Author: Chmshkian Vicken

A1 Plus | 13:49:46 | 06-05-2004 | Politics |
CLASH IN AKHALQALAQ
On May 4 collision occurred in Azmana village of Akhalqalaq. Adzharian
villagers of Azmana being provoked by Georgian Misha Natenadze residing in
the same village threw stones at the Armenian villagers. Then an attempt was
made to bring about 50 young Adzharians from the neighboring Aspindza
District to involve them in the conflict.
But the Armenian young people having arrived from Armenian villages of
Akhalqalaq frightened the Adzharians from Aspindza who left Akhalqalaq
District.
Adzharians of Azmana hurled stones at Akhalqalaq District policemen who had
arrived at the scene, too. To relax tension Nikoloz Nikolozashvili, Georgian
President’s envoy extraordinary in Samtckhe-Javakhq, arrived in Akhalqalaq.
The local leadership and he managed to alleviate tension and to reconcile
the sides.
The Armenian part made concessions since the accident was just an attempt to
cause an armed conflict between the Armenians and the Adzharians.

Zaman, Turkey
April 30 2004
Chirac Supports Turkey’s E.U. Membership in the ‘Long Run’
French President, Jacques Chirac, said Thursday that Turkey was not
ready for full membership in the European Union (EU) under the
present circumstances, but said that he thinks positively about
Ankara’s membership in the long run.
The French leader said that the membership of Turkey, which he
defined as a ‘secular, strong and democratic country’, would be for
the good of the E.U. He stressed that this would end the clash of
civilizations theory, which pits the West against Islamic
civilization. Chirac noted that the Turkish government has passed
reform laws and said the E.U. would care about the implementation as
well as the reforms.
In a press conference held at the Elysee Palace to announce his
opinions on E.U.’s enlargement, Chirac noted that although talks with
Ankara start next year, the process could take a long time and said,
“talks will last for 10 years or more.”
Using England as an example, Chirac acknowledged that during the
membership period, the European public’s attitude towards Turkey
could change as well.
The French leader said if Turkey’s efforts to join the Union are
ignored for religious or ethnic reasons, then Ankara would be alone
and this would cause the feared clash of civilizations to occur. The
President stated that Turkey’s membership was not an issue of debate.
The E.U. state and government presidents accepted its candidacy at
the Helsinki Summit held in 1999.
When asked whether the recognition of the alleged Armenian genocide
would be taken as a precondition for Turkey’s E.U. membership, Chirac
said this was an issue between Turkey and Armenia and it would not be
a condition for E.U. membership.
Support for Enlargement
Chirac stressed May 1, 2004 is an important date in E.U. history and
said enlargement was a chance for both France and Europe. Noting the
significance of enlargement in providing democracy and stability to
Europe, Chirac acknowledged that the E.U. with its 450-million
population would emerge as the world’s most important economic power.
Chirac argued that the European Constitution, which will be taken up
at the European Council to be held in Brussels in June, was an
assertive and faithful text and said that for the E.U. to advance
effectively, a compromise should be reached on the Constitution.
04.30.2004
Ali Ihsan Aydin
Paris

[01-05-2004 ‘Azerbaijan-Turkey’]
————————————————- ———————
RECOGNITION OF NORTHERN CYPRUS MAY TAKE YEARS
Source : “Echo” newspaper (Azerbaijan)
Author: R. Orujev, N. Aliev
Turkey does not press Azerbaijan to solve the question urgently
The Minister of Foreign Affairs of Turkey, the Vice Prime Minister
Abdullah Gul in the interview to Anadolu news agency made a statement
on the recognition of the Turkish Republic of Northern Cyprus
(TRNC). According to him, there are positive trends in this regard.
Answering the question of whether there is any development of TRNC
recognition by Azerbaijan, Gul announced: `So far there has been no
development on this issue. But strategically, it is to be solved
gradually. We will be active ourselves, first, gaining supporting
promises, and the friendly countries have already done this. There are
positive steps on the problem, mostly coming from Europe”.
Gul was reminded about the statement of the EU expansion commissar
Gunter Ferheugen that until the UN recognized TRNC, European Union
will not do that. `This is normal. Certainly the work must be first
conducted at the UN Security Council. The rest will be done later’.
It is interesting to see how lengthy will the process of Northern
Cyprus recognition be and when the time will come for Azerbaijan to
make its point. The recognition of Turkish Cyprus by our state will
hardly occur as a separate act, political scientist Rasim Musabekov
thinks. “Suppose, Azerbaijan has recognized TRNC and waits for
someone else to do it. As far as I can judge from the last
press-conference of Ilham Aliev in Strasbourg, he made a more correct
statement, saying that when the recognition issue gains more
importance, Azerbaijan will be one of the first’.
Political scientist notes that it is as yet unknown whether the Cyprus
problem will be solved in this very direction, by establishing to
states, or the negotiations process will resume in a certain manner,
to keep the island a unified entity. “However, if the process does
evolve in the direction of dividing the island, and the Northern
Cyprus is firm in its determination to be independent, there will most
probably be an act produced, with the involvement of the superpowers’.
Musabekov quoted an example – `the fact that Taiwan as an independent
state is recognized by 20 or 30 countries of the world does not make
its status as an international subject confirmed. It has no place in
the UN, Taiwan has to limit its contacts with other countries to
economic ones, mostly with US and the same mainland China’.
“I want to say that as long as the super powers, namely, the USA, the
United Kingdom, France, Russia, China do not recognize Northern
Cyprus, its recognition by three, five or even ten Turkic, Islam
states will not change anything in the international status of TRNC’,
the scientist is positive. `Moreover, this process may result in a
situation, where the expected relief of economic embargo on Northern
Cyprus is not realized by the Greece (if it is supported by the
European partners). The sanctions in this case will get even tougher’.
