By By Raffi Elliott,
As Azerbaijani artillery batteries opened up along the Line of Contact on September 27, so did the wallets of concerned Armenians across the world. Hayastan All Armenian Fund (HAAF), the pan-Armenian network entrusted with directing the flow of financial contributions from the diaspora toward large-scale infrastructure projects in Armenia—often referred to simply as “Himnadram” (Foundation, in Armenian)—rushed to prepare for the incoming wave.
“We faced lots of issues handling this sudden upsurge of donations, such as maintaining the website, and keeping the donation page from crashing,” Anna Aghajanian, who heads the Programs and External Relations Department at HAAF remembers.
Himnadram’s 30 staffers had to contend with attempts by authorities in Ankara and Baku to block its affiliates’ bank accounts in several countries, and fake phishing sites designed to deflect would-be donors away from their real donations page. Despite these attempted disruptions, which included near-constant denial-of-service (DoS) attacks by Azerbaijani and Turkish hackers, “the site only went down twice during the length of the war,” Aghajanian recalls.
Altogether, the All Armenian Fund managed to collect at least 750,000 individual donations from all over the world as part of the We Are Our Borders fundraising effort, totalling $170 million. An additional $30 million raised following the November 9 ceasefire would bring the total amount of money raised closer to $200 million. The campaign proved the single-most-successful fundraiser in the organization’s 28 year history.
Yet as the guns fell silent on the morning of November 10, and the people of Artsakh, Armenia and the diaspora contended with the events which unfolded over the previous 44 days, Himnadram found itself unwittingly dragged into the ensuing political quagmire that rattled post-war Armenia. With accusations of mismanagement of funds, embezzlement and other allegations mostly lobbed by opponents of Prime Minister Nikol Pashinyan––who many blame for the war’s outcome––also being directed at the fund, Executive Director Haykak Arshamyan believes they have been “artificially politicized”. However, with Himnadram repeatedly pushing back the publication of a long-promised independent audit of its dealings, doubt continues to linger.
The controversy over Himnadram’s activities during the war and in its immediate aftermath have raised important questions, not only about the effectiveness of the organization’s role in coordinating charitable donations but also the general readiness of Armenia’s institutions (both state and non-state) as a whole in responding to black swan events.
Established in 1992 with a mission to connect the people of Armenia with the worldwide Armenian diaspora to create a better homeland for the Armenian nation, the All Armenian Fund quickly grew into the largest humanitarian organization serving the needs of the republics of Armenia and Artsakh. Tasked primarily with raising and coordinating financial contributions from the diaspora towards public construction projects, educational initiatives and cultural activities, the All Armenian Fund says the $400 million it has raised from some 1.5 million donors over its 28-year existence have impacted 800,000 people in Armenia and Artsakh.
Despite a public commitment to transparency—Himnadram regularly publishes audit reports on its website––the organization’s alleged links to Armenia’s notoriously corrupt construction industry have plagued it with controversy. Allegations of embezzlement of funds, bribery and the privatization of properties funded by HAAF have followed the organization’s activities throughout its history.
According to Haykak Arshamyan, who worked at Transparency International prior to the 2018 Velvet Revolution, the organization had seen a steady decline in donations over the previous decade, corresponding with wavering trust in its activities. “I personally checked the donation numbers, and noticed a discrepancy between funds pledged and funds actually collected at the time,” Arshamyan says. In 2013 alone, HAAF had publicly announced $30 million worth of pledges, but only $8 million of the promised sum was eventually donated. “Despite being an independent organization, trust in the Armenia Fund usually reflects trust in the Government,” Arshamyan says. His predecessor, Ara Vardanyan, is currently on trial for allegedly losing over $270,000 worth of the Fund’s money gambling online between 2016 and 2018.
This gambling scandal seriously hindered the organization’s work, which spent the following months on damage control, cooperating with investigators and auditors. Scandals like these pushed the new leadership back to the drawing board in an effort to rebuild trust and the organization itself. “We didn’t even have an actual mission strategy at the time,” Arshamyan remembers, “only a statement which had been pulled from the Charter.” Key changes included refocusing infrastructure projects around community impact and long-term sustainability. “We no longer just build and hand off infrastructure,” Anna Aghajanian says.
