Publication: Eurasia Daily Monitor Volume: 4 Issue: 237

Badri Patarkatsishvili is the most powerful, albeit not the most popular, among the opposition candidates in Georgia’s snap presidential election on January 5. The oft-used designation of Patarkatsishvili as an “oligarch” is a misnomer in the Georgian context. Oligarchy involves a group, but Georgia does not have any such group, and Patarkatsishvili operates individually as the country’s wealthiest businessman, now claimant to the presidency. Patarkatsishvili is a problem that Georgia inherited from Russia’s crime-ridden world of business and politics of the 1990s and from Georgia’s own near-collapse shortly thereafter.

Born in 1955 in Tbilisi, Patarkatsishvili was a minor Komsomol official and a participant in the privatization deals of the final Soviet years in Georgia. In 1990, the rising entrepreneur Boris Berezovsky in Moscow recruited Patarkatsishvili to serve as director of the Caucasus branch of LogoVAZ, the car-selling venture that Berezovsky spun off the state-owned AvtoVAZ, the foundation of his business empire.

In 1992 Patarkatsishvili became LogoVAZ deputy director general (with Berezovsky as director general), with a 3.5% share in the company. He moved from Georgia to Moscow in 1993-94: first to the town of Lyubertsy, a criminal hub in Moscow oblast, and then to the capital itself. Otari Kvantrishvili, boss of a Georgian organized crime group in Russia (killed by rivals in 1994), used his connections with Russian authorities to arrange Patarkatsishvili’s residence visas in Lyubertsy and Moscow (Russian Organized Crime, Global Organized Crime Project, CSIS, Washington, 1997; David Satter, Darkness at the Dawn: The Rise of the Russian Criminal State, Yale University Press, 2003).

In 1997 Patarkatsishvili chaired the Sibneft privatization tender commission, which awarded that major state-owned oil company to Berezovsky’s holding, at a fraction of Sibneft’s value.

From the end of 1994 until mid-2000, Patarkatsishvili was a key figure in Russia’s Channel One Television — ORT, the state radio-television company that Berezovsky privatized both financially and politically. Patarkatsishvili became ORT’s deputy director general, in charge of financial operations. He prevailed early on in a conflict with then-director general Vladislav Listyev, who was assassinated in March 1995; the case was never cleared up. During his years at ORT Patarkatsishvili was also the head of ORT Reklama, controlling the channel’s vast advertisement revenues. From 1996 until 2000, former KGB and FSB officer Andrei Lugovoi was the head of security at ORT as well as head of Patarkatsishvili’s personal and family security detail. Lugovoi came under the limelight much later, as the main suspect in the 2006 assassination of defector Alexander Litvinenko in London.

Caught up in Berezovsky’s unanticipated conflict with the new Kremlin leaders in 2000, Patarkatsishvili returned to Georgia that year. In 2001, the Russian Prosecutor General’s Office issued an international arrest warrant against him through Interpol, on charges of complicity in Nikolai Glushkov’s attempted escape from jail. Lugovoi led that abortive attempt to free Glushkov, a co-founder of LogoVAZ and a Berezovsky appointee as deputy director general of the Aeroflot airline. In 2002, Russia’s Prosecutor General further charged Patarkatsishvili with embezzlement and misappropriation at AvtoVAZ/LogoVAZ, adding those charges to the Interpol arrest mandate.

In Georgia, then-president Eduard Shevardnadze characteristically made a deal with Patarkatsishvili. The businessman was personally richer than the Georgian state budget, did not display political ambitions initially, and craved honors for favors he dispensed in a traditional paternalistic style. In return for safe haven and state honors in Georgia, Patarkatsishvili invested in business ventures and funded charitable projects on a scale otherwise unimaginable in the deeply impoverished country. He became the head of the federation of Georgian businessmen and head of the Georgian National Olympic Committee, subsidized social programs and cultural activities, and on two occasions paid debts for the gas and electricity consumed by Tbilisi residents. He also held court over ministers and other state officials and paid some of them.

Following the Rose Revolution, the new authorities saw no reason to challenge Patarkatsishvili’s legitimate business and charitable activities. Russia’s Prosecutor General’s office continued requesting Patarkatsishvili’s extradition, but the Georgian authorities refused any trade-off. Handing him over may have helped at least temporarily relieve some of Russia’s pressure on Georgia. But the government took the position that Patarkatsishvili was entitled to the protection of the law as a Georgian citizen; that the Russian charges were insufficiently substantiated; and that his extradition to Russia would have been illegal, given the absence of a relevant inter-state agreement.

In business terms, however, the modus vivendi between the Georgian government and Patarkatsishvili unraveled completely by 2006. The government’s anti-corruption policies and the new business environment in the country had severely curtailed Patarkatsishvili’s scope for doing business in his accustomed, post-Soviet 1990s-style ways. Moreover, his political influence and ability to sway the government had vanished. In 2006 Patarkatsishvili moved into moderate opposition to the government, accusing the government of violating democracy and human rights and casting himself as victim of persecution. Meanwhile he negotiated with the government as late in the game as summer 2007 about the possibility of taking over Georgia’s railroads in trust management through a shadowy British-registered company.