Armenia: Doubts Abound on Anti-Corruption Initiative
by Marianna Grigoryan EurasiaNet.org
The Armenian government is pressing ahead with a new effort to contain corruption. But some critics question the integrity of those in charge of the initiative, citing possible conflicts of interest.
Armenia’s cabinet decided to revamp a state Anti-Corruption Council on February 19, one month after the European Union announced plans to allocate 21 million euros (nearly $23.3 million) to Yerevan. The EU money would be designed to promote anti-corruption programs and civil service reform.
Complaints about corruption in Armenia, the South Caucasus’ poorest country, are nothing new. Much of the graft is “controlled” by officials with business interests who oversee patron-client networks within the government itself, anti-corruption watchdog Transparency International Armenia wrote in a recent report. Sixty-three percent of the 1,068 Armenians surveyed for the organization’s 2013 Global Corruption Barometer stated that ordinary citizens can do nothing to influence this situation.
Against that backdrop, Armenian opposition and civil society members wonder how the reorganized 14-member Anti-Corruption Council can have an impact. The council is led by Prime Minister Hovik Abrahamian, a public figure long dogged by questions about his business interests, and also includes the justice minister, finance minister, general prosecutor, government chief of staff, and the presidentially appointed chairperson of the ethics commission for senior officials.
In 2014, investigative reporters at the award-winning news service Hetq.am traced the ownership of dozens of companies to family members of Prime Minister Abrahamian, a longtime politician, who has served as parliamentary speaker, presidential chief of staff, and the minister of territorial administration.
That year, Abrahamian, a former director of the Artashat brandy factory, reported that he possessed $1.95 million and 270 million drams (over $564,548), in dollar and dram-denominated financial assets. He also reported a total annual income of over 37.54 million drams (over $78,504). Aside from a monthly salary of 1,719,130 drams (over $3,594), his other sources of income were not specified. He claims that he became a millionaire through “agriculture.”
Questions also have arisen about his use of public funds. On April 13, Hetq.am, citing government contracts, reported that in December 2014 Abrahamian’s office spent 241 million drams (about $503,910) on sculptures, new furniture and gilding for his office without offering a public tender. To explain the expenditures, the government cited a law that permits purchases without a tender in pressing and “emergency situations.”
Finance Minister Gagik Khachatrian is another on-paper millionaire who is a member of the Anti-Corruption Council. In a 2014 declaration to the Ethics Commission for Senior Officials, Khachatrian’s wife, Laura Epremian, claimed assets of 2.7 billion drams (over $5.64 million) under both her name and Khachatrian’s. How Khachatrian – who used to serve as the head of the State Revenue Committee and State Customs Committee, as well as a senior tax-inspectorate official – and his wife obtained these funds has not been thoroughly explained.
Government observers long have believed that Khachatrian, acting via relatives, has interests in telecommunications, supermarkets and food importers. Khachatrian has denied any personal involvement in such business interests.
An earlier iteration of a state anti-corruption council existed for over a decade, without producing notable results. The rebooted version would include two opposition party leaders and two non-governmental organization representatives. Even so, critics contend that government insiders would remain firmly in control of the council.
To date, no opposition or NGO representative has agreed to sit on the committee.
“If we thought that the purpose of the council was the anti-corruption fight, and that the council would bring changes, we would also join the structure, but a structure formed in a rush and made up of the most corrupt officials follows another aim, and we will never join it,” declared Armenian National Congress member Vladimir Karapetian, a former foreign ministry spokesperson.
Artur Sakunts, head of the Helsinki Citizens’ Assembly, a human rights organization in the regional town of Vanadzor, characterized the new version of the council as little more than window dressing designed to impress international donors.
“The council is being formed simply in order to receive financial resources, grants,” said Sakunts. “They [officials] attempt to show that they have a political will in order to get money from all possible international funds.”
The United States Agency for International Development (USAID) and the European Union both have allocated millions of dollars for governance programs, including anti-corruption and tax reform projects. In February, USAID Acting Assistant Administrator Susan Fritz welcomed the Armenian Anti-Corruption Council’s creation and expressed confidence in its ability to get results.
While the European Commission has noted Armenia’s “lack of convincing results in the fight against corruption, including among the police and judiciary,” it has not stated publicly that these shortfalls have influenced funding for additional corruption-fighting programs.
MP Artak Davtian, a member of the governing Republican Party of Armenia, asserted that the government is genuinely committed to combating corruption. “It is clear that the government must stand in the frontline of this fight. This is the explanation for why the prime minister himself is standing at the head of this body,” Davtian told EurasiaNet.org. “If there was no change in previous years, it does not mean that new steps should not be taken; a fight on a new basis should now be initiated.”
Ultimately, said Transparency International Armenia Director Varuzhan Hoktanian, containing corruption depends on more than a council alone. “The problem is not in the council, in creating a new body, but in political will. If there is political will, then there will be change, if not – even if huge agencies are created, whatever they do, everything will be fake.”