Hostage of the Government

Gela Mtivlishvili

Last December, American congressman Frank Wolf sent letter to the Minister of Justice of Georgia Zurab Adeishvili and requested to release political prisoners. The Congressman quoted an extract from the report of the US State Department on Human Rights which discusses politically motivated detentions together with other violations; the report also underscores oppression on the judiciary system by the government. Before that, FIDH confirmed existence of political prisoners in Georgia.

Case N 1/105

On June 23, 2009, officers of the Kakheti branch of the Investigation Division within the Department for Revenues detained Kote Kapanadze. Kakheti regional prosecutor’s office charged him for abusing his power and requested 3 years of imprisonment. Although there are no proofs against Kapanadze in the case materials, Judge Besarion Tabaghua Telavi district court satisfied the request of the prosecutor’s office.

Everything started as follows…

Law enforcement officers got interested in Kote Kapanadze, resident of the village of Kartubani in Lagodekhi district, after he became active supporter of the New Rights. Brother of Kote Kapanadze Vazha Kapanadze works in Tbilisi office of the Alliance for Georgia. Regional office of the Alliance was established with the support of Kote Kapanadze. Nutsa Papava was appointed as a head of the district HQ of the Alliance based on his recommendation. In spring of 2009 Kapanadze participated in the protest rallies organized by opposition parties where main demand was resignation of the president. Kapanadze organized transportation of residents of Lagodekhi district to Tbilisi to join the rallies in the capital. Wife of Kapanadze Shorena Neparidze said Kote covered transportation fees of the demonstrators from Lagodekhi district.

Nutsa Papava, head of Lagodekhi district HQ of the Alliance for Georgia: “On May 26, 2009 large demonstration was scheduled in Tbilisi. Kote Kapanadze was ordered to take people from our district. Several days before, Kote was warned several times to stop working for the opposition parties but he did not take the warning into consideration.”

Activity of Kapanadze astonished the local authority. Lagodekhi district governor Gia Gozalishvili fired Nutsa Papava from the position of the director of the union of district nursery schools. Lagodekhi district policemen watched the house and family members of Kapanadze.

Kote Kapanadze: “Because of my brother, I was often rebuked. They told me I did not have right to work for the governmental agency. Thus, early in May, 2009 I wrote resignation letter. I worked as a custom-officer at Samtatskaro custom-house. They did not satisfy my resignation letter.

Operation “Neutralization”

On May 23, preliminary investigation was launched at the Kakheti office of the Investigation Division of the Department for Revenues within the Ministry of Finances of Georgia. Criminal case was launched against individual entrepreneur “Aidin Mailov”, resident of the village of Karajala in Telavi district; he was accused in avoiding particularly large amount of taxes in 2007-2008. Report of Zaza Chikvaidze, inspector-investigator of the same department became basis for the investigation.

“I was reported that family members of the dead individual entrepreneur Mailov, Sevdin Mailov and Nazim Mukhtarov were carrying out entrepreneur activities and avoided to pay taxes to the budget,” stated the report of Chikvaidze.

On the same day, investigator Joni Jichonaia was put in charge of the preliminary investigation. According to the case materials, from the beginning Jochonaia did not have any other proofs but the report of Chikvaidze. Despite that, on May 23, investigator Jichonaia petitioned to Telavi district court and reported. “Investigation on this case was launched based on the report of inspector-investigator Zaza Chikvaidze at Kakheti office of the investigation division. The report stated that individual entrepreneur Aidan Mailov from the village of Karajala in Telavi district avoided to pay particularly large amount of taxes in 2004-2008. We kindly request you to allow us to withdraw financial documents issued from January 1, 2004 till May 23, 2009 from the enterprise.”

Telavi district office satisfied the petition of the investigator. According to the court resolution, the investigator was ordered to get financial documents from “Aidnal Mailov” issued from January 1, 2004 till May 23, 2009. However, investigator did not execute the order completely and got financial documents only before August 7, 2007; this was the period when tax inspectors Kote Kapanadze and Teimuraz Iarajuli were working for the tax inspection.