For this reason Musabekov does not think there will be haste in the
issue of TRNC sovereignty, and `Azerbaijan will lead the haste’.
The Milli Meclis deputy Gultekin Gajieva also thinks Azerbaijan should
not haste. “The UN should be the first to react, as the plan of
unification of Northern and Southern Cyprus was presented by the
Secretary General Kofi Annan and is actively supported by the UN’.
Gultekin Gajieva believes that the President Aliev also voiced the
opinion that Azerbaijan should not hurry. “Conceptually we support the
idea of TRNC recognition, but the reaction of the UN Security Council
and the European Union. Azerbaijan has a problem of Mountainous
Karabagh and supporting the friendly TRNC we must naturally keep that
in mind, so that any step on behalf of Azerbaijan does not cause a
negative response”.
In the opinion of the deputy, the process of the recognition of the
TRNC by Azerbaijan will last `long enough at least because the EU
conditions its recognition by the position of the UN Security
Council. And the composition of the Security Council is heterogeneous,
it includes countries of quite differing orientations, such as the
USA, Russia, France, China. The process will not be as easy, as it is
expected now, by the results if the Cyprus referendum. Turkey will
have to make much effort to get Northern Cyprus in these
organizations, since it will be an original step that has no
precedents in the international law. And we must keep it in mind that
Greece will be opposing this step as an EU member’.
[30-04-2004 ‘Karabagh Conflict’]
———————————————————————-
PRESIDENTS SATISFIED WITH WARSAW MEETING
Source : “PanARMENIAN.Net” portal (Armenia)
Author: “PanARMENIAN Network” analytical department
New impulse to Armenian-Azerbaijani dialogue.
Meeting of the Armenian and Azerbaijani Presidents taken place in
Warsaw is the main subject of discussions in both countries. The
statements pronounced in Warsaw allow hoping that a political solution
will be found for the problem; however, it is too early to speak about
a break in negotiations.
The Armenian party was not very willing to disclose the information
about the Warsaw meeting. However, it can be judged from the
statements of the Azerbaijani side that there is a certain
progress. Ilham Aliyev, who used to say that negotiations were in a
deadlock, now assures there were possibilities for finding ways to
settle the conflict.
Everything was more or less clear until the Armenian and Azerbaijani
Foreign Ministers started to do contradicting statements. Eldar
Mamedyarov, FM of Azerbaijan said the Presidents discussed ”concrete
ideas presented by the Minsk group co-chairs in Prague”. Thus, he
confirmed the information of the Russian mediator Yuri Merzlyakov that
the mediators had presented new proposals. Only two weeks ago
Mamedyarov was denying the existence of new initiatives. Vartan
Oskanyan continues to insist that ”no concrete ideas were discussed
during the Warsaw meeting”.
We shall note that after the Paris meeting the Russian co-chair of the
Minsk group made an almost sensational statements saying that the
mediators had presented new proposals that seemed optimistic even to
the FMs of Armenia and Azerbaijan. Oskanyan and Mamedyarov denied
this information while the two other co-chairmen were keeping
silence. So, if up to now there was an evident contradiction in the
statements of the mediators and Ministers, now the conflict parties
contradict themselves. It is difficult to explain it. In Baku they
think that the Armenian Minister does not want to publicize the fact
that there are new proposals because he doesn’t know yet how it will
affect the moods of the opposition.
We think that everything will be clarified at the meeting of the
Foreign Ministers of Armenia and Azerbaijan to be held on May 12-13 in
Strasburg with participation of the mediators. Informing about it,
Vartan Oskanyan noted that the Ministers would arrive at the meeting
having been instructed by their Presidents.
[29-04-2004 ‘Region’]
———————————————————————-
USA CONQUERING ARMENIA
Source : “Zaman” newspaper (Turkey)
Author: Fikret Ertan
The United States are determined to strengthen their positions in the
Caucasus which results in a number of decisive steps. We do notice
some of them, when signing new agreements, and the other go unnoticed.
Among such quiet steps is the agreement on military cooperation signed
by our neighbor Armenia at the end of last week. The brief
announcement of it being signed was made immediately upon the arrival
of the Deputy Commander of ES forces in Europe Charles Wald to the
Armenian capital Yerevan on April 25. On Monday April 26 this
agreement – the first military agreement of the commandment of US
forces in Europe and Armenia was publicized by the head of the RA
General Headquarters of armed forces Colonel Genera Mikael
Harutiunian.
This agreement, prepared during the visit of General Charles Wald to
Armenia, has a logistical nature. According to the document, the US
military forces can enter Armenia, use the Armenian military
facilities, and the US air forces can use the air bases of Armenia.
The United States promise the same conditions to Armenia, but these
are naturally a purely technical detail: why would Armenian forces
enter the US territory?
The agreement has other provisions, too: the US pays for the use of
military facilities in Armenia, covers the expenses on sending and
accommodating an Armenian transportation company in Iraq. Thus,
Armenia plans to send a transportation company to Iraq to assist the
USA. By this Armenia attempts to strengthen its relations with the
USA, balancing the positions of its neighbors, Azerbaijan and Georgia,
that have already sent troops to Iraq (Azerbaijan – 150 soldiers,
Georgia – 180 soldiers).
This logistics agreement between the US and Armenia is one of the most
recent examples of American conquest of Caucasus. The United States,
in their effort to weaken the positions of Russia and Iran in the
Caucasus, signed a strategically important agreement last spring,
according to which the US is free to use the Georgian military
facilities, the American troops can enter and leave Georgia with no
impediments, use the Georgian land and air territory…
The military relations of the USA and Georgia are defined not only by
this agreement; under the recently completed program of military
assistance the USA trained the Georgian special troops. The contacts
with our friend Azerbaijan is nonetheless important, thus, the US
provided different military vessels to the Caspian navy.
