However, I think it’s more in your interest to respond on your own blog, thus giving me the opportunity to make fresh posts with less work involved (sorry, but time is pressing for all of us) as well as driving more traffic to your blog through links and so on.

However, whichever way you choose is up to you. Probably both are most appropiate i.e. you can quote a little and link to the full response on your blog. You’ll also be able to monitor interest through your own stats as well.

Still, a more comprehensive and holistic approach is probably best and the beauty of blogs.

I have sent you copies of the original documents that I refer to here and which are small parts of my submission to GAP in Washington, and which in turn are in part the basis of my 29th March claim to the INT.

Here are the details for your readers:

The first document I sent to you clearly shows how at the time of the Municipal Development Project, Richard Walkling was both Authorized Representative of the International Operator (A. Utilities) and at the same time General Director of the Yerevan Water & Sewerage Company (YWSC). This situation started in June 2000 and is a VERY serious violation of World Bank rules and of the Municipal development Project management contract, which A. Utilities signed with the Yerevan Water & Sewerage Company. Effectively Richard Walkling represented both sides of the management contract, as ‘Principle’ and ‘Contractor’.

In 2002, the YWSC assets were re-valued, in accordance with a Government decree, and the overall value was increased from about $10 million to more than $120 million, before being depreciated to a final end of year figure of about $50 million.

The second document I sent to Onnik shows the variations between the ‘Aucon’ audited assets revaluation and the revaluation shown in the YWSC 2003 financial statement. Although the two documents show a similar total final value, the Aucon document shows the total for the revalued ‘Mobile Equipment’ and ‘Machinery & Equipment’ to be 610 million Drams (approx), about $1.2 million. The 2003 YWSC financial statement on the other hand shows the machines & equipment to be revalued at a massively inflated figure of 56 BILLION Drams (about $115 million!!) and then depreciated to about 13.5 BILLION Drams (about $26 million!!).

My E-mails with the Bank show that the Bank withheld the 2003 statement until AFTER the original end date of the Parliamentary Commission, which was 10th September 2004. But the Speaker of Parliament (Artur Baghdasarian) extended the Commission term, after which the Bank could simply not withhold the document any longer. So on 7th October 2004, the Bank eventually approved release of the statement to the Commission. On the 18th October, after having studied the document, I wrote to the Bank commenting on the grossly overstated revaluation figures for machinery and equipment. That over-valuation gave the YWSC, with Richard Walkling as General Director, the opportunity to claim more than 6 BILLION Drams (about $12 million) depreciation, which should have been no more than $3 million, as mobile equipments are devalued at 20% per year, whereas fixed assets are devalued at only 5%. This was yet another $9 million that Richard Walkling had arranged to be embezzled from the Armenian state budget – on top of several more tens of millions of dollars.

What is of particular interest with this event is that the Bank wrote that it had withheld the document for its own “assessment”. So this demonstrated quite clearly that the Bank was obviously a collaborator in this highly corrupt activity, as the Bank had every opportunity to regulate the problem.

So - when Aristomene Varoudakis says that in 2004 there was no significant project impropriety, he is VERY much mistaken.

SERGE SARGSYAN RECEIVES WB DIRECTOR

A1 Plus, 05 October, 2007

Today, RA Prime Minister Serge Sargsyan hosted the Director of the World Bank Yerevan Office Aristomene Varoudakis.

The parties dwelt on issues connected with the WB programs underway in Armenia, the bank’s future cooperation with the Armenian Government, as well as questions related to the RA Prime Minister’s forthcoming visit to Washington.

Serge Sargsyan will participate in the annual forum of the WB and the International Monetary Fund and the sitting of the Armenian-American Intergovernmental Economic Cooperation Commission in Washington.

According to the RA Prime Minister, the Armenian Government highly appreciates the cooperation with the World Bank and is inclined to develop it in the future.

Serge Sargsyan and Aristomene Varoudakis turned to the document entitled “The World Bank and Armenia: Partnership for Best Future,” which presents the whole path of the Bank’s partnership with Armenia, the Bank’s mission, the package of documents, the results achieved, the new strategic direction of assistance for 2008-2012, the challenges and a number of other issues.

The interlocutors discussed the possible directions of the Bank’s cooperation with the Armenian Government. Serge Sargsyan stressed the importance of implementation of regional development programs, which have both political and economic components.

I would imagine that there’s now no stopping this story until the World Bank’s INT sends an investigation team to Yerevan. Let’s see. There is no reason why they should not now that the allegations raised by a parliamentary commission in 2004 have resurfaced again.

The allegations weren’t properly dealt with back then so let’s hope they are now. Really, it’s the only logical thing that can happen now.