He Is Aimed at

On May 29, 2009 investigator scheduled document based raid of “Aidan Mailov”. Investigator asked the inspector how Kote Kapanadze and Teimuraz Iarajuli had inspected the individual entrepreneur “Aidan Mailov”. In parallel to it, investigator ordered accountant expertise of the enterprise. Jichonaia asked the expertise: “How many facts of avoiding tax-payment did the audit inspectors Teimuraz Iarajuli and Kote Kapanadze fail to discover as a result of field inspecting of the individual entrepreneur “Aidan Mailov” on August 7, 2007?” In order to reply to the question, the expertise provided three volumes and three inspecting protocols to the investigation on June 9, 2009.

Expert Jemal Pilauri from the Department for Special Investigations and Financial Expertises within the Department for Revenues carried out the expertise in one day and concluded: “Chief inspectors of the Telavi district tax inspection Teimuraz Iarajuli and Konstantine Kapanadze neglected the correctness in the purchase documents of import operations carried out by individual entrepreneur “Aidan Mailov” and legality of calculation to the state budget by these operations. “Aidan Mailov” taxed imported and realized goods from corrected custom fees and not based on invoices; thus he hid the entity which had to pay taxes and avoided to pay taxes to the state budget. Tax inspectors did not discover the fact of avoiding the taxes by individual entrepreneur “Aidin Mailov”. More precisely, according to the inspection protocol of August 7, 2007 entrepreneur was not taxed by additional 39 685 GEL in favor of the state budget and did not impose fine of 82 363 GEL; total sum amounted to 208 408 GEL.”The expertise conclusion does not indicate which methods were used by the expert during the expertise and in writing the conclusion. However, it was necessary to be indicated in the conclusion.

On June 15, 2009 investigator Jichonaia issued resolution based on which only Kote Kapanadze was found suspected though Teimuraz Iarajuli had signed the inspection protocol as well.

On June 16 investigator issued one more resolution on forcible delivery of Kote Kapanadze to police station, “On June 11, 12, 13 I was looking for Kapanadze but failed to find him. Then I gave warrant to operative department to hand in to him. The officers reported to me that they could not hand the warrant to Kapanadze. On June 15, I got through Kapandze’s phone and asked him to come to the police station on June 16. On June 16, at 11:00 am he did not come to the station and consequently, I issued resolution to deliver the suspect to the police station by force,” said investigator Jichonaia.

Kote Kapanadze: “Investigator really called me on the phone and said he wanted to meet me. He did not tell me concrete date and place of meeting. After that he did not call me back.”

Investigator issued second resolution on forcible delivery of Kapanadze to the police station on June 22. However, the document was dated by 2006 instead 2009. There is no warrant in the case materials which could prove that investigation department had invited Kote Kapandze to the police station.

Investigator invited Iarajuli to the police station only after Kapanadze was detained in Tbilisi on June 23, 2009.

“He was in his friend’s house when more than 15 special unit officers rushed in to the flat to detain him. He was detained like a dangerous criminal,” said attorney of Kote Kapanadze Giorgi Razmadze.

Teimuraz Iarajuli pled guilty in his testimony to the preliminary investigation. Kakheti regional prosecutor’s office requested 2-month pretrial detention for Kapanadze and Iarajuli. However, Judge Giorgi Gogichaishvili did not satisfy the request. The court bailed Iarajuli with 2 000 GEL and Kapanadze with 20 000 GEL. Kapanadze could not pay the bail because the investigator did not meet them within the estimated period in accordance to the law and could not get documents on bail. Investigator clarified that he was in the district close to border because of investigation of another case. However, in the same period he released Iarajuli from imprisonment. It is noteworthy that bail documents on Iarajuli were prepared a day before Telavi district court started discussion of the concrete liability. The property which was mortgaged for the bail of Iarajuli is valued by price equivalent to the bail imposed on him.

