"In an inspection carried out at the Sotk mine, 865.2 kg of gold, 3.3 tons of silver, 0.86 tons of selenium, and 7.18 tons of tellurium were discovered. An inspection of the Meghradzor goldmine in the Kotayk Marz revealed hidden resources consisting of 143.4 kg of gold, 2.78 tons of silver and 3.38 tons of tellurium," read a June 3, 2004 statement by the Ministry of Ecology's State Environmental Supervision Department. According to the ministry, the concealment of the metals cost the Republic of Armenia 900 million drams (approximately $1,800,000 USD) in lost revenues.

These findings were presented to the tax agencies and to the anti-corruption unit at the Office of the Prosecutor General of the Republic of Armenia. Apparently the Prosecutor General's Office failed to take action, because if they had filed criminal charges, there would not have been a civil suit in Economic Court.

The Sotk mines are run by the Ararat Gold Recovery Company. In a November 4, 2004 appeal to the Economic Court of the Republic of Armenia , its director, Vardan Vardanyan, requested that the ministry's statement be declared invalid, claiming that the text of the ministry's findings did not conform to the requirements of Armenian legislation, and that the inspection had been conducted with numerous breaches of the law. Focusing on technical violations of the Law on Inspections by the Ministry of Ecology, the appeal makes no comment on the actual accuracy of the ministry's data.

On February 2, 2005 , the Economic Court (Judge Nakhshun Tvaratsyan presiding) ruled to uphold a settlement agreement signed between the Ararat Gold Recovery Company and the Environmental Supervision Department of the Ministry of Ecology.

The settlement agreement was signed by Sanjay Dalmya, senior director of Ararat Gold Recovery, and Arthur Hambardzuyman, representing the Ministry of Ecology.

The agreement contains a number of bizarre provisions. Among these, the ministry withdraws its main claim, the second point in its statement, which specifies the amounts of the concealed metals. The agreement stipulates a revision of these figures, following a joint inspection by representatives from both sides. Article 4 of the agreement reads in its entirety: "The sides will appoint fives representatives each, giving them the corresponding authority to conduct a revision of the amounts of concealed metals, from the moment that the decision of the Court upholding this settlement agreement comes into force. The Claimant hereby appoints the respected scientist Mr. Aloyan, and the Respondent hereby appoints the respected scientist Mr. Shekhyan

The mention of the "respected scientists" is strange, to say the least. Who are these scientists? Which research institutes do they work in? There is no mention of this.

But the reality is, inspections of companies are generally carried out exactly as the settlement envisions-with the cooperation of both sides; the ministry's findings regarding concealed metal had to be based on data received from the company itself. When findings are incorrect, they must first be contested in the ministry, and only then in a court of law. If the ministry did not retract the statement it had drafted incorrectly, thereby forcing the company to go to court, then why wasn't the statement in question contested in a public hearing, with the respected scientists as expert witnesses? If the data regarding the concealed resources in the statement is incorrect, then why doesn't the appeal presented by Ararat Gold Recovery mention this? If the state has been deprived of tax revenues, then why does the prosecutor general, as the protector of the interests of the State, have no part in the trial?

One of the scientists mentioned in the settlement agreement, Mr. Aloyan, informed us by telephone that the committee had investigated the mines and no hidden assets had been found. Why they were not found is another question.

According to our information, Ararat Gold Recovery transferred $500,000 to the state budget as "compensation". We can only speculate as to how much of that the Prosecutor General received, since there is no unit that deals with the corruption within the anti-corruption unit of the Office of the Prosecutor General.