Leader of Georgian Dream opposition coalition, Bidzina Ivanishvili, may potentially face up to GEL 148.65 million (about USD 90.96 million) fine if the Tbilisi City Court approves a decision by the State Audit Service, which has accused the billionaire politician of violating party funding rules.

The State Audit Service, which is also in charge of monitoring political finances, has claimed that Ivanishvili used “companies owned by him” in “illegal scheme for the political and electoral purposes”.

Allegations of violating political party funding rules involve two episodes.

In one case, the state audit agency claims, that Ivanishvili through his two companies Burji and Elita Burji provided transportation services with 239 vehicles, including minibuses, under “preferential” terms to his Georgian Dream opposition coalition. The state audit agency estimated this service was worth GEL 2,242,994, which it said actually amounted to illegal donation to the Georgian Dream by Ivanishvili.
 
In another case, the state audit agency claimed, that distribution of satellite dish antennas free of charge by Global Contact Consulting (Global TV) with use of Ivanishvili’s funding also constituted violation of party funding rules. The agency said that the move actually was giving gifts to voters with total worth of GEL 12,622,019.

Two separate hearings were held into these cases in the Tbilisi City Court on June 8; both hearings, however, were adjourned until June 11, when the judge is expected to announce decision. According to newly amended law on political parties, a decision by the state audit agency about imposing sanctions should be adjudicated in the court.

Global Contact Consulting, which is more known under its brand name Global TV, is a cable network also providing clients installation of satellite dish antennas throughout the country.

Global TV is the only cable operator which carries Channel 9, a television station owned by Ivanishvili’s wife, which is also available on satellite.

66.8% of Global TV shares are owned by Bidzina Ivanishvili’s brother Alexander; 16% of shares are distributed among three other Georgian citizens and 17.2% is owned by a U.S. citizen, according to registration papers available at Public Registry.

Global TV’s marketing director, Zurab Bazlidze, told Civil.ge on June 8, that the company started sale promotional campaign in early March involving installation of satellite dishes free of charge in the provinces, where access to television stations other than nationwide broadcasters is limited. Clients, under the campaign, will not have to pay monthly subscription fees for a year period and will start paying GEL 4 monthly fee after one year since the installation of the satellite dish.

According to Bazlidze since the launch of this campaign Global TV has so far installed its satellite dishes in up to 25,000 households across the country. 

Giorgi Amiranashvili, who represents the state audit agency at the court hearing, told the judge on June 8, that Global TV was able to launch this campaign only after Alexander Ivanishvili received a loan from his brother Bidzina Ivanishvili. He also told the court that the state audit agency interviewed over 40 new clients of Global TV and most of them either testified that satellite antennas were installed as “a gift from Ivanishvili” or said that the dish antennas were installed “on behalf of the Georgian Dream.” The state audit agency also said that the scheme under which Global TV was installing satellite antennas was not driven by commercial benefit and was politically-motivated move.

Ivanishvili’s lawyers tried to counter the state audit agency’s arguments by claiming that Ivanishvili “has no electoral goals” and party funding regulations could not be applied to him. They argued, that Ivanishvili had refused to make use of a recent constitutional amendment, which allow him to vote and be elected in elections without having a Georgian citizenship.

Ivanishvili’s lawyers also told the court that it was unjustified to link installation of satellite dishes by Global TV to Ivanishvili’s party – Georgian Dream-Democratic Georgia, because Global TV launched its campaign earlier than Ivanishvili’s party was established in late April. Shalva Tadumadze, one of the lawyers of Ivanishvili, also told the court that Ivanishvili was not even a founder or owner of Global TV.

On the case involving providing transportation services, state audit service representative told the court that his agency had been studying the issue since late January, compiling a file with over 100 pages. 

Ivanishvili’s lawyers again argued that the state audit agency was failing to prove that Burji and Elita Burji were owned by Ivanishvili – the both companies are owned by offshore-registered firms and are part of Cartu Group, a holding uniting organizations and companies affiliated with Ivanishvili. The lawyers also argued, that the law on political party itself is “in conflict with the constitution” and it was up to the Constitutional Court to adjudicate the case. During the both court hearings on June 8, Ivanishvili’s lawyers motioned in vain for recusal of judges, blaming them for bias in favor of the state audit agency. Ivanishvili’s lawyers also complained that they had not enough time to study hundreds of pages of the two cases, which they received less than 24 hours before the court hearings.

“There have been many procedural violations, which makes the hearings far from being fair,” Alexander Baramidze, one of Ivanishvili’s lawyers, told journalists after the court hearings.

Financial penalty envisaged for actions, which the state audit agency claims were undertaken by Ivanishvili, is five times the amount of the sum in question.

That means that in case of providing transportation services Ivanishvili may face GEL 11.21 million fine and in case of satellite antenna dishes – GEL 63.11 million.

But the state audit agency also wants to impose on Ivanishvili an additional fine citing that these violations were committed by the billionaire for multiple times. The state audit agency fined Ivanishvili with GEL 2.72 million (about USD 1.65 million) for making “illegal” political donations in March.

According to the law if the same violation is committed for multiple times the amount of fine should be doubled, which means that if court approves the state audit agency’s decision total fine for Ivanishvili will increase to GEL 148,650,130 (about USD 90.96 million).

Head of the state audit agency, Levan Bezhashvili, said in televised comments on June 8, that financial sanctions requested by his agency to be imposed on Ivanishvili “are strict.”

“But our allegations are backed with strong evidence… Law obliges us to prevent cases of political bribery and to provide level playing field for all the political parties,” he said.

Total financial penalties so far imposed on Ivanishvili or entities and individuals affiliated with the billionaire for alleged violation of party funding regulations stands at GEL 11.38 million (up to USD 7 million).