Tbilisi Is Ready to Recover Officials’ Mistakes with Money and Weapon

Short time ago, the government of Georgia, who categorically denied the complaints of the Israeli Company “Elbit Systems”, confirmed that the years-long argument between the Company and Georgia finished with agreement. Although the country avoided a fine of 100 million USD to be imposed by the London Arbitrage Court as well as international scandal, the mistakes, made four years ago, will cost expensive for the country.

It is interesting what the weapon producing company “Elbit” argued about with Georgia, what was the price of the reached agreement and will governmental officials of Georgia be held responsible for unexecuted contract.

In 2012, the government of Georgia will transfer 35 million USD to the bank account of the Israeli Company “Elbit” and recover the part of equipment to the Company, which was procured by the Ministry of Defense of Georgia in 2007-2008 from the Company. Neither Georgian nor Israeli parties publicly speak about the sort of equipment, but it is doubtless that the agreement was achieved and representative of the Company “Elbit” communication office Dalia Rousen confirmed the fact with us. “Georgia will definitely pay the money! You can formulate your letter as a press-release. It is a legal document and I do not think anybody will dare to ignore it.”

The government of Georgia unwillingly responded to the December 29’s press-release spread by the defense systems’ producing company.

However, on January 23, during the traditional briefing the deputy foreign minister of Georgia Nino Kalandadze repeatedly tried to oppose the allegations against the Georgian government and said: “Since the position of the Georgian side was correct, we do not think speaking about figures will be correct.”

We should discuss the “correctness” of the Georgian side’s position below but first we should underscore that in April, 2010 Nino Kalandadze denied all kind of debts imposed on the Georgian state and claimed: “the Georgian Ministry of Defense not only does not have any amount in arrears, there are number of defense companies, which, unfortunately, themselves owe the Georgian side.”

Nevertheless, the recent history of the Georgian military forces does not have information about any foreign military company which reimbursed some debts with money or with a defense armament to Georgia. In parallel to it, Tbilisi has already started transferring money and military equipment to Israeli to satisfy the Company “Elbit’s lawful complaints. Tina Burjaliani also confirmed Georgia has some debts in her interview with the Radio Liberty. The deputy minister of Justice, who represents Georgia in international litigations, said: “I can confirm that there is no complaints and argument between the Elbit and Georgia. The litigation procedures finished and I can confirm this fact. First of all, I confirm the allegation of the Elbit – 35 million USD and some military equipment will be recovered to the Company.”

 Debt on Cloudless Sky

As already mentioned, the government of Georgia managed to hush the international scandal in exchange of huge sums and weapon. Despite that, the scandal has not subdued inside Georgia. Representatives of the opposition political parties and military experts call upon the government of Georgia to start criminal prosecution against the people, who directly participated in the deal, which was signed four years ago; or it was their responsibility to be aware of the breached agreement with one of the main weapon-supplier of Georgia.

Irakli Aladashvili, editor-in-chief of the Georgian military magazine “Arsenal” prepared a publication about this problem. “35 million USD was transferred from the State Budget and somebody shall be held responsible for it. They should clarify why those funds were spent and which particular agreements were breached. Furthermore, it is not a military secret because the case was discussed at the Court and any interested person could study case materials.”

It is noteworthy that sort of weapon which Georgia procured from the Company Elbit in 2007-2008 is no secret at all. Before the Russian-Georgian armed conflict, the President Mikheil Saakashvili told the foreign media that Georgia has about 40 reconnaissance unmanned aerial vehicles (UAV), which it purchased from Israel.

In the same time, the Government of Georgia signed agreements on other services with the Company Elbit which significantly reinforced mobility and fighting capacity of Georgian military forces. But military experts wonder why the Georgia allocated the debts of the Israeli Company and why the case reached even the international court while the 2008 budget of the Georgian Defense Ministry was extremely increased and amounted to 1.3 billion GEL. Allegedly, the government of Georgia is punished for its incorrect behavior.

