Political parties united in Bidzina Ivanishvili-led opposition coalition, Georgian Dream, may face over GEL 2.85 million in financial penalty into the case for which a company affiliated to Ivanishvili has already been fined.

The State Audit Service, which is also in charge of monitoring political finances, said on June 25, that six parties within the Georgian Dream coalition (Republican Party; Our Georgia-Free Democrats; Georgian Dream-Democratic Georgia; Conservative Party and Industrialists), plus Ivanishvili’s public movement, have violated party funding rules after receiving a non-monetary corporate donation from Management Service, a firm affiliated to Ivanishvili.

If the state audit agency’s ruling is approved by the court, the Georgian Dream coalition may face fine in an amount of more than twice as much than its total monetary donations for the first six months of this year.

Management Service is an offshore-registered company, which manages a dolphinarium in Batumi and an amusement park in Kobuleti, both Black Sea resort towns in Adjara region.

On May 15 the state audit agency said that services, involving renting of office spaces for the Georgian Dream coalition parties and renovation of those offices, constituted to corporate donation in an amount of GEL 476,619.

The Georgian legislation bans corporate donations to political parties and Management Service was fined with amount ten times of the sum involved.

Ivanishvili’s lawyers appealed the state audit agency’s decision to the Tbilisi City Court, which in late May upheld GEL 4.76 million fine; lawyers then took the case to the Court of Appeal, which took into consideration the fact that since the Tbilisi City Court’s verdict the law on political parties was amended and fines for violation of party funding rules was decreased to five, instead of ten, times the sum in question; as a result the Court of Appeals halved the penalty and the Management Service has to pay GEL 2.38 million. The company, however, said the amount of fine was exceeding company’s total assets and it would now face bankruptcy.

The State Audit Service said in a statement on June 25, that after the court confirmed that GEL 476,619 was in fact illegal, non-monetary corporate donation, the agency offered parties in the Georgian Dream coalition “to return illegal donation back the donor”, as envisaged by the law.

“But these political parties refused to execute provisions of the organic law and the court’s ruling,” the state audit agency said. “Violation of provisions of first part of article 342 of the organic law on political unions is evident… The case has been referred to the Tbilisi City Court for further consideration.”

Sanction for violation of the provision, mentioned in the state audit agency’s statement, involves transfer of the sum in question (GEL 476,619 in this case) to the state budget, plus financial penalty in an amount of five times the sum in question (GEL 2.38 million).

It means that six parties, plus Ivanishvili’s public movement may potentially face in financial sanction total of GEL 2.85 (about USD 1.74 million)
 
Total monetary donation, which the Georgian Dream coalition parties, plus Ivanishvili’s public movement, received in a period between January 1 and June 19, 2012 amounted to GEL 1.17 million (about USD 719,700).