Certainly, the recent attack on Armenia, having strong alliance with
Russia, was caused by the wish to gain its support and to weaken the
relations of Armenia with Russia and Iran. Moreover, the United
States now will have a chance to circle Iran, ensuring their military
presence in Armenia.
I hope that those who are to be interested in similar plans have taken
the developments into account.
—
Yerevan Press Club of Armenia, ‘Yeni Nesil’ Journalists’ Union of
Azerbaijan and Association of Diplomacy Correspondents of Turkey
present ‘Armenia-Azerbaijan-Turkey: Journalist Initiative-2002’
Project. As a part of the project web site has
been designed, featuring the most interesting publications from the
press of Armenia, Azerbaijan and Turkey on issues of mutual
concern. The latest updates on the site are weekly delivered to the
subscribers.

US mediator urges Azerbaijan to make concessions on Karabakh
Turan news agency
24 Apr 04

BAKU
The situation requires Azerbaijan to make concessions on a peaceful
settlement to the Karabakh conflict, the US co-chairman of the OSCE
Minsk Group, Steven Mann, said at a meeting with Azerbaijani Defence
Minister Safar Abiyev yesterday.
“If the settlement is delayed for many years, the situation of Armenia
and Azerbaijan will become serious. That’s why the sides should
establish a dialogue and maintain it,” Mann said.
In turn, Abiyev said that the use of double standards in this issue
was inadmissible. Armenia is an aggressor and must be punished. He
cited the examples of Yugoslavia and Iraq where military forces had
been applied. Why are similar things not being done with regard to
Armenia, although there is a relevant legal base for this, Abiyev
added.
Mann recalled that Armenia and Azerbaijan had made a commitment to
peacefully settle the Karabakh conflict. The US position on this issue
is that “the sides should make concessions to each other, which are
acceptable to both sides,” he said.
In turn, Abiyev said that “Azerbaijan will not make any concessions,”
the Azerbaijani Defence Ministry press service reported.

Agence France Presse
April 24, 2004 Saturday
Armenians commemorate 1915 genocide
by MARIAM KHARUTUNIAN
YEREVAN
Armenians commemorated Saturday the 1915 genocide in which up to 1.5
million of their countrymen are reported to have died, with the
country’s president calling on the world to recognise and condemn the
extent of the slaughter.
“As we bow before the memory of the innocent victims, we confirm our
determination to obtain a general recognition and a condemnation by
the international community of this crime against humanity,”
President Robert Kocharian said in a message to the nation.
“Unpunished crimes can give birth to new tragedies and the aim of the
world community is to do everything to rule out the repetition of
such happenings.”
Armenians say up to 1.5 million of their kinsmen were massacred in
orchestrated killings and during deportations by the Ottoman empire
between 1915 and 1917.
Turkey categorically rejects claims of genocide and says that between
250,000 and 500,000 Armenians and thousands of Turks were killed in
civil strife during World War I when the Armenians rose up against
their Ottoman rulers.
The United Nations, the European Parliament, Belgium, France, Greece
and Russia have recognised the Armenian genocide. Canadian lawmakers
voted a few days ago to recognise the massacre, calling it a “crime
against humanity”.
“Armenia wants to put itself above feelings of bitterness and
vengeance and is ready to establish normal relations with all the
states in the region, inluding Turkey,” Kocharian, who heads to
France on Sunday to meet with French counterpart Jacques Chirac,
said.
“The presidents… will discuss bilateral and regional cooperation
during their meeting,” presidential spokesman Asmik Petrosyan said.
France, along with Russia and the United States, is a co-chair of the
Minsk Group, a 13-nation grouping within the Organization for
Security and Cooperation in Europe (OSCE) that has been seeking to
mediate between Armenia and Azerbaijan in their dispute over the
Nagorno-Karabakh enclave.
Thousands of people, some representing the large Armenian diaspora
outside this nation of three million, climbed to the memorial to the
genocide victims on top of Yerevan’s Tsitsernakaberd hill throughout
the day.
Radio and television played somber music and played documentaries of
the genocide.
Seventy-year-old Pogos, whose father survived the attacks, planned to
climb to the memorial in the evening with his grandsons.
“My father… told us thousands of times how in the morning armed
Turks came into the village and began to burn houses, kill men, women
and children and, not allowing people to take food or water, began to
herd them toward the desert,” he said.
Pogos’s father spent the rest of his life searching in vain for his
mother, whom he lost during the forced resettlements.
Some 20,000 survivors of the genocide remain worldwide, 900 of them
in Armenia, Lavrenti Barsegyan, director of a genocide museum in
Yerevan, said.
“Each year there are fewer and fewer eye-witnesses… and fewer and
fewer people can tell of the evil deeds of the Turks,” he said.
Armenians held demonstrations in the Iranian capital Tehran, where
2,000 people held a rally outside a church after being forbidden to
approach the Turkish embassy, and in Greece where hundreds paraded in
Athens and Salonica.

BBC Global Hits
April 22, 2004
Armenian Lullabies by Hasmik Harutyunyan
Armenia has been an independent state for little more than 12
years. But its culture and traditions are said to go back 7000
years. The folk band Shoghaken Ensemble plays the music of Armenia.
As a former member of the Soviet Union, Armenia had to re-invent a lot
of things when it became an independent nation in 1991. Harold
Hagopian is the Shoghaken Ensemble’s record producer. He says that to
revive Armenia’s authentic folk-dance music the ensemble have had to
undo 70 years of Soviet influence.
Harold Hagopian: A lot of the music had been choreographed and taught
at the conservatories. And though these musicians attended those
Soviet conservatories, since the fall of the Soviet in 1991, they’ve
tried to see how the music might have been played outside of this
rigid structure and so they spent a lot of time with actual villagers
and people who came to Armenia in 1915 and survived the genocide and
fled from Turkey.
89 years ago Turkish nationalists were killing ethnic Armenians in an
attempt to form a homogenous Turkish state.
