HARSH REACTION FROM GOAM TO DEPUTY SECRETARY'S

S E C R E T YEREVAN 001051


DEPT FOR D, EUR A/S FRIED, EUR/DAS BRYZA, EUR/CARC

E.O. 12958: DECL: 12/30/2033
TAGS: ETTC PARM PGOV PREL IR BU AM
SUBJECT: HARSH REACTION FROM GOAM TO DEPUTY SECRETARY'S
LETTER ON ARMENIAN ARMS TRANSFER TO IRAN

REF: A. STATE 134490

B. YEREVAN 1040

Classified By: AMBASSADOR MARIE L. YOVANOVITCH, REASONS 1.4(B)(D)


1. (S) SUMMARY AND COMMENT: On December 30, the
Ambassador met separately with Foreign Minister Nalbandian
and Presidential Foreign Policy Advisor Sargsian, who both
expressed the President,s anger over the Deputy Secretary,s
letter to President Sargsian. They both stated that the U.S.
had taken months to act and in the end the U.S. had reversed
the process: the intelligence should be shared and a
discussion should take place before there is movement towards
what steps need to be taken to prevent a future export
control violation. Sargsian also expressed concern that
Congress and the transition team are being briefed. Both
also put the issue in the context of the larger, apparently
disappointing bilateral relationship. Nalbandian expressed
disappointment in the lack of high-level visits, and Sargsian
claimed that U.S. actions could force Armenia to abandon
complementarity as its foreign policy and choose to align
itself with Russia.


2. (S) If there was any doubt before, it is clear now that
the Armenians are angry about the letter, angry that this is
still an issue, angry we are not accepting the President,s
assurances that this couldn,t have happened, and angry that
the issue may poison relations with the new Administration
and with Congress. Some of this anger is clearly due to
built-up disappointment and frustration over the lack of
high-level visits and correspondence and the perception that
the neighbors are treated better. Nevertheless, the Armenian
attitude makes the expert team,s visit even more important
and even more challenging. The team will need to be well
prepared, as we do not expect the GOAM to accept the
intelligence at face value, and there could be some
resistance to discussing the measures outlined in the Deputy
Secretary,s letter. Separately, we will need to focus on
the bilateral relationship and how we can work to improve it
) although clearly the outcome of the expert team visit will
have more than a little impact on this as well. END
SUMMARY AND COMMENT.

FOREIGN MINISTER EXPRESSES ANGER OVER LETTER


3. (S) On December 30, the last day of the Armenian working
year, a visibly angry Foreign Minister Nalbandian called in
Ambassador to express official ire with the &very strange
letter8 that Deputy Secretary Negroponte sent President
Sargsian. Nalbandian reiterated the President,s point that
it has been months since this issue was first raised and that
the President had at that time offered for a group of
American experts to come to Armenia to see for themselves
that this could have never happened. Observing that the GOAM
paid close attention to this letter "since it does not
receive many letters from the U.S," he said the President
was "very disappointed" in the letter.


4. (S) Nalbandian provided a written response to the Deputy
Secretary,s letter signed by the Foreign Minister, where the
operational sentence reads: "Therefore it is strange that
several months later you inform us that the mission from the
United States will arrive not to examine the alleged case but
to exclude the occurrence of similar cases in the future."
(The letter will be scanned and sent to EUR/CARC.)
Nalbandian was not particularly mollified when the Ambassador
explained that the team would provide an intelligence
briefing, answer questions and be prepared to discuss the
steps Armenia should take to strengthen its export regime.
Ambassador agreed that, perhaps, it would have been more
useful to provide the intelligence briefing and then outline
the suggested steps, but told Nalbandian that sending the
letter first provided an opportunity for the GOAM to review
the suggestions and what the GOAM is prepared to do. She
noted that it is relatively rare to send such letters and she
hoped the GOAM would accept the letter in the spirit in
which it was intended: The U.S. wanted to preserve and
bolster the bilateral relationship and ensure that Armenia,s
export control regime was strong enough to ensure that there
would not be another export control violation.


FM STILL READY FOR CONSTRUCTIVE ENGAGEMENT WITH U.S.


5. (C) Nalbandian observed that Armenia wants good relations
with the U.S., and would &do its utmost to enhance, deepen
and enlarge the existing cooperation8 between the two
countries. He noted that*&despite Armenia,s relationship
with Russia, which is no secret8 -- he had publicly stated
this in April and remained committed to this goal.
Ambassador agreed, and asked in which areas the two
countries should particularly focus to strengthen the
relationship. Nalbandian could only note the need for
high-level visits as the major Armenian priority. Ambassador
agreed that high-level visits would be positive and noted
that figures such as the President or Secretary of State
usually come to countries when there is something specific to
accomplish or highlight. She suggested that she and the
Foreign Minister brainstorm about areas where Armenia and the
U.S. could make the kind of real progress that would lend
itself to a high-level visit.


LETTER REVERSES THE DIALOGUE


6. (S) In the evening, Ambassador had a pre-arranged meeting
with presidential foreign policy advisor Vigen Sargsian, who
had been present on December 26 when Ambassador delivered the
Deputy Secretary's letter to President Sargsian. Sargsian
got right to the point and made many of the same points that
the Foreign Minister had, as well as others. He noted that
the Deputy Secretary's letter "changed the dialogue" about
the issue. Whereas the Secretary in New York had told the
President that we would send an expert team to "verify" the
incident, the letter assumed the incident was a fact and
jumped right to what steps Armenia should take. The process
was reversed. Sargsian said the President was angry and
believed that the long delay in providing the information
regarding the arms transfer was due to manipulation of the
intelligence and that this manipulated information will be
provided to the new Administration.