Keen on avoiding the logistical chaos of the 2016 Four Day April War—where multiple NGOs sprung out of the ground accepting donations for the war effort before disappearing—Himnadram had positioned itself as the main channel for diaspora assistance to the country, coordinating the transfers of funds and material aid with various government agencies to ensure efficiency.
But fast-forward four years, and the political fallout of the November 9 ceasefire risks undoing much of the goodwill which Himnadram had painstakingly restored. The revelation that the All Armenian Fund had agreed to donate some 60% of its funds directly to the Armenian state budget was met with uproar from the political opposition and many donors, and mired by unsubstantiated claims that this money was used to grease government officials’ pockets. The issue of Himnadram’s finances was apparently conflated with an unrelated government program to supplement the low salaries of civil servants with monthly bonuses. The Government rejects these claims.
President Armen Sarkissian—who sits on the organization’s board of trustees—apparently provoked renewed controversy when, on November 26, 2020, he addressed a letter to Director Haykak Arshamyan expressing his deep concern over “some distrust and dissatisfaction with the fund’s activities” and calling on him to either “urgently” publish an audit or refund the donations. This final audit has yet to be published.
But Arshamyan insists that the Fund has been the target of a deliberate smear campaign. In an interview with EVN Report, the Executive Director pointed to what he says were identical posts being shared across dozens of online accounts on several social media platforms as evidence of a coordinated effort, rather than the result of lazy journalism. He stopped short of naming any suspects.
Addressing one of the most persistent attacks against the organization—that the transfer of funds to the state budget, rather than paying for expenses directly, amounted to a breach of the Armenia Fund’s Charter—Arshamyan remains confident of its legality. Himnadram’s spokeswoman confirmed to EVN Report that over $100 million was transferred directly to the state budget during the war in order to “streamline and consolidate the purchase and distribution of much-needed aid.” A further $1.1 millionwas also contributed to the Insurance Foundation for Servicemen.
While Article 27 of the organization’s founding charter states that the Government of the Republic of Armenia cannot be considered a benefactor of the fund’s activities, the Charter does provide special dispensations for emergencies. Still, Article 23 of the Charter enables the Foundation to use it’s property and funds in pursuit of its stated goals, so long as it is authorized by the Board of Trustees. Under these circumstances, Himnadram’s legal team has apparently concluded that the transfer of funds to the state budget in times of national emergency do not constitute a breach of the Charter, given that the money is earmarked for financing social and health expenses benefiting the people of Armenia.
This legal justification hasn’t stopped prominent critics, including former President Robert Kocharyan, from insinuating that the $107 million may have been misappropriated by the Government. “I cannot believe the assurances of the government, which throughout the war cynically deceived its own people […], without providing physical documentation on the expenditures,” then-candidate Kocharyan saidwhile on the campaign trail on March 16, 2021. HAAF’s spokesperson confirmed to EVN Report that the entire sum was transferred in nine individual tranches, each one of which had to be individually approved by the Board of Trustees. Kocharyan, himself a member of the Board since 1998, has apparently totally ceased his involvement with the Fund’s activities since 2009, with his last correspondence being received in 2018.
That said, Kocharyan was present—for the first time in decades—at the Board of Trustees’ March 15, 2021 meeting. Immediately following that meeting, the Board published a press statement in the name of all those present, assuring “that funds raised during the war were not misused.” The Board also committed itself to “removing all doubt and maintaining the public’s confidence.”
Among the other decisions made at the March 15 Board meeting was to “work with the international audit firm and other parties to account for the use of the funds raised during the war.” Executive Director Arshamyan says that the initial report promised in December 2020 was not deemed comprehensive enough, and thus a new report was finalized following a review in June 2021 and passed on to the accountancy and business advisory firm Baker Tilly International. This in-depth report is apparently awaiting final approval from the Board of Trustees before it can be made available to the public. Arshamyan could not provide a deadline for when this audit will be made public, but promises it will be “soon”.
Despite the delays, Himnadram reiterates that all the funds have been, or are in the process of being, allocated to key areas of need as identified by state agencies and NGOs. The transfer of funds was managed directly by the Ministry of Finance and thus earmarked for projects in three categories: healthcare, infrastructure and social support. The Finance Ministry’s Vazgen Harutyunyan confirmed to EVN Report that his ministry was in charge of routing the funds through various government agencies providing medical aid to military personnel and civilians affected by the fighting, social services for internally displaced civilians and critical infrastructure maintenance throughout the course of the war. However, the Finance Ministry stopped short of providing a breakdown of the expenditures.
