Stand der Umsetzung der Verpflich­tungen zur De-Oligar­chi­sierung und Korrup­ti­ons­be­kämpfung durch Georgien

Intro­duction:

In June 2022, the European Union proposed twelve priorities for Georgia to address as precon­di­tions for receiving EU candidate status. The Georgian Dream Government immediately pledged to implement all of the condi­tions fully. To this end, working groups were set up in Parliament, and several legis­lative amend­ments were intro­duced. Civil society organiza­tions and opposition parties published papers describing their visions for imple­menting the 12 condi­tio­na­lities that same summer and also put forth specific legis­lative initiatives.

In July 2023, the ruling party of Georgia declared that all condi­tio­na­lities had been imple­mented. The European Commission did not share its optimism, however. The Commission gave oral briefings on Georgia’s progress on imple­menting the condi­tio­na­lities (as well as on that of Ukraine and Moldova) to the European Council in Brussels (at the ambassa­dorial level) and Stockholm (at the informal minis­terial level) on 21 and 22 June. For this purpose, the Commission used a five-point scale (no progress, limited progress, some progress, good progress and completed) to describe the extent of imple­men­tation of priorities. In Georgia’s case, the Commission judged the imple­men­tation of three (ombudsman, ECtHR judgments, gender equality) of its twelve priorities to have been completed. On one priority (media freedom), the Commission saw no progress at all; on another (de-oligar­chization), it identified only “limited progress”. Regarding the remaining eight priorities, the Commission reported that “some progress” had been made.

The views of the Georgian civil society organiza­tions monitoring progress on the 12 priorities largely coincide with the European Commission’s assessment. According to the CSO assessment done regularly through the Candidacy Check, at least five condi­tions (de-polarization, indepen­dence of judiciary, de-oligar­chization, media freedom and coope­ration with the civil society) have yet to be fulfilled, whereas some progress has been made on the remaining seven. The trans­po­sition of the ECtHR judgments and greater gender equality come closest to being fully implemented.

These Brief attempts to sketch out the challenges of imple­menting Georgia’s commit­ments to de-oligar­chization and the fight against corruption.

In June 2022, the EU called on Georgia “to implement the commitment to ‘de-oligar­chization’ by elimi­nating the excessive influence of vested interests in economic, political, and public life”. This request was also repeated in the condi­tions for Moldova and Ukraine, albeit with different wording. In its oral report in June 2023, the European Commission welcomed the announcement by Georgian Dream leadership that it would not be adopting the draft law on de-oligar­chization. Though, in fact, the ruling party only deferred the adoption of the legis­lation until late 2023 and statedthat it would not adopt the law only if the European Commission removed the issue from 12 condi­tio­na­lities. EU, in turn, urged Georgia to adopt a “systemic approach” to de-oligar­chization. Unfort­u­nately, no systemic efforts of this kind have been under­taken by the Georgian Government thus far.

On the subject of anti-corruption measures, the EU requested Georgia to “strengthen the indepen­dence of its anti-corruption agency bringing together all key anti-corruption functions, in parti­cular, to address high-level corruption cases rigorously; equip the new Special Inves­ti­gative Service and Personal Data Protection Service with resources commen­surate to their mandates and ensure their insti­tu­tional indepen­dence.” In its oral assessment on 21 June, the European Commission stressed that full imple­men­tation of this priority would require measures ensuring that Georgia’s anti-corruption agency operates independently and noted that Georgia should consult the Venice Commission regarding the relevant draft legis­lation. The Commission also asked Georgia to recon­sider withdrawing from the OECD anti-corruption network.

1. THE DE-OLIGARCHIZATION PRIORITY (5THPRIORITY)

1.1 One sole oligarch, or many oligarchs?

De-oligar­chization is considered one of the most contro­versial and ambiguous priorities, mainly because the European Commission has not been clear about who Georgia’s oligarchs are. Bidzina Ivanishvili is considered to be an oligarch by 35% of the Georgian respondents in a recent survey conducted by the Caucasus Research Resource Center (CRRC). Mr. Ivanishvili is the founder of the Georgian Dream party and a former prime minister. Although he hasn’t held any political post since 2013, many Georgians believe that the reclusive billionaire continues to rule behind the scenes. In contrast, only 3% of the respondents in the CRRC survey believed that former President Mikheil Saakashvili is an oligarch, and only 2% agreed that Mamuka Khaza­radze, the founder of the TBC Bank and the political party Lelo, could be considered as such. The European Parliament clearly identified Bidzina Ivanishvili as an oligarch in resolu­tions adopted in June 2022 and December 2022. Civil society organiza­tions and opposition parties also believe that Bidzina Ivanishvili is Georgia’s “sole oligarch”.

