Input Paper on Anti-Cor­rup­tion Envi­ron­ment in Georgia

Foto: Shut­ter­stock, artteam

Im Rahmen unseres Pro­jek­tes „Öst­li­che Part­ner­schaft Plus“ ver­öf­fent­li­chen wir eine erste Reihe von Input Papers zum Thema Kor­rup­ti­ons­be­kämp­fung in der Ukraine, Geor­gien und Moldau. Die Autoren aus der Region (Kate­ryna Ryzhenko, Ion Guzun, Sandro Kevk­hish­vili) ana­ly­sie­ren die Rolle der Euro­päi­schen Union bei der Unter­stüt­zung der Kor­rup­ti­ons­be­kämp­fung und for­mu­lie­ren Ihre Hand­lungs­emp­feh­lun­gen an die Ent­schei­dungs­trä­ger in Berlin und Brüssel. 

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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