The state audit agency in charge of monitoring political finances recommended the ruling National Movement party to relinquish part of its last year’s donations and demanded from billionaire opposition politician Bidzina Ivanishvili’s movement to do the same with GEL 20,000, which the agency claims, was obtained through sham deal.
The Chamber of Control’s unit for monitoring of political funding said on February 20, that after study of the ruling party’s 2011 financial declaration it had reason “to suppose” that GEL 95,848, which the ruling party claims in its declaration to be a donation from five various individuals, in fact came from one single source and four other individual donors acted as strawman.
The agency, however, said that strictly in formal terms there was no wrongdoing and no sanctions would be applied, including because the law had no retroactive effect on actions undertaken last year before the new party funding regulations went into force late in December.
The Chamber of Control, however, recommended the ruling party to transfer “the problematic donation” in an amount of GEL 95.848 to the state budget – one of the sanctions which according to the new party funding regulations apply when donations are received through bypassing legal provisions. The state audit agency said such move would be in line with “spirit of the law”.
Shortly after that statement, a ruling party’s general secretary, MP Zurab Melikishvili, said on February 20, that although his party believed that the donation in question was received without any violation, the National Movement party would heed the Chamber of Control’s recommendation and transfer the sum into the state budget.
In respect of Ivanishvili’s Georgian Dream, which is not a political party but falls under the state audit agency’s monitoring because of the group’s, as the audit agency puts it, “declared political goals”, the Chamber of Control said on February 20, that it had “revealed an illegal scheme of political funding.”
The agency said that an employee of one of the company, which is part of Ivanishvili’s Cartu Group, received from its employer on February 6 a bonus in an amount of GEL 40,000. The audit agency said, that it was “unusually high bonus” taking in view the fact that in 2011 the employee received from the same company as annual salary total of GEL 12,000. Three days after receiving bonus, the employee transferred half of this amount as a donation to the public movement Georgian Dream, the state audit agency said.
The state audit agency suggested, that the case was a clear example of channelling of corporate money to Ivanishvili’s movement through individual donation. Corporate donation to the political parties is banned by the new regulations; restrictions apply not only to the political parties, but also to organizations or individuals “directly or indirectly” related with political parties.
“We have reason to suppose, that financing of political goals with black money through the use of this kind of schemes is taking place. For that reason, we call on natural persons, who might be used in such illegal schemes, to refrain from such actions. Otherwise, sanctions envisaged by the law will apply them,” the state audit agency said.
The Chamber of Control said that donation obtained through bypassing restrictions set by the law should be transferred to the state budget and sanctions applied to an entity which committed illegal transaction. The agency, however, said that it was recommending the Georgian Dream to return GEL 20,000 to the company, which gave the sum as a bonus to its employee in order not to face seizure of the amount.
This is the second time when the state audit agency accused Ivanishvili’s movement of bypassing restrictions set by the law. In late January the Georgian Dream had to return GEL 1.1 million which the state audit agency claimed was obtained through sham transaction.
This time, however, the Georgian Dream said it was not going to heed to the state audit agency’s “illegal demand”.
The Georgian Dream said in a statement on February 20, that the employee in question donated to the movement GEL 20,000 in full observance of the law. It said that the employee in question was highly qualified staffer who had a salary of GEL 5,000 per month from several companies he was working for, suggesting that contrary to the state audit agency’s claims, the GEL 40,000 bonus was not unusually high for him.
Election watchdog and legal advocacy groups, joined by some media outlets, have launched a campaign aimed at convincing lawmakers to revise controversial new party funding regulations. To highlight one of their concerns that restrictions set by legislative amendments, including those to the law on political parties and their funding, may apply to broad circle of organizations and individuals, the campaign has been named by the groups as “This Affects You Too”.
The groups have submitted draft of legislative amendments to the Parliament, which aim at narrowing and specifying circle of entities, which may fall under the regulation of the party funding legislation.
Speaking at a parliamentary bureau session on February 20, Parliamentary Chairman Davit Bakradze asked chairman of parliamentary committee for legal affairs, MP Pavle Kublashvili, to meet with representatives of these non-governmental organizations to discuss what could be done to allay their “groundless concerns” about the new regulations.
“Try to elaborate such formulations, which… will remove their concerns according to which restrictions may apply to those non-governmental organizations too, which work in the framework of law” Bakradze said.