How much does crime pay in Georgia? The Georgian government says that it is using fines collected from those prosecuted for corruption or unpaid taxes to finance President Mikhail Saakashvili▓s ambitious reform drive. The crackdown has won high praise from both the international community and most Georgian voters. But government watchdog groups contend that, in reality, no one knows where the millions in fines - an estimated 45.5 million lari according to the most recent public figures -- have gone nor to what purpose they are being put.
The controversy first kicked off in April 2004 when Gia Jokhtaberidze, the son-in-law of ousted President Eduard Shevardnadze and founder of the cell phone company Magti, paid $15.5 million in damages after being arrested on charges of evading payment of 700,000 lari (about $390,000) in income taxes. After payment was made, Jokhtaberidze was released from pre-trial detention and the charges against him were dropped. Saakashvili stated that the money was needed to pay pensions and salary debts.
Before the 2003 Rose Revolution, Georgians referred to defendants buying their way out of prosecution as simply "ransom" or "extortion." Prosecutors often pocketed the bulk of the cash.
Today, government officials say that fines such as those paid by Jokhtaveridze go to depleted state coffers instead of to personal pockets. But the cash trail is no less difficult to follow.
"No mechanism exists in society to control where the money goes," commented Nana Kakabadze, chairperson of the Former Political Prisoners for Human Rights non-governmental organization, and a frequent government critic.
Nor does the law itself provide an easy answer. When a person is arrested, the prosecutor can request house arrest, bail or a three-month pretrial detention for the defendant, no matter what the crime. The court has 72 hours to decide. But detention can be substituted for lighter measures if the defendant agrees to pay damages defined by the state.
According to Georgia"s Criminal Code: "...while deciding which provisional pretrial measure should be used, the prosecutor and court take into account the gravity of the allegation, the personality of the defendant, his activities, age, health, material and family conditions, the fact of compensation by the accused of damages inflicted to [on] the victim..."
Ana Dolidze, chairperson of the Georgian Young Lawyers Association, argues that the compensation for damages is a loophole prosecutors, acting as representatives of the state, use to acquire payments from defendants in cases where the state is deemed the victim of a crime. If a defendant pays the damages deemed to have been inflicted, this act will be taken into consideration when the prosecutor and judge decide how to proceed with a pre-trial measure.
"Let▓s say a tax inspector has been arrested," Dolidze explained, "and the prosecutor says нyour illegitimate behavior and abuse of power has inflicted 50,000 lari [worth of damage on] the state.▓ Because the tax inspector doesn▓t want to stay in jail for three months, he agrees to voluntarily remedy the damages. In the end, his case is justified [he is proven innocent], but the state is not obliged to return the money as there is no legal provision requiring it to."
Dolidze stressed that this does not mean that defendants can buy their way out of punishment. But discrepancies remain. In Jokhtaberidze▓s case, all tax evasion charges were dropped after he had paid the $15.5 million requested.
Some observers see the damages payments as part and parcel of the larger woes that trouble Georgia▓s judicial system and its provisions for the defense of civil rights. In recent months, a growing debate has targeted the degree of judges▓ independence from government pressure.
The danger with the damages payments, according to Dolidze, is whether or not they violate the presumption of innocence.
George Jokhadze, head of the Analytical Service of the Prosecutor General▓s office, says that the criminal code refers exclusively to preventive measures, be they police supervision, release on bail or pre-trial detention, and has nothing to do with the determination of guilt or innocence. The article was adopted in June 2000 under former President Shevardnadze.
"In the cases we analyze, it is clearly stated in the judge▓s order that the accused was released on bail or into police supervision due to the compensation of damages to the victim, along with other factors," said Jokhadze. "This is definitely not illegal as it is clearly stated by law."
Under the law, it is the prosecutor who determines the damages before petitioning the judge to take the payment into account in determining any so-called preventive measures. The amount can be adjusted by the judge before it is finally levied, according to Jokhadze.
This was the case in 2004 when Merab Adeishvili, the former minister of transportation and communications, Akaki Chkhaidze, the former head of Georgian railways, Shota Meparidze, the former chief of forestry, and Ioseb Natroshvili, deputy director of the Wholesale Electricity Market paid compensation for funds they had allegedly misappropriated and were subsequently released from pre-trial custody.
The aim, then Prosecutor General Irakli Okruashvili said, "was to make them reimburse the funds they stole." The four men▓s cases remained under investigation even once the damages were paid.
Nonetheless, official interpretations of how the practice is put to use appear to differ. In a December 2005 interview with EurasiaNet, for example, Supreme Court Chairman Kote Kublashvili stated that the court had no such authority in cases like Jokhtaberidze"s.
By 2004, the last year for which figures are available, the state budget had reportedly obtained 45.5 million lari (about $25.4 million) from such arrests, according to a state anti-corruption strategy document released that same year. Jokhtaberidze▓s sum alone was more than 75 percent of the reported budget increase. Other former ministers and top government officials paid a reported total 20 million lari (roughly $11 million) in fines.
Money and property also go into state coffers by plea bargaining arrangements, introduced into the criminal code in February 2004. Based on the Western practice of obtaining convictions by bartering with defendants who confess and/or inform on other guilty parties for a reduced sentence, plea bargaining in Georgia has been a useful tool for increasing the state budget.
The Georgian Young Lawyers Association, however, argues that private funds set up by several state agencies, including the ministries of defense and interior, are another destination for such payments.
"Of course it▓s normal to pay the treasury, but some people receive different account numbers to pay to, not necessarily the state▓s," said Dolidze. "A private fund is not state budget money."
The reluctance of the government to divulge financial information about funds such as the Law Enforcement Agency Development Fund and Georgian Army Development Fund has prompted criticism that they are, in fact, a dodge. The funds are set up as non-governmental organizations, which means that they are not subject to the same public disclosure rules that govern the state budget. Both funds are now in the process of liquidation. A court decision is pending on whether or not financial information regarding the funds may be released to the public.
Nonetheless, concerns about their transparency remain, commented Tamar Chugoshvili, a representative of the non-governmental organization Freedom of Information Implementation, Law Reform and Financial Transparency.
"These NGOs as well as the government refused to give any information concerning special funds, so their activities are absolutely not transparent," Chugoshvili claimed. "According to the Georgian legislation (General Administrative Code of Georgia), neither the funds, nor the government has the right to refuse us."