An Armenian oligarch who US diplomats once compared to Donald Trump has spent tens of thousands courting UK Eurosceptic politicians over the past two years.
Gagik Tsarukyan MP is one of Armenia’s richest men, and his political party occupies the second largest number of seats in parliament. He has no known assets or interests in the UK.
Today, openDemocracy can reveal that Tsarukyan’s political party has used a loophole in UK political donation legislation to host over a dozen Conservative Eurosceptics at his luxurious Multi Grand hotel and casino complex outside Armenia’s capital, Yerevan. These politicians are on the free-market, Eurosceptic wing of the party.
Tsarukyan’s guests, who have been profuse in their praise of the tycoon, include Lord Maude, a former cabinet minister now in the House of Lords, former MP James Wharton and Lord Callanan, currently minister of state at the Department for Exiting the European Union. Since leaving government, Maude and Wharton have taken up positions as Brexit advisers in the private sector.
Every year, UK politicians take millions of pounds’ worth of overseas trips paid for by foreign governments and non-governmental organisations.
“The fact that these anti-European politicians regularly enjoy the hospitality of one of Armenia’s richest men raises serious questions about their actions and motives back home,” says Labour MP Ben Bradshaw. “British politicians should not be for hire, and these individuals should come clean about their involvement in Armenia.”
A 2018 report by Transparency International UK highlights an exemption in the Political Parties, Elections and Referendums Act which permits donors without a strong link to the UK to pay registered individuals’ overseas travel expenses. This can lead to UK parliamentarians legitimising corrupt and repressive foreign governments via overseas trips, the organisation says.
Speaking to openDemocracy, Steve Goodrich, senior research officer at Transparency International UK, said: “It is prudent that parliamentarians undertake sufficient due diligence to ensure their status is not being used to burnish the reputations of those with something to hide.”
There is no evidence that the individuals entertained by Tsarukyan lobbied on his behalf or promoted his interests in the UK.
Apart from where stated, none of the politicians has responded for comment.
Gagik Tsarukyan, 62, has built a business empire in Armenia comprising construction, mining, brandy and beer production, as well as hotels and casinos.
The Prosperous Armenia party, set up in 2004, is seen by many as a vehicle for Tsarukyan’s political ambitions. “From roughly 2012 to 2017, Tsarukyan was seen as the main political challenger to [president and later prime minister] Serzh Sargsyan,” says Emil Sanamyan, a fellow at the University of Southern California’s Institute of Armenian Studies.
Democratic politicians might well distance themselves from the Republican Party, the clan-like structure that ruled Armenia for nearly two decades: it is widely associated with authoritarian rule, nepotism, police violence, vote-buying and corruption. In May 2018, the party of government was forced to resign under pressure from protesters.
From 2007 to 2012, however, Tsarukyan partnered with the Republicans in government. A member of his extended family, and other political allies, hold political posts in his home province of Kotayk. In addition, there have been reports that Armenian journalists have been threatened and beaten allegedly by people connected to Tsarukyan.
“Tsarukyan is first and foremost a businessman,” says Anahit Shirinyan, an independent policy analyst. “He entered politics from business at a time when the merger of money and politics was going full-throttle in Armenia. This merger was meant to create a scheme of interdependency whereby businesses helped consolidate the ruling regime. In exchange, they were meant to be able to serve their own commercial interests through involvement in political decision-making.”
A former arm-wrestling champion, Tsarukyan is known for his bombastic and ‘man of the people’ style, and like other Armenian oligarchs sponsors numerous charitable projects.
And in a country where roughly a third of the population lives in poverty, Tsarukyan’s philanthropy makes many eager to win his favour.
In March 2017, Armenia’s Central Election Commission stated that Tsarukyan had violated election law by promising material assistance at the start of his campaign, and warned him against continuing to do so. During the 2018 Yerevan city election, police raided the party’s offices as part of a criminal investigation into vote-buying. Prosperous Armenia called this a “false denunciation” at the time.
