FUGITIVE MP'S PRESS SECRETARY VISITS EMBASSY

C O N F I D E N T I A L SECTION 01 OF 03 YEREVAN 000249

SIPDIS

SIPDIS

DEPT FOR EUR/CARC, NSC FOR MARIA GERMANO

E.O. 12958: DECL: 03/19/2018
TAGS: PGOV PREL PHUM ASEC KDEM AM
SUBJECT: FUGITIVE MP'S PRESS SECRETARY VISITS EMBASSY


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Classified By: Charge d'Affaires Joseph Pennington, reasons 1.4 (b/d).

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SUMMARY
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1. (C) Anna Mkrtchian, press secretary for the fugitive
Armenian member of parliament Khachatur Sukiasian, visited
the Embassy March 17 to discuss her boss's plight. She said
authorities continue to exert pressure on Sukiasian's family
and associates that began last fall when he became Armenia's
sole oligarch to publicly support ex-president Levon
Ter-Petrossian. The National Security Service periodically
searches Sukiasian's homes, some of his associates remain in
jail, and the GOAM continues to withdraw its financial
holdings held in Sukiasian's ArmEconomBank. Mkrtchian
indicated Sukiasian is out of the country, and said nobody
knows his whereabouts. She predicted the demonstrations
against Armenia's ruling regime would resume after the
lifting of the state of emergency, but thought that the
protest movement could dissipate if the authorities succeed
in sidelining its leadership. END SUMMARY.

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TAKING A RISK IN COMING TO THE EMBASSY
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2. (C) Mkrtchian is formally the press secretary for
Sukiasian's Sil Group holding company. She said her family
and colleagues had counseled her against coming to the
Embassy, over fears that the authorities could punish her for
advocating Sukiasian's case with the international community.
"But if I don't do it," she declared, "nobody else" will,
referring to her colleagues in Sukiasian's embattled
corporate family. Sil Group came under pressure in October
when authorities launched intrusive tax audits and arrested
two of its executives within days of Sukiasian's public
endorsement of LTP's presidential bid. (NOTE: As a member
of parliament, it is illegal for Sukiasian to directly own or
manage a business, but Sil Group is his creation and is
legally held by family members and associates, while
Sukiasian himself remains honorary chairman. This has become
typical for Armenia's oligarch MPs, given the
counter-productively strict rule barring MPs from private
enterprise. END NOTE.)


3. (C) Mkrtchian delivered a one-page declaration with 1,000
supporting signatures that calls attention to what it calls
the authorities' unwarranted political persecution of
Sukiasian, including the parliament's March 4 decision to
strip him and three other deputies of their parliamentary
immunity. She said she has shared the declaration with other
diplomatic missions and international organizations,
political parties, the Speaker of the Parliament, and the
European Bank for Reconstruction and Development (EBRD) that
owns a 25 percent share in Sukiasian's ArmEconomBank.

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PRESSURE IS STILL ON
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4. (C) Mkrtchian said the pressure that authorities initiated
against Sukiasian last fall has never abated, in fact it has
only intensified in the post-election environment. Since the
MP became a fugitive, the NSS has paid visits every three
days to his family's home in Yerevan and vacation home in
nearby Tsahkadzor to check on his whereabouts. The first
visit of the NSS took place on March 1, just after
authorities cleared Freedom Square, when the NSS came to
Sukiasian's home ostensibly to search for weapons. The MP
was home, and reportedly the NSS didn't find anything.
Mkrtchian said hundreds of neighbors and supporters
spontaneously gathered to show their support for Sukiasian
during this March 1 search, which one of Armenia's TV
stations aired.


5. (C) Mkrtchian indicated that Sukiasian is out of the
country, but did not know where. She says no contact has
been made since he went into his hiding. His family (wife,
married daughter and 15-year-old son) are worried for their
safety, and Mkrtchian said they have remained indoors since
Sukiasian went into hiding. (NOTE: Sukiasian's daughter is
married to the son of recently jailed Deputy Prosecutor
General Gagik Jahangirian, who was fired February 22,
immediately after he publicly pledged his support to LTP on
Freedom Square. Jahangirian was subsequently arrested late
on February 23 in a violent altercation with police that
resulted in his brother being wounded by gunfire. END NOTE.)

