Mr. Berge Setrakian, President and members of AGBU Central Board of Directors

55, East 59^th Street

New York, N.Y. 10022-1112

Dear Mr. President and CB members,

On October 21, 2003,Mr. Setrakian had a meeting, in Pasadena, California, with AGBU California Melkonian Alumni for the purpose of clarification of certain rumors. He stated clearly, among other things, that the Melkonian budget deficit is not a major burden for the AGBU, considering all AGBU schools combined have a budget deficit of approximately $5 million. Secondly, The AGBU is financially in good shape with total assets exceeding $300 Million. The operating budget is in good standing and rumors to the contrary are false. Thirdly, the SALE of Melkonian is not an option..

Under the above circumstances, I cannot understand the actions Mr. Setrakian has taken during the last two to three years. The deficit and the budgets of the schools are not a major burden to AGBU. Since five million dollars is allocated to cover the deficits and the operational budget of AGBU is in good standing , one wonders why the following actions have been taken toward the Melkonian Educational Institute:

1.Two years ago Mr. Setrakian gave instructions to the Board of Trustees of MEI that all students should pay full tuition. Trustee members unanimously opposed that proposal and came to a compromise of fifty per cent pay rather than the complete tuition.

2. Last year Mr Setrakian instructed the Board of Trustees not to allow students more than a thirty percent discount on their total tuition and lodging costs. This resulted in the decline of student enrollment from 250 to 208. Parents with lower income levels can not afford to pay seven thousand dollars tuition.

3. In August, Mr Setrakian instructed the Board of Trustees and the Principal of the school not to recruit students from countries other than Cyprus. This will surely result in the reduction of enrollment by at least fifty students per year.

4.In regard to school budget, we were told several times by Mr. Setrakian and others that the school budget has a deficit over $1 million. No one would provide a breakdown or a source of income to cover the budget. According to my findings, the current budget is 1.2 million Cyprus pounds which is approximately equivalent to US$1.9 million. Nearly 50% is covered by scholarships and donations, 20% from the income producing commercial building on MEI grounds as rental property ($500,000), and 15% from the Melkonian Endowment Fund ($4.600,000). Clearly, 85% is covered by the MEI. In this case, the total deficit is not more than 15% of the budget. In the past, AGBU has never paid a deficit more than $150 to 250,000 a year. You can verify those individual figures through your accountant. I am sure you will be surprised to find the actual deficit of the Melkonian Institute. What happened to Mr. Setrakian’s highly proclaimed AGBU transparency? We have not seen it yet.

I personally cannot understand Mr. Setrakian’s declarations stated above and his actions taken to weaken the school, reducing the number of student enrollment, then attempting to close the school and prepare it for sale. This is silent suicidal action. If AGBU doesn’t have any financial problem, why can’t principal recruit students, who can pay and others who qualifying for free tuition? To me, these actions and expressions are Machiavellian steps. I believe these actions prove that AGBU is in deep financial trouble. Several AGBU branches have been told by the board that their general operating income has dropped from 11% to 2%. Why hide the truth from public?

Armenian people will remember Mr. Alex Manoogian by his deed. He was a true believer of"AZKABAHBANOOM". He built many schools, community centers, and youth centers. He believed our survival depended upon the schools and youth centers. His memory will remain within every Armenian heart forever. The majority of the present Central Board members do not have a clear vision about "Azkabahbanoom". They have not been exposed to their Armenian communities. They have minimum contacts with Armenians. How can we expect, from a board of these values, to make a decision for the benefit of Armenian values in the Diaspora. Why did the CB send the letter to the MEI board of trustees chastising them for daring to take the initiative to save the school? It seems the present AGBU administration will destroy everything Alex Manoogian built because they don’t share the same vision and have the same standards of Armenian values. The CB seems more concerned with finances rather than the original ideology that is the foundation of the MEI.

At the last minute I learned that the Cyprus government appreciates the merits of keeping MEI as is and is willing to extend a helping hand, morally and financially. Recently, I heard that Mr. Bedros Kalaydjian,a prominent Armenian representative in the Cyprus Parliament, is succeeding to obtain additional subsidies from the government in the amount of $500,000 annually for the MEI.

I wish to see the honorary Central Board members of AGBU make constructive and wise decision according to the will of the Melkonian Brothers to the satisfaction of the Melkonian Alumni and Armenian people by issuing a declaration regarding the following:

1. MEI will be free to recruit financially disadvantage Armenian students with high scholastic achievements, in accordance with the vision of the Benefactors, without discrimination, from all countries of Diaspora, Armenia and Gharabagh, free of tuition charge.

2 The MEI will continue to function as a boarding school facility as it has been in the past.

Please consider the irreparable damage that a decision to close the Melkonian Educational Institute or phase out the boarding school status might cause to AGBU. We believe that AGBU’s greatest asset is not its physical properties or wealth, but the faith and confidence of its donors, benefactors, and the Armenian people. Any decision contrary to the "Will" will shake that faith and confidence in the leadership of AGBU.

I look forward to receive your comments and assurances that you will not close MEI. In the meantime, I take this opportunity to express my appreciation, trust and confidence in the leadership of AGBU, our greatest organization in the world.

Respectfully yours,

Zohrab Shamassian

MEI graduate 1951

22008 Via Congora

Mission Viejo, CA 92692