GEO

Asset declarations of public officials still contain inaccuracies

20 September, 2016

TI Georgia continues to monitor the asset declarations of public officials. Publication of asset declarations is an important anti-corruption tool which serves two major goals: identification of cases of unlawful enrichment of officials and prevention of conflict of interest.

According to the Law on Conflict of Interest and Corruption, officials are obliged to annually fill in and submit asset declarations while they are in office. The declarations will contain information on the incomes, property, and participation in entrepreneurial activity of officials and their family members, as well as on other issues.

At the same time, according to the Law on Public Service, a public employee may not be a full-time manager or a member of a controlling, monitoring or audit body of a business entity. In accordance with the same law, officials may not participate in any entrepreneurial activity, and they may only hold shares or stakes in an enterprise.

Officials don’t always fulfill these statutory obligations thoroughly. Representatives of various branches of government often enter incomplete or inaccurate information in asset declarations and fail to publicize their business interests and participation in entrepreneurial activity, which is related to risks of corruption. At the same time, there is no mechanism for verifying asset declarations, which contributes to the retention of this harmful practice.

An analysis of a part of the asset declarations of 2015-16 has shown that such violations still occur at the levels of both central and local government.

The executive government     

Tariel Khechikashvili, Minister of Sport and Youth Affairs

Tariel Khechikashvili, Minister of Sport and Youth Affairs, holds the position of director in Kres GmbH Auto House LLC, which was registered on March 28, 2006, to this day. The company’s main activity is trade in car parts and vehicles. Besides the fact that the minister still retains the director’s position in the company, his 2015 asset declaration also fails to indicate Kres GmbH Auto House LLC.

Aleksandre Burchuladze, Deputy Minister of Justice

The 2015 asset declaration of Aleksandre Burchuladze, Deputy Minister of Justice, fails to indicate that his wife, Maia Shishniashvili, holds a 16% stake in Pharmakon LLC.

Khatuna Totladze, Deputy Minister of Foreign Affairs

The husband of Khatuna Totladze, Deputy Minister of Foreign Affairs, Avtandil Tskvitinidze, is actively engaged in entrepreneurial activity. Out of the enterprises registered in Mr. Tskvitinidze’s name in the Registry of Entrepreneurs and Non-entrepreneurial Legal Persons, Khatuna Totladze’s asset declaration only includes Avtandil Tskvitinidze LLC. However, Avtandili LLC and G-Mania LLC, whose 100% stakes are also owned by Avtandil Tskvitinidze, have not been declared.  

Ketevan Bakaradze, Minister of Health and Social Affairs of the Autonomous Republic of Abkhazia

According to the 2016 asset declaration of Ketevan Bakaradze, the minister’s husband, Akaki Chargeishvili, is a partner of Akaki Chargeishvili Law Inn LLC and the director of Chargeishvili Law Inn LLC. And according to the Registry of Entrepreneurs and Non-entrepreneurial Legal Persons, Mrs. Bakaradze’s husband also holds a 100% stake in Chargeishvili Law Inn LLC in addition to being its director. He also owns All Pay LLC (100% stake, director), Chargeishvili and Company LLC (50% stake, director), Whitemed LLC (15% stake, director), and GBS LLC (shareholder), though Ketevan Bakaradze has not indicated this information in her asset declaration.

Kakhaber Rusia, Deputy Trustee/Governor of the Samegrelo-Upper Svaneti Region

According to the 2016 asset declaration of Kakhaber Rusia, his wife, Lela Arziani, is the director of Nia LLC, while his son, Romani Rusia, holds the position of director of Ea LLC. However, according to the Registry of Entrepreneurs and Non-entrepreneurial Legal Persons, the Deputy Trustee/Governor has not fully declared his and his family members’ assets. The registry data reveal that Lela Arziani is not only the director but also the owner of a 100% stake of Nia LLC. She also owns a 4% stake in Avtosadguri LLC and, in parallel, holds the position of director in Rumo LLC. It is noteworthy that a 50% stake in Rumo LLC is owned by Kakhaber Rusia himself, though his asset declaration says nothing about it. Kakhaber Rusia has also failed to declare that he and his son, Romani Rusia, also own 37% and 7% stakes in Munozoji LLC, respectively, and that Rusi LLC is completely owned by Kakhaber Rusia.

Members of Parliament             

Paata Kiknavelidze, MP  

The asset declaration of Paata Kiknavelidze contains data on the property owned by him and his brother. The MP has fully declared his personal property (registered cooperative Rkoni Wood Enterprise – shareholder; Madli LLC - partner), as confirmed by the Public Registry data, but the information on the property of his brother, Andro Kiknavelidze, contains inaccuracies. According to the Public Registry data, the MP’s brother owns a 40% stake in Lagi LLC and, in parallel, holds the director’s position in the same company.    

