FOLLOW THE MONEY
Many forms of government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed it has been said that democracy is the worst form of government except for all those other forms that have been tried from time to time...”
On November 11th, 1947, Sir Winston Churchill uttered this terrible reality. Just over half a century on, the electorate of the Republic of Armenia had gone to the polls and decided that it was time to bloody the nose of their self-appointed masters. In May 1999, a reform-minded coalition had won a majority in parliamentary elections.73 Vazgen Sargsyan and Karen Demirchyan had emerged as Prime Minister and parliament speaker respectively. In doing so they sidelined President Robert Kocharyan.
Kocharyan’s unhappiness with the folly of the electorate was clear. Fortuitously for him, however, a ‘terrorist’ attack was set to make right any mistakes made at the ballot box.
Attackers spraying automatic gunfire swept into Armenia’s parliament on Wednesday, killing Armenian Prime Minister Vazgen Sargsyan and several other parliamentary leaders. At least five people, including the parliament speaker Karen Demirchyan, deputy parliamentary speaker Yuri Bakhshyan and Operative Issues Minister Leonard Petrosyan, were killed in the stunning raid. A number of others were wounded. Sargsyan was said to have been shot several times in the chest.
Vage Gabrielian, a spokesman for Armenian President Robert Kocharyan, said the president had gone to the parliament building where the gunmen were holding as many as 150 hostages.
A reporter inside the building said the gunmen were claiming to have staged a coup, but Gabrielian said the government believed the gunmen were “individual terrorists” and asserted the government was in “complete control” of the country. He said the gunmen had not claimed affiliation with any group. “It’s only the parliament building and a very small group,” he said. Pictures from the parliament session showed three men with guns opening fire. Witnesses said the prime minister was apparently the target of the attack. Hagop Aveikian of the AZG newspaper said a reporter for his newspaper saw the men enter, curse the prime minister and the parliament, and then open fire.
The reporter said that Sargsyan was hit several times. United States Deputy Secretary of State Strobe Talbott had met earlier in the day with the prime minister and other Armenian leaders to discuss Nagorno-Karabakh. He had been escorted to the airport by Sargsyan about a half hour before the incident at the parliament building.74
CNN’s coverage of the shocking events of October 27th, 1999, continue to hold a horrific fascination to even the casual observer.
Clips on YouTube have a quarter of a million views75 and still cause one to shudder. The sheer horror of a nation’s legislature coming under bloody, murderous attack. The loss of a nation’s premier, cut down by the cold steel of a determined assassin. Legislators felled during the assault. An apparent mission against the seat of Armenian democracy.
Almost two decades have passed since this infamous event. Yet for ordinary Armenians, the murderous death of Vazgen Sargsyan and fellow parliamentarians has taken on the same conspiratorial tone as the assassination of President John F. Kennedy in the United States.
A botched enquiry that seemed more interested in tying up loose ends. Unexplained ties between the assassins, those who plotted the attack, and figures in high government. And an overwhelming feeling of cover up. All contributed to an entirely unsatisfactory non-resolution of this nation-defining event.
Even the protracted trial of the five gunmen failed to shed light on many key questions, not least how weapons and ammunition had been smuggled into the building.
A report published by Radio Free Europe/Radio Liberty on the tenth anniversary of the killings, however, sheds light onto events that day and how these influenced Armenian in the decade that followed: It is not always easy to define precise turning points in a country’s history, but for post-Soviet Armenia, the tragedy of October 27th, 1999, was just such a moment. Looking back a decade later, the parliament shooting marked the end of Armenia’s development as an emerging democracy with balanced political and social institutions, and the beginning of its slide into a semi-authoritarian state dominated by a powerful president...
In the wake of the tragedy, President Kocharyan was able to quickly consolidate power, and in the ensuing years he was able to dismantle Armenia’s emerging democratic institutions. The legislature ceased to be an independent focus of political power. The country’s leading independent television station was closed down. Political parties were weakened to the point of irrelevance.
