Georgian Economy - Victim of Politics
16 August, 2012
Georgian Economy - Victim of Politics


Lately, Georgian economy has become a victim of politics. To take over the political rivals, the ruling party presses on economic keys imposing illegal arrest on property and banking accounts of people who, it figures, are in the opposition camp and dare to donate money to the major opposition political coalition Georgian Dream.  This kind of violating the property rights scares investors off and affects Georgian economy.


The ruling party presses on all means - fair and foul - to secure

desirable votes for the parliamentary election scheduled in October. And since couple of richest citizens of the country stand in the opposition (Georgian Dream founder billionaire Bidzina Ivanishvili and supporter of the said coalition Kakhi Kaladze, millionaire legionnaire of Milan soccer club), the ruling National Movement decided to cut finances of billionaire-millionaires as short as possible.

The law on Party Financing approved early this year to regulate funding of political parties is the key tool enabling the Audit Service of Georgia [an arm of Georgian Control Chamber put in charge of party financing issues] to prevent businesses and private persons from so called illegal funding of political parties through five-fold penalties as the law stipulates.

However, the only businesses and persons charged in the questioned illegal funding as of yet are members of Georgian Dream or businesses and personal contributors affiliated with this political coalition. The “grounded suspect” of the Audit Service is a sufficient proof to Georgian court to impose a penalty for alleged misbehavior and allow seizure of property and banking accounts if the suspected one defies paying unfair fines. The court ignores evidences proving innocence of the accused persons/businesses. And the latter cannot even appeal to Ombudsman for help as far as they do not act as sides in the case.

“This is a very intricate scheme worked out by Zurab Adeishvilim, General Prosecutor of Georgia,” Soso Tsiskarishvili, a political and economic scientist, said in the interview  for the Georgian Journal.”Afflicted people cannot find the truth even through Ombudsman as far as they cannot act as sides; they are not convicted but suspected in committing offences based on grounded suspect of the Audit Service.”

Through this grounded suspect scheme Audit Service launched a series of witch-haunt on well-off people past week. It accused Kaladze and Ivanishvili in illegal funding of the party as well as 16 people including board members of Cartu Bank [imputed to Ivanishvili] who donated money to Georgian Dream. According to Nodar Javakhishvili, the President of Cartu Bank, who is fined by GEL 85 thousand for contributing GEL 17 thousand, all of them presented due papers and documentations proving legality of their incomes and donations but the Audit Service did not take them into account. As a result court fined all 17 people by five-fold penalties on August 10 and imposed arrest on their property since they refused to pay fines.

Ivanishvili and Kaladze inspired the grounded suspect of Audist service since they took several millions from their private banking accounts within 8 months: Kaladze removed GEL 3.388 992 and Ivanishvili – around GEL 6 million. Audit Service could not prove the suspect that they personally donated millions to Georgian Dream. It doubted that Ivanishvili and Kaladze made contributions through several other persons as the timelines of money removal from their private accounts coincided with the period when several other people made contributions to Georgian dream.

However, Audit Service did not disclose names of the alleged contributors and the amount of the money they paid in donation. Nor it brought evidences proving connection of incognito contributors with Kaladze and Ivanishvili. Nevertheless, Audit Service asked Ivanishvili and Kaladze to return money back to accounts but both refused. The case was sent to court that found the grounded suspect valid and imposed five-fold bigger penalties in full accordance with the law:  GEL 17 million on Kaladze [on August 10] and GEL 20 243 827 – on Ivanishvili [on August 11].

According to Kakha Kojoridze, a lawyer with the Georgian Young Lawyers’ Association, the court decision lacks reason as it failed to submit due evidences to back the Audit Service suspect.

“When court imposes a penalty it should be beyond any grounded suspect, it should be based on clear proof that was completely absent in case of Ivanishvili and Kaladze,” Kojoridze elaborated to GJ. “The court could not prove any connection between the persons through whom allegedly Kaladze and Ivanishvili implemented donations, did not disclose their names, how much exactly they transferred and when etc. As to Ivanishvili - he has this 6 million at home and presented due proof at court.”

Meantime the Audit service demanded arrest of Kaladze’s property and banking accounts that actually were already arrested on July 26 in pursuance to the Prosecutor’s office claim for money laundering suspect. Prosecutor’s office still cannot prove the illicit income suspect of Kaladze who provides all paper-work to prove legal origins of his income, Shalva Tadumadze, a lawyer who defended rights of both Ivanishvili and Kaladze at court, said. He already filed appellations for both cases on August 13 but fails to draw any reasonable assessment about legal procedures going on with his clients lately.

“This is beyond legal assessment, this falls in competence of medical assessment,” Tadumadze told GJ.

Economic analysts worry that the chase after private banking accounts, illegal court procedures and property seizure will affect Georgian investment climate for a long time and create a haven for criminal capital alone.

“No reputable and reasonable investor is supposed to come to the country where all state institutes, such as court, control chamber, central bank, etc. that should be neutral, are deeply politicized; no self-governance exists and the law obliges commercial banks to report on  all banking transfers exceeding four digits to prosecutors’ office for checking. Only criminal capital is supposed to come in the country with this kind of risks,” Tsiskarishvili believes.


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