While there is no doubt about who is regarded as an oligarch in Georgia, the Georgian Dream swiftly moved to deflect arrows aimed at Bidzina Ivanishvili. Georgian Prime Minister Garibashvili even sent an open letter to the European Commission’s President, arguing that Mr. Ivanishvili was no longer involved in politics and that calling him an oligarch insulted him and the country. For the Georgian Dream party, the oligarchs in Georgia are indivi­duals linked with the opposition parties and the critical media.

1.2 The “law” that does not solve the problem of oligarchic influence

In the summer of 2022, the Georgian Dream pledged to adopt legis­lation on de-oligar­chization, echoing a similar pledge made by Ukraine. Though initially hesitant to send the draft legis­lation to the Venice Commission, the Georgian Dream „reluc­tantly agreed“ to do so towards the end of 2022, following the passage of the draft law after its first reading in Parliament. In its final opinion on the proposed legis­lation, released in June 2023, Venice Commission strongly recom­mended that the Law on De-oligar­chization be abandoned, as it embraced a “personal” approach, whereas a “systemic” approach was preferable for tackling the de-oligar­chization issue.

Georgian civil society organiza­tions opposed adopting the de-oligar­chization legis­lation right from the outset, making it clear in July 2022  that carrying out a de-oligar­chization agenda using legal instru­ments would not be possible in a country ruled by an oligarch. The CSOs made an alter­native proposal: that the fulfilment of all 11 condi­tions that do not directly address de-oligar­chization ought to be considered as collec­tively fulfilling the de-oligar­chization condition as well. Their rationale was that the influence of the oligarch would automa­ti­cally be reduced by effective action to strengthen the judiciary, reduce polarization, make state insti­tu­tions more accoun­table, ensure free and fair elections, establish parlia­mentary oversight and power-sharing, guarantee a free and independent media environment and ensure the indepen­dence of both the anti-corruption agency and the person appointed as Ombuds­person. Smaller opposition parties, i.e. Lelo, Strategy the Builder, Droa and Girchi, agreed with the CSOs and joined them in calling on the Government to abandon the de-oligar­chization legis­lation and focus on the other 11 condi­tio­na­lities. Several EU member states also pointed out that the EU had never called on the Georgian government to adopt such legislation.

However, not everyone involved took this position. The EU Delegation to Georgia and EU Commis­sioner Várhelyi (Neigh­bourhood and Enlar­gement) both indicated that a law that was approved by the Venice Commission would be a positive develo­pment. And while United National Movement, the largest opposition party, disagreed in principle with the substance of the draft law proposed by the Georgian Dream, rather than rejecting the idea of law altog­ether, it came up with an alter­native proposal for legis­lation targeting solely Mr Ivanishvili. Unsur­pri­singly, the UNM’s bill was neither debated in the Parliament nor sent to the Venice Commission but was quietly voted down at the Legal Committee session in early 2023.

Going on record as condoning a legis­lative approach to the problem of oligarchic influences proved to be a tactical mistake by the United National Movement and several high-ranking EU officials. A mistake that Georgian Dream capita­lized on, shifting the discourse to the nature of the draft law and which the Venice Commission’s earlier recom­men­da­tions should be taken on board. This took the pressure off of Georgian Dream and put them in a position to bargain. As one of the Georgian Dream leaders quipped in late 2022, if everyone, including the EU and the opposition, agreed and asked the Georgian Dream not to pass the law, they would withdraw it– on the condition that this move would count towards successful imple­men­tation of the fifth conditionality.

In June 2023, the Venice Commission issued a final report on the Law on De-oligar­chization, which warned against adopting the law in its current form. The European Commission also welcomed this assessment. Georgian Dream initially planned to adopt the legis­lation nonetheless but later backtracked and pledged to defer its adoption, implying that it would not scrap the legis­lation if the European Union removed the condition of “de-oligar­chization” altogether.

1.3 What does the draft law say?

Under the initial version of the draft law, which is nearly identical to the corre­sponding Ukrainian, persons who had been designated oligarchs by the Government would have been subject to multiple restric­tions on their political and financial activities, for example, barring them from making donations to political parties and political activities, or rallies, and from invol­vement in the priva­tization of the state assets. However, some of these provi­sions were scrapped after negative feedback from the Venice Commission in its interim opinion (March 2023). The current draft would impose an obligation on indivi­duals parti­ci­pating in public life to report any contact with persons designated as oligarchs and bar such indivi­duals from parti­ci­pating in processes priva­tizing state assets, but it would not prohibit them from financing political parties and activities or owning media companies. At this time, it is unclear what the sanctions for viola­tions of the reporting duty would be. Under the current draft, the recently estab­lished National Anti-Corruption Agency, the NACA, would decide who is an oligarch. The head of this agency, which has no inves­ti­gative functions, is appointed by the prime minister.

