(The initial text is corrected in fifth paragraph to show 'GEL 20 million', not '40 million' as initially reported and adds sixth paragraph about newly enforced amendment to the law on political parties, which reduces maximum possible financial fine that can be imposed for violation of this law)
The State Audit Service, which is also in charge of monitoring political finances, said on May 31, that it was examining a deal involving purchase of various types of 214 vehicles worth of GEL 4 million (about USD 2.45 million) by two companies affiliated to Bidzina Ivanishvili, leader of opposition coalition Georgian Dream.
The State Audit Service (formerly Chamber of Control) said that the case involves purchase of vehicles, among them Toyota Hilux pickups, Hyundai and Mercedes-Benz busses, by Burji and Elita Burji companies for the purpose of “providing transportation services to the Georgian Dream”.
The launch of the probe was caused by possible “audit risk in respect of consistency of the Georgian Dream’s financial declaration with actual costs,” the State Audit Service said.
Elita Burji, a construction firm part of the Cartu Group, which is a holding incorporating firms and organizations owned by Bidzina Ivanishvili in Georgia, has once already been fined by the state audit agency with USD 1.5 million – that was the financial penalty ten times the amount, which the audit agency, deemed to be “illegal donation” to Ivanishvili’s movement.
If the state audit agency decides that the two companies, Burji and Elita Burji, have violated legislative provisions of political donation, they may face financial penalty five times the amount of the sum in question – in this case the fine potentially be as high as GEL 20 million.
Amendments to the law on political parties, which went into force on May 29, envisages maximum fine in an amount of five times of sum in question. Before this amendment, the maximum fine was in an amount of ten times of the illegal donation.
In the most recent case, Ivanishvili-affiliated company, Management Service, was fined by the state audit agency with GEL 4.76 million (up to USD 3 million). According to Management Service, it has lost the court appeal against the state audit agency’s fine and now it faces bankruptcy because the amount of financial penalty exceeds the company’s total assets.
So far total financial penalties imposed on Ivanishvili or entities and individuals affiliated with the billionaire for alleged violation of party funding regulations have reached GEL 11.38 million (about USD 7 million).
In other recent case related to financial penalties, the State Audit Service has fined Bidzina Giorgobiani, who resides in Germany, with EUR 900,000 in connection to EUR 90,000 donation made in favor of a new charity fund Komagi, which the state audit agency considers to be associated with Ivanishvili’s opposition coalition. Although some election watchdog and legal advocacy groups said that the new charity could be affiliated with the Georgian Dream, the Tbilisi-based legal advocacy group, Young Lawyers’ Association (GYLA) said that the fine itself imposed by the state audit agency against Giorgobiani was illegal.