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. Last Updated: 07/27/2016

U.S. Earmarks Give Armenians Homes

SARDARASHEN, Azerbaijan — Destroyed by shelling nearly a decade ago, this village of ethnic Armenians is being rebuilt brick by brick, courtesy of the U.S. taxpayer. American contractors have renovated the school, laid new water pipes along the mountain roads and provided a half-dozen local families with new, earthquake-resistant homes.

"If it weren't for America, we would be living in a hut," said Laura Baboyan, a mother of five, whose house was blown up by Azeri mortar fire in 1992 in the aftermath of one of the many ethnic conflicts that tore apart the old Soviet Union — the war between the republics of Armenia and Azerbaijan.

The rebuilding of Sardarashen, one of 48 Armenian villages put back together by U.S. funds on Armenian-controlled Azeri territory, is a good example of the old-style bricks-and-mortar foreign assistance that has gone out of fashion in Washington over the last two decades. It is also a testament to the political power of one of the most active ethnic lobbies in Washington.

In recent years, lobbying groups representing 1 million Armenian-Americans have used their wealth, influence and votes to sharply increase U.S. economic assistance to their compatriots overseas. With the help of key members of Congress, they have turned Armenia into one of the largest recipients in recent years of U.S. aid on a per-person basis after Israel. Last year, U.S. aid to Armenia accounted for about $42 per person, compared with $34 per head for Bosnia, $3 for Rwanda, $1.40 for Russia and 14 cents for India.

Armenia's good fortune is all the more remarkable because the overall U.S. foreign aid budget is dropping. In an era when Washington stresses investment and trade as the best ways to raise living standards, aid fell from around 0.2 percent of the gross national product to 0.1 percent during the eight years of the Clinton administration, ranking the United States at the bottom of donor nations in generosity.

Aid programs that have been cut in the last few years include forestry projects in Nepal and Honduras, institutional reform in Indonesia and Sri Lanka, small-scale lending in Bangladesh and development assistance in Africa.

But in Armenia, the trajectory has been up. Despite plentiful evidence of corruption and a patchy record on democracy and human rights there, Congress has voted six years in a row to increase aid for the nation of 3 million beyond levels requested by the Clinton administration. The tale demonstrates how, in an era of shrinking foreign aid, political connections are more important than ever.

The Bush administration enters office at a time of renewed calls by Republican leaders for the abolition of the U.S. Agency for International Development (USAID), which coordinates foreign assistance programs. Earlier this month, Senate Foreign Relations Committee Chairman Jesse Helms, Republican North Carolina, proposed setting up a publicly funded foundation to dispense grants to private and religious groups to replace what he called "a wasteful federal bureaucracy."

The new administration has not revealed its plans for foreign assistance, now totaling about $15 billion a year, roughly half of which is funneled through USAID. In confirmation testimony, Secretary of State Colin Powell said he looks forward to working with Helms on reforming the agency in the hope that the foreign aid budget might actually rise. Powell praised Helms for being "willing to increase foreign aid funding if we could find perhaps a new model in which to encourage nongovernmental organizations to receive that funding."

A decade ago, Senator Mitch McConnell, was one of the leading critics of U.S. foreign aid. Like Helms, he believed that USAID should be either abolished or folded into the State Department. But his views changed after the Republicans took control of Congress at the end of 1994, and he became chairman of the Senate Appropriations foreign operations subcommittee, the panel that funds aid programs.

McConnell has used that position to channel aid money to Kentucky contractors, such as the University of Louisville and Western Kentucky University, and to causes such as the Mitch McConnell Conservation Fund.

And he has reshaped aid allocation to the world at large. Under his stewardship, aid to Africa and Russia has fallen sharply. At the same time, three countries in the former Soviet Union — Ukraine, Georgia and Armenia — have enjoyed increased packages, with the public rationale that they are fledgling democracies on the fringes of the old Russian empire and need to be shored up.

During McConnell's six years as chairman, he and his colleagues have voted more than $500 million in assistance for Armenia. The 2001 budget allocation is $90 million, down from the record $102.4 million in 2000, but still $15 million more than requested by the administration.

Individual earmarks (some inserted at the behest of House members) that have benefited Armenia include $10 million for the American University of Armenia in the capital Yerevan, $15 million for earthquake relief, $4 million for nuclear reactor improvements and $20 million for Nagorno-Karabakh, the mountainous enclave in western Azerbaijan largely inhabited by Armenians and now under Armenian control.

The Armenian connection has proven valuable to McConnell, even though there are fewer than 300 Armenian-Americans in Kentucky, according to census data. Over the past five years, Armenian-American communities in other states have raised nearly $200,000 for him as the contribution records of the Republican Party in Kentucky show. Armenian-Americans have also contributed generously to the National Republican Senatorial Committee, which McConnell heads.

McConnell declined requests for interviews to discuss his support for Armenian causes. A senior aide, Robin Cleveland, said the senator began earmarking funds for Georgia, Armenia and Ukraine after trips to the region in 1993 and 1995, as "a necessary balance" to the Clinton administration's "exclusive emphasis" on Russia.

In the past, McConnell has rejected suggestions that his appropriations decisions are political. At the same time, he has acknowledged the role of ethnic lobbies. "We have a lot of Jewish-Americans who are interested in Israel, a lot of Armenian-Americans who are interested in Armenia, and a lot of Ukrainian-Americans who are interested in Ukraine," he said in a Senate speech in July 1996. "Boy, when we hear from them, we get real interested."

One of McConnell's leading supporters in the Armenian-American community is a millionaire bakery owner from California, Albert Boyajian, who has contributed tens of thousands of dollars to Republican causes. During an August 1999 fundraising dinner for McConnell, Boyajian recalled tutoring the senator on the history and geography of Armenia. He said no one this century had "helped Armenians and the Armenian nation" more than McConnell.

Armenian lobbying groups are also active in the House of Representatives. They have relied in particular on two members of the House Appropriations Committee, Representative Joe Knollenberg, and the now-retired John Edward Porter, whose districts include large ethnic Armenian communities, and the founder of the 97-member Armenian Caucus, Frank Pallone Jr., Democrat New Jersey, who received $100,000 in Armenian-American contributions for his 1998 House campaign. The House has generally voted for larger Armenian aid packages than has the Senate.

"Thank God, we have a strong lobby in Washington, a lot of friends," said Hirair Hovnanian, a New Jersey construction magnate who founded the Armenian Assembly of America in 1972. The 69-year-old millionaire businessman is sipping whiskey in the luxury home that he recently built in the Armenian hills above Yerevan.

Hovnanian and other leaders of the Armenian-American community see foreign aid as the way to help build a new Armenia from the rubble of the old Soviet Union. "If it wasn't for USAID money, Armenia would be in very bad shape," he says. "What Armenia gets is just a drop in the ocean. We give Israel $3.5 billion year after year, no questions asked."