“The question that has troubled people for a decade is whether or not there was a force that stood behind, and guided, the gunmen in the parliament chamber,” she says. “That question has yet to receive a clear and well- established answer. A big question mark remains... (said Armenian journalist Anna Israelian). As of now, only one thing is clear. After October 27th, authority in Armenia became very monolithic, with a single center.”76
Identifying who was behind the assault had become a popular parlour game in Yerevan. Perhaps the clearest indication, and one that links it directly to the ruling elite, was reported in 2008 and pointed to the brother of Serzh Sargsyan, who was serving as Minister of National Security at the time of the killings.
According to Radio Free Europe/Radio Liberty, members of the coordinating council of the Legitimate President 2008 movement, Garnik Margaryan, Lyudmila Sargsyan and Gurgen Yeghiazaryan, appealed to Armenian Prosecutor General Aghvan Hovsepyan demanding a criminal investigation be launched in connection with reports that appeared in the newspaper Haykakan Zhamanak concerning a sensational admission made by Sashik Sargsyan.
Their submission pointed to widespread media coverage of comments made by the brother and stated: A few days ago, Serzh Sargsyan’s brother, Sashik Sargsyan, who attended the funeral of the nephew of well-known criminal authority Tevosik in St. Petersburg, said in the presence of dozens of people: “We didn’t finish so many people in parliament just to give power so easily to others.”
The newspaper Haykakan Zhamanak later reported that despite numerous witnesses and widespread reporting of Sargsyan’s comments, authorities in Yerevan made no comment and did not look into the matter.
With the passing of time, it becomes even harder to identify the real reasons behind the murders. Yet several areas of fact have become very apparent, Sargsyan, the slain Prime Minister, was a 40-year-old former athletic instructor and Soviet propaganda official.77 He was an ally of Armenia’s Soviet-era leader Demirchyan, having headed an extremist Nagorno-Karabakh war veterans group.
The Premier’s party was closely tied to a militia group known as the Yerkrapah Battalion, condemned by Western human rights groups,78 while Sargsyan had himself forced the resignation of President Levon Ter-Petrosyan in 1998, accusing him of a “defeatist” approach over Nagorno-Karabakh by agreeing even to discuss returning territory to Azerbaijan.79 Sargsyan had set his sights on claiming a slice of the nation’s commercial action. In seeking this, he had emerged as an outspoken rival of then President Kocharyan.
On the morning of the shooting, Sargsyan had met with United States Deputy Secretary of State Strobe Talbott. There were reports that Armenia was preparing to take steps along a road map towards a solution.80
So what changed with Sargsyan’s slaying?
Conflict remained the raison d’être for Armenia’s permanent war footing and, therefore, its lucrative arms import business. Generous subsidies were flowing in from Moscow, the Kremlin quite happy to see the nations of the Caucasus at each other’s throats. And a nationalist cause and an Azerbaijani bogeyman was a primary source of revenue through donations from rattled Armenian diaspora around the world. Ethnic Armenians continued to donate a small fortune towards the cause that had been sold to them.
Sargsyan sought to enrich himself. His death guaranteed the nation’s establishment that the money tree that was planted so firmly in Republic Square would continue to provide for them.
The attack, his death, and all the unexplained questions surrounding the events of October 27th, 1999, had one overwhelming consequence – to cement that status quo.
So who benefitted most from Sargsyan’s death? And does an answer to that question provide a strong pointer to who was behind the murder of the Prime Minister?81 Power plays a role in the story. Amid the confusion and uncertainty Kocharyan, who also served as ‘leader’ of the self-declared administration of Nagorno-Karabakh between 1994 and 1997, was able to regain and, indeed, solidify his grip on power.
If power is one aspect then the second is naked greed. A plutocracy is a society that is controlled by people of great wealth or income. Political thinkers through the ages like Churchill, Alexis de Tocqueville and Noam Chomsky have condemned plutocrats for ignoring social responsibility in the pursuit of personal gain, corrupting societies with their greed and hedonism.
Armenia became, and remains, an example of a small number of wealthy individuals controlling the economic life of the nation at the expense of its masses. It would be the nation’s plutocrats who benefitted most from the removal of Sargsyan and the new era of democratic oversight he represented. His death ensured the continuation of a slide into plutocracy.
“Follow the money” said the mysterious Deep Throat during the 1976 drama- documentary motion picture Watergate.