Tamaz Kacheishvili, MP     

The 2015 asset declaration of MP Tamaz Kacheishvili indicates that the MP is a shareholder of Samegobro LLC and Nugo LLC, while his daughter, Irina Kacheishvili, is a partner of Khariskhi LLC and Kazbegi-Natalishi LLC. However, according to the Public Registry data, Tamaz Kacheishvili owns a 25% stake in Khariskhi LLC and a 19% stake in Kazbegi-Natalishi, which is not indicated in the asset declaration. The asset declaration also says nothing about Irina Kacheishvili’s links to Amarta Media Group LLC, in which she owns a 100% stake.    

Local government bodies

Nabi Abdulaev, Chairperson of the Marneuli Municipal Council

The 2015 asset declaration of Nabi Abdulaev, Chairperson of the Marneuli Municipal Council, only indicates that in 1999-2014 he was registered as a sole entrepreneur. But according to the Registry of Entrepreneurs and Non-entrepreneurial Legal Persons, the Chairperson of the Marneuli Municipal Council owns a 100% stake in Ans Company LLC and also holds the director’s position in the same company. In addition, Mr. Abdulaev has failed to indicate in his declaration that he owns a 50% stake in N.P.B. Group LLC and holds the director’s position in this company. He also owns 5% stakes in L.P.D.E. Co. LLC and LPGE Georgia LLC, a 10% stake in B.H.E. Co. LLC, and a 50% stake in Trans World Group LLC.

Beka Kancheli, Deputy Chairperson of the Kutaisi City Council

Beka Kancheli indicated only one company, Audit Company GBR LLC, in his 2015 asset declaration, though, according to the Public Registry data, Mr. Kancheli also owns a 30% stake in GRB LLC, which was not mentioned in his asset declaration.

Varlam Sharashenidze, Deputy Head of the Vani Municipal Administration

The latest asset declaration of Varlam Sharashenidze is dated 2015. The declaration only indicates one company – Book-Keeper – in the entrepreneurial activity column. But according to the Registry of Entrepreneurs and Non-entrepreneurial Legal Persons, in addition to the aforementioned company, the Deputy Head of the Municipal Administration is also a co-owner of Sakmiani Sasakhle LLC in which he owns a 50% stake.

Davit Lomidze, Chairperson of the Akhaltsikhe Municipal Council

The 2015 asset declaration of Davit Lomidze indicates that the Chairperson of the Municipal Council was registered as a sole entrepreneur in 2004-2015, and his wife, Rusudan Bendeliani, was also a sole entrepreneur in 2011-2015. The declaration also says that Davit Lomidze’s son, Mindia Lomidze, is the director and owner of a 100% stake of Dami LLC. However, according to the Public Registry data, Davit Lomidze’s declaration is not complete, because it does not indicate a 25% stake in Magitom LLC, which is also registered in Mindia Lomidze’s name in addition to Dami LLC.              

Mevlud Beruashvili, Deputy Head of the Eredvi Municipal Administration

Mevlud Beruashvili has indicated in his 2016 asset declaration that he holds the position of director in Eredvi LLC and Liakhvi 2 LLC. However, the data of the Registry of Entrepreneurs and Non-entrepreneurial Legal Persons reveal that Mr. Beruashvili also owns stakes in the said limited liability companies, including a 33% stake in Liakhvi 2, which is not mentioned in his declaration.          

Aleksandre Mitaishvili, Deputy Mayor of Batumi

Aleksandre Mitaishvili’s latest asset declaration is dated 2015. The declaration lists enterprises under the ownership of his father, Gabriel Mitiashvili, although, according to the Public Registry data, Pegasi-94 LLC and Altei LLC, in which Gabriel Mitaishvili owns a 50% stake, are missing in the list.

Zurab Jirkvelishvili, Mayor of Gori     

The 2015 asset declaration of Zurab Jirkvelishvili reflects the entrepreneurial activity of the Mayor of Gori in the past years, though it says nothing about Universali-2006 LLC in which, according to the Registry of Entrepreneurs and Non-entrepreneurial Legal Persons, Mr. Jirkvelishvili has owned a 25% stake since 2006.  

Ilia Zakariadze, Deputy Chairperson of the Kaspi Municipal Council

The 2015 asset declaration of Ilia Zakariadze does not fully indicate the entrepreneurial activity of his wife, Marina Petriashvili, who owns a 5% stake in Daily LLC and a 50% stake in Lino Kavkasia LLC.

As incomplete and inaccurate entry of data in asset declarations is connected with risks of corruption, TI Georgia calls upon officials to pay more attention to the accuracy of data when filling in asset declarations. We would also like to note that a new law on public service is supposed to take effect from January 1, 2017. According to this law, the Civil Service Bureau will be obliged to exercise monitoring of incomplete asset declarations of officials.

Author: TI Georgia
declarations