Publication: Prism Volume: 7 Issue: 5

By Zaal Anjaparidze

In his May 12 address to the parliament and the nation, Georgian President Eduard Shevardnadze warned that Georgia’s status as an independent state would be threatened if it failed to crack down on rampant corruption.

The scale of this corruption is a source of increasing worry to Western countries and international organizations. That most of the Western assistance that keeps Georgia afloat reportedly flows into the pockets and accounts of corrupt Georgian officials is probably why the U.S. Agency for International Development (USAID) emerged as a co-sponsor of Georgia’s first National Anticorruption Program. Created by a special presidential commission chaired by Lado Chanturia, chairman of the Georgian Supreme Court, the program has already gone into the effect. Last month, Shevardnadze appointed his aide Mirian Gogiashvili to head a twelve-member presidential coordinating council–staffed by lawyers, journalists and public figures–tasked with implementing it. The program includes commendations that the government and the parliament liberalize the tax system, increase citizens’ participation, conduct a deep reform of the law enforcement bodies and begin confiscating illegally gained property.

Corruption has plagued Georgia for decades, and the nation has already seen several highly touted campaigns to end it. Can the latest one succeed where the others failed?

At the beginning of the 1970s, the Kremlin, having denounced the leadership of then Soviet Georgia for corruption, installed the republic’s young interior minister, Eduard Shevardnadze, as its leader. Shevardnadze promptly launched an anticorruption effort, officially called the “Struggle against the Negative Phenomena in Social Political Life of Georgia.”

In an attempt gain favor with the Kremlin and the public, Shevardnadze resorted to draconian measures reminiscent of the Great Terror of the mid-1930s. Many people, including Shevardnadze’s closest confidants, were arrested and given long prison sentences. Some were sentenced to death for large-scale embezzlement. However, both the campaign and Shevardnadze’s years in power (1972-1985) came to be seen universally as among the most corrupt. Economic statistics were deliberately rigged upwards while bribes, including those to top Georgian officials based in Moscow, became systemic. In addition, Shevardnadze used the drive as a pretext to rid himself of political enemies.

Corruption was still rampant in Georgia in 1992, when Shevardnadze retook the reins of government. The first corruption scandal involved Demur Dvalishvili, who headed the Georgian National Bank from 1991-1994. Dvalishvili invented a Georgian version of the “liberal monetary-credit policy,” handing out millions of dollars in soft credits to virtually everyone in the government and parliament. While most of these credits were never repaid, Dvalishvili protected himself by keeping a “black list” of all the officials who had stolen credits. When he was removed as head of the central bank, he threatened to make his list public. Then Interior Minister Shota Kviraya summoned him for questioning. What followed resembles a detective story plot. Dvalishvili supposedly entered the ministry building with a pistol in his pocket, despite the fact that it is widely known that only ministry staff may enter the building armed, and after an hour-long interrogation with the minister, walked into the corridor and shot himself. Both the ex-banker and the list disappeared–to this date, no one knows where. The case of the missing millions was closed.

The government’s next attempt to cope with corruption came in 1996, when Shevardnadze ordered the Prosecutors’ Office to investigate whether directives and regulations issued by the cabinet of ministers during the years 1992-1995 had been legal. It discovered more than 3,000 illicit regulations and orders that had been signed by top cabinet members during that period. Then Deputy Prime Minister Avtandil Margiani was discovered to have shielded an illegal scrap export and grain import deal. He found, however, a creative way to escape arrest, by producing documents approving the deals that bore Shevardnadze’s signature. The Prosecutors’ Office then suspended its probe into the 3,000 illegal regulations and orders. It has not been resumed.

Nevertheless, Shevardnadze proclaimed 1997 “the year for combating corruption”–another irony, given that corruption increased dramatically that year. About the same time, the parliament created and ad-hoc anticorruption commission, chaired by Ghia Baramidze, a parliamentary deputy. The commission began its work quite energetically, using data from the Control Chamber, the parliament’s budgetary spending watchdog agency, to expose questionable financial decisions and abuses of power by then Finance Minister David Yakobidze and Fuel and Energy Minister David Zubitashvili. Their policies cost the state budget millions of dollars in losses. Both were forced to resign. The commission sent the incriminating materials about the two men to the Prosecutors’ Office, expecting the latter to institute criminal proceedings. The Prosecutors’ Office, however, found that Yakobidze and Zubitashvili had done nothing criminal. Yakobidze later became President Shevardnadze’s financial adviser and Zubitashvili was made deputy minister of economics, trade and industry. In 1997, Georgia experienced a deep energy crisis, a budget shortfall and growing contraband trade in cigarettes and fuel. The hushing up of official corruption cases, of course, discredited the anticorruption campaign in the eyes of the public.

The fired ministers were substituted with members of the ruling Citizens’ Union of Georgia (CUG) party, and corruption in the energy and financial spheres remained the same. Meanwhile, the energy crisis worsened and the tax collection failed. The Baramidze Commission, however, remained surprisingly tight-lipped, digging up facts of corruption only in ministries led by those whom the CUG wanted to remove. This selective attitude towards corruption bred the opinion that the anticorruption campaign was a noble cover for a very different goal–to remove rivals and enemies from the government. A few people believed that this was going on without Shevardnadze’s approval.

