It's a defining theme for Armenia's presidential campaign.
Five case studies show how deep the debate over corruption actually goes.
Armenian customs handily outranks tax inspections as a source of complaints from the business community. These essentially stem from the State Customs Committee's (SCC) discretionary but legal power to determine the market value of imported goods (by ignoring invoices submitted by importers) and to tax them accordingly. Armenian companies involved in import/export operations say they often have to pay kickbacks to stop customs officers overtaxing their products.
Only one such company, Royal Armenia, has gone public with such allegations so far, however. Its top executives repeatedly claimed in 2004 and 2005 that Royal Armenia, which specializes in coffee imports and packaging, is being unjustly penalized for their refusal to engage in a fraud scam with senior SCC officials.
The SCC dismissed the accusations before having Royal Armenia's main shareholder, Gagik Hakobian, and deputy director, Aram Ghazarian, arrested in October 2005 on charges of smuggling, tax evasion and other fraud. Both men have strongly denied the charges, saying that the case was trumped up by the authorities in retaliation for their embarrassing corruption allegations. They were unexpectedly acquitted and set free by a district court in Yerevan in July 2007. However, four months later, Armenia's Court of Appeals struck down that verdict and sentenced Hakobian and Ghazarian to six and two years in prison, respectively.
Pargev Ohanian, the district court judge who acquitted the two men, faced disciplinary action --ostensibly unrelated to the Royal Armenia case -- shortly after delivering the acquittal, a rare ruling going against the wishes of the government and prosecutors. Acting on the recommendation of a presidentially appointed body overseeing the Armenian judiciary, President Kocharian dismissed Ohanian in October 2007.
The Government Says:
"I don't think there is that much corruption in the Armenian customs [service]."
-- State Customs Committe Chief Armen Avetisian speaking with journalists on October 16, 2006
The Other Side Says:
"The whole thing shows that corruption has an institutionalized character in Armenia. The authorities are not only doing little to tackle corruption, but are punishing people who really fight against it."
-- Varuzhan Hoktanian, deputy chairman of the Center for Regional Development, October 2007 interview with EurasiaNet