Azerbaijan-US Relations ProjectProject Overview....................................................................................................................... 1

PR Message - Political.......................................................................................................................2Political Challenges........................................................................................................................... 2PR Message - Economic....................................................................................................................3Recommended Strategy.................................................................................................................. 3

US-Azerbaijan Relations........................................................................................................ 4Key Lobbying Groups....................................................................................................................... 4Key Figures.......................................................................................................................................... 4Azeri Groups in the U.S.................................................................................................................... 5American Businesses in Azerbaijan............................................................................................5Important Developments in the Last Decade...........................................................................5

US-Armenia Relations............................................................................................................ 5Key Lobbying Groups....................................................................................................................... 5Key Figures.......................................................................................................................................... 6Important Developments in the Last Decade...........................................................................6

US-Georgia Relations.............................................................................................................. 7Key Lobbying Groups and PR Firms............................................................................................7McCain and Georgia.......................................................................................................................... 7Important Developments in the Last decade...........................................................................7

Project Overview

The strategy lies in tackling both Azerbaijan’s political and economic issues as well as its image at multiple levels. The timing can be different for each level although some may run simultaneously. Others depend on prior steps being underway.

The various arms include:

1. Public Relations arm2. Lobbying arm3. Think-tank and academic arm4. Government arm 5. Business development arm

1

PR Message - Political

Azerbaijan is a U.S. ally. It fights in our wars alongside our soldiers – Iraq, Afghanistan, Bosnia.

Azerbaijan is a strategic partner for the U.S. caught geographically between Russia and Iran. The US needs a strong Caucasus.

Azerbaijan is a secular Islamic state and one of the few Moslem nations that is pro-West. It is also an ally of Israel. (Think of Egypt of the Caucasus).

Armenia has much support in the US but it is allied with Russia and sells weapons to Iran (Source: 2003 US Embassy Cable from Negroponte, Wikileaks)

Political Challenges

Iran & Armenia Armenians have well developed psyops media and lobbying plan Iranians have well developed media psyops program against Azerbaijan

o Takes hundreds of youth ages 16-20 each year to educate in Irano Puts pressure on Azerbaijan and doesn’t like its secularismo Broadcasts criticism of Azerbaijan on its media into Az and to Azeris living in

Iran – TV station Sahar 2 and 2 radio stations criticizing Az in Iran. Az has had no help from the US against Iranian propaganda through broadcasting Az has no history of IT psyop warfare & communications Az has problems of location and of human rights issues regardeing elections- but

Armenia’s human rights record is worse. Progressing past these issues in Az.

US/West Az is being alienated from the West. There are 3 developments that have made a big

negative impact on Az:1. Nogorno-Karabakh: The West is supporting Armenia not Azerbaijan.2. Baku-Tbilisi-Kars (Turkey) Railway: US and EU are not supportive of the railway.

US said Az doesn’t need this connection. Cannot connect Central Asia to Europe by rail because of Armenia. $250 million has been provided by Az (SOFAZ) for building the railway that will benefit not only Az but Georgia, Turkey and the EU. Az sees Georgia as a strategic partner. Turkey and Az want to build the railway so the flow of goods and people can move between the Caspian and the EU.

3. Turkey-Armenian Border: Opening has nothing to do with Nagorno-Karabakh (N-K). All Turkish presidents and MPs have stated they would close the frontier with Armenia because of N-K. Recently Turkey said they were going to open the border but a week ago, after an outcry from Az, they have said they will not open the border unless N-K issue was resolved.

2

PR Message - Economic

Azerbaijan is a developing country with a lot of money from oil revenues to invest Unlike most sovereign wealth funds, the State Oil Fund of Azerbaijan (SOFAZ) is still

growing strongly and looking for more foreign risk. SOFAZ:o By saving returns on investments the oil funds can become equal to revenue

from oil by 2024-25.o Az has already received $50 billion from oil revenues and expects $250-300

billion more over the coming yearso This year SOFAZ will send $7.5-8 billion to the state budget; $500,000 is spent

on education abroad, railway and pipeline projectso $25b is invested outside the country. 50% of $25b is invested in US dollars,

40% in Euro, 5% in UK pound, 5% in other currencieso Wants to buy equity in companies through funds. Also looking at private

equities. Exposure hedged by investing in many asset classes. Equities are priority now, then private equities and eventually real estate. Only worried about rate of return. Never lost money - $300 million made in 2008 (mostly bonds).

By 2025 Azerbaijan wants to be a high tech country rather than an oil country: o Every 3 years AZ doubles its IT structureo It’s weak in export of IT products and wants to attract high tech companies o It’s in talks with Micosoft to build a center in Az and it’s working with Intel and

HP – for National PC.o They will spend 2 years funding this project through Booze Allen and Hamilton

Recommended Strategy

Azerbaijan needs support in Congress – a senator like Georgia has in McCain and Armenia has in Barbara Boxer (see below for more details)

Texas is a natural partner for Azerbaijan due to the oil business ties in Houston – need to build these relationships and make them more visible and stronger politically as well as in business

Need to find the right PR/Lobbyist firm

Business development relationships – Invite firms to participate in round-table with Minister of IT and Communications on May 26 in Los Angeles then to attend their Telecommunications & information Technologies conference in November 2011 .