Irakli Sesiashvili, director of the Society “Law and Freedom” defending the rights of military servants, said “Elbit” decided to lodge suit against Georgia at the Arbitrage Court after Georgian law enforcement officers detained Israeli businessmen Ron Fuchs and Zeev Frenkiel in October of 2010 in Batumi. “I believe the situation would not have complicated unless they had detained the Israeli businessmen. It caused discontent of the Israeli State and authority inquired about those Companies, which could be debtors of the Georgian state. In this particular case, of course, they focused on the organizations involved in weapon trading. Consequently, the agreements showed that Georgia owes money to the Company and the controversy started in this format which resulted into imposing a fine.”

The Government of Georgia does not see links between those two cases and denies allegations about breached contracts with Elbit or any debts. Nevertheless, as it was already mentioned, the Israeli Defense Company lodged a suit against Georgian Government at the Supreme Court of the United Kingdom.

Tina Burjaliani explained everything by delay in “restructure obligations: “I told you that as a result of 2008 armed conflict and financial crisis, we got into a situation when we needed to restructure our obligations before the Company “Elbit”. Nobody mentioned a fine, additional payments, etc. So, I say that it was nice that we avoided all extra charges and started a new phase of cooperation with the Elbit that is too appreciable.”

It Is Better to Pay Money than To Disgrace Yourself

Independent experts cannot see anything welcoming in this affair. Military reporter Irakli Aladashvili thinks the litigation with the Company Elbit will not end without results and it will farther damage the reputation of the government of Georgia that is already disgraced on the international market of weapon. “Poor reputation of Georgia has been largely discussed for a while already. Israel stopped all military-technical cooperation with Georgia after the August armed conflict. Other countries also refrain from cooperating with us and it happened not only because of Russia’s oppression on them, but mostly due to so-called financial machinations.”

Opponents of the Georgian authority evaluate the silence of the Georgian Government on the Elbit case as an attempt to hide financial machinations and as a classic example of double moral. Tina Burjaliani categorically denies presence of any signs of criminal offence in the non-execution of the contract. “The format of our activities with regard to this case did not expose any grounds to suspect corruptive deals in it. Consequently, we did not start any investigation and nobody plans to launch criminal case on this fact.”

In parallel to it, the opponents are raging. They state the Government of Georgia applies selective justice, protects senior corruptive groups and is strict only with opponents. Irakli Sesiashvili mentioned the case of former defense minister Irakli Orkuashvili, who has fled from Georgia several years ago. The authority recalled financial shortcomings made when Orkuashvili was on the position after he joined the opposition in 2007 and started public critic of Mikheil Saakashvili’s close team. “I recall Okruashvili’s case, who was charged for illegal agreements on the construction of military units, which was controlled by the Group of Trustees. However, the latter never took responsibilities for the alleged violations and never said if they had information about them.”

The Parliamentary Group of Trustees of Georgia and its leader MP Givi Targamadze does not meet journalists and does not comment on the litigation between the Government of Georgia and Elbit Company. Two oppositionist members of the Group MPs Giorgi Targamadze and Giorgi Tortladze cannot save the situation either. Even more, the oppositionist MPs were not members of the Parliament when Georgian State signed agreement with the Elbit and did not have access to similar sensitive information. Due to large public interest, they might request meeting with the members of the Group of Trustees and Georgian Government, but the parliamentary opposition is disappointed and desperate due to strong influence of the majority.

Member of the Christian-Democrat Party MP Nika Laliashvili told the Radio “Liberty” that the opposition is sure the parliamentary majority will not support their initiative to study legality of particular contracts. “Generally, in a democratic country, the role of a parliament is huge and we should have had right to rise similar question at the parliament and the majority should have satisfied our request. But, of course here we have no chance and I do not hope the majority will welcome our initiative to find out who was responsible in this particular case.”

When an MP cannot see his role, the society loses trust to the legislative body; consequently the executive government, who is beyond all control, can do anything whatever they wish – they can sign expensive contracts and breach them later; they can pay the debt by money and natural compensation and after all these they can announce publicly that successfully coped with one more difficult problem.