In its final opinion on the draft law (released in June 2023), the Venice Commission recom­mended that Georgian not adopt the law. This is something the Commission rarely does, and the wording it used was of unpre­ce­dented sternness. Even before this develo­pment, though, it appeared that adopting the draft law would be unwise even with all the recom­men­da­tions taken on board. If such a law were passed, it would be largely ineffective in reducing oligarchic influences. This is chiefly because the law would not have applied to Mr. Ivanishvili, which is something Georgian Dream leaders made clear from the very start. The law would only be used to target indivi­duals who supported the opposition political parties and critical media: when Georgian Dream leaders talk about oligarchs who exert influence on Georgian politics and economy, they name people like David Kezerashvili, the owner of Formula TV and a supporter of the United National Movement; Koba Nakopia, an MP from the United National Movement who holds shares in the private television company Mtavari TV, and Mamuka Khaza­radze and Badri Japaridze, founders of the TBC Bank and leaders of the Lelo political party. Thus the EU’s call for Georgia to reduce oligarchic influence in the political and economic life of the country might be trans­formed in the hands of the Government into a tool with which to punish political opponents, independent media and civil society organiza­tions, which Georgian Dream frequently accuses of being in cahoots with various alleged oligarchs.

Thus, it is clear that the draft law, if passed, will not address the oligarch’s influence in Georgian politics as the Government itself is dominated and controlled by the oligarch. Prominent ministers, including the prime minister, are personal loyalists of Mr Ivanishvili (who previously held positions in the latter’s Kartu Bank), just as many political leaders in Parliament. Moreover, if the law is enacted, this will show blatant disregard for the Venice Commission’s and European Commission’s positions.

1.4 De-oligar­chization: an unful­filled conditionality

Thus, to put it bluntly, the Georgian Dream has treated the EU’s condi­tio­nality of de-oligar­chization as a joke. The Venice Commission and European Commission have clarified that the law will be counter-productive and that the Georgian Government should take a systemic approach to tackling the problem. The draft law, if passed, will do more harm than good.

The European Union’s insis­tence that Georgia takes effective de-oligar­chization measures springs from a legitimate concern. There can be no doubt about Mr. Ivanishvili’s influence on major political issues and policies, such as arresting political opponents, attacking free media, not joining sanctions on Russia, maintaining cold relations with Ukraine, restoring direct flights to and from Russia, maintaining polarization as a political tool to help those with political power to keep it, and most importantly, maintaining harsh anti-Western rhetoric.

2. THE ANTI-CORRUPTION PRIORITY (4TH PRIORITY)

2.1. NACA – a new agency with new functions

Georgian Dream created a new entity, the National Anti-Corruption Agency (NACA), to address the fourth priority. According to the legis­lation estab­li­shing the NACA, the agency’s main task is to facilitate the fight against corruption by providing oversight of the national anti-corruption strategic documents and action plans, ensuring the coordi­nation of the activities of the relevant agencies, monitoring the asset decla­ra­tions of high-ranking public officials, improving safeguards for whistle-blowers and monitoring the financing of political parties.

The Anti-corruption Agency is accoun­table to the Parliament and to the inter-agency National Anti-corruption Council through its obligation to report to both of these bodies regularly. As its mandate consists primarily of analy­tical and infor­mation-gathering tasks, NACA has often been referred to as a think tank-type agency, and many observers doubt its ability to effec­tively address high-level corruption of the kind that the EU has called for.

It is possible that the NACA will be given an additional function in connection with creating a registry of oligarchs. If the Georgian Dream decides to ignore the negative feedback from the Venice Commission and the European Commission and pass its draft law on de-oligar­chization after its third reading in 2023, then NACA will be put in charge of designating indivi­duals as oligarchs and enforcing some aspects of the legislation.

2.2 Curbed indepen­dence and limited functions of the NACA

The head of the NACA is appointed by the prime minister, which raises serious questions about the institution’s indepen­dence. Georgian Dream never even considered adopting a model that would require the approval of a 2/​3 majority in the Parliament or grant substantial powers to civil society organiza­tions (CSOs) concerning the nomination of candi­dates for this post. Some of the opposition parties proposed that Parliament should decide on the appointment with a 2/​3 majority, which would require the ruling majority and the opposition to agree on a joint candidate. Georgian Dream rejected this proposal outright, though. In its oral report in June 2023, the European Commission stressed that the indepen­dence of the NACA was an essential criterion for assessing the implan­tation of this priority.