The secret government informant, so seminal in revealing the inside scandal to Washington Post reporters Bob Woodward and Carl Bernstein, was one of the iconic elements, in one of the iconic films, of one of the world’s most iconic scandals.
With “follow the money”, Deep Throat delivered a definitive that suggested that there is always a money trail that leads to wrongdoing in high political office. For the film, screenwriter William Goldman attributed this phrase to Deep Throat, although Deep Throat was not recorded as saying that before the film was released, in reporting, or the best-selling book of the scandal.82
Nevertheless it stuck. The image of Deep Throat, hovering in the dark shadows of a car parking garage, as he extolled the young journalists to “follow the money” is in some ways a romantic one. And indeed Woodward and Bernstein did. All the way to the Oval Office.
Some 31 years after President Richard Nixon’s resignation over Watergate, and 11 years after Nixon’s death, Federal Bureau of Investigation Associate Director Mark Felt was finally identified as Deep Throat.83 Felt himself passed away in 2008, but Deep Throat’s misappropriated phrase lives on in popular culture and remains in modern political usage.
In September 2016, the Trump campaign used the phrase in criticising Hillary Clinton and the Clinton Foundation,84 while in February 2017, Bernstein himself uttered the phrase while pressing the international media to look deeper into President Donald Trump’s potential conflicts of interest.85
Yet to “follow the money” is not a singular United States phenomenon.
From former Brazilian President Luiz Inácio Lula da Silva86 to Pakistan’s former leader Asif Ali Zardari,87 the media has played a significant role in shining light into the deepest recesses of the finances of a variety of felonious political figures around the world.
The alleged wrongdoings of the likes of Lula and Zardari are typical of the graft that has hampered nations as they sought to drag themselves into the socio- economic light. Despite the efforts of more international law, increasing degrees of domestic oversight and the ability of an array of non-governmental organisations to highlight wrongdoing, across much of the world some leadership figures remain ready to engage in prolific personal larceny at the expense of their people.
In September 2003, much belatedly, Armenia introduced its Law on Freedom of Information. Widely considered progressive, in theory, lawmakers had framed this with great care for although it laid a foundation, it was, in fact, mostly toothless and provided those in power and with something to hide, a myriad of avenues to stall.88
It took 12 years, until October 2015, before the government bowed to pressure and introduced procedures that streamlined classification, maintenance, and provision of information from the government to the public. Again, however, parliamentarians covered their backs – information holders had the option to refuse to provide information if it contains what they deem state, official, bank, or trade secrets, or infringe the privacy of individuals.89
These ‘Get out of Jail’ provisions are fuzzy and open to the widest possible interpretation. Freedom of information is codified in national law, but only information that lawmakers – those in the spotlight much of the time – condescend to allow.
The secrecy retained by Yerevan’s elite allows them to continue to operate in the dark margins of national life and, in doing so, gather quite astonishing wealth. Highlighted elsewhere in this tome, the head of the Western Customs House Department of Armenia’s Tax Service, Vladimir Tamrazyan, has a reported personal wealth of some 400 times his annual government salary.90
Although a tame example, Tamrazyan’s accumulated funds stand nowhere near the lexicon of those whose personal fortunes stand far north of their apparent salary earnings capacity. Tamrazyan is only ‘comfortable’ by comparison to some, with a tidy $5.9 million in cash and assets.
The question remains over who stood to gain most from the assassination of a Prime Minister. And if ‘most’ can be defined as to the man who went on to become the most flush, then we start with Sargsyan’s erstwhile boss – a man holding both tools and motive.
In 2006, Forbes published its only study of Armenia’s wealthy.91 Robert Kocharyan, a politician, not a businessman, was listed richest person in Armenia with over a billion dollars of wealth. Indeed, unusually Forbes’ research was largely dominated by government and parliamentary figures and not doyens of the business community.