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Mkrtchian says friends, relatives, and business associates
of Sukiasian have been detained and questioned since the MP
went into hiding.


6. (C) Sukiasian's two business associates who were detained
in late October remain in jail for alleged tax evasion
charges. One of them directs a pizza chain for Sukiasian's
SIL Group, and the other a printing house. The director of
the printing house is Sukiasian's male cousin. Also, two of
the MP's bodyguards who were detained by police on February
24 remain in jail on charges of illegal possession of
weapons. Their arrest took place the evening after the
former Deputy Prosecutor General was arrested, also on the
same charges.


7. (C) Mrktchyan said that pressure on the SIL Group has
gradually subsided since the muscular October tax
inspections, with the notable exception of Sukiasian's
ArmEconomBank. She says the GOAM and public institutions
with deposits in the independent bank have gradually drawn
down their assets in the bank, to the tune of USD 30 million
since October. EBRD owns a 25 percent share in
ArmEconomBank, having extended the bank a syndicated loan of
USD 15 million as part of a program to stimulate credit
availability to Armenia's growing entrepreneurial class.
(NOTE: While the EBRD credit program was in process long
before Sukiasian jumped into pro-LTP presidential politics,
EBRD's AmCit resident director deliberately pressed ahead
with the program anyway, in a purposeful signal of
disapproval of authorities' flagrant abuse of power to punish
a political opponent. END NOTE.) The EBRD director
subsequently became a target -- one among many -- of a
hate-speech DVD produced by pro-government forces and later
aired on national televison that attacked him for his Jewish
heritage.


8. (C) Mrktchyan said the decision to strip Sukiasian of his
parliamentary immunity on March 4 was done to silence
Sukiasian once and for all. Surprisingly, Sukiasian's lone
parliamentary staffer has still been manning the office since
the parliament's special session to strip the immunity of the
four pro-LTP MPs. Mkrtchian said the staffer received
"solidarity" visits by more than a few MPs after the session
who questioned the official vote tally (85-22),and alleged
the results had been adulterated.

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NEXT SIX MONTHS
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9. (C) Mkrtchian struck a somber tone about the way forward,
saying the round-up of protest leaders and scare tactics by
the authorities could have a dampening effect on opposition
political expression. She said people will come out "to
protest injustice" in Armenia, but they would eventually tune
out or give up if the authorities maintained their
iron-fisted ways. She said Armenians would be broken, and
some would seek to leave the country as a result. She
maintained LTP's public line that a new election was the only
redress available, and that barring that, all other measures
and gestures would ring hollow and be greeted by public
skepticism, which is already sky high. Mkrtchian asserted
that "human beings are nothing" in today's Armenia, and that
"we didn't even feel this way" during the 1992-94 war with
Azerbaijan over Nagorno-Karabakh which resulted in mass
privations for the Armenian people.

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COMMENT
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10. (C) The last time we met with Mkrtchian was with her boss
in November. Now that he's on the run, she has been left
with the unenviable task of highlighting his fate to the
international community. We have reason to believe
Mkrtchian's account that Sukiasian has indeed left the
country, with some reports putting him in Georgia and others
in Dubai. We have no illusions that Khachatur Sukiasian is a
paragon of enlightened, free-market capitalism. No Armenian
oligarch has entirely clean hands, and we have little doubt
that he has almost certainly bent and broken dozens of legal
and ethical rules over the years, probably most of all during
his skyrocket to wealth during the LTP administration.
Sukiasian has probably been more cautious in recent years.
What is obvious is that Armenia's rules of big business are
starkly different depending on where an entrepreneur bestows
his political loyalties. A pro-government oligarch is a
virtual law unto himself, so long as the political masters

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get their share. Those who publicly break with the ruling
regime, however, do so at their peril. END COMMENT.
PENNINGTON