Today The Shoghaken Ensemble are giving Armenian culture a global
audience. In 2002, cellist Yo Yo Ma invited one of the players to join
his Silk Road ensemble. And that same year, Shoghaken collaborated on
the score of the film “Ararat” about the Armenian genocide. One track
from the film is performed on an oboe-like instrument called the
duduk. The New York Times’ critic Jon Pareles has written: “there may
be no instrument that can sound as richly inconsolable.”
This month, the ensemble is releasing 2 new albums. One of
traditional dances as well as a collection of songs. Harold Hagopian
says singer Hasmik Harutyunyan has memorized quite a repertoire of
traditional songs.
Harold Hagopian: The singer of the group specializes in Armenian
lullabies and she knows over 200 lullabies from all of the regions of
Armenia.
The Shoghaken ensemble are currently on a US tour. They will be
performing in Cambridge, Massachussets, this Saturday, the anniversary
of the 1915 genocide.
Shoghaken Ensemble US Tour Dates:
April 22: Washington DC (Smithsonian Museum)
April 24: Cambridge, MA (Harvard University)
April 30: Hanover, NH (Dartmouth College)
May 2: New York, NY (Symphony Space)
May 4: Ithaca, NY (Cornell University)
May 8: Philadelphia, PA (Annenberg Center)
Audio Report:
Artist: Hasmik Harutyunyan
Title: Armenian Lullabies
Label: Traditional Crossroads
Country: Armenia

Talks on Iran-Armenia gas pipeline end – Armenian minister
Arminfo
21 Apr 04
YEREVAN
Negotiations on the construction of the Iran-Armenia gas pipeline have
ended, Armenian Energy Minister Armen Movsisyan told a news conference
today.
According to him, the Armenian government’s main task is to start the
pipeline’s construction this year.
Passage omitted: reported details
The minister said that Armenia needed 90m-100m dollars for the
construction of the pipeline’s Armenian section. It is planned to
obtain this money partly through loans and grants. The minister
declined to disclose sources of financing until an agreement is
signed.
Passage omitted: pipeline not to be an alternative to Armenia’s
nuclear power station

Azat Artsakh – Republic of Nagorno Karabakh (NKR)
April 16 2004
TEN YEARS OF CEASE-FIRE
_Would you recall the details of the events that took place ten years
ago, which ended in the maintenance of cease-fire in the area of the
Karabakh conflict. _ In my opinion, May 1994 and the meeting in
Bishkek was a significant stage in the history of settlement of the
Karabakh conflict. It should be mentioned that certain agreements had
been signed before that on stopping the military actions at the
Azerbaijani _ Karabakh front but as a rule these worked for several
days, a week at best. For the sake of justice we should state that the
cease-fire was violated mainly by the Azerbaijani party; today the
mediators remind about this. In those years the peacemaking process
was carried out by Russia and the CSCE (today the OSCE). The CIS
interparliamentarian summit, the delegates of which regularly visited
Nagorni Karabakh, tried to carry out a rather active mission at the
beginning of the 1990’s. At the beginning of May 1994 the NKR Defence
Army had mainly fulfilled its military and political role; the
military actions were shifted to the territory of the enemy and a
security zone was created around Nagorni Karabakh, which allowed
starting the regulation of the peaceful life in Karabakh. I think, the
suggestion of signing the cease-fire was necessary for Azerbaijan as
well; the Azerbaijani army then had a problem of time and needed `a
rest’. It should also be recalled that an attempt of signing a
cease-fire was made in February 1994 during the meeting of the heads
of the defence ministers of Armenia and Azerbaijan and the
representative of the NKR Defence Army in Moscow, which however was
not a success; the cease-fire was again broken by the Azerbaijanis. _
Would you also give detailed information on the Bishkek meeting? _ At
the end of March and the beginning of April the representatives of the
CIS interparliamentarian summit visited the area of the Karabakh
conflict, headed by one of the most active participants of the
process, the speaker of the parliament of Kirgizia Medetkan
Shirinkulov. On April 15 the meeting of the heads of the CIS
member-countries took place. The meeting passed a resolution calling
the parties of the Karabakh conflict to stop the military actions in a
short period of time and maintain a cease-fire. Later the
interparliamentarian committee undertook more definite actions and at
the beginning of May the delegations of the direct participants of the
conflict Armenia, Azerbaijan and Karabakh were invited to Bishkek. On
May 2 the NKR delegation left Stepanakert. It was headed by the
speaker of the parliament Karen Baburian. The delegation included the
foreign minister then Arkady Ghukassian, the chairman of the
parliamentary committee Valery Balayan, adviser of the head of the
parliament Vassily Atajanian and in the role of assistants Levon
Mayilian and me. For me it was the first meeting in the sense of
participation in this type of meetings and it was a successfully
fulfilled experience. The delegation of Armenia was also constituted
of the members of the government and parliament: the delegation
included the speaker of the parliament then Babken Ararkcian, Seyran
Baghdassarian, Khachik Bezirchian, Petros Katsakhian and others. The
Azerbaijani delegation included the vice speaker of the parliament A.
Jalilov (not alive any more), several members of parliament and
experts. On May 2 all the three delegations arrived in Bishkek. I
should mention with gratitude the hospitality of the Kirgizian party.
