Armenia's robbers and external debt, Gagik Khachatryan and Mozart

Gagik Khachatryan
Gagik Khachatryan

Newer and newer faces, who became rich illegally under the previous regime due to certain corruption schemes, have been covered during the fight against corruption, being conducted by the new government of Armenia. The publication of the Support Center for Russian-Armenian Strategic and Public Initiatives says that due to tax evasion and various tricks aimed at looting the state budget and various international loans, many high-ranking officials, their closest associates and businessmen close to the imperious feeding trough have acquired fabulous revenues, which are often not commensurate with the scale of Armenia.

"Even in my harshest opposition speeches, I never would've thought that such situation in the country, when the level of robbery can be beyond our imagination, is possible. This is a reality that we should observe. Corruption has reached such a level that, as time goes by, more people are involved in this process, even those who applauded the revolution," Prime Minister Nikol Pashinyan told a press conference on July 20. He attached special importance to the government's efforts to return money that were plundered or underpaid to the state budget. According to the Prime Minister, as a result of the actions of law enforcement agencies, as of July 1, 20.6 billion drams or 42 million dollars have been recovered from unpaid taxes. "We must continue working in this direction," Pashinyan said.

Borrowed Life

It is not a secret for anyone in Armenia that, against the backdrop of the illegal enrichment of a small part of the society, representing primarily the highest echelons of the former authorities, the majority of the Armenian population have continued to live in poverty. This is primarily about the 10-year period of Serzh Sargsyan's rule. According to official data, about 300 thousand people left Armenia in search of better conditions during this period. In order to better understand the scale and philosophy of the robbers of Armenia, let us turn to the problem of public debt. Armenia's aggregate state debt is likely to hit $7 billion by the end of 2018, or about 60% of GDP. Meanwhile, according to the law, a state debt-to-GDP ratio of 60% is critical.Armenia's state debt amounted to more than $6.7 billion in the end of 2017. The country's external debt last year stood at about $5.5 billion, having increased by $689 million. Armenia's domestic debt has grown by $143 million to about $1.3 billion.

As the national debt approaching the ratio of 60% of GDP it cannot but cause concern. Fears are exacerbated by the fact that most of the loans were used by the former authorities not to develop programs, but to solve such social problems as the payment of pensions, benefits and salaries. It was a vicious scheme, developed and widely used by Prime Minister Tigran Sargsyan. Armenia's former authorities for many years, instead of ensuring the rule of law, the development of the country, instead of taking serious steps to reduce the "shadow" economy, they further increased the country's debts, which fell heavily on the shoulders of ordinary citizens forced to pay for illegal enrichment of several dozen families.

Where are these millions from?

A prominent representative of this group of persons is one of Armenia's most corrupt former officials - Gagik Khachatryan. Over the past 15-16 years, he has served in a number of key positions: head of the customs service, head of the Committee of State Revenues, as well as head of the Ministry of Finance. Even according to the specialized Senior Officials Ethics Commission's data in 2015, Gagik Khachatryan was the richest minister. He declared 1 billion 214 million drams (about $2.5 million). Gagik Khachatryan's wife Laura Epremyan declared even more money - 1.5 billion drams ($3 million).

The Ethics Commission did not even try to find out where the Finance Minister and his wife got $5 million, if the salary was noted as the only source of income in the declaration. Maybe the committee thought that Gagik Khachatryan and his wife got these millions as the legacy? ..

Over the years, both Armenian and foreign media have repeatedly published information about Gagik Khachatryan's enormous wealth. Having repeatedly been at the center of high-profile corruption scandals, he never gave any intelligible answer to reports in the press, did not sue any media to defend his honor and dignity, or for libel. In turn (and this was a common practice during the reign of Kocharyan and Sargsyan), the law enforcement bodies showed no interest either in the publications or in the scandalous statements of some opposition deputies regarding Gagik Khachatryan's wealth, made due to certain corruption schemes.

