Below are selected extracts. US embassy cables in full.
GLOBAL GOLD MINING: A YEAR OF CLAIMS OF CORRUPTION AND ATTEMPTED EXPROPRIATION
Global Gold Corporation (GGC) is an international gold mining company with operations in Armenia and principal offices in Connecticut. For the past few years, GGC has been involved in an at-times hostile dispute with the GOAM and more specifically with the Armenian Minister of Nature Protection over licenses to its mines in Hankavan, Toukhmanuk, Getik and Marjan. GGC brought these disputes and an allegation that the Minister had requested a $3 million bribe to our attention in April 2006.
MINISTER OF NATURE PROTECTION ASKS FOR A $3 MILLION BRIBE
On July 25, 2005, according to GGC, the Armenian Minister of Nature Protection Vartan Aivazian had asked GGC's local attorney Ashot Boghossian to pay a $3 million bribe to Aivazian's close associate and Member of Parliament Mourad Gouloyan, claiming that the payment was necessary to complete the December 2003 sale. We first became aware of the alleged bribe request on April 19, 2006, when the GGC's AmCit Chairman/CEO and Boghossian raised the matter with then U.S. Ambassador Evans. GGC claimed that, as a result of its refusal to pay the bribe, the Minister was unwilling to issue licenses to which GGC was entitled, granted duplicate licenses to other companies for mining sites owned and operated by GGC and generally obstructed GGC's business operations.
We were extremely concerned about these allegations and Ambassador Evans raised them as a "hypothetical" at the U.S.-Armenia Task Force Meeting on May 2, 2006. The Finance Minister's response referred to a mining company, a detail we had not included in our hypothetical, which suggested that other members of the GOAM were also aware of the allegations. The Finance Minister recommended that the company appeal to the Prosecutor General. Due to the poor reputation of the Armenian court system, however, GGC was unwilling to initiate a case locally. The Prosecutor General's office had the authority to begin its own investigation based on the allegations, but failed to do so.
COMMENT: A MESSY SITUATION WITH NO CLEAN FACES
There is no question that GGC has been getting the run around from the Ministry of Nature Protection. While it is continuing its operations in Armenia, the company legitimately feels vulnerable and exposed to potential short-fuse attempts to expropriate its mining properties. Adding to GGC's concern are recent actions taken by the GOAM to force another, Indian-owned, gold mining company out of the local market. Global Gold, however, has at times been less than entirely forthcoming with us. They did not report Minister Aivazian's alleged bribe solicitation until almost a year after it happened, were cagey about the timing of events, and for a number of months appeared reluctant to take the matter to court. We strongly support GGC's decision to file for international arbitration and recommend that future U.S. engagement on this issue focus on the need for a full and complete hearing of the facts rather than a political agreement which might resolve GGC's immediate problems but will do little to advance rule of law in Armenia.