According to case materials, after Kapanadze’s imprisonment preliminary investigation did not do anything in fact. On July 29, 2009 Kakheti regional prosecutor Khvicha Begiashvili drew up bill of particulars and charged Kapanadze under Article 332 Part I of the Criminal Code of Georgia (abusing power). Judge Besarion Tabaghua at Telavi district court started discussion of the cases on Kapanadze and Iarajuli on September 23, 2009 and finished on November 11. Court charged them for professional negligence (under article 342 of the Criminal Code of Georgia). Judge sent Kapanadze to prison for 2 years and 6 months and imposed 2-year suspended sentence on Iarajuli.

Proofs for Politically Grounded Imprisonment

In accordance to the Article 28 of the Criminal Procedural Code, “case proceeding shall not start and if started, it shall be stopped if a suspect or accused has died unless the case proceeding aims to rehabilitate the dead person or to discover new circumstances,”

Zaza Chikvaidze’s report was basis to launch criminal investigation against Kapanadze. The document states that individual entrepreneur Aidan Mailov died.

Joni Jichonaia, investigator: “Tax Inspection did not provide any documents on liquidation of individual entrepreneur “Aidan Mailov” and I was not informed about its liquidation.”

-When did you learn about the death of the individual entrepreneur Aidan Mailov?

-Judge ordered me to withdraw documents of the individual entrepreneur and I was informed about his death at that time.

-Why did not you stop criminal proceeding when you learned about the death of entrepreneur Aidan Mailov?

-I did not hold his death certificate. Thus, we checked the information by investigation.

-Why did not you insert death certificate of Aidan Mailov in case materials?

-I do not remember.

-Why did not you follow Article 28 of the Criminal Code of Georgia which bans to start criminal investigation against dead person?

-We were investigating illegal usage of identification code of the individual entrepreneur, as well as avoidance of particularly large amount of taxes and not against the dead person or for other purposes.

-Then why did not you obey the order of Telavi district court and get financial documents of “Aidan Mailov” issued from January 1, 2004 till May 23, 2009? Why were you interested only in the documents issued in the period when Kapandze was inspector?

-We withdrew the documents provided only by Tax Inspection. I requested the documents of the period which was ordered by the court but I was clarified at the tax inspection that there were no other documents on Aidan Mailov. So, I did not request anything more.

-You asked the expertise how many facts of avoiding taxes did Teimuraz Iarajuli and Kote Kapanadze fail to discover during tax inspection of individual entrepreneur “Aidan Mailov” on August 7, 2007. When expertise was scheduled, you had nothing but inspector’s protocol and Mailov’s financial documents. Why did you ask this question?

-I investigated the period I wanted; did not I have the right? 

-Expertise conclusion states that “Aidan Mailov” taxed the imported and realized goods from corrected custom’s fee and not based on invoices; thus he hid the entity that was to be taxed and avoided to pay taxes to state budget. For impartial and thorough investigation of the fact were not you entitled to estimate whether custom officials made similar violations?

-If there were any violation, the inspector could record in the protocol. However, the document does not provide similar information.

-There is no warrant sent to Kapanadze in the criminal case materials. Why did you issue two resolutions on his forcible delivery to the police station? How can you prove that you really sent warrants to him and he did not appear?

-By protocol and by my testimony where I alleged that I was looking for him and could not find.

-Why did not you meet his brother Vazha Kapanadze who had to provide the bail documents to you?

-The meeting was appointed for the weekend and I was in Dedoplistskaro on business. Vazha Kapanadze called me but we could not even talk because my mobile phone failed to work properly on the place I was.

-Then how did you manage to accept the bail documents from Iarajuli?

-I do not remember but apparently I somehow managed it.

During journalistic investigation we met Teimuraz Iarajuli and former deputy head of Telavi district tax inspection Tamaz Chuniashvili.

