Institute for War and Peace Reporting | Giving Voice, Driving Change

Energy Mafia Faces the Music

A parliamentary inquiry in Armenia investigates the alleged theft by state officials of vast quantities of fuel in the early nineties.
By Ara Tadevosian

A former premier and several ex-government ministers have been implicated in an energy scandal which left Armenia with practically no electricity for two years.


A parliamentary commission investigating acute power shortages in the early nineties has revealed that state officials stole hundreds of millions of dollars worth of fuel destined for the republic's power stations.


"There has been an energy mafia in Armenia. If we want to establish the rule of law here, we must prosecute those responsible, " said MP Arshak Sadoyan, during a parliamentary session last week discussing the inquiry's interim findings.


The energy crisis between 1992 and 1994 restricted domestic electricity supply to around two hours a day. "It was especially hard in the winter," recalled housewife Anna Asatrain. "Sometimes the temperature dropped to minus 20 degrees and we could only warm ourselves with home-made stoves."


The former ruling Armenian National Movement party long claimed that fuel shortages in the early nineties were due to the war over Nagorny Karabakh and the resulting economic blockade of the country by Azerbaijan and Turkey.


But the parliamentary investigation, backed by President Robert Kocharian and the leadership of the National Assembly, has provided concrete examples of official corruption. For example, in 1992, Russia sold Armenia nearly 1.3m tonnes of crude oil, yet official documents reveal that around 300,000 tonnes went missing.


"Huge sums of money are concerned," said Manuk Gasparian, one of the members of the commission. "We've already established that the republic lost $80-100m. And that's just after examining about 10 per cent of official documentation. Imagine what the sum will come to when we've checked all the paperwork."


Ex-premier Hrant Bagratian and several former energy ministers have been implicated in the scandal. Inquiry chairman, David Lokian, says other officials are likely to be named in the probe's final report in May.


The Armenian National Movement has strenuously denied the inquiry's accusations. Its members, some of whom continue to hold senior positions within the civil service, have been accused of trying to obstruct the commission's work. Some state institutions, including the Ministry of Finance and the Central Bank, have for example failed to submit relevant documents on time.


"These people continue to hold state jobs, some are very senior, and I don't doubt that they would try to exploit their positions," said MP Hayk Babukhanian.


Manuk Gasparian believes the "energy mafia" may also be prepared to resort to violence to sabotage the inquiry. Gasparian, one of then most active members of the inquiry, suspects the former regime have tried to intimidate him. He claims he was recently followed by two cars, while a store belonging to his son was shot at.


The parliamentary deputy-speaker, Gagik Aslanian, is confident that publication of the probe's findings will result in the prosecution of former government officials, "People must no longer believe they can commit crimes with impunity. At present no one takes responsibility for anything - this must end if Armenia is to have a future."


Many ordinary Armenians want to see convictions too. "If it becomes clear that, during those fearful years, our leaders were making profits while we suffered, then I think they should be tried and shot," said unemployed Garik Martirosian.


But there's widespread concern that those found guilty of economic crimes will escape prosecution. "None of those responsible for our misery have so far been punished, " said school teacher Rimma Sahakian, "and I've got little reason to believe that anything's going to change."


Ara Tadevosian is director of Mediamax, an independent Armenian news agency


More IWPR's Global Voices

Young Iraqis Are Demanding Change
A new generation is standing up for what they believe in - and they refuse to be intimidated.
Nineveh Reborn
Iraq: Women Plant Trees for Peace