Input Paper on Anti-Cor­rup­tion Envi­ron­ment in Georgia

Foto: Shut­ter­stock, artteam

As part of our project “Eastern Part­ner­ship Plus”, we are pub­lish­ing a first series of input papers on the topic of anti-cor­rup­tion reforms in Ukraine, Georgia and Moldova. The authors from the region (Kateryna Ryzhenko, Ion Guzun, Sandro Kevkhishvili) analyse the role of the Euro­pean Union in sup­port­ing the fight against cor­rup­tion and for­mu­late their polit­i­cal rec­om­men­da­tions for deci­sion-makers in Berlin and Brussels.

By Alexan­der Kevkhishvili

Input Paper on Anti-Cor­rup­tion Envi­ron­ment in Georgia

Trans­parency Inter­na­tional Georgia (TI Georgia)

(3 May 2021)

The current sit­u­a­tion vis-à-vis cor­rup­tion in Georgia is char­ac­ter­ized by impres­sively low levels of petty cor­rup­tion com­bined with near total impunity for high-level corruption.

After the Rose Rev­o­lu­tion in 2003, Georgia under­went a series of sweep­ing reforms that suc­cess­fully curbed petty cor­rup­tion in the pre­vi­ously graft-plagued public admin­is­tra­tion. They included a total over­haul of the tax system and the police force, cre­ation of a one-stop-shop approach to the pro­vi­sion of gov­ern­ment ser­vices, and the com­plete dig­i­tal­iza­tion and opening up of public procurement.

These reforms were hailed indi­vid­u­ally as mile­stones world­wide. More impor­tantly, they suc­ceeded: process dig­i­tal­iza­tion, automa­tion and cen­tral­iza­tion dra­mat­i­cally reduced oppor­tu­ni­ties for bribe-taking, bring­ing petty cor­rup­tion down to a minimum. This achieve­ment has been main­tained to this day –  in annual surveys com­mis­sioned by TI Georgia over the past several years, the per­cent­age of respon­dents report­ing that they or a family member had been asked to pay a bribe for a public service has never exceeded 1%.[1]

However, the last 18 years have not seen sim­i­larly ambi­tious reforms tar­get­ing high-level (so called ‘elite’) cor­rup­tion. As a result, both of the two admin­is­tra­tions that have gov­erned in this period have faced serious accu­sa­tions of cre­at­ing an envi­ron­ment of impunity for high-level corruption.

Of par­tic­u­lar concern is that Georgia has seen a marked dete­ri­o­ra­tion of its anti-cor­rup­tion envi­ron­ment over the past several years, com­bined with a near total halt to efforts to carry out anti-cor­rup­tion reforms.[2] This is evi­denced by the following:

  • There has been no sig­nif­i­cant improve­ment in Georgia’s score in the Cor­rup­tion Per­cep­tions Index since 2012. In its 2020 assess­ment,[3] Trans­parency Inter­na­tional high­lighted “state capture and undue influ­ence over key insti­tu­tions as the main chal­lenges to polit­i­cal integrity in Georgia”.
  • Georgia has made little progress in imple­ment­ing inter­na­tional anti-cor­rup­tion rec­om­men­da­tions and com­mit­ments over the past four years. The national action plans devel­oped by the Geor­gian gov­ern­ment to imple­ment the anti-cor­rup­tion part of the Asso­ci­a­tion Agenda have focused largely on orga­niz­ing various types of train­ing ses­sions, while failing to imple­ment impor­tant aims, such as effec­tive inves­ti­ga­tion of cases of high-level cor­rup­tion and adop­tion of a law on freedom of infor­ma­tion.[4] In its latest report (2019),[5] OECD ACN judged that Georgia had made no progress in imple­ment­ing the major­ity of the 81 rec­om­men­da­tions. Con­sid­er­able short­com­ings remain in terms of ful­fil­ment of GRECO rec­om­men­da­tions as well.
  • The National Anti-Cor­rup­tion Strat­egy repeat­edly fails to address the key chal­lenge of high-level cor­rup­tion, despite being reg­u­larly updated.
  • Key anti-cor­rup­tion mech­a­nisms have yet to be imple­mented in prac­tice: (1) Whistle-blower pro­tec­tions exist only on paper; law enforce­ment agen­cies are effec­tively exempt from the rel­e­vant law.[6] (2) There are no effec­tive mech­a­nisms to enforce con­flict-of-inter­est and revolv­ing-door pro­vi­sions.[7]
  • Public per­cep­tions of the preva­lence of and response to high-level cor­rup­tion are very dif­fer­ent from those relat­ing to petty cor­rup­tion: 63% of survey respon­dents believe that abuse of power by public offi­cials is common or very common, and 47% are of the opinion that cor­rup­tion cases involv­ing high-ranking offi­cials or ruling party asso­ciates are not inves­ti­gated prop­erly (29% believe that they are).[8]
  • Recent years have seen increas­ing numbers of cases in which alle­ga­tions of high-level cor­rup­tion have failed to elicit any response from inves­tiga­tive bodies. As of March 2021, TI Georgia listed 50 un-inves­ti­gated high-profile cases of cor­rup­tion involv­ing high-ranking public offi­cials or persons asso­ci­ated with the party in power.[9]
  • The only sig­nif­i­cant new element to be intro­duced into the country’s anti-cor­rup­tion leg­is­la­tion since 2016 is the Law on Facil­i­tat­ing the Pre­ven­tion of Money Laun­der­ing and the Financ­ing of Ter­ror­ism (2019). Although a mech­a­nism to monitor asset dec­la­ra­tions by public offi­cials went into oper­a­tion in 2017, the process does not include any steps aimed at iden­ti­fy­ing con­flicts of inter­est or illicit enrich­ment.[10]

