Georgia: Criminal Charges against Tbilisi Mayor Spark Conflict (Eurasianet.org; 23 FEB 2013)

Tbilisi’s first popularly elected mayor, Gigi Ugulava, one of Georgia’s most powerful politicians, has been charged with embezzlement-misappropriation of budget funds and money laundering.

While the 37-year-old mayor, one of Georgian President Mikheil Saakashvili’s closest allies, has denied any wrongdoing, the February 23 indictment is another political blow to the president, and puts another yawning crack into efforts by the country’s divided national government to coexist peacefully.

The Georgian Ministry of Finance’s Investigative Service alleges that Ugulava was involved in a convoluted real estate transaction that cost “the budget” 10 million lari (approximately $6 million) in a bid to place a private national broadcaster, Imedi, which had been critical of Saakashvili, under de-facto government control. Though they have not detailed their reasoning, investigators have termed the alleged misuse of funds “money laundering.”

The case centers around the city’s sale and subsequent repurchase of a four-hectare plot of land in a popular Tbilisi neighborhood, Rike, that was aggressively promoted for development during Saakashvili's United National Movement's years in power.

The finance ministry maintains that Ugulava helped orchestrate the city’s sale of the land for 7 million lari ($4.24 million), but then had it repurchase the land, two years later, for 17 million lari ($10.3 million) to provide compensation for the alleged Imedi takeover to Georgian-American businessman Joseph Kay, who was then overseeing the station’s operations. Allegedly, 10 million lari from the sale was sent to an offshore account owned by Kay.

Another charge of embezzlement-misappropriation of budget funds stems from a student work program initiated by the Tbilisi city government that investigators maintain was used to pay 4.1 million lari ($2.48 million) to youth activists for Saakashvili’s United National Movement party.

Ugulava has denied the charges categorically, maintaining that the investigation is an attempt by Prime Minister Bidzina Ivanishvili’s Georgian Dream to usurp control of Tbilisi’s city government, and to lay the groundwork for dictatorship.

“I’m ready to prove my innocence,” he told media and supporters on February 23, asserting the day before that if the “freedom of my country” means going to jail, he is ready to go.

Over the past five months, one former cabinet minister has been jailed, another charged in-absentia, and scores of lower-ranking former officials have been investigated and/or arrested.

At the same time, while UNM politicians remain a majority in the Tbilisi city government, a growing number have left the party over the past several weeks. The party has also lost power in regional governments since last October’s parliamentary election.

The combined effect has sparked growing allegations that the Georgian Dream is more interested in introducing “political terror” than in working with an opposition or achieving justice.

In a February 22 television interview, President Saakashvili picked up that theme, claiming that the charges against Ugulava are linked to the fact that Prime Minister Ivanishvili, when a private investor, had been “interested” in the Tbilisi property in question, which was eventually sold to another investor, and that a “disagreement” with the billionaire had occurred.

For now, however, Uglava’s path does not lead directly to jail: General Prosecutor Archil Kbilashvili told journalists that there is no indication that Ugulava will be arrested at this point. He did note, however, that Saakashvili could be called in for questioning.

In what has been seen as a counter-move against more serious steps deemed likely to come (in particular, the mayor’s resignation from his post pending trial), former Prime Minister Vano Merabishvili, the secretary-general of the UNM, has been named as one of Ugulava’s deputy mayors.

Senior members of the Georgian Dream coalition though, have asserted that no political persecution is taking place, and that the investigation into Ugulava was carried out “normally.”

The fact that no concrete evidence against Ugulava yet has been released to the public has not, however, hindered the new government and other political parties from assuming the mayor’s guilt – a practice common in Georgia during the UNM’s years in power as well.

The prime minister weighed in on the case on February 22, telling journalists, without citing grounds, that Ugulava “spent the people’s money.”

http://www.eurasianet.org/node/66595?