On the next day the delegations started their work. There was certain
unease on the first day. In the beginning the president of Kirgizia
Askar Akaev and the head of the CIS interparliamentarian committee
Vladimir Shoumeiko addressed the meeting. A working group was made up
for working out a united document and presenting it to the delegations
to sign. The work of the group was not in vain because the Azerbaijani
party tried in any way to hinder the participation of the Karabakh
delegation in the talks as a separate party. Then long-lasting talks
followed between the heads of the delegations after which the final
text was worked out and presented for signing on May 5. At the last
moment the head of the Azerbaijani delegation refused to sign the
Bishkek protocol (in several days from the Azerbaijani party it was
signed by the speaker of the parliament Rasul Guliev). The Bishkek
agreement signed by all the conflict parties served as basis for the
Russian mediator to achieve the arrangement of the cease-fire which
was brought in effect on May 12 at the Azerbaijani-Karabakh front. _
Recently there has been some anxiety in our society concerning the
expiry of the term of the cease-fire agreement. Do you confirm or you
do not share this anxiety? – The anxiety of our citizens is because
our society is not well-informed on the agreement of cease-fire. The
rumours that the cease-fire agreement signed in the area of the
Karabakh-Azerbaijani conflict will expire in May are merely rumours
and only create additional tension. The cease-fire was maintained ten
years ago and was the result of the agreement reached between Armenia,
Azerbaijan and Karabakh in Bishkek. According to this agreement the
cease-fire came in effect on May 12, 1994, and on May 16 in Moscow the
defence ministers of Armenia, Azerbaijan and Nagorni Karabakh
confirmed the willingness of their countries to maintain the
cease-fire, which works up today. The agreement has no time
limit. Moreover, their devotion to the maintenance of peace was
confirmed in July 1994 when the conflict parties assumed
responsibility before the mediators to maintain the cease-fire up to
signing of a final political agreement by which the military actions
will be finally stopped. In other words an arrangement was made
according to which in case of achieving final peace in the region the
cease-fire agreement is changed to a peace agreement. Again I want to
stress that there is no reason for worry. There are no objective
causes for resuming the military actions. In these ten years the
cease-fire is maintained without international peace-keeping forces
due to the balance maintained between the forces of the conflict
parties. And the efficiency of the Karabakh army allows hoping that
this balance will be maintained henceforth.
SEYRAN KARAPETIAN

Bloomberg
April 21 2004
Rafsanjanis Are Iran’s Power Brokers as Investors Seek Oil
April 21 (Bloomberg) — At 6 p.m. on Sept. 11, 2003, agents from
Oekokrim, Norway’s financial crimes police unit, raided the Stavanger
headquarters of Statoil ASA, the nation’s largest oil company. They
were seeking records of a $15 million contract with Horton
Investment, a London-based consulting firm with links to a son of
Iran’s former president, Ali Akbar Hashemi Rafsanjani.
Oekokrim said in Sept. 12 press release that a $5.2 million Statoil
payment that wound up in a Turks and Caicos Islands bank account
might have been a bribe to drill in Iran’s natural gas fields, the
largest in the world after Russia’s. Oekokrim charged Statoil with
violating Norway’s General Civil Penal Code, which prohibits
influencing foreign officials.
The Statoil scandal reveals the risks of dealing with Iran – – a
country that ranks with Armenia, Lebanon and Mali as “highly
corrupt” in a survey by Berlin-based Transparency International,
which polls business executives and academics on investing. Two weeks
after the raid, Statoil Chairman Leif Terje Loeddesoel, 69, Chief
Executive Officer Olav Fjell, 52, and Executive Vice President
Richard Hubbard, 53, resigned. None of the executives has been
charged with any wrongdoing.
Iranian Revolution
Twenty-five years after Ayatollah Ruhollah Khomeini led the
revolution that toppled Shah Mohammad Reza Pahlavi, a dozen families
with religious ties control much of Iran’s $110 billion gross
domestic product and shape its politics, industries and finances,
says Ray Takeyh, a professor and director of studies at National
Defense University’s Near East and South Asia Center in Washington
and coauthor of “The Receding Shadow of the Prophet: The Rise and
Fall of Radical Political Islam” (Praeger, 2004).
The Rafsanjanis — who have investments in pistachio farming, real
estate, automaking and a private airline worth a total of $1 billion
— are among the best connected and most influential of the families,
Takeyh says.
Rafsanjani, 69, has wielded power since the creation of the Islamic
Republic in 1979, when he served on the Revolutionary Council under
Khomeini.
Mohsen Hashemi, 43, Rafsanjani’s oldest son, heads a $2 billion
project to build Tehran’s subway. Yasser Hashemi, 32, the youngest
son, runs a horse farm north of Tehran in the exclusive suburb of
Lavasan, where an acre of land costs $2 million. Mehdi Hashemi
Rafsanjani, 34, the son whose contact with Statoil led to the police
search, was a director at National Iranian Gas Co. and heads the unit
that develops compressed natural gas for cars.
“The whole Iranian economy is set up to benefit the privileged
few,” Takeyh says. “Rafsanjani is the most adept, the most
notorious and the most privileged.”
Tempting Riches
Iran’s riches are tempting to companies and private investors. The
country — which, at 1.65 million square kilometers (637,069 square
miles), is slightly smaller than Alaska — holds 9 percent of oil
reserves, second in the world behind Saudi Arabia. Iran also holds 15
percent of global natural gas deposits.
With two-thirds of Iran’s 70 million people under age 30, the
country’s appetite for consumer goods is ballooning. GDP will climb 8
percent this year: the same rate as China and almost double the 4.6
percent rate in the U.S., the International Monetary Fund projects.
In 2003, the Tehran Stock Exchange All-Share Price Index more than
doubled to 10879.87 compared with a 26 percent increase for the
Standard & Poor’s 500 Index. The market value of the 350 companies on
the exchange rose 7 percent to $37 billion in the first three months
of 2004. Automaker Iran Khodro Co.; Melli Investment Co., a unit of
Bank Melli, Iran’s biggest bank; and Kharg Petrochemical Co., the
country’s fifth-biggest company by market value, powered the gains.
Stock Market
The government of President Mohammad Khatami, 60, who replaced
Rafsanjani in 1997, introduced legislation last year to open the
stock market to foreign investors. A 1996 ban keeps the exchange
closed to all but Iranians. Khatami also proposed creating an
independent regulatory body like the U.S. Securities and Exchange
Commission.
