Category Archives: Corruption

Blatant Nepotism

Corruption is a well-known long-term problem in Armenia. While Armenia has been making incremental improvements, the amount of blatant nepotism, especially in the regions, is astonishing. Hetq recently publicized multiple instances of no-bid contracts being given to family members of the people in power. This obvious conflict of interest is exactly what Armenia needs to fight against.

In the first link, the mayor’s brother’s company got the no-bid contract because his company was “one of the biggest road construction companies around and best capable to get the job finished on time.” First, if you primarily give contracts to only one company, then of course they’ll be one of the biggest company. Second, even if they are the best to get the job finished on time, require documented proof, especially when there is a clear conflict of interest. Here’s the list so far:

In yet another setback, the police have not investigated another small town mayor six months after Hetq reported on the 1.2 million AMD spent on gas on a car that doesn’t run, among other petty embezzlements. The media can only do so much, it’s up to the police and prosecutors to act to stop this blatant corruption.

To end on a positive note, the Freedom of Information Center of Armenia (an NGO that I just recently learned about, but I believe does great work) helped organize the Open Government Partnership Conference here in Armenia. The Partnership is an international agreement between a number of states to “promote transparency, empower citizens, fight corruption, and use new technologies to strengthen governance.”



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Hetq names Names on the Corruption at Nairit Rubber Plant

It looks like Hetq’s previous threat to name the corrupt agents that swindled millions of dollars from Armenia’s Nairit plant was ignored. Today, Hetq released the details on exactly who profited from the corruption, how they did it and what shell companies were used to cover it up.

What no one suspected, is that Hetq was working with the International Consortium of Investigative Journalists, the organization that was unknown to the average person until two days ago when they released a data set on offshore money 10 times the size of Wikileaks. That leak covers years of financial info on the super rich that hide money in the British Virgin Islands. Included in the list are family members of Azerbaijani President Aliyev.

It’ll be interesting to see what other fun corruption and embezzlement by Armenian oligarchs comes to light because of this leak. It’ll be more interesting to see what the authorities do about it.

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“Leave Civilitas Alone!”

While it wasn’t said in so many words, that was the message the ambassadors of the United States, Germany and Switzerland as well as the honorary consul of Norway and Finland gave when they met with the Civiltas Foundation yesterday and called it a reliable partner.

As mentioned earlier, Vartan Oskanian, the founder of Civilitas (and possible would-be presidential candidate), has been investigated by the National Security Service for possible money laundering. While the ambassadors were not willing to call this investigation politically motivated, US Ambassador Heffern did say that “We (the US) believe that there is nothing to be investigated by the NSS or anybody else and certainly nothing of a criminal nature.”

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Hetq does real Investigative Reporting into Corruption, Nothing Results’s tag line is “investigate journalists,” but if you’re looking for the Armenian version of New York Times, good luck. Hetq only has 15-20 journalists, and is unable to afford to pay many of its contributors in the regions. Most of their “investigation” is simply to examine public records or go check out a river to see if there is pollution in it. However, with the sad state of journalism in Armenia, both of these activities are completely newsworthy.

In a change of pace, Hetq has recently done a serious investigation: investigating a missing $170 million from the Nairit rubber plant. They spent seven months tying together the players and shell companies that had dealings with the $170 million loan meant to get the plant operational again. When they pieced together how public money was ending up in private Russian bank accounts, they contacted the authorities. The authorities did absolutely nothing or simply gave a choice quote like “I don’t want to make any comment in order not to annoy anyone.”

On Thursday, Hetq published a scorching criticism of the government agencies that turned a blind eye to corruption. They’ve also said they’re going to publish everything they have: they’re going to name names and the evidence that proves “money laundering, bribery, abuse of state power” and other crimes.

