Tbilisi mayor, Gigi Ugulava, has been formally charged with two counts of misspending and embezzlement of large amount of public funds and one count of money laundering into two separate cases.

Ugulava, who appeared before investigators at the Finance Ministry’s Investigations Service on Saturday, was not arrested. Chief Prosecutor Archil Kbilashvili said on February 22 that Ugulava would be charged without arresting him.
 
Ugulava’s lawyer said that his client was not questioned by investigators as he exercised his right to silence.

The Investigations Service says charges involve two separate cases – one related to “a criminal scheme of seizure of Imedi TV” in 2008, which is also related to the case of Tbilisi municipality’s Rike deal and another one related to misspending of GEL 4.1 million of public funds by creating hundreds of fictitious job positions in a municipal service through which funds were channeled to pay salaries of UNM party activists.

In connection to the case of alleged fictitious jobs, Ugulava has been charged with second and third parts of article 182 of the criminal code, involving “misspending or embezzlement” of large amount of state funds by an official, carrying prison term for seven to eleven years.  
 
In connection to “Imedi TV/Rike deal” case, Ugulava has been charged with the same parts of the article 182 of the criminal code, plus third part of article 194 of the same code, involving legalization of especially large amount of illicit income, carrying prison term from nine to twelve years.

Ugulava denies charges as “absurd” and claims that criminal proceedings against him aim at forcing him out of office, which, he says, is part of Georgian Dream coalition’s efforts to take over Tbilisi municipality, now controlled by the UNM party.

Supporters of Ugulava, among them UNM parliamentarians, as well as UNM’s secretary general Vano Merabishvili, were gathered outside the Investigations Service on Saturday protesting against filing of criminal charges against the Tbilisi mayor.

“I am happy today as never before, because I see you are in good spirits and I see hope in your eyes,” Ugulava told supporters before entering into the Investigations Service. Ugulava said criminal proceedings against him were “the least of our problems”. He said “the country is in a trouble” because the right to express a dissent opinion was in danger.

Supporters greeted Ugulava with applause after he left the building of Investigations Service with some chanting “Gigi, Gigi”.

Secretary of National Security Council Giga Bokeria, who was among those gathered outside Finance Ministry’s Investigations Service, said that PM Bidzina Ivanishvili’s declared goal “is to destroy political opposition.”
 
“This case [against Ugulava] is about an attempt to seize Tbilisi municipality without elections, which is a very dangerous choice for our country’s democracy. But I am sure that this goal to [silence] real political opponents will never be materialized,” Bokeria said.

Commenting on criminal charges against Ugulava, President Saakashvili said in an interview with public broadcaster’s program, Accents, on February 22 that “Ugulava will of course defend himself” and expressed hope that “independent judiciary still exists in Georgia”; he said what “matters most of all is to maintain free local-self governance, Tbilisi self-governance.”

“That’s more important than the issue of whether he [Ugulava] will be arrested or not,” Saakashvili said.

In respect of Imedi TV/Rike deal case, investigators claim that in 2008, when Imedi TV’s controlling shares were owned by Joseph Kay, a distant relative of late tycoon Badri Patarkatsishvili, founder of this TV station, “then defense minister Davit Kezerashvili met Kay and through direct threats convinced him to relinquish [his ownership] of the Imedi TV on the condition that Gigi Ugulava would have reimbursed USD 10 million”, which Kay had spent on TV channel’s operations.

The Investigations Service claims that Ugulava schemed Rike deal for the purpose of obtaining USD 10 million state funds and covertly transferring it to Joseph Kay.

The Investigations Service launched probe into sale and then buying back of over four hectare plot of land, known as Rike, in downtown Tbilisi by the capital city’s municipality in December 2012.

Tbilisi city municipality sold 43,350 square meters plot of land on Rike for USD 7 million to a private company New Rike in 2006; in late 2008 the Tbilisi municipality bought back from the same company the same plot of land for USD 17 million. 

The Investigations Service said on February 22, that in late 2008 Tbilisi mayor Gigi Ugulava made a deal with owners of New Rike company on buying back plot of land on Rike for USD 17 million, but New Rike should have transferred funds to a company controlled by Joseph Kay. After selling plot of land on Rike to the municipality, New Rike transferred USD 8.81 million to Kay’s company, the Investigations Service said, adding that the deal represented seizure of Imedi TV through “misappropriation of state funds and money laundering” scheme.

About two weeks after the October 1, 2012 parliamentary elections Imedi TV, which was run by President Saakashvili’s long-time ally and former government member Giorgi Arveladze, was transferred in ownership to late tycoon Badri Patarkatsishvili’s family. The television station is now wholly owned by widow of Patarkatsishvili, Ina Gudavadze.

Speaking with Imedi TV’s political talk show on February 22, Chief Prosecutor Archil Kbilashvili said that according to a testimony of Joseph Kay, President Saakashvili was aware of deals surrounding Imedi TV back in 2008. Kbilashvili said that Kay had indicated in his testimony that while meeting with Kezerashvili, he also spoke via phone with President Saakashvili in December, 2008; citing Kay’s testimony Kbilashvili also said that Kay was told by Saakashvili to do what Kezerashvili was asking him. Also citing Kay’s testimony before investigators, Kbilashvili said that in early 2008, before Kay took control over Imedi in controversial circumstances, Kay met President Saakashvili over the Imedi TV issue and its future operations. Asked if prosecutors would “question the President” over Imedi TV issue, Kbilashvili responded: “In the course of investigation, it is possible to invite the Georgian President as a witness for the purpose of clarifying this issue.”

President’s spokesperson Manana Manjgaladze dismissed Chief Prosecutor’s remarks as “dirty lie.”

“It is difficult to talk about cohabitation when another party resorts to such methods. It is impossible to speak about cohabitation on the one hand and on the other hand to resort to such dirty fabrication,” Manjgaladze said.

Another case over which Ugulava has been charged is related to allegations by the Investigations Service that total of 764 people were fictitiously employed in Tbilisi municipality’s waste management service, receiving salaries, total of GEL 4.13 million, from capital city’s budget, but in fact performing various activists for UNM party.

“Investigators accuse us of employing people. Yes, we have employed them and I think there is no crime in it,” Ugulava said late on February 22, adding that the truth would be revealed during court proceedings where hundreds of witnesses, who have testified before investigators into this case, will have the opportunity to testify “freely” before the court.