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Sorry, You Might Be … Liquidated!

28.12.2011

Aleko Tskitishvili

Parliament passed with its second reading on December 27 amendments to the law on political parties, envisaging new regulations for party funding. On the same day, the Parliament passed with its first and second hearings amendment to the criminal code tightening measures against and punishment for cases involving political bribery.

Experts and civil society organization do not doubt that the ruling party – the National Movement – needed the new strict regulations to neutralize the new stakeholder in the Georgian politics, billionaire Bidzina Ivanishvili. The government’s fear that Ivanishvili’s billions will play the key role in the upcoming parliamentary election has enough grounds. Consequently, the parliamentary majority controlled by the National Movement tries to design the legislative base which will ensure the failure of the opposition parties through considering Ivanishvili’s factor.

NGOs working on election issues think the draft-laws reflect several extremely strict and unreasonable restrictions which will restrict freedom of expression among other restrictions.
The NGOs suggest the parliament of Georgia to ensure the compliance of the national law with human rights international standards and to prevent execution of unbalanced and biased norms. The NGO representatives think similar threat is easily visible in the draft-amendments.

The Georgian Young Lawyers’ Association, Transparency International – Georgia, International Society for Fair Elections and Democracy and Coalition for Freedom of Choice signed the joint petition to the Parliament. However, the parliamentary majority did not consider the suggestions of the civil society organizations on the December 27 session.

According to the Civil.ge, among the key provisions of the planned new regulations are banning legal entities, including business organization, to finance political parties; doubling donation cap that a single individual person can provide to a party from current GEL 30,000 to GEL 60,000 per year; a cap of GEL 1,200 for party membership fee annually from each member; putting state audit agency, Chamber of Control, in charge of monitoring party funding; measures for increasing transparency of party funding.

Opponents of the proposal say new regulations have been introduced by the authorities in order to tighten billionaire politician Bidzina Ivanishvili’s ability to finance his planned political party and an opposition coalition he is establishing. Ruling party lawmakers say one of the major principles behind the proposal is to link party funding and the political processes in general in the country to number of supporters and not to a single or a small group of wealthy sponsors.

It emerged last week, that in November-December, 2011 four opposition parties, picked by Ivanishvili as his political partners – Republican Party; Our Georgia-Free Democrats (OGFD); Conservative Party and Party of People, received GEL 4.1 million in donations, including GEL 3.3 million from companies and a charitable foundation affiliated with Ivanishvili; rest of the sum, GEL 800,000, was donated by two companies affiliated with footballer Kakhi Kaladze, who is Ivanishvili’s supporter; in late November Ivanishvili’s Tbilisi-based Cartu Bank bought 8.67% shares in Kaladze’s Progress Bank.

These donations were made by total of twelve entities with each of them donating GEL 100,000 to the parties cooperating with Ivanishvili; GEL 100,000 is the maximum that a single legal entity is allowed to donate to a political party per year according to the existing regulations.

Such donations from legal entities will become illegal after the new regulations go into force.

Before Ivanishvili’s going into politics, only the ruling party enjoyed with generous corporate funding; GEL 4.1 million is regarded to be a significant funding for an opposition coalition in Georgia.

The Civil.ge reports that Five parties and election blocs, which cleared 5% threshold in the May 30, 2010 local elections spent total of about GEL 16 million for their electoral campaign, but 92% of that amount was spent by a single, ruling National Movement party. At the time the Republican Party and OGFD (now Ivanishvili’s allies), together with New Rights Party, were part of a single electoral bloc, which spent only GEL 136,600 for its election campaign, which also included a campaign of OGFD leader Irakli Alasania who was at the time running for Tbilisi mayoral race.

President Saakashvili spent up to GEL 23 million  during his re-election campaign in late 2007 and early 2008, while his major competitor in the January, 2008 snap presidential elections Levan Gachechiladze spent GEL 720,000 for his campaign.

In September, 2011 when the ruling party tabled initial draft of new election code, it envisaged increasing of electoral campaign funding by legal entities, including from business organizations from current GEL 100,000 to GEL 200,000. The plan, however, was dropped and in November the authorities put forth new regulations banning legal entities to finance political parties and thier electoral campaign.

New election code passed with its third and final reading on December 27, envisages GEL 1 million funding from the state budget for parties and election blocs, which will clear 5% threshold in the parliamentary elections, in order to cover their election campaign cost. GEL 300,000 out of this sum will specifically be used for covering TV advertisement cost.

Parliament passed on December 27 with its first and second hearings amendment to the criminal code tightening measures against and punishment for cases involving political bribery.

According to the draft amendment to a relevant provision in the criminal code, offering, promising and giving money, services or other benefit of any kind directly or indirectly “for the political purposes” or making any sham deals “for a purpose of evading restrictions,” set by the law will be punishable with a fine or imprisonment for up to three years.

A legal entity engaged in illegal activities, laid out in this provision, will become subject to “liquidation”.

Liquidation, however, will only apply to legal entities other than political parties, a senior ruling party lawmaker, Pavle Kublashvili, said during the parliamentary hearings on December 27. It, however, has yet to be defined what the punishment in case of political parties will be.

The existing formulation of the same provision of the criminal code, which is currently in force, deals only with the electoral campaign period and bans to induce voters “to vote for any electoral subjects or to refrain from voting.” The existing code sets imprisonment for up to one year as a punishment for such actions.

The new formulation of this provision will also make it an offence to accept inducements, involving money or any other kind of benefits, for “the political purposes”; it will also be made punishable either with fine or imprisonment for up to three years.

According to the civil.ge, Opposition lawmakers have criticized the amendment describing it “vague”, giving possibility of broad interpretations, especially the wording ‘for political purposes’.

A ruling party MP Akaki Minashvili said during the parliamentary hearings on December 27, that discussions were ongoing, including with election watchdog groups, in order to make this formulation more specific and final wording would be ready before the draft’s approval with its third and final reading on December 28.

MP Minashvili also said that discussions were also ongoing on possibility of setting a maximum annual amount which political parties will still be able to donate in frames of various activities, for example during various festivities; if introduced, such donations within a set annual cap will not be considered as a political bribery. Exact formulations, however, have yet to be defined.

The proposed amendment to the criminal code was also criticized by some election watchdog and legal advocacy groups.

In a joint statement Georgian Young Lawyers Association, Transparency International-Georgia and International Society for Fair Elections and Democracy said that the proposed amendments were setting “disproportionate” measures.

They noted that while tightening punishment and measures in respect of legal entities and individuals, the amendment was not envisaging separately criminal proceedings against public officials for illegal use of administrative resources for the electoral campaign.

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