Human Rights Center’s Statement about Fining of Kakhi Kaladze and Bidzina Ivanishvili

August 8, 2012 statement of the Georgian State Audit Office states “Since the beginning of 2012, Bidzina Ivanishvili and Kakhi Kaladze, individuals with declared political and electoral goals, have withdrawn unusually large amounts of cash from their bank accounts without indicating its intended use. Specifically, Mr. Ivanishvili withdrew 5,552,135 GEL in cash, while Kakhi Kaladze withdrew 3,388,992 GEL in cash.

Given their political activities, and in order to determine the intended use of the cash, the State Audit Office (SAO) addressed letters to Bidzina Ivanishvili and Kakhi Kaladze requesting that they present documentation of how the cash had been spent. This was in order to ensure that the millions of lari that had been withdrawn were not being dispensed in violation of Georgian law. The SAO’s request was rejected by both individuals.

The SAO’s main objective is to prevent violations rather than to enforce punitive measures. Therefore, the SAO has addressed a second letter to each of these individuals who have declared electoral goals, requesting that they return the large amounts of cash to their personal accounts to ensure the transparency of their political finances.”

It is noteworthy that the Organic Law of Georgia on Political Union of Citizens does not restrict the removal of considerable amounts of money from personal bank accounts of a person with declared political and electoral goals even if it was done without official purpose. Consequently, SAO is neither authorized to oblige these people nor “request” them to return the money to their accounts.

The SAO’s statement reads that “Audit Office (SAO) addressed letters to Bidzina Ivanishvili and Kakhi Kaladze requesting that they present documentation of how the cash had been spent. This was in order to ensure that the millions of lari that had been withdrawn were not being dispensed in violation of Georgian law. The SAO’s request was rejected by both individuals.”

Regarding this, we should consider Article 341 of the Law of Georgia on Political Unions which regulates time for monitoring of legality and transparency of political party’s financial activities, as well as authority of the State Audit Office. In accordance to the same law, the Chamber of Control of Georgia shall be authorized 

a) to draft annual financial declaration form of a political party;

b) to estimate audit standards for party funding;

c) to inspect completion, correctness, and legality of financial declarations and fund reports of election campaign of a political party

d) to conduct financial audit of the party activities;

e) to ensure transparency of party funding; 

f) in case of necessity to request information about party funding from the party itself, administrative agencies and commercial banks;

g) in case of necessity to request information from individuals about the origin of the property they had assigned to the party and to individuals envisaged under Article 261of this law;

h) to provide interested individuals with consultation about party funding issues;

i) to respond to any violation of the law with regard to party funding and to apply to sanctions envisaged by the law’

j) to appeal to the prosecutor’s office if signs of crime are detected .

3. If there is grounded doubt about violation of law requirements, state institutions shall inform the State Audit Office about them.

The bbove-listed provisions of the law clarify that the State Audit Office does not have authority to request a private person, even if she/he has declared electoral and political goals, to provide them with any financial report about expenditures or other operations made on their personal bank accounts. It is noteworthy that in accordance to Article 341 Part II – h of the Organic Law, the Audit Office is authorized to request relevant individuals to release information about the origin of the property they have assigned to a political party or a person associated with a political party. In this particular case, as the SAO statement reads, nobody has assigned property to the mentioned individuals nor have they given the money to anybody. Although there is no sign of law violation, the Audit Office is inquiring about the purpose of withdrawing large amounts of money from their bank accounts. This interest does not originate from the SAO’s authority and the abovementioned individuals do not bear responsibility to satisfy these illegal interests of the SAO.

The last paragraph of the State Audit Office reads “the SAO has addressed a second letter to” Bidzina Ivanishvili and Kakhi Kaladze –“requesting that they return the large amounts of cash to their personal accounts to ensure transparency in political finances.”  The statement does not aim to expose the law violation or prevent any crime, but it suggests the individuals to return their money to their own bank accounts.

The law does not authorize the SAO to “request” any individual to conduct the abovementioned operation; thus similar requests or suggestions might be considered as legal obligation.

Thus, if an individual does not execute the SAO’s non-obligatory request, this action cannot be considered an action prohibited by the Organic Law on Political Unions of Citizens and the individual cannot be fined for it.

Despite that, the SAO fined the abovementioned individuals which are abuse of its power and a violation of constitutional right of a person by the state institution.

Tbilisi City Court satisfied the solicitation of the SAO and fined Kakhi Kaladze and Bidzina Ivanishvili with a multi-million lari fine because they had not satisfied the “request” of the SAO. In its ruling, the court relied on the fact that after Kaladze and Ivanishvili withdrew money from their bank accounts, certain people donated to the relevant political parties. However, any evidence to prove connection between the money withdrawn by Kaladze and Ivanishvili and the donation of other people to the political party was not provided to the court.

Similar actions of state institutions that aim at total control of individuals’ finances is particularly alarming when Georgian civil society cannot get public information about expenditure of budget funds by state institutions.

It is noteworthy that the Organic Law on Political Union of Citizens fines individuals when they clearly breach the law provisions and it cannot be used as preventive measures. The SAO statement does not say anything about violation of the organic law but about preventive mechanisms. We should take into consideration that in order to allow relevant institutions to prevent law violation, the State Audit Office should have confirmed that bank transactions of the individuals aimed to breach the requirements of the organic law on political unions. However, the SAO obliged the relevant individuals to provide evidence about legality of financial expenditure.

Besides that, Tbilisi City Court needed just one hour to impose a multi-million fine on Kaladze and Ivanishvili. One more important issue is that when the court imposes large fines on an individual the former shall give reasonable time and possibility to the defendant to prepare his/her positions for adequate defense.

The European Court of Human Rights, due to an autonomous definition principle of legal notions, when discussing relevant cases, estimates high standards for the states which shall be envisaged for criminal law process. So, such a short court discussion breaches both domestic and international laws.

We believe that the State Audit Office and Tbilisi City Court breached property rights guaranteed by the Constitution of Georgia and right to fair trial (guaranteed by Article 6 of the European Convention on Human Rights) with regard to Kakhi Kaladze and Bidzina Ivanishvili as well as equality right to the law (by using selective justice).

Bearing the abovementioned circumstances in mind, we evaluate this fact as politically motivated persecution of people with different political views and the government’s attempt to totally control them.

We are particularly concerned about the Georgian court’s participation in politically motivated persecution of citizens. Instead of imposing adequate legal control on any action of the government with regard to human rights and to return their actions within legal frames, the court has turned into a tool of political revenge.

With its recent judgments, the Tbilisi City Court completely neglected important principles of the judiciary system that should be the basis for the government acting under the Constitution, justice, and ethic and moral ideals of justice.

Bearing the abovementioned circumstances in mind, we request to immediately stop politically motivated persecution of people in opposition to government. We provide the embassies accredited in Georgia and international human rights organizations as well as relevant organizations abroad with appropriate information.

Human Rights Center