The basic expla­na­tion for this slow­down in anti-cor­rup­tion reforms and the unwill­ing­ness to address high-level cor­rup­tion lies in the polit­i­cal system in Georgia, which has allowed each sub­se­quent gov­ern­ment to con­cen­trate all polit­i­cal power in its own hands. However, this state of affairs is cur­rently ren­dered even more alarm­ing by clear indi­ca­tions for the exis­tence of infor­mal power struc­tures cen­tring around the founder of the current ruling party, bil­lion­aire Bidzina Ivan­ishvili, that operate in par­al­lel to demo­c­ra­tic insti­tu­tions. After analysing all avail­able evi­dence for an influ­ence by infor­mal power struc­tures on formal struc­tures, TI Georgia has con­cluded that Georgia is expe­ri­enc­ing state capture, which is the ulti­mate form of cor­rup­tion for a demo­c­ra­tic context.[11]

Bidzina Ivan­ishvili is the founder of the current ruling party. The richest man in Georgia, he has an esti­mated worth of USD 5.5 billion,[12] or about 30% of Georgia’s GDP,[13] though he prefers to use proxies and off­shore com­pa­nies to keep this wealth out of the public eye.[14] While Ivanishvili’s 2012–2013 term as prime min­is­ter was the only time he has ever held public office, no one, includ­ing the ruling party offi­cials, has ever made any secret of the fact that he has con­tin­ued to play an active role in making major deci­sions, such as dis­missal and appoint­ment of prime min­is­ters, since his res­ig­na­tion. In fact, the highest posi­tions in key bodies of the exec­u­tive branch in Georgia are filled by persons who are loyal to Ivan­ishvili or have worked for him in the past.[15]

The two main agen­cies respon­si­ble for address­ing cor­rup­tion in Georgia can serve as exam­ples here. The current head of the State Secu­rity Service has held top jobs in a number of Ivanishvili’s com­pa­nies in the past; his pre­de­ces­sor had been Bidzina Ivanishvili’s per­sonal chief of secu­rity. The current Pros­e­cu­tor General also has ties to Ivan­ishvili, and his pre­de­ces­sor had pre­vi­ously acted as Ivanishvili’s per­sonal attor­ney. Under such cir­cum­stances, it is impos­si­ble for exist­ing anti-cor­rup­tion agen­cies to combat high-level cor­rup­tion free of polit­i­cal and undue influence.

While they realise that no single reform can address the sheer scale of the problem described above, TI Georgia and its partner orga­ni­za­tions in Georgia believe that the reform with the largest poten­tial to bring at least some results in com­bat­ing cor­rup­tion is the cre­ation of an inde­pen­dent, multi-func­tion anti-cor­rup­tion agency tasked specif­i­cally with address­ing high-level cor­rup­tion. A leg­isla­tive ini­tia­tive to estab­lish such an agency, pre­pared by TI Georgia, was intro­duced in Par­lia­ment in 2020.[16] However, the con­vo­ca­tion of the Par­lia­ment elected in the autumn of that same year refused to carry the pro­posal over for further consideration.

Rec­om­men­da­tions to the Euro­pean Union

The EU con­tin­ues to be the grav­i­ta­tional centre for Geor­gian pol­i­tics and society. Public opinion polls con­sis­tently show that the major­ity of the Geor­gian pop­u­la­tion remains in favour of closer ties with the EU. In its engage­ment with Georgia there­fore, the EU should con­sider intro­duc­ing con­di­tion­al­ity on key anti-cor­rup­tion reforms, such as the estab­lish­ment of an inde­pen­dent anti-cor­rup­tion agency and cre­ation of a ben­e­fi­cial own­er­ship reg­istry, both of which are nec­es­sary pre­con­di­tions for any future efforts to combat high-level cor­rup­tion and state capture. The EU’s recent efforts proved deci­sive in helping to bring Georgia out of six months of polit­i­cal impasse, sug­gest­ing that more direct engage­ment com­bined with stricter mech­a­nisms, such as con­di­tion­al­ity, would have a good chance of success without many drawbacks.

