Lost Opportunity?: Lincy Closure Seen By Some As Indictment

By Gayane Abrahamyan
ArmeniaNow.com

In 2011 Armenia is losing the current or potential support of two major foundations. It became known on Tuesday that the Lincy Foundation shuts down after 22 years of work during which it has made major gifts of over $1.1 billion to schools, hospitals, scientific research projects and other charitable endeavors. More than $200 million in Lincy money has been spent on Armenia.
This coming September will see the completion of the U.S. Government’s Millennium Challenge Account program, which since 2006 had planned to assist with a total of $236 million to projects in irrigation and agricultural areas. But in the wake of the 2008 post-election violence in Armenia, the programs were curtailed to $180 million.
The charitable organization founded by Armenian-American businessman Kirk Kerkorian will transfer all of its assets, currently valued at $200 million, to the UCLA Foundation.
Before its shutdown, in early February, Lincy donated $10.5 million to the United Armenian Fund and a major portion of this grant will be used by the UAF to renovate and reconstruct six schools in northern Armenia.
The start of major Lincy projects in Armenia was in 2001 with the three-year $150-million project targeting road construction, housing construction in the earthquake zone, construction of cultural centers and schools.
In 2006-2008, the foundation implemented its second major program in Armenia with $60 million. The means were equally divided into three programs — Yerevan streets repairs, school building and road construction.
Reasons for Lincy’s closure of the Fund are still unclear and those potentially privy to its affairs have mostly stopped short of providing any commentary or interpretation.
Prominent Diaspora commentator, editor of the California Courier and former Lincy vice president Harut Sassounian declined ArmeniaNow’s request for comment, but cautioned against “unwarranted and erroneous sweeping generalizations” as to the Lincy decision.
While saying that the reasons are unknown, several representatives of the Armenian opposition, however, say Armenian authorities who, to put it mildly, were guilty of “mismanaging the funds,” have caused the 93-year old billionaire to close his hand on handouts to Armenia.
“It is not a coincidence that the funds for repairing schools were given not to an Armenia-based fund, but to the United Armenian Fund,” opposition Heritage Party MP Anahit Bakhshyan told ArmeniaNow.
(The United Armenian Fund is the collective effort of the Armenian Catholic Eparchy, Armenian General Benevolent Union, Armenian Missionary Association of America, Armenian Relief Society, Diocese of the Armenian Church of America, the Lincy Foundation, and Prelacy of the Armenian Apostolic Church of America.)
In the past several years (at least three) Kirk Kerkorian and his Lincy Foundation has not made any major donation to the All-Armenian Fund Hayastan either.
Still during the first phase of the Lincy Foundation’s programs in Armenia, in 2001-2003, when restoration work worth $150 million was carried out, 17 cultural centers were renovated, about 3,600 homes were built, the activities were dogged by allegations that it was “a big wash” and that the money was not being used purposefully.
After the end of this phase of the project it was intended to solve the housing problem in the earthquake zone.
As then president Robert Kocharyan said during the ceremony opening one of the buildings constructed with the foundation’s allocations “due to this serious investment in 2003 we solve the housing problem.”
But still today up to 4,000 families remain in makeshift housing in the earthquake area despite further serious allocations from the foundation for housing construction in northern Armenia.
In 2006, the President’s audit service began to conduct checks at the Foundation’s Armenia office whose coordinator was President Kocharyan’s staff manager Artashes Tumanyan.
While reports surfaced (though unconfirmed) that Tumanyan was being questioned by the National Security Service (KGB) department combating organized crime, he was relieved from the foundation post, replaced by Deputy Prime Minister Armen Gevorgyan.
The last controversy surrounding the Foundation was in June 2010, during the discussion of the report on the fulfillment of the 2009 state budget when in the report of the Lincy Foundation presented to the lawmakers it was stated that the $17.8-million project had been fulfilled completely, by 100 percent.
“It was mentioned in that performance report that 17 schools had been renovated and about $19 million had been spent on the work. However, as a person who is from this sphere (a long time educator) and is very well aware in which schools actual work was done, I saw in the list the names of schools that had not been repaired,” says Bakhshyan, who had worked as school principal before becoming a lawmaker.
In response to the question raised by Bakhshyan, Deputy Prime Minister Gevorgyan explained that no work had been done in seven schools because of the budget reducing due to the dollar-dram fluctuations.
“First, this answer did not satisfy me, because in the agreement there is a point that the government is committed to bridge the gap that originates because of such exchange rate fluctuations to make sure the program is fulfilled by 100 percent. Why didn’t the government close that difference and was that difference really equivalent to the price of repairs at seven schools?” the lawmaker said.
No clear answers have yet been provided, but like many other Armenians, the lawmaker feels sorry that Armenia is deprived of very serious funds that would give a unique opportunity to develop the country.
“I regret it very much. Our authorities once again should think carefully about what they are doing and how much love and confidence of their homeland they lose because of their interests,” Bakhshyan told ArmeniaNow.