Jim Rogers, 61, who founded the New York-based Quantum Fund with
George Soros in 1969, is among a handful of foreigners who bought
shares in Iranian companies in the early 1990s, before Iran’s
parliament banned outside investment. The exchange let investors like
Rogers keep their shares.
Rogers says his holdings, which he declines to name, have risen “an
enormous amount.” He says he’s aware of Iran’s attractions — as
well as its pitfalls. “The country has oil, lots of minerals, a
young population,” Rogers says. “Transparency is a problem. They
only send me information about my companies when they want to.”
Legal Traps
Companies and investors that want to break into Iran need to
understand how to navigate legal and ethical traps like the one that
rocked Statoil, says Arwa Hassan, program director for the Middle
East at Transparency International.
In 1979 and 1980, U.S. President Jimmy Carter imposed a series of
bans on Iran that barred travel, trade and financial transactions
after militants held 52 American embassy staff members hostage in
Tehran for 444 days. In 1995, President Bill Clinton banned U.S.
companies from helping to develop Iran’s energy industry. In 1996,
the U.S. Congress authorized the president to impose sanctions on
non-U.S. companies that invested more than $20 million in Iran’s
energy assets.
Interest From Europe
European and Asian companies aren’t bound by U.S.-style prohibitions
against Iran — and they’re rushing to get a piece of the action.
France’s Total SA, Europe’s No. 3 oil company, is in talks to
construct a $2 billion liquefied natural gas plant. Alcatel SA, the
world’s second-biggest maker of telecommunications gear, is building
Iran’s phone system and supplying lines for high-speed Internet
service.
In February, Japan’s state-run oil company, Inpex Corp., and Osaka,
Japan-based trading company Tomen Corp. agreed to spend $2.5 billion
to develop the Azadegan oil field.
Michael Thomas, an adviser to the U.K. Department of Trade and
Industry, says Iran is ripe for foreign investment. “Iran has
everything the West needs: cheap energy, lots of raw material and a
large labor pool,” he says.
Statoil pursued Iran’s oil and natural gas. The North Sea reserves
that produced more than 90 percent of Statoil’s output began to
decline in 1999. Hubbard, the former executive vice president, said
in a January interview that the onus of finding new fields fell to
him as head of international exploration. Fjell and Loeddesoel
declined to comment for this story.
Meeting With Junior
In a letter given to Statoil’s board after his resignation, Hubbard
said that when he got a chance to talk with the son of Iran’s former
president, he took it. In 2001, Hubbard met Mehdi Hashemi Rafsanjani,
whom he called Junior, in Statoil offices in Bergen.
According to Hubbard’s Oct. 22 letter, Mehdi Hashemi asked if Statoil
would pay “a success fee” to develop the Salman oil field in the
Persian Gulf. Hubbard turned down the proposal after his development
team rejected Salman on technical and cost grounds. “Junior led us
to believe several companies had paid success fees for various
contracts,” Hubbard wrote.
Mehdi Hashemi made other proposals, Hubbard wrote. One was a plan to
divert funds to Iranian Islamic charities, or Bonyads. Hubbard
rejected those. In early 2002, he found one offer acceptable, he
wrote in his letter: Mehdi Hashemi proposed acting as Statoil’s
political adviser and said he would commission a consulting agreement
with Abbas Yazdi, 34, an Iranian who had set up Horton Investment and
was living in London. In a September interview, Yazdi confirmed that
he ran Horton.
Consulting Deal
In June 2002, Statoil and Horton Investment signed a formal agreement
for an 11-year, $15 million consulting deal, Hubbard said in the
January interview. Four months later, Statoil announced plans to
invest $300 million to drill and pump natural gas from the South Pars
field, the world’s largest, with 800 trillion cubic feet of reserves.
That December, Yazdi asked Statoil to wire $5.2 million to his
account in Turks and Caicos, according to Hubbard’s letter. A few
months later, Statoil’s internal auditors questioned the payment,
says Jan Borgen, national director for Norway at Transparency
International.
“The auditors became suspicious because of the size of the contract
and the fact that Statoil paid a 35 percent lump sum, which is
unusual,” says Borgen, who followed the case as an official at
Transparency International. The consulting agreement was for 11 years
and Statoil paid 35 percent of the value after six months, he says.
Hubbard confronted Yazdi about the transfer, he said in his letter.
Yazdi said it had always been his intention to use an offshore
account. “There was a clear understanding that companies that are
active in Iran are expected to contribute to the society one way or
another,” Hubbard wrote.
Suing Iran
Houshang Bouzari, 51, an adviser to Iran’s oil minister in the 1980s,
says doing business in Iran without paying someone in power is
impossible. When he refused to pay a bribe, he says, he wound up in a
Tehran prison. Now a Canadian citizen, Bouzari is suing the
government of the Islamic Republic of Iran for torture, abduction and
false imprisonment.
In 1988, Bouzari left his post and set up an oil trading and
consulting firm with offices in Rome and Tehran. Four years later, he
says, he began working with Saipem SpA, Europe’s second- biggest oil
field services company, and Tecnologie Progetti Lavori SpA, an
Italian subsidiary of France’s Technip SA, Europe’s largest oil field
services company.
With Bouzari’s help, the companies secured a $1.8 billion contract to
help develop Iran’s South Pars gas field, the area Hubbard targeted a
decade later. Bouzari would have made as much as $36 million, or 2
percent of the total contract, he said in February 2002 in testimony
at the Ontario Superior Court of Justice, where he’s taken his case
against the Iranian government.
Tortured in Prison
Instead, Bouzari got nothing. On June 1, 1993, he told the court that
three agents from Iran’s Intelligence Ministry arrested him as he was
finishing his morning coffee. They took him to Evin, a Tehran prison
where Iranian political prisoners are detained. Jailers whipped the
soles of his feet with metal cables and pushed his head in a toilet,
he testified. On three occasions, he was told to prepare for his
imminent execution, according to the court transcript.
