Business Tycoon Gagik Tsarukyan Charged with Bribery, Corruption

Prosperous Armenia Party leader Gagik Tsarukyan, June 16, 2020 (Photo: National Assembly of Armenia/Facebook)

YEREVAN—Gagik Tsarukyan, Armenia’s wealthiest businessman and leader of the opposition Prosperous Armenia Party, has been formally charged with corruption and bribery. According to his lawyer, Emin Khachatryan, late on Tuesday night, the National Security Service (NSS) filed a motion with the Yerevan Municipal Court to detain Tsarukyan under Article 154.2 of Armenia’s criminal code which deals with political bribery.

This development comes hours after the National Assembly voted to revoke Tsarukyan’s immunity from prosecution—which he was entitled to as a parliamentarian—upon the request of Prosecutor-General Artur Davtyan. In his speech to lawmakers, Davtyan accused Tsarukyan of creating and leading “an organized group that bought more than 17,000 votes for his Prosperous Armenia Party during parliamentary elections held in April 2017.” Alleged evidence of these claims was found in the businessman’s mansion in an early-morning raid on Sunday. Investigators purportedly uncovered piles of handwritten and signed letters from Tsarukyan’s known deputies formally pledging to provide him with a desired amount of votes by any means necessary for the 2017 parliamentary election. According to Davtyan, the documents even included voter names, passport numbers and the amount of bribes provided.

As Parliament debated the motion, employees of Tsarukyan’s various business interests attempted to block Yerevan’s Acharyan Street which leads to the tycoon’s mansion using buses and trucks registered to his Multi Group holding company. However, a video posted online depicted passersby removing those vehicles from the road. Another group of Tsarukyan supporters was detained by police in front of the National Assembly for violating the ban on mass gatherings under the State of Emergency.

Parliament passed the motion in a secret ballot on Tuesday with 87 of the 137 MPs voting in favor. Judging by the figures, Prosperous Armenia and Bright Armenia legislators abstained from voting. 

Tsarukyan has dismissed the accusations as a politically motivated retaliation against his recent public calls for the government’s resignation over what he claims was poor handling of the ongoing pandemic. “Going against Tsarukyan marks the end of your Revolution,” Tsarukyan declared on the debate floor, addressing himself in the third person. Parliamentary Speaker Ararat Mirzoyan responded that he is guaranteed a fair trial under Armenia’s constitution. 

Several extra-parliamentary opposition parties joined the two parliamentary opposition factions in condemning the charges on Tsarukyan as ‘politically motivated.’ In a written statement, the Bright Armenia Party claimed to “strongly condemn” the criminal prosecutions “resulting from political expediency and carried out through a selective enforcement of the law.” This statement was echoed by the now-ousted Republican Party communiqué which called for the “resignation of the impotent government of Nikol Pashinyan” for his alleged authoritarian behavior. Incidentally, the Republican Party itself successfully silenced a similar bout of public descent by Tsarukyan through threats of auditing and corruption charges a mere five years earlier.

The raid and ensuing charges have sparked vigorous debate among analysts and the public alike over the state of the country’s transitional justice and anti-corruption efforts. While there is widespread consensus that the charges are valid, some have questioned whether Pashinyan’s government was employing intimidation tactics against political opponents not unlike those used by the previous regime. 

Tsarukyan, who is widely accused of using his close relationship with former president Robert Kocharyan (who is currently in pre-trial detention himself) to amass millions in assets and wrest control over a vast business empire, became somewhat of an oddity as one of the few oligarchs to survive the Velvet Revolution as a political force. The oligarch-turned-politician had managed to cultivate an image of an uneasy, yet mutually beneficial alliance with the Pashinyan government, begging the question as to whether Pashinyan simply cracked down on him when he turned into a political liability.

While the timing for these charges may seem on the nose, Dr. Nerses Kopalyan, a political science professor at the University of Nevada postulates that such a causation/correlation argument “makes no chronological sense.” Tsarukyan and his various business dealings have been subject to a series of separate investigations long before this apparent public spat with the Pashinyan government. Tsarukyan’s holding company Multi Group has been audited by both tax and health and safety inspectors on several occasions. His personal bodyguard, Edward Babayan, was arrested on assault charges in July of 2018. Multi Group CEO Sedrak Arustamyan was arrested on multiple charges including bribery, tax evasion and money laundering relating to the construction of the North South Highway. Vahagn Gevorgyan, the mayor of the commuter-town of Abovyan (widely considered to be Tsarukyan’s seat of power) is also facing charges for allowing Multi Group to illegally privatize municipal property for condo development. 

The charges do not coincide with the first time Tsarukyan publicly criticized the authorities either. While his party initially made overtures to the new government, they took part in an attempt to impede a motion for snap elections back in 2018, in which they eventually won just over eight percent of the popular vote. Since then, Tsarukyan has publicly derided the new government for its refusal to extend tariff protection to his failing businesses, accusing it of mismanaging the economy and fostering an unhealthy business climate. He also recently refused to pay his own employees’ wages when the government announced lockdowns at the start of the ongoing pandemic.

Tsarukyan is not the first public figure associated with the former government to paint himself as the victim of political repression for criticizing the new authorities. Other notable figures to make the same assertions include Mikayel Minasyan (former President Serge Sarkisian’s self-exiled son-in-law), Gagik Khachaturyan, Ruben Hayrapetyan and other oligarchs widely accused of using their ties to the previous government for self-enrichment. 

