ArmenTel’s Fired American Employee Charges Widespread Fraud & Corruption

YEREVAN (RFE/RL–Noyan Tapan)–A former American executive in ArmenTel–fired from the telecommunications monopoly one year ago–alleged Friday that the company’s operations were tainted with large-scale corruption–with millions of dollars in bribes taken by Armenian officials from its former US shareholder. Robert Green–the former consultant of an ArmenTel chief manager–told reporters that he has all documen’s to prove that former officials were paid a total of $50 million by America’s Trans World Telecom to "support everything TWT wanted to do in Armenia."

TWT had a 49 percent share in ArmenTel until December 1997 when Greece’s OTE paid $142 million to buy 90 percent of its stock. Some analysts say TWT emerged as the main beneficiary of the sell-off getting $70 million while having invested less than $15 million in Armenia’s telephone network.

But Green said most of TWT’s income came from the embezzlement of a $100 million loan which it helped ArmenTel to secure from the German Siemens giant. He claimed that only $35 million has been used by ArmenTel while the rest of the money went was appropriated by the TWT management.

He singled out the former communications minister Grigor Poghpatian among the most corrupt Armenian officials. Green also showed a134-page package of what he claimed is "evidence" to support his allegations.

ArmenTel was set up in the early 1990s as a joint Armenian-American venture to handle international phone calls. Under a controversial government license–ArmenTel took over Armenia’s entire phone network in summer 1997. The license also gave the company exclusive 15-year rights on Armenian telecoms.

Those rights featured large in the deal with OTE and are increasingly challenged by Armenian opposition groups. The opposition will again try to abolish the ArmenTel monopoly at a session of parliament on Monday. The Constitutional Court ruled in late January that the law giving the exclusive rights is unconstitutional but said OTE can continue its monopolist activities for at least five years.

The allegations about TWT’s activities will also be on the opposition’s agenda.

Green further said that he will continue to seek $300,000 in compensatory damages for his "illegal" sacking in March 1998. Green who joined ArmenTel in 1996 said he "helped OTE save $14 million" during the first three months after its takeover of ArmenTel but was then unjustly dismissed.

A court in Yerevan last year rejected Green’s appeal that the sacking was against Armenia’s labor legislation. The verdict was later upheld by the Court of Appeals. The former American consultant alleged that the verdict was ordered by "powerful forces above the level of the judge."

Green said the US government stands firmly behind his claims and hinted that it will exert pressure on Yerevan considering the fact that it is "the second-largest foreign aid recipient."

Pokhpatian and a number of Armenia’s top officials regularly received huge bribes from TWT for the ArmenTel deal–Green–a former employee of ArmenTel and chief of Utah-based Anglia Consulting company told the news conference.

He said that initially the sum of the bribe totaled $10 million– whereas the Armenian officials received $50 million from TWT.

Green rejected recent statemen’s by former minister Pokhpatian that TWT had invested $100 million ArmenTel–saying that the statement by the minister for economic and structural readjustment Vahram Avanessian that TWT had invested $9 million in ArmenTel was also not true.

According to Green–TWT had not made any investment in Armenia. Instead–he said–that TWT had promoted the outflow of huge sums from Armenia.

Green said that ArmenTel paid for five to seven million dollars more for acquiring equipment from Siemens. The difference between the actual price and what ArmenTel had paid went to TWT. ArmenTel also sustained great damages because of rather quick supplies of equipment from Siemens. After all these–TWT got $77 million for its 49 percent share.

Green also said that the rejection of the Anglia Consulting lawsuit of $200,000 to be paid by ArmenTel for services provided by the company was a result of pressure exerted on the Spandarian public court of Yerevan and personally judge Yelizaveta Danielian. Danielian admitted after the hearings that she was ordered by top officials to turn such a verdict.

According to her–there were pressures by the government of Greece which owns OTE.

Learning about the case–Senator Orin Hatch of Utah sent a letter to the US Trade Representative Chareline Barschevsky–expressing his doubts regarding the expediency of further economic cooperation with Armenia.

Green also sent a report to president Robert Kocharian–wherein he outlined consequences Armenia may face–due to the court verdict. Green was also going to present the same report to all ministers involved in the ArmenTel deal.

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