Armenia's anti-corruption council accused of lavish spending

Marianna Grigoryan

A much-touted anti-corruption drive in Armenia has got off to a bad start as questions are raised about the spending and income of leading government members of the committee – including its chair, the prime minister.

The Anti-Corruption Council, which receives funds from the European Union and the United States Agency for International Development, formally began operations at the end of July. It is supposed to have opposition and civil society members as well as government officials on its ranks, but so far no one from the opposition or non-governmental organisations has joined – largely because of scepticism about its credibility.

In 2014, the watchdog Transparency International ranked Armenia 94th out of 175 countries for perceptions of public-sector corruption. The government has long condemned corruption but has largely failed to investigate or prosecute senior officials suspected of wrongdoing.

In a speech to open the new council, the prime minister, Hovik Abrahamyan, stressed that it had “the will and the determination” to battle corruption and “form a whole class of law-abiding and conscientious public servants”.
But Abrahamyan’s suitability to lead an anti-corruption drive is itself in question. A recent report by the media site Civilnet.am detailed government procurement records for several high-cost private flights taken by Abrahamyan.
Contracts for the flights were signed on the day the prime minister urged officials to save money and dispense with non-essential foreign travel. Armenia no longer has a national airline.

On 3 July the government paid the Air Training Centre, a company that runs private flights, 31,448 million drams (about $66,000) for the prime minister to make a round-trip trip to Paris on official business. The most expensive commercial fare for the same trip was $3,340, according to local travel agencies.

Other flights made since his call to cut travel costs fit a similar pattern. A trip to Prague in June, for example, cost about $43,000. For the Eurasian Economic Union’s summit in May, taxpayers shelled out about $34,500 for Abrahamyan’s private flight to Kazakhstan – a few hours away. A February flight to Moscow for $54,000 cost more than 100 times the price of a commercial flight.

The costs of such flights are magnified in Armenia where roughly a third of the 3 million population lives in poverty and the average monthly nominal wage is about $383.

Abrahamyan, a veteran politician who has served as parliamentary speaker, presidential chief of staff and minister of home affairs during 20 years in office, declined to comment on his travel expenses. Last year he faced severe criticism after documents revealed that he had redecorated his office at a cost of more than half a million dollars – without issuing a public tender. .

The prime minister’s personal wealth has also come under scrutiny. Under Armenia’s constitution, members of the government are not allowed to be involved in business to avoid conflicts of interest. But Abrahamyan is alleged to control scores of private companies, ranging from gas stations to casinos, and thousands of hectares of land, in the names of relatives.

His lavish lifestyle came under scrutiny recently when an online Armenian news site, 1in.am, filmed one of his newly built homes in an upmarket district of Yerevan.

Abrahamyan is not the only senior official on the council with apparently entrepreneurial relatives. Family members of the finance minister, Gagik Khachatrian, have been linked to a variety of businesses, including the large internet service provider Ucom, several food importers, a huge shopping centre in downtown Yerevan, the supermarket chain Nor Zovq and a cash-register-related importer.

Khachatrian has denied any involvement in these companies, saying they are owned by his family members. Asked by Gala TV how the Anti-Corruption Council could fight corruption amid outstanding questions about conflicts of interest, he replied: “That is a different topic.” Against this backdrop, opposition parties and non-governmental organisations say they have no confidence in the Anti-Corruption Council. “At all times, the government has spoken about the fight against corruption [like a dish] with different sauces, [with] promises and beautiful words, but all that is theatre and we cannot enter a process which we do not believe in from the very beginning,” said Anahit Bakhshian, a senior member of the tiny opposition Heritage Party.

Many Armenian citizens are similarly sceptical. “There should be another council formed to fight against them,” said 38-year-old Yerevan software developer Narek Galstian. “When Hovik Abrahamyan speaks about the fight against corruption, is it the same person who wastes millions from the state budget to travel here and there?”

Yet the council appears to have the blessing of western donors. The United States Agency for International Development has given Armenia $16.5m to fight corruption over the past eight years. In July Armenia announced that USAID would contribute another $750,000 towards the Anti-Corruption Council.

The European Union Delegation to Yerevan contributed €1.5m towards two anti-corruption projects in 2011-14, and has announced plans to allocate another €21m to promote transparency and civil service reform.

Responding to criticism of the contributions, USAID mission director for Armenia, Karen Hilliard, said the funding for the latest anti-corruption strategy was a “risk worth taking”.

Civil rights activist Artur Sakunts, an outspoken government critic, believes the funds will be wasted, in accordance with previous official anti-corruption initiatives. “Unfortunately, this is another theatre that leads nowhere unless there is a political will and an independent body to fight” corruption, Sakunts said.

"The Guardian," August 12, 2015