Armenian ex-deputy PM’s family business gains from state program
In Armenia, former Deputy Prime Minister Tigran Avinyan has found himself at the center of an unfolding story that intertwines family business, state-funded projects, and political influence. Avinyan, a prominent figure of Armenia’s “Velvet Revolution” in 2018, went from a city council member to a deputy prime minister during a time of national upheaval. While heralded as part of a new generation intent on ending corruption, an investigation by the Organized Crime and Corruption Reporting Project (OCCRP) and Civilnet reveals that state programs Avinyan supervised provided indirect benefits to his family’s irrigation business, Irrigate LLC.
The 2018 “Velvet Revolution” was a defining moment in Armenian politics. Led by reformists who championed democracy and transparency, it unseated the entrenched Republican Party and installed the Civil Contract party, led by Nikol Pashinyan, as the governing force. Among its rising stars was Tigran Avinyan, a 29-year-old city council member catapulted to the position of deputy prime minister. Tasked with steering government projects related to economic growth, Avinyan soon found himself overseeing initiatives aimed at agricultural development-a sector in which his own family had interests.
Avinyan’s family-owned business, Irrigate LLC, specializes in irrigation systems and agricultural products. Notably, Irrigate LLC became a go-to subcontractor for beneficiaries of the state’s intensive orchard program, which Avinyan oversaw. Though the program aimed to modernize Armenia’s agriculture through subsidies and financial assistance, questions have emerged about Irrigate’s extensive involvement and significant profits.
According to government records, Irrigate LLC reaped significant financial rewards through its work as a subcontractor for nine beneficiaries of the agricultural program Avinyan supervised. Between 2018 and 2021, companies and individuals participating in the program hired Irrigate to set up specialized orchards aimed at maximizing fruit yield. These beneficiaries collectively received hundreds of thousands of dollars from the Armenian government to establish these orchards, although it remains unclear how much of this money ultimately flowed to Irrigate.
The investigation reveals that, while there is no direct evidence of misconduct, the financial windfall for Irrigate LLC raises ethical concerns. Avinyan’s role in these projects provided a unique advantage for his family’s business, which paid over 12.5 times more in taxes during his tenure as compared to prior years, suggesting a substantial boost in revenue. Tax records show that Irrigate’s total tax contributions shot up from an average of 1.7 million drams ($3,800) per year before 2018 to about 21 million drams ($48,000) annually from 2019 onwards.
The 2018 Velvet Revolution might have symbolized a break from Armenia’s political past, yet Avinyan’s early actions raised eyebrows. Shortly after being appointed deputy prime minister, a grant application Avinyan had filed before entering office was awarded to Irrigate LLC, sparking criticism. The $35,000 grant intended for dried fruit production was finalized in June, after Avinyan had assumed his new role. Although he maintained that all grant decisions were made before his appointment, the timing still led to public outcry.
Despite this backlash, Irrigate LLC’s growth trajectory continued as the company benefited from the state’s expansion of the intensive orchard program in 2019. Originally limited to loan subsidies, the program began offering direct payments covering up to 50 percent of the cost of setting up high-efficiency orchards, a change introduced by the Civil Contract government. Beneficiaries under this new component received approximately 2 billion drams ($4.4 million) in state funding to implement intensive orchard systems. While Irrigate LLC was not a direct recipient of these funds, five of the beneficiaries subcontracted the company for establishing over 29 hectares of orchards.
The Ministry of Economy provided few specifics regarding the exact amount paid to Irrigate for its subcontracting work. However, several beneficiaries did comment on their choice of Irrigate as a service provider. While one beneficiary claimed Irrigate was selected “by chance,” another pointed to the company’s quality of work, citing Irrigate’s well-constructed orchards as a reason for choosing them. These testimonials lend some credibility to the company’s merit, but the close connection between Avinyan’s oversight of the project and the family business’s profitability has stirred concerns about possible conflicts of interest.
In addition to direct payments, the intensive orchard program offered loan subsidies covering up to 98% of loan interest, which further reduced the financial burden on participants. Of the 88 subsidy beneficiaries, four also hired Irrigate LLC for various aspects of orchard development, covering another 27.3 hectares. Since program rules prohibited using both subsidies and direct payments for the same project, the overlap was avoided, although Irrigate’s involvement continued to expand.
The investigation by OCCRP and Civilnet indicates that, while Avinyan played only a technical role in the program’s operations, his position allowed him to influence the distribution of state resources, potentially creating favorable conditions for his family business.
Prime Minister Nikol Pashinyan came to power promising a crackdown on corruption and increased transparency. Yet, Avinyan’s case highlights the challenge of disentangling private interests from public service in a political system rife with nepotism and historical conflicts of interest. The intensive orchard program was a noble attempt to modernize Armenian agriculture, but its benefits appear to have been unevenly distributed, with Avinyan’s family reaping disproportionate rewards.
This case also exposes the limitations of Armenia’s oversight mechanisms. The Ministry of Economy refrained from disclosing specific payments made to Irrigate LLC, citing privacy restrictions. Without clear transparency requirements, the program leaves room for public skepticism and suggests the need for a more rigorous system to monitor potential conflicts of interest among public officials and their families.
In October 2023, Tigran Avinyan assumed a new role as the mayor of Yerevan. This career shift has added another layer of scrutiny to his past actions, as opposition figures and civil society members continue to question the ethicality of his tenure as deputy prime minister. The intertwining of Avinyan’s political responsibilities with his family’s business interests signals a need for deeper reforms to prevent similar conflicts in the future.
While no legal misconduct has been proven, Avinyan’s involvement highlights the complexities of managing public programs in Armenia. As Avinyan and his Civil Contract peers continue to steer the nation, Armenia’s citizens and anti-corruption advocates are likely to push for stronger protections to ensure that public officeholders cannot leverage state resources for personal or familial gain.
In the end, the Avinyan case underscores a broader struggle faced by post-revolution Armenia: achieving a democratic, transparent system in a society still grappling with the influence of power and privilege. For a government that rose on the promise of reform, the response to this ethical dilemma will serve as a test of its commitment to a fair and accountable administration.