“Tsarukyan was a potent force for two reasons,” says Emil Sanamyan, who names the tycoon as one of Armenia’s principal employers. “He accumulated genuine public popularity based on his philanthropy aka vote bribes, and Tsarukyan’s party was set up with support from Robert Kocharyan.”
Tsarukyan’s ties with Robert Kocharyan, independent Armenia’s powerful second president, are mentioned in US diplomatic cables leaked by WikiLeaks. “The Kocharyan relationship was seen as giving Tsarukyan access to the Kremlin that could have bested that of Serzh Sargsyan,” says Sanamyan.
Kocharyan, a friend of Russian president Vladimir Putin, is currently under investigation for his alleged role in the events of March 2008, Armenia’s ‘Bloody Sunday’, when at least eight civilians died in police clashes following presidential elections. A 2009 US embassy cable released by WikiLeaks stated that Kocharyan headed one of several “major political/economic pyramids” in the country.
In February this year, Tsarukyan called attempts to find connections between Prosperous Armenia and Kocharyan “speculation”, saying that he “no longer owed anything to anyone”.
Partnership at first sight
Since 2017, Prosperous Armenia has hosted 15 UK Conservative Eurosceptic members of the House of Lords, MPs and other politicians in Yerevan. With some exceptions noted in this article, Tsarukyan’s party paid for all travel and accommodation, according to the UK parliamentary Register of Members’ Interests.
In September 2017, for example, a delegation of eight Eurosceptic peers, MPs and other politicians, including Teesside mayor Ben Houchen, who recently invited Donald Trump to visit Redcar, travelled to the Armenian capital to attend a ‘Conservatism and Progress’ conference held at Tsarukyan’s hotel and casino complex outside the city.
Here, former MP James Wharton, ex-parliamentary under-secretary for international development – who introduced the EU referendum legislation into Parliament in 2013 – called Tsarukyan and his party “trusted colleagues”, presenting his host with a signed photograph of Margaret Thatcher as a gift.
openDemocracy could not confirm whether Wharton’s trip was paid for by Prosperous Armenia.
As reported by Tsarukyan’s TV channel, Lord Callanan, the future minister of state at the Department for Exiting the European Union, gave a speech in which he noted how popular Tsarukyan was among the Armenian people, and hoped the tycoon would win double the number of seats in the next election.
Baroness Pidding said that she had previously met Tsarukyan at Westminster Palace, where she realised they “would become partners the moment they met”.
Anna Shahnazarian, Armenian civic and ecological activist, says that it should "be outrageous for citizens of the UK that their elected officials' reputations are used in political games elsewhere in the world."
Scott Mann MP was another member of the visiting party. Responding via email, he stated that all his foreign travel is “recorded on my register of interests. I only take up offers to travel to other countries in parliamentary recess.”
Britain turns global
The ‘strong bond’, as Tsarukyan called it, between the Conservative Party and the oligarch extends to the former’s representatives in Europe.
The Alliance of Conservatives and Reformists in Europe (ACRE), the Conservative Party’s partners in Europe, has listed Tsarukyan’s Prosperous Armenia party as a member since 2015. Since its inception, ACRE has positioned itself as a leading voice of direct democracy and free-market economics in Europe.
In March 2017, Lord Callanan and Andrew Bingham MP joined an ACRE delegation to Yerevan for a conference held by Tsarukyan’s party. Callanan previously chaired the European Parliament’s European Conservatives and Reformists (ECR) grouping, co-founded by the Conservative Party in 2009.
The visit was conducted by ACRE, and a Tsarukyan spokesperson stated at the time that the group’s visit was aimed at supporting the oligarch’s party ahead of Armenia’s 2017 parliamentary elections.
The parliamentary Register of Members’ Interests does not record this trip for either Bingham or Callanan, and openDemocracy could not confirm who paid for it.
