Can an Arm-Wrestling Champ Turned Armenian Power Broker Prevail?
WHY YOU SHOULD CARE
Because being a connected Eastern European tycoon isn’t always a secure lifestyle.
By Dan Peleschuk
Anyone who refers to himself in the third-person is bound to raise eyebrows. But for Gagik Tsarukyan, Armenia’s most recognizable tycoon, it somehow seems fitting. Maybe it’s the burly businessman’s jovial demeanor or his endearing, down-home style — both of which have helped him capture hearts in his homeland.
True, he’s not for everyone. To his detractors, Tsarukyan is a clownish oaf with no place in politics. Supporters, meanwhile, credit the 62-year-old with tapping into his wealth to give back to an underprivileged population. Like him or not, this bootstrapping former athlete has been a staple in Armenian politics for more than a decade, nurturing alliances with ruling administrations to retain his riches and exercise political influence through his Prosperous Armenia party.
But as a new government prepares to make good on its promises to clean up the former Soviet republic of 3 million and pull it out of poverty, some are wondering whether Tsarukyan’s days are numbered. After all, he’s a symbol of the sort of excess most Armenians can’t even imagine and, critics say, of the sort of dubious political influence that’s angered them. Meanwhile, his popular support has already dropped in the past year. “I think it’s a matter of time before the new government goes after his assets and cripples him further,” says Emil Sanamyan, an expert at the Institute of Armenian Studies at the University of Southern California.
Tsarukyan was most proud of his lion, the symbol of Multi Group, and a collection of enormous Caucasian shepherd dogs, which reportedly win most of the invitation-only dogfights attended by Armenia’s rich and infamous.
Leaked U.S. diplomatic cable
Like many other conspicuously rich tycoons scattered throughout Eastern Europe today, Tsarukyan — whose estimated worth is at least several hundred million dollars — started making money in the early 1990s, a time when fast post-Soviet cash came to those with either brains or brawn. The budding businessman chose the latter path, though in a decidedly less violent way than some of his more criminal contemporaries: He became a world arm-wrestling champion. Investing his winnings into small businesses, Tsarukyan eventually built Multi Group Concern, a conglomerate that includes interests ranging from brandy and pharmaceutical production to mining. In between, he managed to raise six children.
Soon after hitting it big, Tsarukyan made a name for himself well beyond the business world. From building churches and paying for scholarships to chairing Armenia’s Olympic Committee, he won respect as a true Armenian patriot. Part of his appeal may also be rooted in his entertaining personal style, which a leaked 2006 U.S. diplomatic cable said could “make Donald Trump look like an ascetic.” Detailing a meeting with Tsarukyan in that same cable, an official described dining with him at his personal estate, where the tycoon showed off his menagerie: “Tsarukyan was most proud of his lion, the symbol of Multi Group, and a collection of enormous Caucasian shepherd dogs, which reportedly win most of the invitation-only dogfights attended by Armenia’s rich and infamous.”
As for many businessmen, entering politics in the mid-2000s was Tsarukyan’s way of defending his business interests (a seat in parliament buys elected lawmakers immunity). Under the administration of President Serzh Sargsyan and his ruling Republican Party — which controlled nearly all the levers of power between 2008 and 2018 — Tsarukyan and Prosperous Armenia came to occupy a useful role as a so-called controlled opposition. “Everybody knew that the party he created and the people he attracted to join him were basically a project of the Republican Party,” says Artyom Tonoyan, a research associate at the University of Minnesota and expert on the South Caucasus region. Meanwhile, Tsarukyan’s business activities hummed along.
In that time, he also learned a thing or two about putting his best face forward on the international stage. In a 2017 op-ed for New Europe, ahead of that year’s parliamentary elections in Armenia, Tsarukyan lamented how his country “remains crippled by the legacies of the past” and unable to adapt to the global economy. “With improvements in governance and the elimination of corruption, I see no reason why, with strong democratic political leadership, we cannot unite the country behind a new modernizing program that can attract investments and expertise and lead Armenia to growth and prosperity,” he wrote.
Fast-forward to April 2018, when anti-government protesters hit Armenian streets to decry Sargsyan’s rule and demand an end to government corruption. The widespread protests propelled opposition darling Nikol Pashinyan to power — with the help of Tsarukyan, whose party declared its support for the reformist leader — helped funnel people onto the streets of the capital city of Yerevan and effectively formalized the peaceful transfer of power after Sargsyan finally agreed to step down.
Once again, Tsarukyan had proven his political usefulness. But there’s just one problem: Pashinyan rode to popularity on promises of cleaning up government and giving ordinary Armenians a greater say in their political system. So it’s difficult to see how Tsarukyan, an uberwealthy oligarch who’s enjoyed cozy ties with Armenia’s allegedly thieving leaders for years, would remain unscathed. Since Pashinyan took power last year, his government has launched a prominent anti-corruption campaign that’s even ensnared a former president.
And although signs indicate Pashinyan and Tsarukyan are on good terms — they’ve even appeared together on press tours — experts say there’s no guarantee the new government won’t go after the tycoon as a much-needed sacrificial lamb. That’s especially the case given Armenia’s overstretched budget, which badly needs a cash infusion the likes of which Tsarukyan could easily provide if so compelled. Sanamyan points out that squeezing businessmen for money isn’t new in Armenia. “Obviously, the expectations now are much higher,” he says, referring to popular hopes following the revolution. In his 2017 op-ed, Tsarukyan urged the state to “assume the responsibility of providing certain basic provisions for its people.” He may well play an even larger part in that effort than before.
It’s not over for Tsarukyan yet though: While Prosperous Armenia finished a distant second to Pashinyan’s reformist My Step Alliance in December’s parliamentary elections, which handed the revolutionary victors some 70 percent of the vote, Tsarukyan has signaled to allies and adversaries alike that he’s a political survivor.
Given the overwhelming popular mandate for Pashinyan, it’s clear Tsarukyan will need to play ball with the country’s new rulers. He’s done it before, but somehow the question remains more pressing than ever: Will a newly egalitarian Armenia have room for him?
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- Dan Peleschuk, OZY Author Contact Dan Peleschuk