Coalition Partners Fall Out in Armenia

The most dramatic event since the May 6 election in Armenia is not the formation of a new parliament, but the prosecution of a former foreign minister immediately after his party decided to leave the governing coalition.

On May 25, Armenia’s National Security Service launched a criminal case into alleged money laundering by Vartan Oskanian at the Civilitas Foundation, a charitable organisation which he set up after leaving the foreign ministry in 2008.

Oskanian, who served as foreign minister for a decade, won a seat for the Prosperous Armenia party in the May polls.

The allegations relate to the sale of a company called Huntsman Building Products for two million US dollars. Oskanian is accused of not paying tax on the deal, misusing some of the money, failing to submit the correct documents to the taxation service, and ignoring the wishes of business partners who wanted 1.1 million dollars of the proceeds to go to charity.

Oskanian denies the allegations against him, and says the case was “ordered politically”.

“I want to say this – the words ‘money laundering’, ‘Oskanian’ and ‘Huntsman’ do not belong in the same sentence,” he said.

Prior to the May election, Prosperous Armenia was in coalition with President Serzh Sargsyan’s Republicans and the Rule of Law party, although relations were not always smooth.

On May 24, it announced it would not be joining a new governing coalition and a day later, the criminal case was opened.

Eduard Sharmazanov, deputy speaker of parliament and the main spokesman for the Republican Party, denied that the case was in any way connected with Oskanian and his party moving into opposition.

“The time for political orders and repression in Armenia is a thing of the past. A democratic state is being built based on the principles of liberty,” he said.

That did not convince those observers who were struck by the timing of the case.

“If Oskanian had not gone into politics, I don’t think anyone would have remembered Civilitas,” Yervand Bozoyan, a political analyst and head of the Dialogue think-tank, said.

Some saw a connection with the presidential election scheduled for February 2013, and suggested that the incumbent Sargsyan would be keen to see off any challenge from his predecessor Robert Kocharyan by neutralising his allies.

“In the current political situation, Prosperous Armenia is certain to play a major role in the presidential election,” Avetik Ishkhanyan, head of the Helsinki Committee of Armenia, said. “Judging by the party’s behaviour, it seemed to be planning to use Oskanian and – and with his help – to bring Kocharyan back.”

After the 2007 parliamentary election, Prosperous Armenia announced it would not nominate anyone for the presidential polls the following year, and backed Sargsyan instead.

The recent election gives it the second-largest number of seats in parliament – 37 compared with the Republicans’ 69.

Despite the longstanding coalition agreement, Prosperous Armenia began carving out a space for itself in the run-up to the May election, and even set up a joint election centre with the three opposition parties.

The National Security Service has summoned Oskanian for questioning, but only as a witness, since his parliamentary seat gives him immunity from prosecution.

His lawyer Tigran Atanesyan told IWPR he had seen the case documentation but could not comment on specifics.

“There is no legal basis to make an accusation about any form of illegal activity, or to conduct a legal investigation into Mr Oskanian,” he said, adding “there may well be other motives”.

Oskanian has been updating his Facebook page regularly with information on the case.

“I’m receiving notes from people on Facebook, by email and by phone. They all say the same thing – don’t give up, and continue the fight,” he said in one of his Facebook postings. “I realise this fight is not just mine, but that of the whole of society. I also understand that it could be a long, hard fight."

The head of the National Security Service, Gorik Hakobyan, denied there was any political motivation behind the investigation.

“By making all this noise, Vartan Oskanian is trying to distract public attention from the main issues of the case and to present himself as the victim of a political witchhunt,” the security chief said.

Oskanian is not the first former foreign minister to be accused of money-laundering in Armenia. Alexander Arzumanyan held the post for two years until President LevonTer-Petrosyan resigned in 1998. Arzumanyan moved into opposition politics, and a criminal case was opened against him in 2007.

“They talked about money-laundering at that time only because Arzumanyan was an opposition politician, and there were order to punish him,” Vardan Harutyunyan, chairman of the Centre for Rights and Freedoms, commented.

Nor is Oskanian’s case the only new one involving Prosperous Armenia.

Investigators have been looking into the finances of the municipal administration of Aramus, a town in the Kotayk region, home to Prosperous Armenia’s founder Gagik Tsarukyan, a wealthy businessman. The mayor of Aramus is a member of the party.

Diana Markosyan is a correspondent for A1+ television in Armenia.