Criticism voiced by influential media and financial tycoon Badri Patarkatsishvili on March 29 was immediately denounced by the authorities as an attack on Georgia by “oligarchs, Moscow and criminal bosses” and an attempt “to blackmail the Georgian government.” Some analysts suggest that the current rift is a sign that the government is losing its strong grip on businesses.

Fugitive tycoon Badri Patarkatsishvili, who is wanted by Russia for fraud allegations and who has reportedly invested tens of millions U.S. dollars in the Georgian economy since 2001, when he returned to Tbilisi, accused the authorities of mounting pressure on his television station Imedi TV and of extorting money from businesses.

Patarkatsishvili was speaking at an annual assembly of the Federation of Georgian Businessmen (FGB) on March 29. This influential business lobby group is chaired by Patarkatsishvili and unites 110 companies.

He said while addressing the forum that he no longer plans “to keep silent” over “the methods the authorities resort to” as “keeping silent today is equal to a crime.”

Patarkatsishvili runs Imedi media holding, which unites a television and radio station. He said that signs of tensions with the authorities started to appear shortly after February 12, when his television station, Imedi TV, broadcasted details of Sandro Girgvliani’s high-profile murder case, which implied that some top-level officials from the Interior Ministry could have been linked to this murder.

“This became a reason for the authorities’ dissatisfaction, which triggered the financial authorities to actively launch a probe into my businesses and companies so to force me to mount pressure on journalists at Imedi TV and facilitate the creation of a favorable image of the authorities from my television station's TV screens,” Badri Patarkatsishvili said.

Recently, some influential parliamentarians from the ruling National Movement party, namely Giga Bokeria, who is regarded as a key decision-maker in the parliamentary majority, have accused Imedi TV of “biased coverage” of the recent political developments in the country.

Speaking at the same business forum, Imedi TV board member Irakli Rukhadze, chief executive of Salford Georgia - a company reportedly affiliated with Patarkatsishvili’s businesses - said that the television’s management spares no efforts “to depoliticize Imedi TV.”

“Recently I hear that Imedi TV has turned into an opposition television station. No, it is not true. This television is a business. We have decided to make Imedi TV’s activities totally transparent and open for the society; moreover, we plan to make the television’s board open and invite absolutely unbiased and independent people there so that they can see our editorial policy and decision-making process. Imedi TV is a business which tries to provide unbiased news as well as entertainment,” Irakli Rukhadze said.

Patarkatsishvili also accused the authorities of illegally extracting money from businesses for so called 'law enforcement development funds.'
 
The Army Development and Law Enforcement Development Funds were set up in Georgia shortly after the 2003 Rose Revolution to, as the authorities put it, collect donations from “patriotic businessmen” for boosting the capabilities of the country’s armed forces and law enforcement agencies. But the authorities claim that these funds have already been abolished and the information about spending from these funds is transparent.

“One of these funds was set up at the General Prosecutor’s Office in which a total of GEL 160 million was accumulated… It was money paid by businessmen as kind of a compulsory payment and almost no business was left which has not suffered from this… I think this is one of those issues on which the society should know the truth about - especially those businessmen who paid money to these funds through different forms - some of them with cars, some of them with cash, some of them with shares,” Patarkatsishvili said.

Temur Chkonia, General Manager of the Coca-Cola Company in Georgia, who also runs McDonald’s Corporation in Georgia, said at the assembly that he thinks those “mistakes” by the authorities which were mentioned in Badri Patarkatsishvili’s speech are most likely the “mistakes of certain individuals and not the official policy of the authorities.”

“I do not want to perceive this as a policy of the President, or Parliamentary Chairperson, or the Prime Minister, which is directed towards setting up these kinds of unreasonable funds and to establish unreasonable relations between the business sector and the political sector… Mistakes are possible, but we should jointly and constructively tackle these problems,” Chkonia said.

Patarkatsishvili also said in his speech that his statement should not trigger irritation among the authorities, as his “constructive criticism” is not coming from “an ill-wisher.” At the end of his speech Patarkatsishvili tried to soften his criticism by applauding the government’s efforts in developing the economy in the Adjara Autonomous Republic.

Shortly after this statement MP Giga Bokeria convened a news conference and accused Patarkatsishvili of blackmailing the authorities. He said that Patarkatsishvili’s criticism was triggered by the fact that the Georgian authorities prevented him from “becoming a Don Corleone of the Georgian economy.”

“It appears that he [Patarkatsishvili] cannot forget his past – Russia during [ex-President Boris] Yeltsin’s presidency, when he and his friends controlled everything – the authorities, business and seized huge amounts of property. However, present-day Georgia is not Yeltsin’s Russia. At the same time, present-day Georgia is not [Russian President Vladimir] Putin’s Russia, where political opponents are persecuted or arrested, where televisions are closed down. I want to stress that television, freedom of speech is untouchable. Mr. Patarkatsishvili can be engaged in politics, business - but he will not be able to blackmail the authorities through his own television or influence,” Bokeria said.

Bokeria added that by this statement by Patarkatsishvili has unveiled the tycoon as “a leader of the opposition and an apparent sponsor of the opposition.”

Fugitive tycoon Patarkatsishvili started gaining influence by buying shares of independent media sources, investing in real estate, and establishing a charity organization. He also became the President of Georgian Olympic Committee.

He reportedly managed to maintain good ties with all the leading political forces in the country, especially with the authorities, both with ex-President Shevardnadze and President Saakashvili’s administration. The first signs of rift, however, emerged in April, 2005 when Patarkatsishvili admitted that “a crack appeared between the business sector and the government” after the authorities abolished the Tax Arbitration Councils, which was viewed by the business community as the only meaningful and independent body that could solve tax disputes with the government.

Political analyst Ia Antadze argues that the recent rift will most likely have political consequences.

“Initially, when the government was totally controlling businesses there was no free money left for the opposition and the televisions, so the government was receiving two-folded benefits from that situation. Of course, those businessmen, or oligarchs, who at least partially shed the authorities’ influence, will start investing in the media and the opposition, which will certainly create discomfort for the authorities,” Ia Antadze said.

Temur Iakobashvili of the think-tank Georgian Foundation for Strategy and International Studies (GFSIS) assumes that the recent rift is “mainly economically-motivated.” “There can be several scenarios for further developments. Patarkatsishvili can either start financing the opposition, or he will leave the country,” Iakobashvili told Civil Georgia.