The case of former Communications Minister Fridon Injia, who became a parliamentary deputy last year, is emblematic of the state’s attitude toward corruption. The Prosecutors’ Office submitted evidence to parliament showing that Injia had embezzled as much as US$14 million while in office and requesting that it strip Injia of his parliamentary immunity so that he could be interrogated about this matter. Surprisingly, an overwhelming majority of the parliament declined this request, despite the fact that the evidence was well grounded. A mix of corporate, personal, financial, clan and political interests outweighed the publicly declared wish to promote rule of law in the country. Among those who supported Injia were parliamentarians with a solid reputation for honesty. The challenge the parliament’s majority gave to the minority who wanted to see Injia investigated caused a split within the CUG. Baramidze, former chairman of the parliament’s ad hoc anticorruption commission, publicly accused some his fellow party members of having a “criminal mentality.” According to recent reports, the Prosecutors’ Office plans to close Injia’s case once and for all. No one appears worried about the missing US$14 million.

Meanwhile, former Agriculture Minister Bakur Gulua, who was closely associated with the importation of potentially harmful grain and the misappropriation of a Japanese government grant to Georgia’s agricultural sector, had a lucky escape. Sources say that the bulk of the Japanese grant was spent on last year’s CUG presidential election campaign, and that this is why Gulua enjoys Shevardnadze’s favor. Shevardnadze recently blamed the misappropriation of the Japanese grant on all of the former senior Agriculture Ministry officials–except Gulua.

Another high-profile corruption case involved the embezzlement of millions of dollars from a Georgian shipping company, which bankrupted the Georgian Maritime Fleet. The issue was spotlighted during the parliamentary elections, when the CUG used this scandal to stigmatize the Adjarian leader, Aslan Abashidze, and his Revival of Georgia party. As soon as CUG won a convincing victory in the elections, the case of corruption in the shipping company was quietly shelved. This was not surprising, given that high-ranking officials in the capital and relatives of President Shevardnadze were also implicated in the abuses.

Another case involved the misuse of a GEL 5 million (some US$2.3 million) credit by the Defense Ministry in 1998-1999. The credit was earmarked for the purchase of food and clothing for soldiers. The money was used for other purposes and the troops received nothing. The case was closed after a key figure in the deal, Guram Tevzadze, brother of the defense minister, David Tevzadze, was killed last June in a car bomb explosion. No one knows what happened to the stolen money.

Yet another case that government and law enforcement officials hushed up involved the embezzlement of millions of dollars from the pension fund. An investigation found that as many as 35,000 dead pensioners continued to receive pensions and allowances for years after their demise, with payments flowing into the pockets of Pension Fund and Ministry of Social Security officials. The government found a scapegoat, Avtandil Khupenia, chairman of the Pension Fund, whom it sacked. Yet Social Security and Labor Minister Tengiz Gazdeliani, who supervised all matters related to the Pension Fund, won a seat in the parliament, and the investigators did not explore his role in the abuses. Gazdeliani is known as one of Shevardnadze’s minions and is a power broker in the Svaneti region.

During the period of January-October 2000, the Prosecutors’ Office instituted 251 criminal cases involving official corruption. By May of this year, the number of such cases–including abuse of power, embezzlement of property and money, bribetaking, violation of customs regulations and tax evasion–had increased to 1,400. Of these, 128 have already gone to court. Mirza Dolidze, a department head in the Prosecutors’ Office, has admitted that some cases, especially those involving influential persons, have been delayed for “subjective” as well as “objective” reasons.

Shortly before stepping down as prosecutor general, Jamlet Babilashvili told his staff: “The arrest of corrupt people is not our ultimate goal. The goal is to retrieve the stolen money. We would prefer, if the abusers return it, to suspend the case.” Yet there has not yet been a case in which stolen money was recovered. Sources say that corrupt officials who have been arrested would rather buy their freedom from the law enforcement agencies than return the money to the state budget.

Several months ago, an investigation by the “Resonance” newspaper revealed that a number of parliamentarians, ministers, heads of departments, senior police and security officials and prosecutors had some sort of kinship ties. Tengiz Makharadze, prosecutor of Tbilisi, said: “Everyone knows well who backs whom, but everything is on the level of whispering and rumors. Nobody wants to say or write about it in public. Nepotism is one of the main reasons why the crimes and cases of corruption are hushed up.” This explains why the government continues to seek out the “small fries,” leaving the “sharks” to continue their “hunting.”

Meanwhile, the attitude of the Georgian political establishment toward corruption was revealed earlier this month, when a Ministry of Justice draft law, “On confiscating illegally gained property and turning it to the state’s advantage,” encountered fierce resistance from many MPs and ministers.

The National Anticorruption Program has identified the legacy of the communist regime and the moral climate in the country as among the key reasons for the spread of corruption. The Georgian president himself underscored the moral climate (somewhat ironically, critics might say, given his own record) during his speech to parliament on May 12. “As soon as anticorruption campaign deals a blow to a specific clan or political group and their interests, the anticorruption enthusiasm of most fervent fighters goes out suddenly,” Shevardnadze complained.

All of this suggests that the question–“can the latest anticorruption campaign succeed where the others failed?”–has already been answered quite clearly.

Zaal Anjaparidze is the editor-in-chief of Georgia’s English-language weekly Georgia Today.