Teimuraz Iarajuli, the convicted: “I have 27-year working experience in the field. I worked for the tax inspection from 1996 till August, 2009. I was inspector of audit department. In 2007, when we, Kote Kapanadze and I, inspected individual entrepreneur “Aidan Mailov”, I remember that custom declarations provided by the entrepreneur did not have invoices. We informed head of the department Tamaz Gumbaridze about the fact and told him that the entrepreneur was importing plastic materials by kilograms while he could sell them in retail and could have much profit from it. Gumberidze told us we did not have to invent a new bicycle. Finally, we inspected the enterprise. I realized my mistake after investigation showed expertise materials to us.”

Tamaz Chuniashvili, former deputy head of Telavi district tax inspection. “I occupied various positions at the Tax Inspection from September of 2005 till October of 2007. I was coordinator of the audit division of service and tax-payers. When inspecting tax-payers we drew up protocols which was handed to the head of control department and then to law department. The draft-resolution on paying fines was prepared only after that. I signed the resolution on imposing the taxes on Aidan Mailov. I did not doubt about the decision. If I had doubted, I could check the information and order other inspectors to do it. However, I did not doubt about the legality of the protocol prepared and signed by Kapanadze and Iarajuli.”

We showed the conclusion of Jemal Pilauri from the department for special investigations and financial expertise to the auditors of the AuditKonsultingGroup, Ltd I. Maghradze and M. Papidze. Specialists state that during expertise expert did not use the method which he had to use during working on the conclusion. According to Maghradze and Papidze, so-called proportional method used by the inspector is used only while calculating the VAT.

Invoices on Aidan Mailov withdrawn from the custom-house proved that Kapanadze and Iarajuli could not inspect the enterprise based on invoices. In order to turn the invoice into a tax document,  it shall comply with the requirements of the Article 93, of the Tax Code of Georgia. Invoices in the case materials on Aidan Mailov did not comply with these requirements. More precisely, they do not provide information about props, name, amount and weight of the good. Besides that, we discovered such invoices in the case materials which do not belong to Aidan Mailov at all. For example, one of the invoices is issued on Airol Lidin.

It is noteworthy that there were no obligations or recommendations before May of 2008 which made tax inspections to fine enterprises based on invoices.

In May of 2008 Tbilisi Regional Center of Tax Inspection petitioned to the consulting council of the department for revenues within the Ministry of Finances about taxing the entrepreneur who imports goods to Georgia and requested recommendation. Based on the recommendation issued on May 23, 2008 by consulting council tax inspections were clarified that entrepreneurs were to be taxed based on invoices instead corrected prices.

Based on the Article 113 of the Criminal Procedural Code of Georgia, court decision has power of prejudice and court, prosecutor and investigator shall obey it.

On September 4, 2009 Telavi district court passed verdict on the case of individual entrepreneur “Oruj Mahmud Ogli” which annulled the protocol of the tax inspection. In this case, Tax Inspection accused Oruj Mahmud Ogli in artificial reduction of the base which was to be taxed; it was done in accordance to the custom declaration of the expenditure instead invoices. In the final decision court stated that they could not estimate how they had to deduct expenditure part – based on the invoice or custom declaration?

Despite legislative obligations, Judge Besarion Tabaghua at Telavi district court did not envisage the decision passed on the other case by the same court.

Giga Bokeria: “There Are No Political Prisoners in Georgia”

Deputy Foreign Minister of Georgia Giga Bokeria thinks there are no political prisoners in our country and this issue shall not be seriously discussed. “Georgia is the country where the government is permanently criticized. I think, we do not have political prisoners and it is not serious topic to discuss,” said Bokeria.

Topic of political prisoners was not discussed in the 2009 report of the Public Defender of Georgia. According to Ombudsman Giorgi Tughushi his representatives tried to get in touch with the attorneys of the detainees several times to get corresponding materials, though in vain. He said if attorneys will introduce the materials on the detention of political activists to the public defender, this topic shall be definitely discussed in his next year report.