Bouzari spent more than eight months in prison. His wife paid $3
million to Iran’s Ministry of Information before he was released,
court documents show. Bouzari then paid another $250,000 to secure
his passport. He left Iran for Rome in July 1984 and emigrated to
Canada in 1988.
Bouzari testified he was tortured because he’d refused to pay $50
million as a bribe to Mehdi Hashemi. “I didn’t believe at that time
in paying money to a government official or son of the president,”
Bouzari said.
Pressed for a Commission
In a February interview in London, Bouzari elaborated on his ordeal.
“Mehdi and Yazdi pressed me to give them a commission, but I didn’t
need the Rafsanjanis because I had done all the hard work in lining
up the contract,” he said. “I was detained and tortured illegally.
No shred of paper was ever presented to me or my family as to why I
was jailed or tortured.”
Bouzari sued in February 2002, seeking to regain the $3.25 million he
says his imprisonment cost him. That May, Judge Katherine Swinton
said she accepted the truth of Bouzari’s testimony. She ruled the
Canadian court had no jurisdiction over Iran as a sovereign nation.
In December 2003, Bouzari appealed to Ontario’s Court of Appeal,
where the case is pending. While he waits, he has set up the
International Coalition Against Torture, which aims to end
state-sponsored abuse.
“I would have been killed had I tried to take this action in Iran,”
Bouzari says.
`Psychological Warfare’
Mohammad Hashemi, 52, Rafsanjani’s younger brother, dismisses such
stories. He says his family is a victim of rumors, gossip and
propaganda.
In a December interview at the former Saadabad Palace in northern
Tehran, in a complex of buildings that once belonged to the deposed
shah’s sister, Hashemi says enemies of the Islamic regime are lying
about the family wealth.
“This is part of the psychological warfare to create a rift between
the people and their government,” says Hashemi, who abandoned his
studies at the University of California, Berkeley, in 1978 to join
the revolution. He served as Iran’s vice president from 1995 to 2001
and headed state radio and television for 13 years. Today, he often
acts as family spokesman with the international press.
Tea and Almonds
“Our Mehdi has said he had nothing to do with bribery,” Hashemi
says, speaking over a snack of tea and salted almonds in a room
furnished with Louis XVI chairs, silk wallpaper and a Persian carpet.
“If foreign companies want to do business, they should do so in a
correct way without resorting to any middlemen.”
Mehdi Hashemi declined telephone, fax and e-mail requests for an
interview. In a March interview with the Shargh newspaper, a Tehran
daily, he said he had no knowledge of Horton Investment and has had
no consulting agreements with Statoil or Horton.
The discovery that a Rafsanjani figures in controversy over money and
power doesn’t surprise Ali Ansari, an Iranian lecturer in Middle
Eastern history at Exeter University in southwest England.
“Rafsanjani operates on the principle of what’s good for him is good
for the country,” says Ansari, who has written two books on Iran:
“A History of Modern Iran Since 1921: The Pahlavis and After”
(Longman, 2003) and “Iran, Islam and Democracy: The Politics of
Managing Change” (Royal Institute of International Affairs, 2000).
“His family has long tentacles.”
Rafsanjani stepped down as president in 1997 after serving Iran’s
limit of eight years. Today, he leads the religious organizations
that shadow Iran’s official government. He’s deputy chairman of the
Assembly of Experts, which appoints Iran’s Supreme Leader, the
ultimate political and religious authority. In 1999, the assembly
named Ayatollah Ali Khamenei to the post.
Extending His Reach
Rafsanjani also heads the Expediency Council, which sets strategic
economic policy and mediates between parliament and the Guardian
Council, a 12-member clerical body that oversees parliament. “He is
one of the most powerful men in Iran,” Ansari says. “His reputation
is that of a Mr. Fix-it.”
Rafsanjani extends his reach through his family. Cousin Ahmad
Hashemian is managing director of the Rafsanjan Pistachio Growers
Cooperative, which dominates the $746 million pistachio export
market, according to the Web site of Iran’s Customs Ministry.
Older brother Ahmad, now retired, headed the Sarcheshmeh complex,
Iran’s largest copper mine. Another brother, Mahmud, was governor of
Qom, Iran’s most important holy city. Nephew Ali Hashemi, 43, is a
member of the parliamentary energy commission that oversees oil and
gas policy. Mohsen Rafiqdoust, 63, Rafsanjani’s brother-in-law, was
Khomeini’s driver and head of security when the ayatollah arrived
from exile.
Role of Bonyads
One way the Rafsanjanis and other clerical families maintain their
grip is through the Bonyad foundations, says Shaul Bakhash, a
visiting fellow at the Brookings Institution, a Washington- based
research organization.
After the revolution, the Bonyads expropriated assets of foreigners
and the former shah’s friends, says Bakhash, who has written
extensively on Iran and is the author of “The Reign of Ayatollahs:
Iran and the Islamic Revolution” (Basic Books, 1984).
Companies under Bonyad control account for as much as a third of
Iran’s economy, he says. The Bonyads don’t disclose their accounting
or pay taxes; they get subsidized loans and report only to the
Supreme Leader, he says. “The economic power structure is even more
opaque than the political system,” Bakhash says. “The Bonyads
funnel money to senior religious figures for patronage and suspected
clandestine activities.”
Links to Terrorism?
The Bonyads have been linked with funding terror organizations, he
says. In 1989, Bonyad 15 Khordad offered $1 million to any
non-Iranian who carried out Khomeini’s charge to kill author Salman
Rushdie for writing “The Satanic Verses” (Viking Press, 1989), a
novel that mocks the prophet Mohammad. Over the years, the bounty has
increased to $2.8 million.
