominent members of the Democratic Party during their successful 2005 general election campaign, recruiting influential Washington DC lobbyists BGR to advise.

He insists he didn’t charge the party for his assistance, claiming to have helped out solely because he believed in their cause.

Fazlic’s Empire The emails obtained by BIRN during its investigations into Fazlic’s relationship with Meridian show how the British-Bosnian used his political connections made during Albanian election campaigning to solicit business investments across the globe while managing to keep his involvement in Albanian state deals off the radar. According to one leaked email, Fazlic was in touch with the then Prime Minister, Sali Berisha, over a 2007 government tender to provide the country with generators. Meridian prepared a bid for the contract but the firms US partners were unable to establish if it was ever tendered after communications with Fazlic broke down. Correspondence between Meridian’s US partners and Fazlic also reveal the British-Bosnian planned to use his contacts gained by advising an unnamed party in a Macedonian election campaign to secure a telecommunications deal there. The documents also reveal Fazlic was in touch with representatives in Congo in relation to a similar project. Fazlic worked alongside US elections experts in Joseph Kabila’s successful 2006 presidential campaign.

Following Berisha’s election victory, Fazlic quickly set about using his contacts to build up his business empire in Albania – one of Europe’s fastest growing economies. He set up three companies in Tirana – Crown Acquisitions, Virtu Acquisition and SRF Developments – installing Basha’s brother-in-law, Erion Isufi, as manager of each.

His controversial links to power came under intense scrutiny when Albanian prosecutors – alerted by the use of offshore banking and cash-only land purchases – launched a money laundering investigation in October 2008 into a series of land deals brokered on Fazlic’s behalf by Berisha’s daughter, lawyer Argita Malltezi.

The investigation was heavily and publicly criticised by Berisha and his supporters, with prosecutors eventually dropping the probe after failing to obtain crucial documentation in relation to Fazlic’s business operation from Cypriot and Bosnian officials.

Click here for more on BIRN’s investigation into Fazlic’s land deals.

Both Berisha and Fazlic repeatedly denied allegations the Bosnian had benefited from his political connections, but documents unearthed by BIRN in a separate investigation into the Bosnian’s controversial land deal suggest otherwise.

In an interview with BIRN, Fazlic, who has powerful friends in Washington and the Balkans, admitted he used his contacts to open doors but denied any impropriety.

“Do I daily use my contacts to open some doors? Yes. There’s access, then there’s corruption. Access is a legitimate tool in business and that’s what I want to make very clear,” he said.

Meanwhile, Altavilla has been rebuilding his life after he was forced to declare bankruptcy in 2012, still saddled with half of the $1m loan.

“I was very foolish,” he admits, having now ruled out ever seeing his investment again.

This article was produced as part of a programme titled “A Paper Trail to Better Governance”, with funding from the Austrian Development Cooperation (ADC) and implemented by BIRN Kosovo and BIRN HUB. The content does not reflect views and opinions of ADC.