Kocharian Appoints Commission to Probe ArmenTel Corruption Charges

YEREVAN (RFE/RL)–President Robert Kocharian has set up a commission to look into allegations that the ArmenTel telecommunication company’s establishment in the early 1990s and ensued activities were tainted with large-scale corruption–his press service said on Thursday.

The presidential decree said the ad hoc commission will investigate the "conformity with Armenian legislation of the ArmenTel joint-stock company’s foundation–activities as well as its privatization process."

The move follows unsuccessful efforts by leading opposition parties to create a similar body in parliament last month. Some opposition leaders have alleged that senior officials in the Armenian government had accepted millions of dollars in bribes from the company’s former US shareholder.

The allegations were backed by an American former executive in ArmenTel–who said in early February that the US Trans World Telecom had paid a total of $50 million to have the officials "support everything TWT wanted to do in Armenia." Robert Green was fired from the telecommunications monopoly one year ago.

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 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. Green singled out the former communications minister Grigor Poghpatian among the most corrupt Armenian officials.

Kocharian announced his intentions to form a commission on ArmenTel a few weeks before the decree was signed. But leaders of most opposition parties have reacted to the decision with skepticism–saying that the authorities only want strip opponents of a powerful trump card and eventually kill the issue. The center-right Republic–Homeland and National Democratic Union factions in parliament have rejected Kocharian’s offer to name their representatives to the commission.

The ArmenTel commission–however–will be headed by David Vartanian–a leading NDU member. Vartanian told RFE/RL earlier that he will be working only in his capacity as chief of the presidential oversight service. Among its members are the minister for telecommunications and postal service and deputy ministers of finance and justice.

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 have been challenged in court by the opposition. The Armenian 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.

ArmenTel’s Greek owner has so far refrained from commenting on corruption accusations against its predecessors. OTE has come under strong public criticism since last December when it announced a drastic increase in telephone charges.

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