Forbes highlighted the likes of Minister of Justice Davit Harutyunyan, Mayor of Yerevan Yervand Zakharyan, Transport and Communication Minister Andranik Manoukyan, and the ubiquitous Serzh Sargsyan, as the nation’s financially strongest individuals.92
Another notable name is that of Gagik Tsarukyan – ‘seen as the most influential of Armenia’s government-connected oligarchs, and a key business partner of former Armenian President Robert Kocharyan’ – whose wealth was estimated at $60 million in 2012, according to 168hours.93
A look at Kocharyan’s career path betrays nothing of his rise to billionaire status. In the 1970s he served in the Soviet Army, as a labourer in Stepanakert and Moscow, worked as a mechanical engineer94 and lackeyed his way up the Communist greasy pole, within the Komsomol Union and into the town committee.
By the 1980s, he continued to ingratiate himself, winning positions within the Nagorno-Karabakh Soviet, a good party man, and, when it seemed that Moscow’s powers were eroding, emerging as a self-proscribed nationalist after all.
In February 1988, he became leader of the independently minded Artsakh movement. Kocharyan’s remarkable transformation from Soviet-era stooge to independence politico grew as it became expedient, as he served as a deputy of the Supreme Council of Armenia and, between 1991 and 1992, deputy of the Supreme Union of the Nagorno-Karabakh Republic.95
According to one former Foreign Minister of Armenia, interviewed by this author for another publication, even at this point in his career Kocharyan remained little more than a chancer in a cheap suit.
Yet he was “a political bellwether. Kocharyan’s talent was knowing instinctively how to read the prevailing situation, and tie himself to the coat tails of those who were in the ascendancy.” If that meant a party figure in Stepanakert, a political godfather in Yerevan, or an enthroned kingmaker sitting in the Kremlin, Kocharyan was a master ingratiator.
At this point in his career, Kocharyan was still wearing his cheap, shiny Soviet-era suits and telling the time from a plastic Casio watch. There were no signs of the wealth that would suddenly become his. Yet, almost out of the blue to those who were aware of the prevailing situation in Nagorno-Karabakh, Kocharyan caught the break he was desperate for.
Yerevan was seeking to assert a ‘post-independence’ stance for its occupied territory and looking to form an independent government.
Armenia’s President Levon Ter-Petrosyan needed a patsy, a figure who could fulfil a deferential role and be relied upon not to take an independent line from his real masters in Armenia. Kocharyan had all the credentials required for a political lapdog.
On December 29th, 1994, Kocharyan became ‘President of Artsakh’.96
Ter-Petrosyan thought he had his man. As La Fontaine put it ‘Let’s not force our talent... Never can a clod, however he grimace... Pass himself off as a gallant.’97 As Ter-Petrosyan would find out, instead of an ass wearing a lion’s skin, in fact Kocharyan had pulled off the perfect political heist. He was a lion who had been wearing an ass’ skin.
The same former Foreign Minister comments: “Kocharyan was ready to fulfil what he considered his destiny. He believes in the Artsakh cause, don’t get me wrong, but he believes in the Kocharyan cause more. The latter is not about nationalism, or power. It is simply about money.”
At 40 years old, Kocharyan found himself leader of a nation, even if it shared much with The Republic of Gilead from The Handmaid’s Tale and Peter Pan’s Neverland, in that it was essentially a fictional entity.
Nevertheless, he would systematically set about turning ‘Artsakh’ into a personal fiefdom, and begin to amass his fortune.
After a duration of six years, two months and 22 days, the Nagorno-Karabakh War had paused officially on May 12th, 1994.98 Yet sporadic skirmishing continued along the frozen front lines, and the long shadow of a wounded Azerbaijan, which understandably wanted the fifth of its territory now occupied returned,99 hung over the landscape.
During the conflict, and in its aftermath across the world, the Armenian diaspora had supported the vision that had been spun, of Armenia regaining its rightful homeland. Money had flowed in, through the likes of the Hayastan All- Armenian Fund – whose director Ara Vardanyan was arrested by Armenia’s National Security Service for embezzlement and, among other things, using money to fund an online gambling habit – the Monte Melkonian Fund and the Artsakh Investment Fund.
Foreign money supported key infrastructure like the Goris-Stepanakert road, a key artery that connects the region with Armenia, and therefore the rest of the world.100 Constructed using funding from the Armenian diaspora, this stretch of tarmac won a reputation locally as the most expensive road in the world due to the graft involved.
This included Kocharyan of course, a silent but well-known partner in several of the firms contracted on the project. All he had to do was remain in situ and the money would come rolling in.