In addi­tion to con­di­tion­al­ity, without which painful anti-cor­rup­tion reforms are highly unlikely, the EU should con­sider employ­ing the model of engage­ment that it used during the visa lib­er­al­iza­tion process to help improve the anti-cor­rup­tion envi­ron­ment in general. The success of the visa-regime lib­er­al­iza­tion process proved that, given the prospect of a con­crete benefit and a clear roadmap to attain­ing it, Georgia’s polit­i­cal elite is capable of ful­fill­ing all require­ments stip­u­lated by the EU. Employ­ing a similar approach in the area of anti-cor­rup­tion, i.e. devel­op­ing more spe­cific bench­marks and dead­lines, as well as follow-up mech­a­nisms to keep track of imple­men­ta­tion, should guar­an­tee long-term success. Basing these bench­marks on the new best-prac­tice-based method­ol­ogy devel­oped by OECD ACN should be considered.

[1] Trans­parency Inter­na­tional Georgia, Cor­rup­tion and Anti-Cor­rup­tion Policy in Georgia: 2016–2020, 21 October 2020, https://bit.ly/2QBINS4

[2] Ibid.

[3] Trans­parency Inter­na­tional, Georgia’s Anti-cor­rup­tion Reforms Stall Amid Polit­i­cal Crisis and Alle­ga­tions of State Capture, 28 January 2021, https://bit.ly/3xE3SM0

[4] Trans­parency Inter­na­tional Georgia, Georgia’s Anti-Cor­rup­tion Policy Fails to Fulfill Asso­ci­a­tion Agree­ment and Asso­ci­a­tion Agenda Com­mit­ments, 11 June 2019, https://bit.ly/3vxnvnf

[5] OECD-ACN, Georgia Progress Update, March 2019, https://bit.ly/3aQNoXs

[6] Trans­parency Inter­na­tional Georgia, The Dys­func­tional Whistle­blow­ing Mech­a­nism in the Geor­gian Public Service, 25 June 2020, https://bit.ly/3xwV36Z

[7] Trans­parency Inter­na­tional Georgia, “Revolv­ing door” Problem in Georgia: Short­com­ings of Leg­is­la­tion and Enforce­ment, 15 July 2019, https://bit.ly/3vtO2Ss

[8] Trans­parency Inter­na­tional Georgia, Cor­rup­tion in Georgia: Results of Public Opinion Survey, 10 June 2020, https://bit.ly/3vxogN7

[9] Trans­parency Inter­na­tional Georgia, Unin­ves­ti­gated Cases of Alleged High-Level Cor­rup­tion in Georgia — A Peri­od­i­cally Updated List, 30 March 2021, https://bit.ly/333GeuA

[10] Trans­parency Inter­na­tional Georgia, The Geor­gian Asset Dec­la­ra­tion System is in Need of an Update, 29 Sep­tem­ber 2020, https://bit.ly/332nJ9H

[11] Trans­parency Inter­na­tional Georgia, Is Georgia a Cap­tured State?, 11 Decem­ber 2020, https://bit.ly/3gWYeit

[12] Bloomberg, Bloomberg Bil­lion­aires Index — Bidzina Ivan­ishvili, 9 Decem­ber 2020, https://bit.ly/342wuS1

[13] National Sta­tis­tics Office of Georgia, https://www.geostat.ge/en

[14] Trans­parency Inter­na­tional Georgia, Off­shore Com­pa­nies and Other Busi­ness Con­nec­tions of Bidzina Ivan­ishvili, 2 Novem­ber 2018, https://bit.ly/36YsHXW

[15] Trans­parency Inter­na­tional Georgia, Ivanishvili’s Com­pa­nies – the Forge for Gov­ern­ment Offi­cials, 1 May 2015, http://bit.do/ePTzY and Trans­parency Inter­na­tional Georgia, Ivanishvili’s Com­pa­nies – Public Offi­cials’ Talent Pool Three Years Later, 8 October 2018, http://bit.ly/2sr9Fb7

[16] Trans­parency Inter­na­tional Georgia, A new leg­isla­tive ini­tia­tive, if sup­ported, to greatly improve anti-cor­rup­tion capac­ity of Georgia, 1 Sep­tem­ber 2020, https://bit.ly/3eJukeH


Alexan­der Kevkhishvili joined the Trans­parency Inter­na­tional Georgia team in October 2019 as the senior analyst of the anti-cor­rup­tion team. Since May 2020, he holds the posi­tion of Project Manager of the same team. 

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