Armenia: Anti-Corruption Panel Grapples with Credibility Issues

Armenia's much-touted anti-corruption initiative has gotten off to a less-than-ideal start: leading government members of the body intended to root out graft are bogged down by questions about their own spending habits and sources of income.

The driving force in the latest Armenian government effort to promote honest administration and sound business practices is the Anti-Corruption Council, which formally kicked off its activities on July 28. The council is supposed to comprise top officials, as well as opposition and civil society members. But so far, no opposition or non-governmental organization representative has joined the body, due primarily to widespread skepticism about its ability to catalyze reforms.

In 2014, watchdog Transparency International reported that the South Caucasus nation ranked 94th out of the 175 countries surveyed for perceptions of public-sector corruption. The Armenian government has long condemned graft, but has not shown an eagerness to investigate or prosecute senior officials for possible misdeeds.

In his July 28 speech to open the Council's first session, its chairman, Prime Minister Hovik Abrahamyan, stressed that the group has "the will and the determination" to make "daily efforts" to battle corruption and "form a whole class of law-abiding and conscientious public servants."

Long before the speech, however, Abrahamyan's credibility to lead the Council came into question. A July 19 report by Civilnet.am, a site run by the Civilitas Foundation, an NGO founded by former Foreign Minister Vartan Oskanian, detailed government procurement records for several high-cost flights by Abrahamyan abroad.

Contracts for the flights, provided by a closed joint stock company, Air Training Centre, were signed on the same and following day (May 27-28) that the prime minister had urged officials to save money and dispense with non-essential foreign travel. Armenia no longer has a national airline.

An Airbus A319, capable of carrying between 124 and 156 passengers, appears to be the prime minister's own preferred mode of travel. The cost of leasing the popular business jet can run in the neighborhood of $15,000 per hour in the United States, according to rental sites.

"There should be another council formed to fight against them," quipped 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?"

Public attention is fixed on a payment made July 3, when the Air Training Centre received 31,448 million drams (about $66,000) from the government for the prime minister to make a round-trip flight to Paris on official business in an A319, EurasiaNet.org found. By contrast, a top fare for the same time period on commercial flights for a Yerevan-Paris round trip was $3,340, according to local travel agencies.

Other flights made since his call to cut travel costs fit a similar pattern. A June 1 trip to Prague, for example, cost about $43,000 or 20.6 million drams. For the Eurasian Economic Union's May 29 summit, taxpayers shelled out 16.5 million drams (about $34,500) for Abrahamyan's several-hour-long, 1,953-kilometer (1,213-mile) flight to Kazakhstan. In addition, a February flight to Moscow for $54,000 (25.8 million dram) amounted to more than 100 times the price of a commercial flight.

Abrahamyan, a veteran politician who previously, according to Hetq.am, redecorated his office for over half a million dollars without issuing a public tender, has not commented on his foreign-travel spending practices. The costs of such flights are magnified in Armenia by the fact that the average monthly nominal wage was the equivalent of $383 in May 2015, and roughly one-third of the country's approximately 3 million population lives in poverty.

Not only Abrahamyan's spending practices have faced criticism; his sources of wealth have drawn scrutiny, too. He has attributed his 2014 declaration of nearly $2 million in dollar-denominated assets to "farming." Media outlets claim that he controls via his family scores of private companies, ranging from gas stations to casinos, and thousands of hectares of land.

The prime minister, however, is not the only senior official on the council with apparently entrepreneurial relatives. Family members of Finance Minister Gagik Khachatrian, dubbed the "super minister," have been linked to a variety of businesses, including a large Internet service provider (Ucom), several food importers, a huge shopping center in downtown Yerevan, a supermarket chain (Nor Zovq) and a cash-register-related importer.

On July 22, the French-owned Orange Armenia, one of Armenia's largest telecommunications operators, stated that it was in talks about selling the company to Ucom, RFE/RL reported.

Khachatrian has not commented on his possible role in any of these companies. Asked on July 28 by Gala TV about how the Anti-Corruption Council could fight corruption when some of its members faced media scrutiny, he answered: "That is a different topic."

Against this backdrop, opposition parties and non-governmental organizations are unlikely to endorse the Council's work anytime soon. "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 theater and we cannot enter a process which we do not believe in from the very beginning," commented Anahit Bakhshian, a senior member of the tiny opposition Heritage Party.

The European Union Delegation to Yerevan and the United States Agency for International Development - two sources of tens of millions of dollars in assistance for anti-corruption drives in Armenia - have not yet commented on the council's work or composition.

On July 28, however, the prime minister's chief of staff, David Harutiunian, announced that a cooperation agreement will be signed with USAID as part of a $750,000 anti-corruption initiative.

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