Political analyst Richard Giragosian described Sunday’s raid on Tsarukyan’s compound and subsequent arrest as a strategic “determination to show an end to the previous culture of impunity that prevailed under the old government for many wealthy businessmen that entered politics.” The events of the previous week have also, in Giragosian’s view, exposed Tsarukyan as having “no real power base of his own” beyond those financially dependent on him. This view was echoed by CivilNet’s Tatul Hakobyan who characterized Tsarukyan as “playing the wrong hand and paying dearly for it.”

In Parliament on Wednesday, Prosperous Armenia MPs announced that they would call for a parliamentary inquiry into the government’s handling of the COVID-19 crisis, as well as a constitutional appeal to the ban on public demonstrations during the State of Emergency. The other parliamentary opposition party, Bright Armenia, signaled that it might join in this motion.

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Raffi Elliott

Columnist & Armenia Correspondent
Raffi Elliott is a Canadian-Armenian political risk analyst and journalist based in Yerevan, Armenia. As correspondent and columnist for the Armenian Weekly, he covers socioeconomic, political, business and diplomatic issues in Armenia, with occasional thoughts on culture and urbanism.

14 Comments

  1. It is good to see him out of politics. He worry about his pocket and his investment. Beside corruption His unethical lose “necktie” is not appropriate figure as an official MP for Armenian parliament either!

  2. So a year or so after Pashinyan claimed that there were no more oligarchs in Armenia, just big investors and proprietors, Tsarukyan is becoming an oligarch again. Thats the news.
    After reading this article, I am reassured that it is a complete coincidence the prosecution is coming few days after Gago heavy criticism of the government. Thanks Lord, for a second I thought we were back in the good old days, like in 2015 when Serj Sarsyan did exactly the same thing, or Kocharian in his time. But now its Nikol, so it must be different.
    I also suppose it is a complete coincidence that less than a month after having lost the mayoral elections in Abovyan vs a BHK candidate, the mayor was also prosecuted for some obscure construction permit issue?
    As for Giragossian analysis, if one may publish a blooper recollecting his failed analysis, the book will be very very thick.

  3. Tsarukyan has missed over half of all parliamentary votes since his 2018 re-election. Of all 132 MPs, he has been absent most often.

  4. Thi sis nothing but political persecution by Yerevan’s CIA and George Soros funded kindergarten. The regime’s life is short. That is why Nikol is panicking. That may also be why Kocharyan was released from his illegal detention…

  5. Yes, That is good
    My friend you can’t do all at the same time, it takes time, documentation, rule of law.

    Rome was not built in 1 night, one day or one year.
    Pashinyan must continue, to clean it up, Armenia has been corrupt for centures basically after Tigran the Great [even not so much Great”

    Good Luck.

    Gharashmish.
    aa

  6. No democracy is without its share of mafias or oligarchs; but finally, thanks to Pashinyan, the oligarchs are now on the run. And its because of these changes that the general population is is no longer fleeing Armenia for a better life. Why? Because they have hope. They’re not abandoning the country en masse like they did with Robert or Serj. Armenians haven’t had this kind of hope since the early years of Ter Petrosyan. So things HAVE changed: the oligarchs have learned that if they want to continue in their old ways, they can move to Russia.

  7. It’s a purely political process of course.

    Gago criticizes the government and asks for its resignation (a banal/classic/standard opposition move);
    Turn the page;
    Gago is prosecuted.

    The Premier has been picking fights with everyone since 2 years, the overwhelming majority of people love it and want this entertaining reality show to continue and intensify … Armenia has found its Trump!

  8. I agree with Richard Guiragossian’s analysis. I believe Guiragossian is one of the brightest strategic minds we have in our nation.
    I am also in favor of making Armenia more of a law-abiding country and if Tsarukyan is guilty, then he should be dealt with according to the law.
    But I am totally disappointed with the video posted on Youtube (https://youtu.be/DS7U33ucdMU) by the National Security Service. Really, what business do they have publishing the interior of Tsarukyan’s residence, the lion’s cage and the expensive cars’ garage?
    We seem to be back to the old regime’s methods.

    • Antoine, your question as to the pertinence of the video is an indicator that you may not be familiar with the political culture/legal customs of the former soviet republics. The government since soviet times always showed incriminating videos of its opponents, making a show of it, exaggerating everything in order to have public opinion on its side. It’s deeply ingrained in the political culture and can’t be undone within 1-2 decades.

      That’s how it is in Georgia and Ukraine as well who also went through a revolution and leaned towards western values, but even the leaders and activists of the revolutions carry in them the former soviet instincts even though they genuinely want to change. So it will take time, a generation or two. Until then, we will routinely see these cheap reality TV shows: Gagik’s home on video, Manvel Grigorian personal Zoo and cars, Hrayr Tovmasyan’s father’s house’s roof, forbidding entry to tribunals, etc … people want to see that the king (Nikol) is strong and that he is punishing the bad guys! The moment the king shows weakness, he will be overthrown … medieval style!

      Don’t forget that it took the people of France and the US decades to overcome their primitive understanding of what a state should be.

  9. Enough of Pashinyan bashing! Armenians throughout the world need to unite behind the Pashinyan movement and give him all the support it takes, let’s be patient and help his government to carry on the good cleaning up job they started. As if the existing problems weren’t enough now like the rest of the world, we have to tackle this dreaded virus situation. Look at how less than efficiently the much more wealthy and advanced nations are coping. Let’s put our stupid and petty emotions aside and use our brains for a change! We can do it, we MUST do it.

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