GEO

The companies and other organizations related to the Georgian Orthodox Church

05 September, 2014

Georgian Orthodox Church, the largest religious organization in the country, is rated as the country’s most trusted institution with more than 80% of the population describing themselves as Orthodox Christians.

The Georgian Patriarchate is also the richest religious organization in the country, both in terms of land ownership and funding it receives through citizen donations as well as government transfers – in 2013, TI Georgia traced at least GEL 200 million in public funds that had been given to the Patriarchate since 2002. The Patriarchate received GEL 25 million from the central budget in 2013 and the same amount of funds will be allocated to the Church in 2014.

The Church has business interests across the country through 27 limited liability companies that it owns, either partially or fully, that cover a variety of commercial spheres, ranging from mineral water production to education.

Unlike other state budget funded institutions that face certain degree of accountability for their spendings, the Georgian Orthodox Church has never been obliged to report back. In order to shed some light on Patriarchate’s finances, TI Georgia conducted a small scale research into publicly listed companies and organizations that are owned or were founded by the Patriarchate. The research highlights few cases that contain possible breaches of the law.

Companies owned by the Georgian Patriarchate

Akva Geo

Akva Geo produces mineral water brand called Sno, named after the Patriarch Ilia II’s home village. The company was registered in 2009 and currently the Patriarchate owns 20% of its shares (it owned 80% before April 2010), the rest is owned by Vakhtang Lipartiani, who does not seem to have any other business links with the Church.

In February 2014, Vakhtan Lipartiani and his business partner Aleksandre Kharebava donated GEL 37,353 each to Georgian Dream. Kharebava was the director of Patriarchate owned Krtanisi Park before January 2011. 

From the beginning of 2012 Akva Geo has won 26 competitive government tenders (out of more than 45 tenders it bid on) from various government entities, worth total of GEL 502,145. In addition to these tenders, the company has been awarded 166 government contracts without tenders, through the simplified procurement procedure, worth more than GEL 200,000 since February 2012.

Dariali Church’s construction company

LLC Construction Fund of the Dariali Monastery Complex of Holy Archangels was registered in December 2010 with the sole purpose of building a Church in the Dariali Gorge and is wholly owned by the Patriarchate. The company is headed by Kostantine Iakobishvili, better known as Meupe Iakobi (Reverend Jacob), who is a member of the Holy Synod, Bishop of the Bodbe Eparchy, chairman of the Financial-Economic Council at the Patriarchate, and Chorbishop (deputy) of the Patriarch.

The Construction Fund has received four government contracts from the State Construction Company worth a total of GEL 2 million for assisting with building of a Church complex in the Dariali Gorge. Most contracts were signed in the first half of 2011. The largest one of them (GEL 936,000) was awarded to the company through simplified procurement procedures on 15 August 2011.

The Dariali Monastery Fund won one of these tenders (GEL worth 818,000) even though its competitor had offered a bid that was 50,000 GEL lower. The Tender Committee disqualified the low bidder for not presenting all of the required tender documentation, which included a letter from the Patriarchate granting permission to construct a Church. 

Ertsulovneba

The Patriarchate owns its own television company called Ertsulovneba that holds a private specialized broadcasting license, covers Tbilisi and its adjacent territories and produces mainly religious and cultural-educational programs. Registered in December 2008, Ertsulovneba was fully owned by Ilia II until September 2010, when ownership was transferred to the Patriarchate. The company is headed by the Bishop of Chkondidi Eparchy Petre (Paata Tsaava) and since 2010 it occupies two buildings and 4,151 square meters of land on Sandro Euli street in Tbilisi, which were transferred free of charge by the government to the Patriarchate a year earlier. Ertsulovneba is largely unable to support itself and is funded by the state and the Patriarchate. In February 2009 the government decided to fund Ertsulovneba for GEL 300,000.

Ertsulovneba used to broadcast by renting a frequency from the television and radio company Evrika. In June 2010 Evrika briefly suspended Ertsulovneba’s broadcasting due to a debt of about GEL 112,000. The contract with Evrika was not extended after it ended on May 1, 2013, leaving Ertsulovneba without a frequency. As a result, the Patriarch went as far as to ask the Chairman of the Parliament Davit Usupashvili to use the Parliament authority to somehow make possible for the GNCC (Georgian National Communications Commission) to allocate a new frequency for Ertsulovneba, even though no frequencies were available at the time. In January 2014, Stereo + handed over its own license to use radio spectrum to Ertsulovneba for a symbolic price and Ertsulovneba’s signal can be received through antenna.

The Patriarchate also has its own radio channel -- Iveria. According to the GNCC, Iveria broadcasts in Tbilisi and several Georgian cities, however, it is not listed in the registry of broadcasting license holders. Article 75, paragraph 4 of the Law on Broadcasting forbids using radio frequency spectrum without a license.[1] The GNCC is currently working to solve this legal problem.

Hospitals

The Patriarchate owns two hospitals, one in Tbilisi − St. Ioakime and Ana Medical Center (previously known as Nikoloz Barnovi Hospital) and one in Kutaisi − St. David the Builder’s Hospital. Both hospitals were transferred to the Patriarchate as part of a privatization process, the former in December 2007 for a symbolic price of USD 1 and the latter in April 2000 for free. Since 2000 the Patriarchate also owned St. Ioakime and Ana Maternity Hospital, which was merged with the Medical Center in October 2012.

