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Government Unit Restructured After Corruption Case


By Atom Markarian
The Armenian government approved what appears to be an overhaul of a key Finance Ministry division on Thursday just two days after the embarrassing arrest and prosecution of its former chief on corruption charges.

Levon Shahinian, who headed the ministry’s Department of Financial Oversight, is accused of large-scale fraud which prosecutors say enabled him to embezzle 40 million drams ($85,000) in budgetary funds. They say the money was due to be paid to two private firms that audited government agencies. Shahinian was sacked several days before his arrest.

A government statement said ministers approved changes to a statute regulating the work of the Finance Ministry and its oversight division in particular. It did not specify what those changes are, saying only that the important body was renamed into the Department of Internal Audit Assessment and Financial Oversight. It is therefore not yet clear what lies behind the name change.

The official press release came after a news briefing held by Deputy Finance Minister Pavel Safarian following the weekly cabinet meeting. Journalists covering it were thus unaware of the decision to restructure the troubled unit.

The existing regulations effectively allow senior officials running it to select and sign contracts with auditing companies without Finance Minister Vartan Khachatrian’s endorsement. Safarian admitted that this gives them too much leeway to spend ministry funds. “I think there must not be such a thing in the statutes,” he said.

Safarian was also asked to comment on rumors that Khachatrian is about to be relieved of his current duties and appointed as new chairman of Armenia’s Central Bank. “What kind of an answer are you expecting from me?” he replied. “What can I say? I’m not the one who makes or suggests such appointments.”
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