March 2017: Kentron TV programme on a Prosperous Armenia-ACRE conference held at Tsarukyan's Multi Grand Hotel in Yerevan. Here, ACRE and British politicians call on viewers to support Tsarukyan's party at the upcoming April 2017 elections.
The sentiment of support was affirmed by the British and ACRE politicians, whose conference speeches in support of the tycoon’s party appeared in a Tsarukyan campaign video shortly after.
In December 2017, former MP James Wharton returned to Yerevan for another conference. He joined Brexit architect Daniel Hannan MEP, who wants the UK to become an ‘offshore, low-tax, global free-trading entrepôt’ after leaving the EU, in Tsarukyan’s hotel and casino complex outside the Armenian capital.
Hosted by Prosperous Armenia and ACRE, the ‘Yerevan Summit’ witnessed ACRE’s annual general meeting, as well as a speech on “patriotism and conservatism” by Hannan.
This relationship has caused the European group some problems, however.
In 2017, Prosperous Armenia gave a €121,043 donation to ACRE. But following a 2018 European Parliament investigation into ACRE trips and expenses, the party had to return all but €12,000 of these funds to Prosperous Armenia: - donations over this amount are not permitted for groups taking European funds. Speaking to openDemocracy, ACRE stated that these funds were a membership fee, and said it has now returned the funds.
Commenting on ACRE’s relationship with Prosperous Armenia and its leader, Richard Milsom, the group’s chief executive, said:
“Our core mission is to promote the values of a free society – democracy, freedom of speech, press, property rights, rule of law. We facilitate these values and these relationships through a centralised network of politicians, to spread our message and build our movement. Countries on the border of Europe have many different problems, including geopolitical ones. Prosperous Armenia is an asset to the Alliance, we can help each other.”
The Queen’s speech
This sentiment was echoed in comments made by Lord Callanan to Tsarukyan’s TV channel during the oligarch’s visit to the UK in June 2017.
“We stand with Mr Tsarukyan and Prosperous Armenia, and are ready to support them in their initiatives,” Callanan said during Tsarukyan’s visit to the House of Lords. A few months later, Callanan became a minister of state at the Department for Exiting the European Union.
“The fact that our two parties agree on ideology is a guarantee of the success of our collaborations,” commented Callanan at the time.
Tsarukyan was in the UK in a trip facilitated by ACRE, according to the latter. In Armenia’s parliamentary elections two months earlier, Prosperous Armenia had been predicted to potentially beat the ruling Republican Party, but instead took just 31 seats out of 105.
In London, the oligarch attended the state opening of Parliament. As reported by his TV channel, Tsarukyan later went to dinner at the private, Conservative-linked Carlton Club as the guest of Sir Geoffrey Clifton-Brown MP, a vice-president of ACRE and member of Parliament’s hard-Brexit European Research Group.
Gagik Tsarukyan and Lord Martin Callanan. Source: Kentron TV
He was joined by, among others, James Wharton, Eleanor Laing MP, the deputy speaker of the House of Commons, and Richard Milsom, ACRE chief executive.
In May 2018, Armenians peacefully overthrew the corrupt Republican Party government through waves of protest across the country. And in the aftermath, Prime Minister Nikol Pashinyan’s new government has sought to take aim at the country’s entrenched oligarchic interests.
There have been high-profile investigations and arrests of old-regime officials and businessmen, including, most notably, Robert Kocharyan. While Tsarukyan may have supported protesters publicly in May 2018, observers aren’t convinced that this is enough to protect him from the country’s anti-oligarch drive in the long run.
“The government’s policy is to squeeze as many unpaid taxes from Armenia’s rich as they can,” says Emil Sanamyan, “and Tsarukyan is a prime target.”
“Following the Velvet Revolution, the inherent contradiction between Tsarukyan the politician and Tsarukyan who holds huge assets and commercial interests, even if he’s not formally running businesses, remains,” says analyst Anahit Shirinyan, “Naturally, this potential conflict of interests also casts a shadow over the political party he leads.”
