Audit Of Armenia’s Ruling Party Finds Financial Irregularities

An independent audit has found irregularities in the ruling Civil Contract party’s financial operations following two journalistic investigations that called into question the legality of its election campaign funding.

A private firm, Trust Audit, looked into Civil Contract’s annual financial statements in accordance with an Armenian law that mandates audits of all major parties eligible for government funding.

It concluded, in particular, that the party led by Prime Minister Nikol Pashinian exceeded last year a legal limit on donations and failed to return the surplus worth 123 million drams ($315,000) to donors or contribute it to the state.

The recently conducted audit also found that the party violated the law by accepting money from anonymous donors as well as businesses and other entities. The total amount of those donations stood at almost 11 million drams ($28,000). They too should be handed back or transferred to the state treasury, Trust Audit said, adding that Civil Contract has not done that either.

Vahagn Aleksanian, the party’s deputy chairman, downplayed these irregularities, saying that they are mere “technical” errors that can be corrected “very quickly.”

“We’ll do that. I think it’s a technical issue,” Aleksanian said of the revenue surplus exposed by the audit.

Aleksanian also claimed that Pashinian’s party did give up the sums raised from the unauthorized sources. “We just may have had delays in bank transfers,” he told RFE/RL’s Armenian Service

Trust Audit had given a more negative assessment of Civil Contract’s 2022 financial report. Its findings are still supposedly examined by the state Commission on the Prevention of Corruption. The supposedly independent body has yet to decide whether to recommend fines or criminal proceedings against the ruling party.

Armenia – Prime Minister Nikol Pashinian and his Civil Contract party hold a post-election rally in Yerevan, June 21, 2021.

Earlier this year, two Armenian online publications reported that ahead of local elections held in 2023 and 2022 Civil Contract received lavish and dubious campaign donations on behalf of scores of mostly low-income individuals who claimed to be unaware of those contributions.

The party claimed to have raised 506.5 million drams ($1.3 million) in the run-up to last September’s municipal elections in Yerevan. The investigative publication Infocom.am revealed in January that the bulk of that sum was generated by donations ranging from 1 million to 2.5 million drams, the maximum amount of a campaign contribution allowed by Armenian law. Their nominal contributors included presumably non-rich people, linked to senior government officials and businesspeople, as well as ordinary residents of Yerevan who could hardly afford such payments.

For its part, Civilnet reported in March that ahead of local elections held in other parts of Armenia in 2022, Pashinian’s party received 170 million drams ($435,000) from 140 persons, the vast majority of them its own election candidates. The media outlet randomly interviewed 31 such individuals and found that 15 of them categorically deny making any campaign donations.

“Others avoided answering or said they do not remember, and some said they are too busy to answer the question,” it said.

Critics suggested that Civil Contract arranged these shady payments to circumvent the cap on political donations. Pashinian flatly denied this. He claimed that the payments made on behalf of third persons unaware of them resulted from human or organizational “errors.”