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Senior Ruling Party MP on Arrested Israeli Businessman's Case
Civil Georgia, Tbilisi / 22 Mar.'11 / 22:05

A senior lawmaker from the ruling party said that an Israeli businessman who is now on trial in Georgia on bribery charges, was “blackmailing” Georgia, trying “to extort” tens of millions in compensation for the revoked energy concession rights he obtained “through bribery” back in early 1990s.

MP Petre Tsiskarishvili, leader of the parliamentary majority made the remarks during the parliamentary debates following speeches from Prime Minister Nika Gilauri, Finance Minister Kakha Baindurashvili and Economy Minister Vera Kobalia. The latter was asked by lawmakers from the Christian-Democratic Movement (CDM), a leading party in the parliamentary minority, if the arrest of Israeli businessmen was negatively affecting business climate in the country. The Economy Minister shunned away from addressing the issue, saying that the case was heard in the court and she was not in the position to comment on that. It was reported last week that like Georgian parliamentary speaker, the Economy Minister was also asked by the Israeli authorities to delay a visit to Israel, because of the case involving arrested Israeli businessmen.

Israeli citizen Ron Fuchs and his associate, Zeev Frenkiel, were arrested in October and charged with an attempted bribery of the Georgian Deputy Finance Minister. Fuchs has a long-standing USD 98.1 million dispute with Georgia, which he won in the International Centre for Settlement of Investment Disputes (ICSID), an institution of the World Bank group, in March 2010.

The case goes back in early 1990s when Fuchs and his Greek business partner obtained concession on oil pipeline network development in Georgia; but the Georgian government revoked the concession from them in 1996. After that Fuchs and his business partner tried in vain to settle a dispute, involving composition for the revoked rights, with the Georgian government and eventually in 2004, the two businessmen went to the international arbitration.

Speaking on the matter MP Tsiskarishvili said that the issue needed to be openly explained to the public. He said that Fuchs obtained energy concession rights in Georgia through “bribery.”

“And then, holding this paper [concession rights], which he obtained through paying bribes – I can speak openly about it because no one would have issued such paper at the time without taking bribe – he went to the [international] arbitration, blackmailing the country [Georgia] to extort 100 million U.S. dollars,” MP Tsiskarishvili said.

“I do not want to prejudge [the court’s] finding, but… this persons then starting offering bribe to our officials, offering them kickbacks in exchange for assistance in extorting this sum from the state,” he continued. “And you [referring to the opposition] are saying that such a person, who wanted to extort such amount of money from the state totally unfairly and who became embroiled in a problem after facing bribery charges, will make the business climate in the country worse?”

“We do not need such businessmen and they’d better not to come here for offering bribes and extorting money from the state,” MP Tsiskarishvili said.

The trial into the case is nearing its end in the Tbilisi City Court. The trial heard prosecution’s closing arguments on March 21 and will hear the defense final statement on March 23; after that the judge will retire to consider the verdict.

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