Need to find a military supplier for equipment and weapons they need

We can help build out the think-tank and academic relationships but again starting with Texas – UT, LBJ School etc.

3

US-Azerbaijan Relations

Key Lobbying GroupsPatton Boggs:(Since December 2010) The contract filed with the Justice Department indicates that the company’s activities “will include counseling and assisting [Azerbaijan] with regard to US-Azerbaijan bilateral relations.” The Azeri government pays $35,000 per month for their services (Source).

The Livingston Group: (Until 2009) Received $347,900 for organizing political consultations with the members of the US Congress, from the Azerbaijan MFA through the Embassy of Azerbaijan in the USA, and also for carrying out various actions on the subject of building American- Azerbaijan relations, freedom of speech in Azerbaijan, and assistance in organizing visits of Azerbaijani MFA representatives in the USA.

Jefferson Waterman International - Jefferson Waterman International (JWI) operates inside centers of power and across boundaries to develop and activate international relationships for business, governments, political movements, and issue-oriented organizations. "JWI received from the International Bank of Azerbaijan about $108,100 for the operations on lobbying the legislation in the interests of the pledge. The same company received $26,000 from the Azerbaijani President for similar operations in working out the strategy on the relations with the press." (Source)

Melwood Global - The Melwood Communications company received from the Embassy of Azerbaijan an unspecified sum for carrying out media- strategy in the interests of the Republic of Azerbaijan. (Source)

Sitrick and Company - The Azerbaijan General Consulate transferred about $8,900 to Sitrick and Company for the assistance rendered in building contacts with the media of the city of Los Angeles, as stated in the report of the U.S. Ministry of Justice. (Source)

Key FiguresMatthew Bryza: Current U.S. ambassador to Azerbaijan

Ed Whitfield: Under the initiative of Mrs. Leyla Aliyeva, General Coordinator of Islamic Conference Youth Forum for Dialogue and Cooperation under the motto of “Justice for Khojaly, Freedom for Karabakh”, Hon. Ed Whitfield of Kentucky, delivered a speech in the House of Representatives in connection with the 17th anniversary of the massacre at Khojaly…In his speech Hon. Ed Whitfield said that on February 26, 1992, the small town of Khojaly, Azerbaijan was violently shaken by invading Armenian troops during the Armenian-Azerbaijan war. (Source) This announcement was prompted by lobbyists from The Livingston Group contracted by the Azerbaijani government.

4

Azeri Groups in the U.S.Azerbaijani American Council (AAC): Established in 2006 – General Director, Javid Huseynov.

U.S. Azeris Network(USAN): A non-profit, non-partisan, true grassroots organization in Washington, DC which aims to educate, engage, energize, link and unite Azerbaijani-American voters across the political spectrum into the U.S. political process, on both Federal and State levels.

Azeri America (a.k.a. Azerbaijan Society of America): President Tomris Azeri - second oldest Azerbaijani Diaspora organization in the world, main priorities are highlighting “Azerbaijan’s occupied lands, the plight of the refugees, and the importance of informing the world community of the aggression our people endure”.

American Businesses in AzerbaijanUnited States-Azerbaijan Chamber of Commerce, Chevron, ConocoPhillips, ExxonMobil, Halliburton, Coca-Cola, Hyatt Hotels, Raytheon, Pfizer

Important Developments in the Last Decade

November 10, 2010 - Morningstar recalled bilateral cooperation as part of the project on the Baku-Tbilisi-Ceyhan (BTC) main export pipeline exporting Azerbaijani oil, saying that Azerbaijan remains a strategic country for Washington in the energy sector, as well as on other bilateral and multilateral issues.

Dec. 29, 2010 - President Obama bypassed the usual Senate confirmation process to appoint four new envoys whose nominations had been held up, including Matthew Bryza to Azerbaijan…. the so-called recess appointment is temporary, lasting until the session ends in late 2011…Bryza's appointment, which had been stalled by lawmakers for months, came after two Democratic senators, Barbara Boxer and Robert Menendez, placed a "hold" on a full Senate vote on the nomination in September. They claimed the White House nominee had failed to address their concerns about his alleged pro-Azerbaijani bias in the conflict over Nagorno Karabakh.