I have to give Hetq props. This type of in-depth reporting is what gets Armenian newspapers hit with million dram slander suits. I really hope the same doesn’t happen to Hetq. While it claims it has hard evidence, the police haven’t helped in the investigation, so Hetq’s information might be weaker than what a court would demand. Without sufficient evidence to support their claims, Hetq is a sitting duck for a slander suit from any of the big shots they’re trying to call to justice.

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Skimming off the Top

Hetq has continued its series of calling out public servants who magically have millions in unaccounted money in their tax fillings. This time around we have:

  • The Minister of Justice declared 3 million in “other revenue,” above his salary of 3.7 million.
  • The Minister of Emergency Situation’s bank account went from 4.8 million to 34 million in two years when his revenues were only 7.2 million.
  • An appeals court judge’s wife bank account grew 34 million more than her stated income.
  • A member of parliament has a few million in undisclosed revenue.
  • And, an assortment of governors whose bank accounts grew suspiciously.

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Stories of Corruption

People always speak of the rampant corruption occurring in Armenia. Here are two stories of what the corruption is like. The first comes from a friend who heard the story from one of the pipe-layers. The second comes first hand from that same friend.

#1 The Naive (Armenian-)American

There was an Armenian-American who visited this small town in Armenia and noticed how hard it was for old people to go get water from the well. Being a proper Armenian, he decided to fund a piping system to bring the water to this and a neighboring village to make it easier for the old people. He spent $10,000 of his own money and organized contractors to lay the piping and record their work so he can oversee it from America.

The contractor got to work laying the pipe. He paid a number of workers to do the work and everything seemed great. The people, the mayor, the contractor and the American couldn’t be happier. The piping for the first town was finished, so there was a small celebration and the contractor took lots of pictures to send back to the American.

After the celebrations end, the contractor told the workers to dig up the pipes. Wanting to get paid, they did so. The contractor then had the workers lay the same piping to the second village. Another small celebration occurs with nice pictures taken for the American to show all of his Armenian friends and family in the US what he accomplished with this money.

Then the contractor dug up the piping, sold the pipes and pocketed the money.

There is no doubt that the mayors of those towns get a healthy chunk of the money, so there’s little reason for them to challenge the contractor. And, when protesting can get your house burned down or when you honestly believe that your mayor’s connections (i.e. corruption) is the only way that any money or services will come to your village, there isn’t much a villager can do.

#2 Bringing a Kalashnikov to a Knife Fight.

My friend is a swell fellow who donated his time freely when he was rich once upon a time. At this point, he was volunteering to fix up the kid’s room at the local hospital. The room was in terrible condition and it took him and a few other volunteers a good amount of time to fix it up and give it a fresh coat of paint. In the end, the room was rather nice. So nice that the department officers wanted the room for themselves.

My friend gets a call one evening to “come quickly, they’re trying to take the room.” He shows up to hear the head of the department trying to take over the room for his own office.

“What are you doing? This room is meant for the kids. You can’t just take it.”

“Hey, hey, hey. This is my department. I choose how the resources are used. Besides, you forgot what country you’re in. It’s best not to ruffle too many feathers here before something bad happens to you.”

This is when most reasonable people would have cowered. Key word being reasonable.

“Do you know who I am? Do you know who I am? Do you think I’m just some naïve Diasporan? You don’t think I have my own connections? I’ll tell you right now, if anything happens to me, you’re dead. If I get hit by a car, if my bus catches on fire, if I so much as cut my finger, you’re dead. Not just you, but your family is dead to. Don’t expect it to be a slow death either. My guys will slowly kill your children in front of your eyes before they turn to you. These aren’t empty threats, I’m calling my people as soon as I step out of that door.”

“Whoa whoa whoa! This is getting too heated, let’s take the night off and talk in the morning.”

Morning comes around, and suddenly the department head’s story changes, “there was a misunderstanding last night. Of course nothing will happen to the kids room.”

As I can’t have a blog post without any links. Here is a comment about how corruption remains a “serious problem” in Armenia. More visceral and depressing, here’s a story of art “gone missing” from the National Gallery for over a year with no criminal charges being pressed.

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