His administration also took its slice of funds earmarked for humanitarian relief and to buy arms for ‘defence’. Prolific dealers like Viktor Bout – the world’s most efficient postman, able to deliver any kind of cargo101 – especially illicit weapons – and the notorious Armenian arms peddler Sarkis Soghanalian102 were able to move consignments of small arms and light weapons into Nagorno- Karabakh.
These deals left in their wake a trail of commissions, bribes and kick-backs, lining the pockets of a new Nagorno-Karabakh elite. For good measure, while millions of ethnic Armenians abroad were funnelling their money into the dream sold to them of a ‘Greater Armenia’, their donations were being siphoned off in dodgy arms deals and diverted aid. Kocharyan’s administration also had a tidy sideline in most major businesses, including gold mining.
Another lucrative trade, more than mining, was military conscription – soldiers without influential connections or the ability to pay bribes were bearing the brunt of combat. It was a system that would generate tens of millions over the years and, as Eurasianet observes: ...soldiers killed did not include the names of men known to be the sons of senior officials or wealthy businessmen, noted Armenian human rights activist Artur Sakunts, head of the Vanadzor office of the Helsinki Citizens Assembly, which works with military abuse cases, and Edgar Khachatrian, the head of Peace Dialogue, which also deals with soldiers’ rights...
“On the grounds of confidentiality, there is no such mechanism to be able to control or find out how many children of state officials serve, who serves where, and so forth,” said Khachatrian. “But the study of fatalities shows that not a single official’s son died. According to our information, no son of an official serves on the frontline.”103
In addition to this despicable and lucrative business, deciding who lives and dies according to their surnames or ability to pay, this new administration in Nagorno-Karabakh was enveloped by a state of uncertainty translated into dollars earned as the diaspora poured their money into the region. As events in Yerevan have shown – Member of Parliament Manvel Grigoryan’s recent arrest for stealing aid money and supplies being typical – even foodstuffs and emergency supplies were targeted for resale onto the black market.104
The emergence of an administration – with tax collection powers and providing services like licensing and permits, offered further opportunities. It was a bonanza that brought in millions for those willing to turn the nationalist cause into a commercial enterprise.
And Kocharyan personally did not have to wait long for what he coveted most. The hot seat in Armenia. After Kocharyan’s brief sojourn as Prime Minister, during which time he was instrumental in destabilising the President, Ter- Petrosyan was forced out from Yerevan in February 1998 after advocating negotiation with Azerbaijan over Nagorno-Karabakh.105
Kocharyan had positioned himself as the nationalist alternative and became President of Armenia on February 4th, 1998.106 If Nagorno-Karabakh had been somewhat limiting for a man of his great thirst, then Yerevan was on a whole different level.
“That February he went from apparent nationalist to state mafia godfather in a heartbeat,” says the same observer.
The case against Kocharyan amassing a personal fortune while the majority of his people lived in paucity is overwhelming. In 2008, the Russian media estimated Kocharyan’s wealth at $4 billion.107
An excellent measure of this comes from the nation’s spending on the social sector (health care, education and culture) which stood at $220 million in 2004.108 Armenia’s President could have funded or multiplied this, personally, for a dozen years and still been left a rich man. In 2010, the Armenian National Congress issued a statement that asked the question ‘what if?’: What would be the solution of the Karabakh problem, if only some part of the $4 billion looted by Robert Kocharyan was aimed at the settlement of Karabakh issue?109
How a legitimate politician could find himself so undeniably wealthy is a good question, and a difficult one to answer, for as independent Armenian news and analysis publication 168hours observes: ...there is no research in Armenia similar to the list of Forbes as they calculate the wealth of the richest people with the stocks and shares they have in large companies and the market value. In Armenia it is not possible because the stock exchange market is not developed and rich people register their properties in names of others. Even the declaration of properties by high rank officials is not reliable. The rich do not show their income and want to demonstrate that they survive with salary only...110
In 2013, the Presidential salary in Armenia was more than doubled, to $22,000 per annum,111 a vast improvement over Kocharyan’s salary as ‘leader’ of Nagorno- Karabakh between 1994 to 1997, Prime Minister of Armenia from 1997 to 1998 and Head of State between 1998 and 2008.