US-Armenia Relations

Key Lobbying GroupsThe Armenian National Committee of America (ANCA): Armenian National Committee (ANC) aims to provide political grassroots organization to form coordination between establishments. They recommend which political candidates to sponsor during election time at the federal, state, and county level. The ANCA is generally considered to be more radical than the Armenian Assembly

5

Armenian Revolutionary Federation (ARF): This group is an Armenian socialist political party. Not clear what influence they have in the US, though they claim some standing in the diaspora. They work with the ANCA.

The Armenian Assembly of America (AAA): The group was founded in 1972. Headquartered in Washington, DC, the Armenian Assembly of America is the largest non-partisan Armenian-American advocacy organization in the United States.

Key FiguresBarbara Boxer

In 1991 Boxer was among the first Congressional Members to travel to Armenia as part of a human rights fact-finding mission to personally assess the situation there. Before the trip a newspaper article noted that “Boxer has been a consistent advocate of the Armenian people, urging her colleagues to pass the Day of Remembrance resolution commemorating the April 24, 1915, genocide and to condemn human rights violations against Armenians.” It is not clear how far back this support goes, but it clearly predates this trip. Her then congressional district does not appear to have a particularly strong Armenian presence.

She has been a vocal advocate for Section 907, which puts restrictions on U.S. assistance to Azerbaijan stating that the country’s blockade of Armenia and Karabagh had devastating effects.

In 2003, Senator Boxer was a cosponsor of bipartisan legislation to establish normal trade relations with Armenia. President Bush established permanent normalized trade relations with Armenia in 2005.

Mitch McConnell A major backer of Armenian causes in Congress is Kentucky Senator Mitch McConnell.

He has helped steer high amounts of earmarks and mandatory allocations toward Armenia and Ukraine. In fact, in some years, Armenia has been second only to Israel as the largest beneficiary per capita of U.S. aid. McConnell does most of his fundraising away from Kentucky, in major coastal cities where Armenian Americans and other ethnic groups are most politically active. 

Important Developments in the Last Decade On March 27, 2006 Armenia signed a Millennium Challenge Corporation (MCC)

Compact with the United States; the agreement entered into force on September 29, 2006. The MCC provided development and reconstruction assistance over five years and amounts to $235.65 million. (Link Link2)

Approximately 70 U.S.-owned firms currently do business in Armenia, including Dell, Microsoft, and IBM. Recent major U.S. investment projects include the Hotel Armenia/Marriott; the Hotel Ani Plaza; Tufenkian Holdings (carpet and furnishing production, hotels, and construction) several subsidiaries of U.S.-based information technology firms, including Viasphere Technopark, an IT incubator; Synopsys; a Greek-owned Coca-Cola bottling plant; jewelry and textile production facilities; several copper and molybdenum mining companies; and the Hovnanian International Construction Company (Link)

6

The U.S.-Armenia Task Force, which was established in 2000, meets every 6 months to review the progress and objectives of U.S. assistance to Armenia. (Link)

US-Georgia Relations

Key Lobbying Groups and PR Firms

Glover Park Group: Though the contract between Georgia and the group expired in January 2010, the Glover Group represented the Republic of Georgia since 2008. The group is an independent, strategic communications firm that delivers research-driven, targeted campaigns that draw attention, shape opinions and inspire action.

Gephardt Group: On February 10, 2010, Georgia signed a $436,800 annual contract with the Gephardt Group to be its representative in Washington. Former House Majority Leader Dick Gephardt is the group’s leader and will lobby for Georgia’s government.

Orion Strategies: Randy Scheunemann, founder of Orion Strategies, represented the governments of Macedonia, Georgia and Taiwan between 2003 and 2008.

McCain and GeorgiaOne of Sen. John McCain's top foreign-policy advisers is Randy Scheunemann of Orion Strategies. As a foreign-policy aide to then-Senate Majority Leader Trent Lott in 1997, Mr. Scheunemann accompanied Sen. McCain on a trip to the newly independent former Soviet republic. At a dinner, Sen. McCain first met Mr. Saakashvili, who had been a law student in Washington, and was then a young reform-minded Georgian parliamentarian, Mr. Scheunemann said (Link). This first visit gave way to a friendship between the Senator’s advisor and the rest of McCain’s party. McCain traveled to Georgia several times after that and met with President Saakashvili in Georgia in 2006.

Important Developments in the Last decade

On June 20, 2007 U.S. Deputy Trade Representative, John Veroneau, and Minister of Economic Development of Georgia, Giorgi Arveladze, signed the Trade and Investment Framework Agreement (TIFA) in Washington, DC. The agreement is an important first step toward building closer trade and investment relations between the United States and Georgia.

The signing of the U.S.-Georgia Charter on Strategic Partnership (2009): This charter reflected strong U.S. support for Georgia’s continued sovereignty and independence. It also stated that the US and Georgia would seek to expand the scope of their ongoing defense and security cooperation programs, expand Georgian access to the General System of Trade Preferences, and explore the possibility of a Free-Trade Agreement. (http://www.fas.org/sgp/crs/row/97-727.pdf)

7