Armenia: Former Economy Minister Charged With Corruption

On February 15, two days after he resigned his post, former Armenian Economy Minister Vahan Kerobyan was charged with abuse of office. The following day a court ordered him placed under house arrest.

Armenia’s Investigative Committee said in a statement that ministry officials, including Kerobyan, disqualified a private entity from a procurement tender to ensure that it was won by another bidder that charged a much higher sum. They allegedly rigged the procurement to award the Armenian branch of Synergy International a $1 million contract. The possible motivation behind Kerobyan’s action was not mentioned.

Kerobyan’s arrest followed the detention of his deputy and six other officials related to the same corruption scandal. Deputy Minister Ani Ispiryan was dismissed and detained on 31 January. Law enforcement then raided the houses of over 15 people, ultimately arresting six other employees of the ministry.

Kerobyan criticized the arrests in a cabinet meeting last week, saying that the criminal proceedings “paralyzed” the work of the ministry.

In his last Facebook post before being charged, Kerobyan stated he had disagreements with the country’s leader, Prime Minister Nikol Pashinyan.

“I have wanted to leave this job many times, but I have committed myself to maximizing the value of my service to my country,” Kerobyan wrote.

In later remarks to journalists, he acknowledged that the prime minister’s chief of staff, Arayik Harutyunyan, told him to resign as “they were not happy” with his work.

Kerobyan has dismissed the charges against him but also said that he does not believe that the case was politically motivated.

Kerobyan was appointed as minister of economy in 2020, following Armenia’s defeat against Azerbaijan in the Second Nagorno-Karabakh War. Before joining the Pashinyan government, he ran a food delivery company.

Several employees, including the director of Synergy International’s Armenian branch, Ashot Hovhanesian were put in pre-trial detention. Following a backlash from the country’s tech community, MPs from the ruling Civil Contract party members initiated a motion in parliament to appeal to the court asking to release Hovhanesian and his colleagues. One of those arrested is the sister-in-law of Parliament Speaker Alen Simonyan.

Some in Armenia have speculated that Pashinyan wanted to sacrifice some of his team members to boost his declining popularity.

Pashinyan’s government came to power through a street protest movement in 2018. It declared the fight against corruption a top priority. Pashinyan has repeatedly vowed that his own team members would not be spared if they were found to be engaged in wrongdoing.

Transparency International’s Corruption Perceptions Index for Armenia has improved significantly since then. In 2023 it ranked 63rd out of 180 countries, compared with 105th five years earlier.

Several members of Pashinyan’s government or his Civil Contract party have been charged or arrested in the past several years. The country’s former deputy health minister Gevorg Simonyan was charged for allegedly embezzling Covid relief money in 2023. Former Defense Minister Davit Tonoyan was arrested for alleged fraud in weapons procurement before and during the 2020 Karabakh War. A former deputy mayor of Yerevan, Stepan Machyan, was also charged with tender-related embezzlement in 2023.

At the same time, however, Pashinyan’s team dismisses the accusations and claims about Armenian parliamentary speaker Alen Simonyan’s brother’s successes in government tenders, as well as Simonyan’s friend’s links to a luxury real estate project.

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