chamber of control

Levan Bezhashvili: The reality is that Georgian Dream routinely violates the law

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The Chamber of Control has been charged with monitoring the financing of political parties since the Parliament enacted amendments to the Law on Political Unions in late-2011. Since then, the activity of the Chamber’s financial monitoring service of political parties has itself been under intense scrutiny by civil society and media. Tabula interviewed Chamber of Control Chairman Levan Bezhashvili about public criticism of the Chamber of Control, penalties it has imposed against the Georgian Dream political coalition of Bidzina Ivanishvili, and the status of various related cases.
Several non-governmental organizations accuse the Chamber of Control of unequal treatment of political parties with regard to the monitoring of their finances. What do you say in response to this criticism?
 
 The first case which we initiated within the scope of monitoring related to the United National Movement. Based on our auditing evaluation, ninety-five thousand laris were transferred to the state budget. There was a Rustavi case [against a member of the ruling United National Movement party]. Now an Asureti case [involving majoritarian Member of Parliament Davit] Bezhuashvili is under consideration. According to reports, Bezhuashvili organized a dinner for citizens there [in early June]. We have started investigation into the case and will provide the information to the society in the nearest future.
 One can also hear the criticism that, in contrast to the opposition parties, we do not react instantly about incidents related to the ruling party. I do not agree with that. As regards the political coalition Georgian Dream, the fact that we actually have to react on an almost daily basis creates an impression among some people that we practice a discriminatory approach toward that concrete political subject. The reality, however, is that Georgian Dream routinely violates the law. The impression is that the Coalition has put aside the legislation and carries out its political activity beyond the law. There are many examples of that. 
 It should also be noted that we do not react to ten-to-fifteen percent of existing violations given our resources and also the fact that it is difficult to obtain sound arguments and indisputable evidence, which we must obtain in accordance with procedures.
On the other hand, the criticism concerning our activity, professional and ethical standards, is acceptable for us and adds stimulus to improve our activity.
 
You have mentioned the Rustavi case, which was assessed as an unequal approach. The deputy chairman of the Rustavi city council and member of the United National Movement, Kakha Baratashvili, was considered an administrative violator by the Chamber of Control for distributing sheep and wine before the Easter holiday. The criticism concerns the fact that that case was not considered by the Chamber to involve bribing voters for election purposes even though Baratashvili is a public official. That is what Transparency International Georgia (TI) has declared.
 
 We had consultations with TI on that issue. We explained to them that, when one is not familiar with the evidence, one should not evaluate the case at first glance. They did not have information about what explanations we had received from citizens, what evidence we possessed, what the context was of the case, but they made superficial statements.
 We explained to them that, in case of a criminal offence such as the bribery of voters, the legislation requires that there be certain circumstances: a concrete action undertaken in return for securing support from voters; an action organized by a political party for the support of a concrete activity of the party, etcetera.
 A whole set of motives, the goal, have their defined meaning. Baratashvili said that he does that every year at his own expense and as an expression of certain gratitude. All that was reflected in the evidence and explanations. That was not an action undertaken in return for the support of any political party. In that case, we cannot speak about bribing voters because that was a pure administrative violation and we undertook relevant measures envisaged by the law as well.
 
Did the Kutaisi case, in which several persons were charged with voter bribery, contain circumstances envisaged in the Criminal Code?
 
 The Kutaisi case was a different one. The Georgian Dream itself evaluated that fact as a criminal offence and distanced itself politically from those young people, claiming that they were hired by the Chamber of Control.
 We reacted to an obvious fact. TV aired how those young people suggested to voters to write down in fliers their wishes up to the limit of GEL one-thousand in return for support to Georgian Dream. Voters were to turn up at the protest rally, tear off stubs from fliers, and drop fliers into a box installed for that purpose. They were promised that, before the parliamentary elections [scheduled for October], all these wishes would come true. Signs of criminal wrongdoing were obvious. We voiced our doubts and applied to the Prosecutor’s Office.
 We also applied to the Prosecutor’s Office on the case involving businessman Levan Pkhakadze. However, we were criticized in that case as well for sending the case to the Prosecutor’s Office and not probing the case ourselves.
 
