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Fraud Case Against Oskanian Dropped


Armenia - Former Foreign Minister Vartan Oskanian addresses the National Assembly, Yerevan, 01Oct2012.

Armenia - Former Foreign Minister Vartan Oskanian addresses the National Assembly, Yerevan, 01Oct2012.

In what amounted to an out-of-court settlement, Armenia’s National Security Service (NSS) dropped on Wednesday controversial accusations of financial impropriety leveled against Vartan Oskanian, a former foreign minister highly critical of the government.

The NSS closed the criminal case after a more than yearlong criminal investigation that was launched shortly after Oskanian returned to active politics and began openly challenging President Serzh Sarkisian’s administration.

The case stems from a nearly $2 million donation that was made by U.S. philanthropist Jon Huntsman in 2010 to the Civilitas Foundation, a Yerevan-based think-tank founded by Oskanian. The NSS has claimed all along that Oskanian misappropriated a portion of the sum. He was formally charged with embezzlement and money laundering immediately after the Armenian parliament lifted his immunity from prosecution last October.

Oskanian, who is a senior member of the opposition-leaning Prosperous Armenia Party (BHK), has strongly denied the accusations, calling them a government retribution for his strong criticism of Sarkisian and the BHK’s decision to pull out of Armenia’s ruling coalition in May 2012. The authorities, for their part, deny any political motives behind the case also condemned by the BHK leadership.

In a statement, the NSS said the case was dropped because Oskanian last week admitted using almost $251,000 of Huntsman’s donation for “personal purposes.” The feared security agency, which is the Armenian successor to the Soviet KGB, said the ex-minister paid on Tuesday 20 million drams ($49,000) in taxes levied from that income.

Oskanian insisted, however, that he “made no confessions.” A written statement issued by him said NSS investigators failed to prove the fraud accusations and opted for “other ways of closing the case.”

Oskanian also publicized a letter which he sent to a top NSS investigator last week. In that letter, the Syrian-born former U.S. citizen, who served as Armenia’s foreign minister from 1998-2008, admitted “ accounting errors” in his handling of the lavish donation that was transferred to his personal bank account.

“My biggest mistake was that I considered the money, donated to Civilitas and deposited with me, and my personal savings at the time to be a single sum,” Oskanian wrote. “There were really moments when I unconsciously used the Civilitas money for my personal needs. There was also a moment when a sum was transferred from my personal account to the Civilitas Foundation.”

Oskanian added that if this violated Armenian laws he is ready to acknowledge the $251,000 shortfall as his personal gain and pay all resulting taxes. He said he therefore hopes that the NSS will discontinue the criminal proceedings in return.

The NSS investigation, which has involved a tax audit of Civlitas and repeated interrogations of its staff, has prompted concern from U.S. and European diplomats. The Yerevan-based ambassadors of the United States and several European nations made a point of jointly visiting the Civilitas offices and praising the foundation’s activities in March. The U.S. envoy, John Heffern, said they are “critically important to Armenia’s democracy.”
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