Considering this, the vast grey area of Kocharyan’s fortune is perhaps best summarised by former United States Ambassador Marie L. Yovanovitch, whose 2009 report ‘The Business of Politics’: Leading enterprises of political elites was fully published by WikiLeaks. Ambassador Yovanovitch stated: The murky ownership of Armenia’s major industry clusters is a hidden driver of Armenian politics and elites’ inter-relationships. Yerevan chatter frequently refers to which prominent political figure owns what prominent economic assets, but it is difficult to get clear and consistent information.
One well-connected businessman was recently willing to speak candidly and confidentially about the major economic interests of leading political figures. Broadly speaking, almost all the most lucrative sectors and enterprises are divided into one of two major political/economic pyramids: one headed by
President Serzh Sargsyan and the other by ex-President Robert Kocharyan... Our contact told us that Sargsyan and Kocharyan share a significant amount of revenues from a number of government and business revenue streams. While unclear on how much revenue they share in reality, it is safe to assume that the sources of this revenue stream include customs proceeds, bribes, and other illegal payments.112
Ambassador Yovanovitch’s report highlights a rat’s nest in Yerevan, where these two national figures had turned the nation into a private enterprise, the scraps they leave behind, according to Open Democracy, equating to a dire situation where “...The average monthly salary in Armenia is $370, the average monthly pension is $90, and 20% of children under five years old have health problems caused by undernourishment...”113
While ordinary Armenians seemingly fight to exist, the two grandees of their nation fought between themselves for the spoils. As Ambassador Yovanovitch notes: Serzh Sargsyan had a head start on Kocharyan when it came to gaining control of lucrative economic assets. Though both men are Karabakhis, Sargsyan came to Yerevan and took up the first of a string of powerful ministerial posts five years earlier than Kocharyan, who remained in Nagorno-Karabakh until 1998. In ten years as president, Kocharyan caught up to Sargsyan and it evolved to the point that most of the dominant business and economic sectors were in some way linked to one of the two of them.114
Typical of the commercial web that Kocharyan has spun around himself, amid a network of friends and associates, one name that features prominently is that of his son, Sedrak, who the United States ambassador linked to Converse Bank and Ardshinbank, a one-third partnership (with Deputy Prime Minister Armen Gevorkian and H2 Television owner Samvel Mairopetian).115 Along with this was a de facto monopoly for importing mobile phones and the nation’s Toyota distributorship.116
Indeed, their influence goes beyond simply the economic rape of Armenia.
Kocharyan and Sargsyan’s indirect ownership links to the country’s mobile phone operators raises uncomfortable questions not only about competition, but that these companies cooperate in the monitoring of phone calls and Internet use on a massive scale, in order to maintain the duo’s influence over the nation, even in the new Nikol Pashinyan era.
These hidden connections also raise serious questions about Internet freedom and the extent to which a ‘deep state’ may be monitoring ordinary Armenians.
With the nation’s security apparatus at his disposal and the ‘private sector’ telecommunications sector under his grip, Kocharyan maintained a vice-like grip over the nation as he set about amassing his fortune.
While he himself enjoys almost unfathomable wealth, Kocharyan’s activities have seen his people mired in poverty and picked off by criminal gangs. The widespread people trafficking that so afflicts Armenia and Nagorno-Karabakh is no accident, but a direct result of the nation’s wealth being plundered.
Kocharyan is married, has two sons, one daughter and three grandchildren. All three children: Sedrak, Gayane and Levon are married. His three granddaughters are not yet at an age that would trouble the recruiters, enthusiastically buying up or simply snatching young girls across the poverty- sown regions for their burgeoning domestic and international sex-trafficking businesses.
His family will never have to face the unbelievable choice of giving up a daughter, knowing her fate, in order to ensure the rest of the family is not starving and homeless. Bella Kocharyan knows, as do Sedrak, Gayane and Levon, but are apparently content to go along with his actions.
Kocharyan’s business empire – illicit and legitimate – has sucked the socio- economic life out of the nation. While sitting on a fortune, residing in palatial properties all over the world, and living a luxury lifestyle, the dream of an independent, free and prosperous nation has simply withered on the vine.
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