You have said that you study circumstances. What can you tell us about that case? We have seen video footage featuring people receiving a promise of health care funding in the name of Levan Pkhakadze in Samtredia…
 
 We are studying this case, speaking to people and clarifying details in order to determine whether we are dealing with an administrative wrongdoing or a criminal offence. 
 There are, however, lots of question marks in regard to that case. There must be clearly identified a person with electoral and political goals. That person, Pkhakadze, was referred to as a possible candidate from the United National Movement although he is not officially nominated yet. If events develop in such a way that that person will become a nominee, then certain signs of wrongdoing will be obvious and thereafter, in combination with other circumstances, it will be determined whether it is an administrative or criminal offence.
 
 Under what circumstances could that incident be qualified as a criminal offence?
 
 There is no need for Pkhakadze to be nominated as a candidate officially. An election campaign usually starts two months earlier than the date of elections] and the registration, award of the status of the candidate happens after the official start of the campaign. International as well as our standards envisage the legal status and responsibilities of a person with electoral goals. A person may not be registered as a candidate but may pursue a declared goal of taking up a concrete electoral position and spending for the achievement of that goal. In the Samtredia case, the declaration of such a goal has not been established yet.

As regards bribing and making promises, in general when someone gives promise in the name of a political force, how is the link between that person and a political subject established? What happens when someone gives promises on his/her own initiative? 
 
 The legislation regulates that issue as well. Yes, a person may give promises on his/her own. However, to qualify as a criminal offence, it is important to establish whether that person has any links with a political organization; whether he/she is acting in coordination with that political organization; whether promises are given and delivered in support of a political subject.
 If such evidence does not exist, then we may consider that case as an administrative offence and illegal contribution.
 
Can a promise be regarded as such?
 
No, a promise cannot; but a concrete act, gift, etcetera – yes.
In case of a promise, it is of utmost importance what is promised. The goal of a promise is important. It must be related to the achievement of electoral-political aims or to a concrete political subject.
   
Yet another subject of criticism is that of closed meetings conducted by representatives of the government. You are requested to show interest toward such meetings as well.
 
 We react to each such meeting adequately, requesting information about that. We have even published such information in several cases. The mentioned events were financed from the party budget – that was declared and made public by the party.
 
Bidzina Ivanishvili was penalized one-hundred-forty-eight-million GEL for two cases. Later, the appeal court halved that penalty. One of the cases involved the free distribution of satellite antennas by cable network provider Global TV. The Chamber of Control established that activity was financed by Bidzina Ivanishvili. Moreover, the Chamber also established that the company’s plan was not profit-oriented and that it pursued conspicuous political and electoral goals. These accusations were denied by representatives of the Global TV company. Could you elaborate on that case?
 
That case was distinguished with the strongest arguments. Georgian Dream associated the activity of Global TV with itself. Political leaders of the coalition repeatedly declared that publicly while activists offered citizens free installation of antennas and provision of service by Global TV. That was proved through questioning in the regions. Media also reported that those installing the antennas were dressed in T-shirts with the “Georgian Dream” logo. 
 The convergence of political and electoral goals in the activities of the political subject and the company were obvious. These two entities were also clearly connected financially. The case contains materials showing that Global TV completed the year 2011 with a loss, in conditions when it charged a one-hundred-fifty GEL rate for its service. It did not have monetary means and took [funds] out from the Cartu Bank. The Cartu Bank gave a loan to the bankrupt company. Part of the loan was issued to Ivanishvili’s brother, who is the owner of the company, and another part was issued directly to the company. Documents reflecting the bank transaction are available.
 Lawyers for Ivanishvili also ask how we can prove that Cartu Bank belongs to Ivanishvili. The Law of Georgia on Activities of Commercial Banks envisages the status of “beneficial-owner,” founder. Documents evidencing that are also available. The management of the Cartu Bank confirmed in testimony that Bidzina Ivanishvili is a beneficial-owner.
 Moreover, the fact that the business plan of the company was clearly unprofitable was studied and established by independent expertise, along with our auditors.
 
Another case for which Ivanishvili was penalized concerns the provision of car service to Georgian Dream at a discounted rate by the companies Burji and Elita Burji. The Chamber of Control considered that service to be an illegal contribution. The other party in the dispute alleges that the Chamber of Control does not have evidence that those companies are owned by Bidzina Ivanishvili. They also questioned the calculation of the rate of service.
 