CONCERN ABOUT BRIEFINGS TO CONGRESS/NEW ADMINISTRATION;
DOUBTS CAST ON INTELLIGENCE


7. (S) Sargsian expressed conviction that the incident
couldn,t have happened because of the President,s
certitude, but also raised concerns that Congress is being
briefed on the issue. He noted that the President,s view is
that even when the information is proved wrong, it will be
hard to change the minds of those Americans who have received
the briefing. Sargsian raised the intelligence regarding
Weapons of Mass Destruction in Iraq and asked how the U.S.
could be sure that the intelligence regarding Armenia is
better vetted. Ambassador assured Sargsian that the
intelligence had been closely examined in Washington and told
him that when the expert team came to Yerevan, there would be
an opportunity to ask questions and challenge the findings.
The letter with the suggested steps provided Armenia an
opportunity to think about what how it wanted to improve its
export control regime before the team arrived.


8. (S) As a final note on this subject, Sargsian raised what
the Armenians consider to be the protocol breach of a deputy
secretary sending a letter to a president, and the Embassy,s
failure to provide a signed original. The Ambassador noted
that nothing should be read into this, and the export control
issue was a serious issue for the U.S. ) and for Armenia.
She added that as the details of the expert team,s visit to
Yerevan become known, she wanted to be in close touch with
Sargsian so that the visit goes as smoothly as possible. The
U.S. wants to handle this issue as carefully as possible; we
would need Armenian help to do so.


U.S. SINS OF OMISSION AND COMMISSION


9. (C) Like the Foreign Minister, Sargsian raised the broader
issue of the bilateral relationship, but was much franker.
He noted that Armenia,s stated policy of complementarity
does not come without effort. It,s easier for Armenia not
to provide troops for Iraq, Kosovo and soon Afghanistan. It
takes a serious effort to undertake such actions and not
create problems for the U.S. with the Russians. Armenia is
trying to survive in a neighborhood where Russia, Turkey, and
Iran all have vast ambitions. Their appetites have not
vanished with their empires, the U.S. is a new and powerful
player on the block, and Armenia is just trying to survive.


10. (C) Sargsian provided a long list of U.S. sins of
omission and commission. In the last year, the U.S. had not
congratulated Armenia on its presidential elections (unlike
Azerbaijan, which had worse elections) and has held back MCC
monies. More recently, the appointment of the new RFE/RL
director &was a real blow to the bilateral relationship.8
After the Russia-Georgia conflict, the U.S. rushed to help
Georgia, but Armenia, which was also hurt, was not offered
any additional assistance. And despite the fact that the
U.S. had not offered assistance, it pressures Armenia over
its relationship with Iran, which was the only country that
helped Armenia, providing emergency supplies of gas and
wheat. The U.S. relationship with Georgia and Azerbaijan,
including frequent high-level visits, do not go unnoticed, he
said, and noted that the bilateral relationship does not
exist in a void -- relations in the region matter as well.
Finally,, citing Ukraine, Georgia, and Kyrgyzstan, Sargsian
noted that U.S. promotion of a rapid transition to democracy
was not the best model for Armenia. Armenia wants democracy,
but at its own pace and without a loss of stability.


RELATIONSHIP WITH RUSSIA: &SWEET8


11. (C) The president,s advisor said that previously there
had been a balance between Armenia,s relationship with
Russia and its relationship with the U.S. But now that
balance is gone. The relationship with Russia is &sweet.8
Russia provides gas cheaper than it does to Belarus; they are
about to provide a &huge8 credit to Armenia; and CSTO
countries are evaluating an important change in the CSTO
Agreement which would provide a &serious security
guarantee8 against a possible Azeri attack. Moreover,
unlike the U.S., the Russians never condition their
assistance and they don,t pressure Armenia regarding its
rapprochement with Turkey, which is sensitive to Russia.
This combined with American actions is forcing Armenia to
choose Russia. It is increasingly difficult for Armenians
who want democracy and good ties with the West to argue that
complementarity is the best foreign policy for Armenia.
American actions are &provocative8 and the Armenians need
something more from the U.S., specifically a high-level visit
and the MCC monies that are now on hold.


AMBASSADOR: BILATERAL RELATIONSHIP IMPORTANT; ARMENIA,S
CHOICES ARE ARMENIA,S


12. (C) Ambassador responded that she agreed that the
relationship between the two countries was positive, but
could be improved. She said the U.S. provides millions of
dollars of assistance every year, the diaspora provides many
important ties, and Armenia has many friends in Washington
that care about the country,s development. However, the
U.S. expects countries to adhere to certain standards,
especially the standards that they have signed up to as UN,
OSCE, and PACE members. This may not always be comfortable,
but in the long-term it is in the interests of the country
and the relationship with the United States. The U.S. was
not forcing Armenia to make a choice between Russia and the
United States; the Armenians were making their own choices
about the future of their country. However, the Armenians
need to make those choices with their long-term interests in
mind, not just their immediate tactical concerns. The
Ambassador repeated the suggestion that she had made to the
Foreign Minister that it would be useful to brainstorm
together, decide on specific objectives and make serious
progress towards those goals. This could provide the kind of
momentum necessary for a high-level visit, but perhaps lower
level visits might be useful in the shorter-term. Sargsian
was as unenthusiastic as Nalbandian, and simply repeated that
principals would have many issues to discuss if they met.


YOVANOVITCH