Georgia’s State Audit Service widens investigations into companies associated with the opposition, amid warnings from the EU and the OSCE. 1

CEW Editorial writer Karina Gould follows the latest moves by Georgia’s State Audit Service against the Georgian Dream Coalition.

On the heels of the property seizure and fines levied against Georgian Dream leader, Bidzina Ivanishvili, this week witnessed a continuation of the State Audit Service’s (SAS) investigation into campaign and party financing in Georgia.

The increased investigations come just days after the OSCE published the report of the Needs Assessment Mission for the upcoming parliamentary elections in Georgia. The report notes that the SAS has been perceived in the country to be “applying a selective and excessively rigid approach due to the number of cases it launched to investigate the legality of spending by Mr. Ivanishvili” and his affiliates. Though recognising the need and importance of monitoring political financing and spending, the report cautioned that the penalties imposed were considered by many political stakeholders as excessive.

The SAS emphasised in a meeting with the OSCE mission that it is “guided solely by rule of law principles” and “scrutinises the activities and reports of all political parties.” The SAS sentenced Burji Ltd, a company they claim is affiliated to the billionaire leader of the opposition coalition, to pay an 8, 644, 640 lari fine, or about USD 5.2 million for what the Tbilisi City Court deems an illegal donation to a political party. The fine has been issued for the use of 54 cars that the company provided to Georgian Dream free of charge.

According to Merab Barbakadze, a lawyer for Burji Ltd., the court refused to consider evidence provided by the company that the parties indeed paid for the services provided by his company, citing the company tried to present receipts and contracts for the cars hired with the coalition parties. Furthermore, given that Georgian Dream hired the cars for three days, Barbakadze stated the fine issued was completely disproportionate with the cost of the services provided. According to Georgian law, the SAS has the right to fine up to ten times the original value of the violation. However, Burji Ltd.’s lawyer confirmed that while the cost of the purchase of the cars was equal to 864 000 lari, the cost of renting the cars for three days is not equal to the total value of 54 cars. According to the SAS, the owner of Burji Ltd. is registered offshore, and chaired by Kakha Kobiashivili, Ivanishvili’s nephew. In addition to the investigation mentioned above, the SAS also claims the company, along with Management Services (another company affiliated with Ivanishvili and the subject of previous funding violations) provided renovation services that were “artificially deflated” for offices run by the opposition coalition.

In a similar vein, the court found Burji Ltd and Management Services guilty of a violation of a non-monetary corporate donation to a political party and fined the enterprises a further 2 373 475 lari, or USD 1.4 million; the companies have seven days to pay the fines. On Friday, the court seized the company’s bank account, which according to Democracy and Freedom Watch will make it impossible for the company to pay the fines. Burji Ltd. has stated that it will appeal both cases.

In addition, twenty-seven people were investigated by the SAS in relation to donations made to political parties, including the ruling party. Ten were able to provide sufficient evidence and their cases were closed, however the remaining seventeen were unable to satisfy the SAS that their donations were made legally and their cases have been submitted for review to Tbilisi City Court. The investigations come just days after concerns were raised in the European Parliament .

On July 4th Andreas Mavroyiannis, on behalf of the current Cypriot Presidency of the European Union, read a statement in the European Parliament issued by EU foreign policy chief Catherine Ashton. The statement said, “We have noted with concern the perception that the government is trying to hinder participation of opposition leader Ivanishvili, resources are deployed against him and laws on party finance are being applied in a onesided way. We must insist that laws are correctly and transparently applied to leave no possible doubt that due process has been followed.” “On the other hand,” continued the statement, “there is also a perception that Mr. Ivanishvili is using his… financial asset for electoral gain and this is a legitimate concern. Again we must insist that there is a level playing field for democratic competition and that votes cannot be bought.” Mavroyiannis concluded that “The EU stresses that politically-motivated persecution, direct or indirect, by law enforcement agencies or use of selective justice against political contenders are not compatible with democratic values.”

Moreover, the session closed noting that the EU will continue to monitor closely the electoral environment in Georgia and is considering offering additional support to civil society and additional observation initiatives to ensure “maximum transparency” and confidence in the electoral process.

Source: CEW with, and

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