Rafiqdoust, Rafsanjani’s brother-in-law, headed the biggest Bonyad
for more than 10 years, until 1999. The Bonyad Mostazfan and
Janbazan, or Foundation for the Oppressed and War Invalids, owns the
former Hilton and Hyatt hotels in Tehran; Zam-Zam, Iran’s largest
soft drink company; Bonyad Shipping Co., a global shipper with
offices in London and Athens; and industrial plants and real estate,
according to its Web site.
A 2000 World Bank report put the value of BMJ assets at $3.5 billion;
Iranian economist Mohammad Jamsaz, a consultant to Iran’s Chamber of
Commerce, estimates the number is closer to $12 billion.
Student of Khomeini
Rafsanjani gained entry to Iran’s political and religious elite early
on. He was one of nine children born into a pistachio farming family
from the village of Bahraman, near Rafsanjan, a dusty town in central
Iran. When he was 14, his parents sent him to Qom, a seminary town on
the northern fringes of the Dasht-e Kavir Desert.
Khomeini taught classes there, and Rafsanjani studied Islamic law,
morality and mysticism. Khomeini advocated giving clerics more say in
running the country, an interpretation that contrasted with the then
Shiite leadership, which shunned political entanglements, Bakhash
said in his book.
In 1964, Iran’s military arrested Khomeini and exiled him to Izmir,
Turkey, and Najaf, Iraq. Khomeini opposed the shah’s policies on
women’s rights and land reform, under which the government
accumulated property from Iran’s mosques. He also fought the growing
role of the U.S. military in Iran. During the next 15 years,
Rafsanjani landed in jail five times for his own activities against
the shah.
Shah’s Regime Falls
The shah’s regime fell in 1979 after his modernization plans and
links to the U.S. sparked a revolution. Khomeini returned as a
national hero and pushed his idea that only the religious class may
rule. An assembly composed of 82 percent clerics changed Iran’s
constitution to create an Islamic republic.
Rafsanjani stayed at the center of power. He was a member of the
Revolutionary Council, which ordered executions of officials in the
shah’s regime, Bakhash writes. He was speaker of the Majlis, Iran’s
parliament, for nine years. He acted as Khomeini’s representative on
the Supreme Defense Council — or war cabinet – – during the
eight-year war with Iraq. The war ended in a stalemate in 1988,
leaving a million casualties. In 1989, Rafsanjani was elected
president, replacing Khamenei, the current Supreme Leader.
Today, Rafsanjani’s two terms are remembered for corruption and
nepotism, says Mehdi Haeri, a lawyer in Bochum, Germany. Haeri,
himself a former student of Khomeini and a classmate of President
Khatami at Qom Theology School, spent four years in jail for
criticizing Khomeini’s ideas on Islamic rule.
In 1997, Haeri testified before the U.S. House International
Relations Committee in favor of continuing U.S. sanctions against
Iran. “In every major industry and in every financial activity, you
find the Rafsanjani family somehow connected,” Haeri said.
Prevalence of Bribes
Siamak Namazi, managing director of Tehran-based consulting firm
Atieh Bahar Consulting, says bribes are prevalent in Iran. “In a
country where you have to pay off the postman to make sure your
international packages are delivered, bribes can be a way of life,”
says Namazi, who counts Nokia Oyj and BP Plc as clients.
Nokia, the world’s biggest mobile-phone maker, sells handsets in Iran
and is seeking a contract to expand cell phone coverage. BP, Europe’s
biggest oil company, is negotiating with the oil ministry for
drilling rights.
`Zero Tolerance’
BP spokesman Toby Odone says his company doesn’t pay success fees or
bribes. Nokia spokeswoman Arja Suominen says the company and
employees won’t pay bribes or illicit payments to government
officials or candidates.
“You have to have zero tolerance toward bribery,” she says. Namazi
says he advises clients not to pay to win business. “I would advise
against paying a bribe,” he says. “You’ll only bring fire upon
yourself.”
At Statoil, CEO Fjell’s resignation makes the case for Namazi’s
statement. “Looking back, I see that I entered an ethical
borderland,” Fjell said at his September farewell news conference in
Stavanger. “This particular agreement shouldn’t have been made. I’m
struggling with the fact that I could allow that to happen.”
Iranian Deputy Foreign Minister Mohammad Hossein Adeli says the
Statoil episode would have blown over had the company been more open.
A former central bank governor and ambassador to Canada, Adeli takes
a deep breath, searching for the right words.
“If a Western company wants to come to Iran, should they pay someone
to show them around and to help them navigate the Iranian market?
Absolutely,” he says. “They have to pay. The only thing Statoil did
wrong was to keep the payments a secret.”
Foreign investors may not be so generous in their assessment. “If
there’s a feeling a country has corrupt officials, it’s bad for
investors,” says Karina Litvack, head of governance at Isis Asset
Management Plc, a London fund manager with about 62 billion pounds
($111 billion) under management, including Statoil shares. “It makes
it risky because corruption breeds lawlessness.”
Investors seeking riches in Iran are likely to run up against the
Rafsanjanis. The challenge is to avoid the pitfalls.

To contact the reporter on this story:
–Kambiz Foroohar in London at [email protected]
To contact the editor of this story:
Ron Henkoff at [email protected]

A1 Plus | 16:33:19 | 20-04-2004 | Politics |
NEGOTIATIONS RESUMED
On the initiative of Raffi Hovhannissyan, first Foreign Minister of Armenia,
Opposition-Coalition dialogue resumed.
Intellectuals and members of Parliament “People’s Deputy” group appeared as
a mediator for the meeting. Journalists were forbidden to enter the
building. We will later obtain information about the agreements achieved
during the talks.
Let’s remind that Opposition representatives think the negotiations won’t
have serious results since Coalition can’t influence upon Robert Kocharyan.