Post-Election, Questions Linger About Georgia's Campaign Finance Practices

Sizeable gaps in the information submitted by presidential candidates to Georgia's Central Election Commission for the 2008 presidential campaign raise troubling questions about the country's campaign finance practices, according to one international anti-corruption watchdog.

President Mikheil Saakashvili's campaign outspent those of all other contenders, spending more than double the amount reportedly spent by his nearest rival, parliamentarian Levan Gachechiladze.

Based on documents submitted to the Central Election Commission, the Saakashvili campaign spent just under 23 million lari (about $14.6 million); 10 million lari or $6.35 million of that sum was contributed by Saakashvili's party itself, the United National Movement. Some 101 individual contributors gave a total of more than 2.45 million lari (about $1.6 million) and companies and organizations handed over 20.5 million lari or roughly $13 million.

Among the notable contributors was State Chancellery administration head Kakha Bendukidze, who donated 30,000 lari (over $19,000), the legal limit for personal contributions, to the campaign.

By comparison, the late billionaire Badri Patarkatsishvili, whose financial muscle had been cause for much speculation during the campaign, spent a mere 400,000 lari (about $254,251) on the campaign, according to the CEC documents. The sum was drawn from his own funds. The bulk went on advertising: 53, 578 lari or just over $34,000. The CEC documents do not, however, provide a detailed breakdown of what is meant by "advertising."

Second-place candidate Levan Gachechiladze, a onetime wine producer, also finished second in terms of campaign spending. The Gachechiladze campaign spent 6,860,379 lari in total or just under $4.36 million. Twenty-eight individuals contributed over 630,000 lari (about $400,629) to the campaign. Despite frequent complaints by the campaign that Georgian businesses shy away from donations to opposition candidates, the campaign managed to secure nearly 6.3 million lari, or just under $3.96 million, from some 12 companies and organizations.

Prominent Gachechiladze supporters Tina Khidasheli, Goga Khaindrava, a former state minister for conflict resolution, and former Rustavi-2 television anchor Natia Lazashvili were among those who contributed the legal maximum of 30,000 laris to the campaign.

A precipitous drop in spending follows for the remaining four candidates. New Rights Party leader Davit Gamkrelidze, who has since sided with Gachechiladze in protests against Saakashvili's rule, dished out roughly 149,900 lari or just over $95,200, most of it donated by 20 individual contributors.

Labor Party leader Shalva Natelashvili, who won 6.49 percent of the vote, spent a mere 35,454 lari or roughly $22, 532, most of it taken from party funds. Gia Maisashvili, who won less than 1 percent of the vote, shelled out $2,061 on his campaign, while last-place finisher Irina Sarishvili, head of the Imedi (Hope) movement, spent just $221.

But one critical piece of information for monitoring campaign finance practices is missing, argues anticorruption watchdog Transparency International Georgia, which tracked election spending.

"Due to defects in the election legislation, it's not possible to say whether or not the financial data shown in the campaign balance sheets are transparent," commented Nino Khatiskatsi, director of parliamentary programs at Transparency International.

Khatiskatsi believes that individual donors who give at least 30,000 lari (over $19,000) to campaigns should be required to submit income declarations and proof that they pay property tax. Georgians with incomes of at least 40,000 lari are required to pay a property tax (separately from an income tax).

"Most probably people who contribute 30,000 lari should have incomes of 40,000 lari per year. People with annual incomes 40,000 lari and above are required to pay income tax. It would be better to know that such contributors really are able to contribute such large sums and that they pay taxes," Khatiskasti said.

The addresses of companies and organizations should also be provided along with their registration numbers to dispel suspicions that they mushroomed overnight, she added.

One of the most peculiar discrepancies, Khatiskatsi continued, is the donation of some 8 million lari (over $5.08 million) to the Saakashvili campaign after the election was over; between January 9 and 11. The donations account for over half of the contributions by companies and organizations and roughly a third of those by individual contributors, she said.

The United National Movement did not respond to repeated requests by EurasiaNet for clarification of the reasons behind this practice, and hung up the phone on a follow-up inquiry. National Movement parliamentarians also could not be reached.

By law, though, donations can continue to be made into a campaign fund until the fund is closed. Funds must be shut down within 20 days of the announcement of election results. Georgia's final 2008 election results were approved on January 13.

"The law neither restricts fundraising activity in the interval between the submission of the fund's finance documents to the CEC and the date of the fund closing nor envisages any supervision over the sums raised after the financial reports are already submitted," elaborated Nino Gobronidze, an expert at the Georgian Young Lawyers' Association. Gobronidze adds that her organization appealed to the CEC after the 2006 local elections to amend the requirements, "but the issue is still under consideration at the CEC and in parliament."

Advertising makes up the majority of all candidate expenditures. The Saakashvili campaign reported that it spent 12,469, 530 lari (over $7.924 million) on television advertising, 2,322,552 lari ($1.476 million) on print ads and billboards and 183,299 lari ($116, 491) on such items as posters and flyers.

Media monitoring done by market research group GORBI estimated Saakashvili campaign had spent up to 15 million lari (over $9.5 million) on TV spots alone.

Other information gaps also exist. Campaign finance legislation does not require political parties to submit information about the sums they themselves contributed to their sponsored presidential candidate. Short of a disclosure by the party itself, that makes it impossible to find out who contributed what to political parties during a presidential campaign, and what potential connection, if any, there may be between the donors and the candidate.

A CEC campaign finance monitoring group made up of five independent experts (a legal expert, two academics, an auditor and a non-governmental organization representative) does not need to express an opinion about the campaigns' documentation until March 1, under CEC regulations. The group was set up as soon as the winning candidate – in this case, Saakashvili – submitted his campaign finance report to the CEC, eight days after the final election results were announced. Other candidates have a month after results are announced to turn in their finance report.

Giorgi Chkheidze, a member of the council and head of the Georgian Young Lawyers' Association, declined to comment on the deliberations.

"The comparison of figures requires a very diligent perusal and it really takes a lot of time to guarantee accuracy," Chkheidze said. "Neither can I comment on other candidates' funds. I bear the responsibility if I confuse the figures."

The CEC has also declined all commentary until the March 1 deadline.