YEREVAN (RFE/RL)—Vartan Ayvazian, a senior Armenian lawmaker and former environment minister, was ordered by a U.S. federal court to pay more than $37 million in damages to a U.S. mining company that has accused him of corruption.
The Connecticut-based Global Gold Corporation publicly accused Ayvazian in 2006 of demanding a $3 million bribe from its top executives after the Armenian Ministry of Environment terminated the company’s license to carry out exploratory and mining operations at a small gold deposit in Hankavan, central Armenia.
Ayvazian, who was environment minister at the time, strongly denied the allegations, saying that Global Gold was stripped of the license because it failed to honor its investments commitments. Then Prime Minister Andranik Markarian also dismissed the bribery claims.
Ayvazian on Monday dismissed the charges.
The U.S. Embassy in Yerevan took the claims seriously, however, raising the matter with the Armenian government.
In 2007, Global Gold filed lawsuits against Ayvazian and the government with the International Chamber of Commerce and the International Center for Settlement of Investment Disputes (ICSID) respectively. It subsequently settled the dispute with the government but pressed its case against Ayvazian. The company also took the case to the U.S. Southern District Court of New York.
On September 5, the New York court ordered law-enforcement bodies to seize $37.5 million worth of assets from Ayvazian and transfer them to Global Gold. The order came almost two months after the court slapped the huge fine on the Armenian official.
Global Gold sources say Ayvazian was notified about the verdict before it took effect on August 10 but failed to respond to it.
Ayvazian denied receiving its copies, however. He dismissed the ruling, saying that it can have “no legal consequences” because a U.S. court can have no jurisdiction over Armenian citizens residing in Armenia.
The ex-minister, who now chairs the Armenian parliament’s committee on economic affairs, also again denied ever seeking kickbacks from the U.S. firm. “Let one person say that I demanded a bribe from them so that I can sue them,” he told a news conference. “There is no such person.”
A Global Gold source told RFE/RL’s Armenian service (Azatutyun.am) that Ayvazian was fined by the New York because he was the de facto key shareholder in SHA, an Armenian company that sold the Hankavan deposit to Global Gold in 2004, and guaranteed that the latter will not get in trouble with the Armenian government. The source said that when they signed the takeover deal both firms also agreed to submit to the jurisdiction of courts in the U.S. state of New York in case of disputes.
Ayvazian has denied fully or partly owning SHA. Armenian media outlets have for years linked him with ownership of properties rich in precious and other metals. The Ministry of Environment Protection had considerable regulatory authority over the Armenian mining industry when it was run by Ayvazian.
The investigative online publication Hetq.am reported last year that Ayvazian at least partly owns Bounty Resources Armenia Limited (BRAL), an obscure firm that controls three untapped iron deposits in three different parts of the country. Ayvazian did not deny this. “Let that remain a secret as well,” he said at a news conference in February 2011.
The ex-minister affiliated with the ruling Republican Party of Armenia spoke shortly after it was announced that a Hong Kong-headquartered firm, Fortune Oil, has paid $24 million to buy a 35 percent stake in BRAL. BRAL was apparently set up and granted operating licenses for the three iron mines during Ayvazian’s ministerial tenure that ended in 2008.