Currently, the nomination procedure creates a selection committee with members repre­senting various state insti­tu­tions and CSOs, with the majority of the committee seats being held by the Government. The selection process is based on an open compe­titive procedure open to any and all candi­dates. The selection committee reviews the appli­ca­tions and then nominates several candi­dates to the prime minister, who then appoints one of them to a six-year term as the head of the NACA. A selection procedure held in early 2023 resulted in the appointment of Mr Razhden Kuprashvili to the post. Mr. Kuprashvili has led the Legal Aid Service (another state agency) since 2019. Trans­pa­rency Inter­na­tional, which took part in the selection process, did not observe any signi­ficant viola­tions or foul play during the process; however, various CSOs have expressed doubts about the indepen­dence of Mr. Kuprashvili, the first person to hold this post, as he is known to be a close acquain­tance of the prime minister.

The most signi­ficant deficit of the newly estab­lished NACA is its lack of inves­ti­gative functions, which precludes effective action on its part in a law-enforcement role. The main focus of criticism from opposition parties and civil society about the NACA has concerned these two deficits – lack of indepen­dence and inves­ti­gative functions.

2.3 Previous initiatives

Before adopting the legis­lation that estab­lished the NACA, several opposition parties had submitted earlier legis­lative initia­tives on this issue, inspired by the relative success of the independent anti-corruption entities in Romania and Ukraine. The opposition party Lelo for Georgia, for instance, intro­duced a legis­lative package of this kind in 2021. However, Georgian Dream never even discussed the package. Several former Georgian Dream MPs had also submitted a set of bills on this subject in the previous Parliament. This package, which was initiated by ex-MPs Tamar Chugoshvili, Tamar Khulordava, Irine Pruidze, Nino Goguadze, Dimitri Tskitishvili and Trans­pa­rency Inter­na­tional Georgia, was shelved right at the start and never was taken up in Parliament.

In October 2022, Lelo requested that Parliament turn its attention back to the legis­lative package about the anti-corruption agency submitted by the opposition in 2021. The “national anti-corruption agency” estab­lished under that proposal would have been an independent government insti­tution with inves­ti­gative functions. It would have been accoun­table to the Parliament, and its chair­person would have been elected by the legis­lature for a five-year term. In addition, the State Security Service would have relin­quished its role in the fight against corruption as this role would have been trans­ferred to this new agency. The agency would be mandated to prevent public service corruption, monitor public servants‘ asset decla­ra­tions and watch over political parties‘ financing. In addition, the proposed legis­lation would also have provided criminal immunity to the head of the agency unless that person was arrested at a crime scene. Lelo’s proposal provided for the single-term election of the chair­person. As stated above, this bill was never seriously considered by the Georgian Dream, even though it probably came closer to meeting the EU’s requi­re­ments than the approach ultim­ately adopted.

2.4. Special Inves­ti­gation Service and the Personal Data Protection Service

The anti-corruption priority also includes ensuring the indepen­dence and provision of adequate resources for the Special Inves­ti­gation Service and the Personal Data Protection Service.

These agencies were created in late 2021 when the Georgian Dream decided to abolish the State Inspector’s Service (SIS) and divide up its mandate. It was widely believed this move was motivated by a desire to fire the head of the SIS, Londa Toloraia, who was not averse to taking steps that GD inter­preted as political and aimed against their party interests. The final straw came in November 2021, when the SIS inves­ti­gated the allega­tions that Mikheil Saakashvili had been treated inhumanely. The State Inspector’s Service concluded that the Ministry of Justice and the Special Peniten­tiary Service violated the Law on Personal Data Protection by releasing footage and photo­graphs of Mikheil Saakashvili being trans­ferred from Rustavi Prison to the Gldani Prison’s medical facility against his will.

This proved to be one step too far for the Georgian Dream, which immediately abolished the SIS, breaking up its personnel into two separate agencies despite criticism from the President of Georgia, the opposition and US and EU partners. The US Embassy to Georgia stated that “by aboli­shing the State Inspector’s Service, the ruling party under­mined the government’s accoun­ta­bility,” while the EU Ambassador took an even harsher line, pointing out that the disman­tlement of SIS “put into question the respect for democratic insti­tu­tions and proper democratic oversight mechanisms.”