According to the Armenian media, Khachatryan, using proxies, owned (owns) food importing companies "Apeyron" and "Megafud", "Mega Motors" LLC (Mitsubishi's official representative in Armenia), "Alliance" customs terminal, "Yukom" company (satellite television, fixed telephony, Internet), "Amasia" dairy plant, "Santa Fe" cafe, "Galaxy" bakery, Mega Sport chain store, "Chronograph" expensive watch store, "Alekseev" company supplying paper for cashier's checks. Companies controlled by Khachatryan are major importers of vodka and sweets. According to some media reports, still uncontested, all these companies, cafes and shops have evaded taxes for years, while Khachatryan used his official position and hurt interests of his competitors directly or indirectly. According to the head of the Anti-Corruption Center "Transparency International" Varuzhan Oktanyan, a few years ago the center appealed to a special commission on ethics in order to find out whether Gagik Khachatryan really owes "Yukom" and other organizations. The commission gave a very laconic answer: "Khachatryan's sons are engaged in business."

Speaking of Gagik Khachatryan's sons

Two years ago, the ex-finance minister and his sons - Gurgen and Artem - were at the center of a loud corruption scandal. The Association of Investigative Journalists NGO published information on its website Hetq.am that the sons of the minister purchased a sprawling private house in the affluent Los Angeles neighborhood of Westwood in 2010, paying $14.4 million for it and wanted to sell it for $35 million. As a result, the mansion was sold last spring for $18.8 million.

Neither the official himself nor his sons denied this fact. "The article does not contain exposure. My sons are adult and do their own business. Naturally, I know some details of their business activities, but I think that everyone should respect the privacy of other people and refrain from disclosing such information, even if they are his children," Gagik Khachatryan commented on the article. Of course, he did not explain how his sons managed to buy expensive real estate in the United States. Gurgen Khachatryan told Hetq that this deal is a part of his and his brother's economic activities, aimed only at making a profit. And now, the latest news: a criminal case was initiated against Artem Khachatryan, who lives in Paris with his family, on the grounds of  inhuman treatment. His servants filed a suit against the Khachatryanov family. According to the Armenian media, the $1.6-1.7 million apartment belonging to Artem Khachatryan is located in one of the most expensive districts of Paris.

And still - where did Khachatryan's sons get these millions? In this family, absolutely everyone is engaged in business (naturally, using looted millions), however, like in most families of other Armenian oligarchs.

Gagik Khachatryan and Mozart

It's no secret that the geography of business activities of Armenian oligarchs has long outgrown the "home state". Metastases from their activity reached the Czech Republic, France, Great Britain, the US and other countries. Former Armenian officials and members of their families are owners of hotels, clinics, real estate and other property in these and other countries. Gagik Khachatryan is no exception.

According to a number of Armenian outlets, Gagik Khachatryan has actively invested in the US real estate market. However, one of his steps crossed all the possible lines and demonstrated the true "thinking" of one of the most ardent robbers of Armenia - Gagik Khachatryan.

The fact is that a few years ago Khachatryan bought a famous Mozart chocolate factory in Austria for 200 million euros, that is how he received his legendary nickname "Mozart Gago". The fact of acquiring a well-known factory was not denied by the Austrian Embassy in Armenia. It can be assumed that having bought this factory, which was founded in Salzburgas early as 1890, Khachatryan tried to join the world treasury of musical art in such a peculiar way ...

But seriously, everything this person's has achieved is a vivid and adequate reflection of the norms and rules of the previous regime, which was dividing the society into a "minority," which can do anything, and the "overwhelming majority," which was supposed to live with the outrage caused by the "minority."

Today, one does not have to doubt the objectivity and integrity of law enforcement agencies and the authorities as a whole. At the same time, it is too early to give assessments and, especially, to draw any conclusions regarding the anti-corruption struggle. And I would like to hope that the mayhem perpetrated by Gagik Khachatryan and similar oligarchs will not escape the attention of the competent authorities.

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