On the 22nd November, I finally managed to meet with Mr. Aristomene Varoudakis, the Bank’s recently appointed Armenia Country Manager. Dr. Beatrice Edwards, Director of International Programs for the Government Accountability Project (GAP), had come to Armenia to discuss my claim, so she was able to join the discussions as my legal council.
I first wrote to Mr. Varoudakis in May, requesting a meeting so that I could explain the action, and to present the documentary evidence behind the twelve claims of fraud, corruption and embezzlement, all of which are detailed in GAP’s March ‘Demand Letter’ to the INT.
Varoudakis had presented his credentials to the Armenian President in March, but he was rarely in Armenia throughout the summer months. But in the early autumn, the Bank’s portfolio manager signed three new World Bank credits totaling $73 million with the Armenian Government, and a week later Varoudakis finally arrived.
In September, an Observer newspaper Article brought my action to the attention of the international community. In response, in October Varoudakis arranged a press conference, when he announced to the Armenian public that the World Bank did not have evidence of deception or inadequate management with respect to the Yerevan water supply program, adding that as far as the Bank was concerned, the matter was closed. I retorted with a report in the Armenian 168 Hours newspaper, which explained how the Bank had withheld documents from the Parliamentary Commission in 2004 – which was later understood to have been because they included a One-Hundred Million Dollar financial manipulation.
Immediately after that article, Varoudakis eventually agreed to a meeting, which his assistant advised would be on the 15th November, after his return from Washington. Accepting the invitation, I requested that it be postponed for a week to coincide with the trip that Dr. Edwards was to make to Armenia.
The meeting was set for the 22nd November, and Dr. Edwards and I duly attended, armed with a case full of the documentary evidence that GAP’s lawyers had scrutinized prior to submitting its March 2007 Demand Letter to the INT. Varoudakis had his portfolio manager with him, Naira Melkumyan, and was surprised to see GAP’s Director of International Programs by my side. The meeting started with a request from the Bank that the discussions be tape recorded. We agreed, on the understanding that a copy of the recording be provided to our party.
Varoudakis started with the Bank’s position regarding my claim at the INT. He presented a copy of the presentation that Vahan Hovhanissian, the Head of Commission had made to the National Assembly in March 2004, in the early stages of the study, adding that this was all the information the Bank had relating to the Municipal Development Project. His explanation clearly contradicted statements he had made during his press conference, that the Bank and the INT had studied the evidentiary documentation and had found that my claims were unfounded. Varoudakis explained that he had not in fact seen the many documents I submitted to the Bank in 2004; nor had he seen the Demand Letter which GAP sent to the INT in March, which included a number of the more critical of those documents.
Eventually I had the opportunity to respond to Varoudakis’s latest position, that his irresponsible comments to the Armenian press were based on this single document:
Of the twelve packets of evidentiary documentation I had prepared, I selected one which related directly to Vahan Hovhanissian’s March 2004 National Assembly presentation; a letter from the Armenian State register which provided details about the Non-Existent Municipal Development Project Management Unit (MDPMU). The letter confirmed that no PMU or PIU was registered in September 1998; the proof that the stamp on the Bank’s Municipal Development Project sub-credit agreement was counterfeit and referred to a PMU/PIU that never existed. Naira Melkumyan, the Bank’s portfolio manager, intervened by insisting the translation from Armenian to English was incorrect. Melkumyan had a vested interest in that particular matter, because it was her husband Michael Melkumyan who was behind the non-existent Project Management Unit and its counterfeit stamp.
After I corrected Naira’s deceitful assertions, Varoudakis studied the documents and commented that the lack of a registered PMU was not important, as other documents needed to be finalized for Bank funds to be released. According to Varoudakis, a counterfeit stamp on an official Bank document, needed to approve the release of thirty million dollars, is not a concern.
Varoudakis then attempted to defend the Bank’s position with regard to the manipulation of the re-assessed Yerevan Water & Wastewater Company (YWSC) assets, fraudulently reported in the YWSC annual accounts at a vastly over-stated value of more than 100 million dollars. He explained that the Bank has no association with externally audited financial accounts. An E-mail message from Roger Robinson clearly provided the evidence needed to convince Varoudakis that his understanding was not in line with actuality. Robinson had withheld the YWSC 2003 statement for a period of four months, until after the closing date of the Parliamentary Commission in September 2004, explaining that it was pending the ‘Bank’s own review’. Unfortunately for Robinson, the Commission term was extended, after which he was eventually obliged to release the document, which he did in October.
After our meeting,I sent the evidentiary documents relating to these two highly illegal activities to Varoudakis, together with a letter, which asked how and when I was to receive the copy tape of our discussions. In reply, Varoudakis sent the following message:
“Please note that the tape of our November 22 conversation will be directly transmitted to INT. Let me also mention that your reference to an "agreement" that the tape recording would be shared surprises me. Perhaps it was not understood that having the conversation recorded was in fact a condition for me to even have this meeting with you? Unfortunately, the extensive misreporting and misquotations in the press/internet of previous interactions between you and the World Bank office in Yerevan makes it necessary for our office to keep better track of such conversations”
The two instances I refer to above are more than sufficient reason to explain why Varoudakis later reneged on his promise to provide a copy of the taped discussions, as it includes more incriminating ‘evidence’ against the Bank. The tape will only further aggravate the Bank's efforts to discredit my comprehensively documented claims of High-Value and Wide-Ranging fraud, corruption and embezzlement associated with the Bank’s Municipal Development Project. But it is hard to imagine how Varoudakis could have so unashamedly misrepresented the matter in his above message - knowing that my legal council was witness to the entire proceedings.
If the INT ever gets a copy of the taped discussion, and if it is not distorted or damaged, it will serve very nicely as additional evidence in support of my claim. I had already made arrangements to release the tape to the press, but now the details will only be available from Varoudakis, assuming he agrees to release them? In either event, an application to Varoudakis will enable the press to draw its own conclusions about truth of this affair – if, after all the recent publicity, there is any doubt left in anybody’s mind?
In conclusion, it is hard to understand how in October Varoudakis had convened a press conference and made a public statement to discredit my claim of fraud, corruption and embezzlement, which involved tens of millions of dollars, when in November, in his own words, he had not been in possession of the documents, not to mention studied them sufficiently well to make a sound judgment. It also follows, that if Varoudakis’s press conference assertions were based on information from the INT, then, after nearly nine months, the INT has also not taken the time to properly study to my claim.
Armenian Parliamentary Commission (2003/4)