Georgian Dream appointed two relatively loyal figures to head the newly created agencies. After they and their work cropped up in the EU’s condi­tio­na­lities, Georgian Dream streng­thened their functions. On 30 November 2022, Parliament expanded the inves­ti­gative powers of the Special Inves­ti­gative Service. In parti­cular, the Special Inves­ti­gation Service is now empowered to lead inves­ti­ga­tions launched when the European Court of Human Rights finds a violation enshrined in the European Convention on Human Rights, a task which formerly fell to the Prosecutor’s Office.

Parliament also supported a package of legis­lative amend­ments intended to strengthen the Personal Data Protection Service as an insti­tution. The amend­ments streng­thened social protection guarantees for its employees and imposed a statute of limita­tions for the commission of an adminis­trative offence by an agency employee. Changes were also made to the Parlia­mentary Rules of Procedure – in parti­cular, providing for the heads of the Special Inves­ti­gation Service and of the Personal Data Protection Service to submit infor­mation to Parliament, at Parliament’s request, about legis­lative short­co­mings identified during their work processes, as well as opinions on measures to address these short­co­mings and steps to increase the efficiency of the perfor­mance of their respective service.

2.5 Tackling corruption in real life?

Several journa­listic inves­ti­ga­tions carried out by Georgian media have exposed corruption on the part of Georgian Dream members. Recent reports by TV Pirveli unveiled that Prime Minister Irakli Ghari­bashvili regularly receives hefty monetary gifts from his father. There have also been numerous reports about his family members receiving properties, including from the state. None of these allega­tions have been inves­ti­gated by law enforcement officials. The insti­tution currently in charge of fighting corruption – the State Security Service, completely ignored these reports, as it always does when the opposition media or civil society organiza­tions uncover foul play in connection with the expen­diture of public funds or indica­tions of receiving illegal income by high-ranking officials. In theory, the independent anti-corruption agency should have inves­ti­gated such cases; however, the current NACA does not have inves­ti­gative powers enabling it to react to media reports of this kind, even if they are highly credible.

It is worth noting that the opposition and civil society assigned little priority to this condi­tio­nality. Therefore, Georgian Dream opted to pass the minimum of legis­lative changes and create the NACA with limited functions, hoping that this would be considered suffi­cient for ticking the box as counting towards the progress on the fourth priority. It appears that this strategy has paid off – the condi­tio­nality was assessed as having been partially completed, even though the missing elements – indepen­dence and inves­ti­gative functions – are crucial for fully imple­menting the EU’s fourth priority.

Conclusion

The European Commission and the EU Member States will have to take a decision on whether candidacy status for Georgia in late 2023. According to the latest assessment, Georgia has imple­mented three of the twelve condi­tio­na­lities and has made either limited progress (de-oligar­chization) or some progress (remaining eight) on the others. A great deal of political will and effort on the part of the Georgian Dream will be required to persuade the European Commission that the leadership is taking the de-oligar­chization and anti-corruption condi­tions seriously and that the steps aimed at their imple­men­tation are tangible and result-oriented rather than mere window dressing.

Given that the de-oligar­chization priority remains un-imple­mented and that steps have not been taken to safeguard the indepen­dence of the Anti-corruption Agency and empowered to conduct inves­ti­ga­tions, I believe that the only viable strategy for the European Commission and the Council is as follows:

• Only once all 12 recom­men­da­tions, including the de-oligar­chization and anti-corruption, have been fully imple­mented should the Commission should issue a favourable report on the candidate status, acknow­ledging the strong European identity of the Georgian people;
• The European Commission and Council should continue to insist that the Draft Law on De-oligar­chization in its current form not be enacted and emphasize that tackling de-oligar­chization will require signi­ficant systemic reforms of the judiciary, anti-corruption reforms and power-sharing;
• The European Commission and Council should continue to insist on the creation of a genuinely independent anti-corruption agency that has inves­ti­gative functions and can bring high-level officials and ruling party politi­cians to justice if need be;
• The European Union should consider sanctioning those indivi­duals who act as the tools of oligarchic influence, including the judges that the US State Department sanctioned in April 2023, as well as politi­cians impli­cated in cases of high-level corruption and those who are hindering the actions to combat corruption in Georgia.

Dr. Sergi Kapanadze ist einer der Gründer und Vorstands­mit­glieder von Georgia’s Reforms Associates (GRASS). Er ist außerdem Professor für Friedens­studien, inter­na­tionale Bezie­hungen und europäische Integration an der Ilia State University (Tiflis) und Inhaber des Jean-Monnet-Lehrstuhls an der Caucasus University (Tiflis). Als ehema­liger Vizeprä­sident des georgi­schen Parla­ments war er auch stell­ver­tre­tender Außen­mi­nister Georgiens.