One Judge Confesses to Outside Revenue Sources: “They are shares not business” In 2009, the salary of judges in Armenia doubled from 220,000 AMD to 440,000. The national budget allocated 1 billion AMD for the wage increases. The government justified the expense by arguing that salary hikes would cut down on corruption in the ranks of judges.

At the time, even members of the National Assembly voiced their opposition, saying that in the name of fair play their salaries should be increased as well. In the end, only the judges got a pay raise. According to the judicial code, judges also are permitted to receive a number of supplementary payments in addition to their salaries. The President of the Court gets an additional payment of 25% his normal salary. The President of the Court of Cassation gets a 15% bonus. In addition, judges receive bonuses according to their tenure in the system. Judges with up to five years of experience under their belt get an annual bonus of 2% and those with more than five years experience get 5%. The extent to which these salary hikes have had an impact on judicial corruption and bribery is an issue for another day. The fact is that many working judges never needed a pay hike in the first place given that they have other sources of income in addition to official wages. The judges themselves are the first to admit it. Taron Nazaryan, a judge with the Civil Appeals Court, declared revenues of $219,465 and 3,747,000 AMD on his 2008 “Revenue and Property” affidavit. He claimed no real estate transactions for the year and only declared the purchase of a Mercedes Benz automobile. Naturally, the amount of foreign currency revenues he declared is rather large for a judge sitting on the Civil Court bench, so we asked Taron Nazaryan where the money came from. We also requested he provide us a copy of the original “Revenue and Property” affidavit he submitted with the State Revenue Committee, since it includes a more detailed breakdown of the financial data. The judge turned around and said he had no copy to give us. He did, however, provide the sources of the $219,465. According to a notice provided by the State Revue Committee, the Nazaryan had revenues of 3,747,000, but the judge explained that the true amount of his 2008 revenue was 3,147,000; his salary as an Appeals Court judge. As to his foreign currency revenue, Judge Nazaryan stated that $117,686 comprised cash advances from his $50,000 credit line with InecoBank. “For example, I took an advance to buy a car during the year, which I paid off over the ensuing months. Then there was cash needed to take the family on vacation, a debt I also paid off. I took out several advances of differing amounts for repair work on our house, for furnishings, etc. I used dividends received at the end of the year to pay them off,” Judge Nazaryan explained. The judge also had another credit line of 559,000 AMD that he tapped and which was paid off using his wages. He added that many judges on the bench utilize this credit line and he was no exception. That Judge Nazaryan does not merely rely on wages is confirmed by the judge himself. To date, he receives interest dividends on $75,800 placed with the Georgian “Unimed” company. In 2009, this interest amounted to $9,294. Judge Nazaryan said this amount was used for sundry expenses throughout the year. “I received $92,437 in revenue from “Unimed”, a company registered in Georgia. This reflected a yearly non-one time dividend payment over the course of the year that was basically paid for by the $50,000 overdraft with InecoBank,” he said. He argues that his U.S. dollar revenue is actually $101,779 and not the $219,465 registered with the State Revenue Committee. The judge doesn’t count the credit advances he took and later paid off as revenue, which is perplexing given that they were paid off with received revenues. Even though the judge describes the $78,500 deposited with the Georgian company as a loan, nevertheless, we believe that it constitutes commercial activity, given that Mr. Nazaryan has shares in “Unimed” in that amount and receives a profit on. “A loan is not commercial activity. Who says it is so? I also receive revenue in the form of wages. Is this to be considered commercial activity as well? My stake in the company is private property, not commercial activity,” was how the judge responded to our inferences of engaging in business. He also didn’t agree with the view that a majority of judges receive other revenue streams other than basic wages – for example, shares in companies, loans, and that there was thus no need to double their salaries. On the contrary, Judge Nazaryan believes that judges’ salaries are low and that the government must pay them more. “The wages received by a judge today is not sufficient to guarantee financial independence while serving on the bench,” he states. By his calculations, judges in Armenia should be paid at least $50,000 yearly to be considered financially independent and not vulnerable to bribery. Today, Judge Nazaryan receives 480,000 AMD per month and he has no complaints since he has other revenue sources. “I don’t conceal the fact that I have other revenues coming in, but many other judges survive on the wages alone, he added.