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Former US Ambassador on Sargsyan’s and Kocharian’s Political/Economic Pyramids

“Armenian politics is winner-take-all, and this very much applies not only to the political spoils, but very often to the leading business and economic spoils as well.  This is one reason that Armenian politics have become so implacable,” begins comments by former US Ambassador to Armenia Marie L. Yovanovitch in a confidential diplomatic cable dated Nov. 17, 2009 recently released by WikiLeaks.


“Moreover, one outcome of the 2008 presidential election was the break-down of a tacit ‘live and let live’ pact that had previously allowed some business figures who supported former President Levon Ter-Petrossian (LTP) — most notably oligarch Khachatur “Grzo” Sukiasyan, who controlled the SIL Group of businesses — to continue to hold lucrative interests after Ter-Petrossian’s 1998 ouster. When LTP fell in what amounted to a non-violent palace coup, one of the unspoken deals was that so long as LTP and his business allies kept out of politics and made no trouble for the new regime, they would be left alone. With Grzo’s open support of LTP’s 2008 presidential campaign, all bets were off. The SIL Group has been substantially disassembled, and its most lucrative assets seized and effectively transferred (by rigged court actions) into the hands of loyalists of President Serzh Sargsyan,” Yovanovitch writes.


The US diplomat notes that one “well-connected” businessman agreed to speak “candidly and confidentially” about the major economic interests of leading political figures:


“It was clear that this information is very sensitive. During the conversation, our interlocutor spoke freely and confidently about the latest insider political party intrigues and confidential political dealings to which he was privy. When the conversation turned to oligarchs, monopolies, and business ownership, his body language changed completely: he leaned forward and lowered his voice, and there were certain questions he deferred until a presumed later meeting ‘outside Yerevan,’ a conversation which did not ultimately transpire.”


Yovanovitch notes that with the information provided by the businessman, as well as the embassy’s own sources, it became clear almost all of the most lucrative sectors and enterprises in Armenia are divided into one of two major political/economic pyramids: one headed by Serzh Sargsyan; the other, by former president Robert Kocharian.


In the Sargsyan camp are Mika company (which includes the Armenian national airline Armavia) owner Mikhail Baghdasarov, fuel import company Flash and Ararat bank owner Barsegh Beglaryan (who Yovanovitch calls “Nikolai Barsegh”), notorious businessman and MP Samvel Aleksanyan (“Lfik Samo”), Prosecutor General Aghvan Hovsepyan, Serzh Sargsyan’s son-in-law Misha Minasyan, businessman Harutyun Pambukyan, the president’s brother Alexander “Sashik” Sargsyan, businessman and Football Federation of Armenia chair Ruben Hayrapetyan (“Nemets Rubo”), and businessman Hrant Vardanyan, who Yovanvotich is told is the wealthiest man in Armenia.


In the Kocharian camp, Yovanovitch names Prosperous Party leader, prominent businessman and MP Gagik Tsarukyan (“Dodi Gago”), Kocharian’s son Sedrak Kocharian, and former minister of transport and communications, businessman Andranik Manukyan.


Yovanovitch notes that National Assembly chair Hovik Abrahamyan controls his own business empire which, though formerly part of the Kocharian pyramid, is now increasingly autonomous.


The US diplomat concludes with a caution that all of the material in the cable is from a single source who has a more oppositional outlook, but is nevertheless well-connected to both government and opposition figures.


“That said, all of what we have presented here more or less fits with the prevailing understanding of the intersection between politics and business. We will continue to seek additional sources to corroborate this information for the benefit of Washington analysts,” Yovanovitch concludes.