The action started in March this year when my claim was submitted to the INT, the World Bank’s watchdog organisation in Washington, and since that time regular updates have been widely distributed throughout the Armenian media.

But it was only after the action hit the mainstream UK newspapers that any of the other ostensibly independent Armenian papers eventually decided to cover the story. That includes both locally and internationally orientated papers, which until this week have presumably considered the ever-increasing international scrutiny of Armenia’s corruption to be of insufficient interest to warrant exposure to the Armenian public.

But thanks to Onnik’s resolute Oneworld Media coverage, the Armenian media has eventually had little other choice but to do the right thing and cover the story – each in its own way, to suit its own political agenda, and often with the Armenian version presenting one story and the English version another, as per this weeks A1+ coverage.

The Bank’s new country manager now contends that there was no significant fraud or corruption, even thought GAP’s Washington lawyers have found that there is sufficient documented evidence of high-level and wide-ranging corruption to warrant a full investigation. At the same time, the Bank’s Department of Institutional Integrity continues to ignore repeated requests from high-level international officials and may never carry out an investigation. But Oneworld exposure has already helped to generate the attention needed for the World Bank to take a much closer look at its activities in Armenia.

And now that the story has reached the attention of the Armenian Prime Minister, with his intervention, this action could lead to real improvements for a significant amount of Armenia’s lesser privileged – and that would be thanks in no small part to truly independent Oneworld media coverage.

Bruce Tasker
Blowing the World Bank Whistle

Just as Yerevan and it’s population is so small that corruption, nepotism and connections are everywhere and unavoidable, I fear that the same is true for the expat/repat community. I know a number of instances where this is the case and while it is probably only natural given the situation, there is no doubt about it. There needs to be stricter controls and tighter monitoring with increased transparency not only for the government and civil society, but also for international organizations and diplomatic missions too.

Ask me to describe the current situation in one word, and there’s only one that seems appropriate — incestuous.

I posted about that here.

My answer is that when I agreed to accept Vahan Hovhanissian’s request and join the commission in October 2003, it was on the understanding that I would manage a team of specialists who would gather publicly available information on credits, grants and humanitarian assistance, and register that information into a computer program which we would develop. The nine commission members, Deputies of Parliament, would then determine which of the programs were better and which were worse. This is all covered in my end-of-year report to the commission of September 2004.

In November 2003, Vahan started an effort to persuade me to carry out an investigation into a specific World Bank credit project, and he spent the next three months pressing me to do that. Eventually Vahan gave me an ultimatum, either I would do as I was asked, or I would be unceremoniously dismissed from the commission.

I asked Vahan why he insisted that we study a specific project, adding that we would undoubtedly open a tin of worms, and the commission would not have the clout to put the lid back on. Vahan insisted that corruption in Armenia had already escalated to an unacceptable level and the commission was obliged to make an effort to curtail it.

On that understanding, and trusting Vahan Edwardovich to his word, I stipulated that we must have a concrete basis for initiating a study into any specific project, and I would need written authorisation from the Head of Committee (Vahan). At that time, the local construction company “Betartshin”, had written to the Commission complaining that it had won a tender to build a water reservoir for the Municipal Development Project and the work had been taken away from them and given to another local construction firm, which happened to be owned by a member of our commission. Betartshin had refused to pay a backhander to have the work finally approved.

I interviewed the directors of Betartshin, and after they confirmed the details of their complaint, I agreed to carry out the study.

To answer another question raised by our PM Serge Sargsyan, about my working for the Italian A. Utilities, company and the French company Veolia not hiring me. Serge Arzatovich has been incorrectly informed, I have NEVER worked for the Italian company, or for the French company, nor have I ever asked for a job at either company.

However, in February 2004, when visiting the Garni water pumping station, which should have been taken out of service after hundreds of thousands of Municipal Development Project dollars had been spent to convert the water supply to gravity feed, a senior official of the water authorities offered me a job to work as deputy to Richard Walkling, who was the Authorised Representative of the International Operator, A. Utilities, and at the same time General Director of the Yerevan water company, to which A. Utilities was under contract – a very serious conflict of World Bank project terms and conditions and certainly not in the best interests of Armenia’s taxpayers.

I turned down the offer, adding that Walkling was a disgrace and I would never be associated with him in a working capacity. Walkling is still a disgrace and as far as I know, now works for the French company Veolia, under the present World Bank financed water project for Yerevan, whilst the INT ignores continuous requests to carry out an investigation into my claims.

In June 2004, when most of the fraud and corruption had been exposed, and which I had reported to the World Bank and the INT, Vahan Edwardovich changed his position and attempted to close down the study. Hence, Vahan did not report the final results of the study to the Armenian people and the Word Bank ignored the allegations of corruption that I had reported to their country manager and to the INT.