All three hospitals have participated in the Social Service Agency’s Referral Service program, which pays for health care services for socially vulnerable citizens or those injured during natural disasters. The hospitals have been awarded a total of 126 contracts through simplified procurement procedures worth a total of GEL 241,834 since 2011. (The Social Service Agency has awarded more than 12,000 such contracts to hospitals all over the country.) St. Ioakime and Ana Medical Center has also won a competitive tender announced by Healthcare Service of the Ministry of Internal Affairs worth 266,500 GEL in January 2011. The Medical Center and the Maternity Hospital have also won three tenders from the Ministry of Health of Abkhazia worth a total of GEL 93,800 since March 2011.

The Patriarchate owns two other hospitals − Therapeutic Clinic for the Socially Vulnerable and the Development Fund of St. George's Cardiological Hospital that function as regular hospitals but are registered as non-commercial organizations.

Food Business

Organic food production is one other sector the Patriarchate is involved in. The Church has two shops called Monastris Baraka in Tbilisi (one next to Sioni Cathedral and the other on Kazbegi street, also next to a church), which claim to sell organic food produced by monasteries throughout the country and wine from the Khashmi Wine Factory.

In January 2014, the Strategic Research and Development Center took samples of dairy products being sold in the shop, sent them to three separate laboratories and revealed that they were not, in fact, derived from milk. Since this is not illegal under Georgian law, the NGO simply sent a letter to the Patriarchate with a request to control food quality.

Other companies owned by the Patriarchate

The Patriarchate also owns its own Rugby Club (called Bagrati) in Kutaisi, A large park (Krtanisi Park) just south of Tbilisi, Khashmi Wine Factory (since Februrary 1992) in Kakheti, which was declared bankrupt in May 2010, 11 schools (limited liability companies) all over the country and 1 kindergarten in Batumi.

A couple of schools owned by the Patriarchate were changed into companies. In May 2010 Dimitri Shiolashvili, Bishop of the Batumi and Lazeti Eparchy and nephew to the Patriarch Ilia II, exceeded the limits of his power of attorney by changing LLC Kobuleti School of Holy Martyr Catholicos-Patriarch Kirion II into a design and construction company LLC Iberia Burji. In January 2014, another school LLC Chakvi Saint King David’s School was changed into a food producer and distributor company.

Noncommercial Organizations

The Patriarchate is also a founder of at least 84 noncommercial legal entities, including 4 universities, 5 religious seminaries, 25 schools, 8 social institutions, 18 charity and development funds and 16 cultural and spiritual centers. Some of these organizations have commercial activity indicated as supportive activity in their statutes. There also also a number of schools, funds and centers that were founded and are run by senior church representatives and in this way are not directly connected by the Patriarchate.

According to a statement released by the Church in April 2013, there are up to 90 education and social institutions (seminaries, schools and kindergartens) as well as several orphanages under the Patriarchate, with more than 2,000 employees and up to 18,000 children attending them. Many of these schools have been founded by the Patriarchate and are currently managed by bishops and other senior church representatives.

Social Institutions

The Patriarchate owns 7 to 9 orphanages throughout the country that house anywhere between 1,200 to 1,500 children. The exact number of neither is known, since these orphanages remain largely inaccessible to the Ministry of Health, the Public Defender, and organizations working on children’s rights. Children housed in these institutions have been reported to be under high risk of abuse and in many cases do not even have proper identity documentation.

Charity and Development Funds

The Patriarchate has at least 16 funds that it has registered. Ten of these are Eparchy Development Funds that are headed by Bishops of respective eparchies and have charity, education and construction and restoration of churches as main spheres of activity indicated in their statutes. Ten more Eparchy Development Funds can be found in the Public Registry that have been founded not by the Patriarchate but by the respective bishops, but otherwise have analogous goals.

Other Funds include the Patriarch’s International Charity Fund for Developing Spirituality, Culture and Science that mostly funds scientific research; funds for promoting church singing, building churches and taking care of socially vulnerable children. None of the Funds under the Patriarchate are registered as charity organizations. Registering as one gives tax benefits, but requires periodic submission (to the Revenue Service) and publishing of financial statements (Article 32 (10) of the Tax Code).

Centers

A total of 16 centers exist under the Patriarchate. Most of them work on young generations’ spiritual development Christian education. A couple of these centers incorporate schools and kindergartens (Kobuleti Educational Center of the Holy Martyr Catholicos-Patriarch Kirion II). Others are more charity oriented and run a free dining hall, a nursing home (St. John Charity Center), and a kindergarten for children with hearing problems (Center for Rehabilitation and Adaptation of Hearing-Impaired Children). There is also a center fighting against drug use (Center for Anti Drug Use), one for popularizing church singing (International Center of Georgian Church Singing), and one for supporting theological research (International Center of Christian Research).


[1] Article 1441 of the Administrative Code of Georgia sets penalty of GEL 5000 for broadcasting or using radio frequency spectrum without a license. Fine rises to GEL 10,000 on the second violation and to GEL 50,000 on third and further violations. 

Author: TI Georgia