But almost half of these funds—much of which didn’t sit in Himnadram’s accounts until after the war’s conclusion—are dedicated to post-war reconstruction efforts, a task which Himnadram is now undertaking. “We’re currently engaged in very large-scale construction projects in and outside of Stepanakert, to the tune of some $75 million,” Aghajanian explains. The Fund says it is constructing 1100 individual homes and 630 apartment units for families whose homes were lost when the Azeribaijans overran Hadrut, Talish and Shushi. Some 40 km of interconnecting roads and highways are also being paved across Artsakh.
Some of the funds are also being spent in Armenia proper. In the northern Armenian city of Gyumri, where hundreds of families continue to live in temporary container homes 33 years after the devastating 1988 Spitak Earthquake, Himnadram is pouring concrete on the site of a future apartment complex for the families of wounded veterans. The four buildings were initially funded through a donation drive in 2019 to end lingering homelessness from the 1988 earthquake, however, Aghajanian says their design was modified post-war to meet accessibility requirements, and allocations prioritized for families with disabled veterans. Other projects include financial assistance for the families of deceased service members and support for the Homeland Defender’s Rehabilitation Center, which assembles high-tech articulated artificial limbs for war amputees.
Questions of organizational transparency aside, the war has unmasked some serious structural vulnerabilities in Himnadram’s abilities to react to crises and provide coordinated relief for Armenians caught in adverse situations. These stresses in the logistics chain were apparently further strained by the country’s slow and often burdensome bureaucracy, which many accused of facilitating war profiteering, or delaying the rapid distribution of much-needed supplies to the war effort.
Still, Himnadram’s Anna Aghajanian doubts that the organization’s logistics chain could have been any more efficient, given the situation. “Urgent humanitarian aid, such as medical supplies, shelter and food, we brought in very quickly through airlifts,” Aghajanian recalls, though bulkier or less urgent items, such as winter coats and construction equipment, would take about six weeks to reach Armenia by sea and land.
Aghajanian also mentioned that a special government body, convened to lift customs duties on humanitarian aid, actually helped expedite the process of customs clearance—which still took up to two months in some cases. That said, Himnadram also acknowledged being unaware of the final whereabouts of packages which had been collected by other government agencies, such as the Ministry of Defense and Ministry of Health. Smaller independent aid organizations, by contrast, found themselves waiting up to several months to clear vital aid packages at customs.
Haik Kazarian, a Canadian-Armenian who co-founded the aid agency Transparent Charity NGO which fed and clothed some 45 thousand refugees during the war, complains of half-year long delays at the customs office, and endless bureaucratic hurdles to pick up aid shipments. “Without exaggerating, that’s over five days of full-time work,” Kazarian says, “resources that an NGO could never afford.” He’s not alone in this predicament. Dozens more smaller NGOs have faced similar issues.
The All Armenian Fund’s wartime experiences have tested the organization’s ability to meet its charter obligations to its beneficiaries. Of the many lessons to be drawn from this episode, questions arise about the need for more flexibility in the Board of Trustees, to better represent all aspects of the global Armenian community, the development of more secure and rapid transportation links for vital goods in a landlocked country, and the importance of trust-building.
The Board’s composition, at the Armenia Fund’s inception back in 1992, was meant to provide inclusive representation of every Armenian organization across the time, from religious groups to political parties and well-established charities. However, in the decades since, questions arise as to whether the Board’s seat allocation still reflects a more diverse global Armenian community with newer interest groups rising to prominence.
Himnadram itself has proposed a number of initiatives designed to boost the organization’s capacity to manage its obligations with more flexibility. Arshamyan’s pet project, a Patreon-style monthly subscription system for the diaspora, has been in the works since before the war. “If only 50,000 Armenians committed to donating just $10 a month, we could achieve projects that have until now been out of reach,” the Director says.
Though the flurry of post-war construction and charitable activity undertaken by Himnadram suggests that at least some of the collected funds is reaching its intended use, the absence of a complete audit almost a year since it was first proposed leaves donors still asking “where is the money?” It would be wise to lay out the answer in black and white before asking for more.