GEO

Political Party Finances in Georgia: 2017 Local Elections

20 October, 2017

Transparency International Georgia prepared an interim report concerning the political party finances in the 2017 local elections. According to this research, from June 1 to October 1, Georgian Dream – the ruling party - received 93% of all donations. In total, the ruling party received 10,319,998 GEL, which is 12 times more than the total amount received by the other 14 qualified electoral subjects.
In addition to finding that the ruling party received significantly more money, the research also examined the origins of donations and potential risks of political corruption.

The main findings of research conducted from June 1 to October 1 are as follows:

  • All qualified electoral subjects and the independent Tbilisi Mayoral candidate Aleksandre Elisashvili, received 10,319,998 GEL in total donations. From this amount, 8,274,776 GEL (80%) were donated by individuals, and 2,044,143 GEL were donated by 32 legal entities.

  • The largest part of this sum, 9,553,178 GEL (93%), was donated to the ruling political party, Georgian Dream. Other parties received the following donations: European Georgia - Movement for Liberty - 609,969 GEL; United National Movement - 48,261 GEL; Alliance of Patriots – 28,187 GEL; and Aleksandre Elisashvili - 20,241 GEL.

  • The donation received by the Georgian Dream is 16 times greater than that received by European Georgia, the party that received the second largest amount in donations. In addition, the donations received by the Georgian Dream is 12 times more than total donations of all qualified electoral subjects.
    Of the 32 legal entities mentioned above, 31 companies donated to Georgian Dream and only one legal entity donated 90 GEL in favor of Alliance of Patriots.

  • 7 companies were the biggest donors - each of them donated a maximum amount of 120,000 GEL in favor of Georgian Dream. These companies are: LTD “GMP’’, LTD “Kakhetian Traditional Winemaking’’, LTD “LION,’’ “Tegeta Motors,’’ “DETI,’’ “Partner,’’ “MEEKI.’’ It is notable that the first three companies donated the same amount in the year 2016 to Georgian Dream. It is also interesting that the company "Transproject", which donated 50,000 GEL in favor of Georgian Dream during the reporting period, donated 100,000 GEL to the United National Movement in 2011.

  • In 2017, 15 of the Georgian Dream's 31 donors received simplified public procurement contracts with a total value of approximately 2,145,022 GEL. The same companies donated 1,021,793 GEL to the ruling party during the reporting period. In this regard, the cases of ‘’Tegeta Motors’’ and ‘’Tsekuri’’ are the most interesting. In the reporting period "Tegeta Motors" as a legal entity donated 120 000 GEL to the ruling party. The shareholder of this company Zaur Tskhadadze donated an additional 60 000 GEL. In exchange, this year this company signed 1,539 simplified public procurement contracts with the total value of 1,500,000. As for the company "Tsekuri", it donated 40 000 GEL to Georgian Dream and received one simplified public procurement contract worth 400,000 GEL.

  • As for individual donors, 289 people out of 643 donors were related to 818 legal entities with different statuses.  70 out of these 818 legal entities had received at least one simplified public procurement contract in 2017;
    Out of these 70 companies, 49 of them were related to Georgian Dream’s 55 individual donors who donated 1,661,470 GEL to the ruling party in the reporting period. Their companies received simplified public procurement contracts of approximately 2,400,000 GEL.

  • In order to check the donations, the State Audit office of Georgia in the reporting period sent a request to study the incomes of 544 individual  donors. Out of the 544 individuals, 31 were asked to come at interview. 13 of them are donors of European Georgia and 18 of Georgian Dream. None of the donors were fined.

  • The State Audit Office did not manage to publish data related to party funding fully. The data regarding the donations made in favor of independent candidates and several parties can’t be found on the State Audit Office’s website. Hopefully, the Office will take appropriate measures to correct this omission.