Indeed, Tsarukyan has recently come under fire over allegations that, as an MP, he is not permitted to engage in business activity under Armenian law.
He responded to these concerns, including some raised by the parliamentary speaker, by stating that he has passed his property into trust management – and that he would resign his position as MP only when “the Armenia of his dreams is established”.
“As leader of the Prosperous Armenia party, I have served my authority in the country and outside of it to bring in as many investments to Armenia as possible,” he wrote in response to the speaker. “Many foreign investors met with me to get familiarised with the investment environment. Moreover, many investors see me as a reliable guarantor of their investments.”
According to Armenian investigative journalism website Hetq.am, Tsarukyan responds to concerns regarding his business by stating they “are aimed at targeting his reputation”.
In whose interest?
Late last October, four backbench Eurosceptic MPs – David Morris, Damien Moore, Matthew Offord and Sheryll Murray – followed the Conservatives’ well-worn trail to Yerevan for an international investment and trade round table hosted by Tsarukyan at his Multi Grand hotel and casino complex. This roundtable was attended by the new prime minister, Nikol Pashinyan.
According to the parliamentary Register of Members’ Interests, this trip was for discussions with Prosperous Armenia – and was, once again, sponsored by Tsarukyan’s party. Their visit was broadcast in a nine-minute segment on Tsarukyan’s channel.
The Conservative peers were joined by William Shawcross, the former head of the UK Charity Commission, and Afzal Amin.
“Lords and Lordesses [sic] from England, who wanted to make a contribution, came to visit me,” the oligarch commented to the press. “This Lord [Maude], who was a minister during Margaret Thatcher's time, wants to see how we organise.”
During this visit, Tsarukyan called for an “economic revolution” and pointed to the United Arab Emirates’ extensive tax breaks as an example for Armenia to follow.
Afzal Amin, Baroness Simone Finn, Gagik Tsarukyan, Francis Maude, William Shawcross. Source: Kentron TV
Anna Shahnazarian says that "it is outrageous that Tsarukyan, a local oligarch, invites foreign politicians and presents them as investment partners - for whom he, as a member of parliament, and his party, are willing to adopt laws. This kind of breach of democratic principles exposes the internationalisation of neoliberal politics."
Two months later, Prosperous Armenia signed a cooperation agreement with Russia’s ruling party, United Russia.
Room for change
“In Whose Interest?”, a 2018 report by Transparency International UK on how UK parliamentarians legitimise corrupt and repressive foreign governments via overseas trips, highlights an exemption in the UK Political Parties, Elections and Referendums Act (2000).
This exemption permits donors without a strong link to the United Kingdom to pay registered individuals’ overseas travel expenses. For donations to individuals or parties over £500, donors must evidence a strong connection to the UK – but these controls do not cover foreign travel.
“Our research has found that corrupt and repressive regimes from across the globe have sought to buy friends in Westminster through all-expenses-paid trips,” says Steve Goodrich, author of the report. “MPs and peers are regularly offered international engagements from a wide range of hosts. To protect the independence of parliamentarians when they’re abroad, there should be greater controls on who can pay for their travel, as is currently the case for political donations.”
In order to mitigate against perceptions that foreign trips influence parliamentarians, Transparency International UK recommends the creation of a proscribed list of organisations that may not fund politicians’ travel.
Sarah Clarke, senior policy and communications officer at campaign group Unlock Democracy, commented: “The majority of the public think that the UK political system is rigged to advantage the rich and powerful. This is hardly a surprise when British politicians spend their time on trips paid for by international oligarchs to legitimise their political aspirations, while keeping the British public in the dark about the substance and consequence of those trips.”
openDemocracy contacted those who travelled on trips to Yerevan, but received no response except where stated.
Sams Martirosyan and Knar Khudoyan contributed reporting from Yerevan.