 Some decided to blind themselves. Managers of the companies themselves confirm in their explanations that the companies belong to Ivanishvili. The schemes of founders of these companies show that they are offshore firms connected with Ivanishvili and Georgian Dream. One such offshore company is Chista Enterprises Ltd. When, in December 2011, the opposition political parties united in the coalition Georgian Dream started expending money [given to them by Bidzina Ivanishvili], Georgian Dream had six million laris left and it bought a share in that company.
 
 A representative of those offshore companies and a founder of these limited liability companies is one and the same person, [Kakha] Kobiashvili. He is a close relative of Ivanishvili. Not only Burji and Elita Burji, there are multiple companies which provide services to Georgian Dream. We have supplied information about that to non-governmental organizations.
  This case is also well substantiated. Imagine a company which buys only two cars in 2011 and, all of a sudden in 2012, it purchases two-hundred-thirty-nine cars. Then it rents those new cars – expensive Toyota jeeps – to the Georgian Dream for six-hundred GEL a month. And that happens when, according to information from the Revenue Service as well as private market surveys, such a car is rented for a minimum one-hundred-fifty USD a day. When such circumstances exist, it is easy for auditors to calculate what is the real value of the service, what price is offered for the benefit of the political subject, and what is the difference. Consequently, a formula of wrongdoing is determined.
 
 Can you also tell us about the case of Management Service?
 
 That company also belongs to Ivanishvili. It rented spaces from private persons and then subleased them to political parties. Then those offices were refurbished. We have investigated and calculated minimal refurbishment costs. The parties did not make a financial accounting of those costs and, at the same time, it was an illegal contribution. The cost of that repair work amounted to, if memory serves me well, four-hundred-seventy-thousand GEL. Consequently, the court studied the issue and ruled that the company Management Service made an illegal contribution and the court imposed a penalty on it.
 A political party has an obligation to return the contribution. We send to Management Service a preventive notice requiring that four-hundred-seventy-thousand GEL be accounted in books and the money returned to the company in order to eliminate the fact of an illegal contribution. However, we face a curious situation. We addressed the political party Georgian Dream. Today, there exist four legal subjects – all of them Georgian Dreams. They are: the non-commercial legal entity Georgian Dream; the coalition Georgian Dream; the political party Georgian Dream; and Georgian Dream Ltd. All four subjects are busy performing financial and economic activities for a single political subject, which creates an absurd situation. That should be a matter of concern for everyone, non-governmental organizations included.
 To our notice, we received such responses as: Which subject do you mean? Have you not confused addresses? We are a new political party – Georgian Dream. We then addressed the political parties in the coalition which had received that benefit. From them, we received cynical responses that they did not receive such service, even though they use those spaces as election headquarters.
 
Finally, I would like to ask you about explanations which the Chamber of Control receives from citizens. That issue was especially topical in March. The Public Ombudsman studied that issue back then and sent you recommendations regarding human rights violations. Have you taken those recommendations into account? What has changed since then?
 
  We receive objective criticism adequately. Since mass questioning, which took place in March, we drew corresponding conclusions. We disagree with a number of assessments; many facts were exaggerated. But we still took relevant measures which would adequately meet challenges of that time.
 
 We took a decision to make audio and video recordings of each questioning; to ensure every person with the right to defense; gave the right to a high-standard defense similar to that in a criminal case. We established the position of “consultant of a person under questioning,” who meets with citizens to provide them with additional information, psychological assistance… Procedures have also been improved. When we have to conduct a mass questioning, we announce in advance what the procedure is, for what reason it is undertaken, etcetera.
 As a result, questioning by the Chamber of Control is no longer topical. Since March, we have questioned some two-hundred-fifty people and no one has actually questioned that process.
  We often give an opportunity for civil society representatives to watch videos and listen to audio recordings. For example, a report of the International Society for Fair Elections and Democracy (ISFED) said that we put questions to two persons which were not related to political financing. We invited representatives of that organization to see the recordings. They should have shown interest in the recordings before releasing their report. After watching the recordings, they confirmed that their information did not reflect the reality.

This article first appeared in Tabula Georgian Issue # 106, published 25 June 2012. 

                                    

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