But President Mikheil Saakashvili says Okruashvili's arrest shows that no official is immune to the rule of law. Furthermore, he advised cabinet ministers October 4, a newly formed anticorruption commission means there's definitely more to come.
"Don't be offended," he said in the televised remarks. "But the function of this commission will be to check and control each one of you -- as well as your friends, your family members, and so on."
Ever since the 2003 Rose Revolution, Saakashvili has been the toast of the West and a rallying figure for pro-democratic figures in the former Soviet region. But according to political scientist Marina Muskhelishvili, Okruashvili's accusations and the government's failure to investigate them demonstrate that Georgia still suffers from major institutional and structural shortcomings.
"If we were a democracy with a normal political system, this would constitute a severe governmental crisis," Muskhelishvili says. "If there were any structures that functioned outside the control of the political regime -- be it prosecutors, the Constitutional Court, Supreme Court and so on -- an investigation would have been launched, and some results would have emerged."
What makes the situation particularly sticky, Muskhelishvili says, is that the accusations were made by a man who -- by virtue of having served as prosecutor-general, interior minister, and defense minister -- is widely seen as a government insider. Okruashvili may have failed to present evidence to back his claims, she says, but that does not excuse the state from its obligation to investigate them.
Now, the question on the minds of many Georgians is not so much whether Saakashvili is guilty of seeking to eliminate his opponents, or whether he was unnecessarily heavy-handed in throwing Okruashvili in jail. Rather, it is whether this episode will tarnish the country's democratic reputation to the extent that it may compromise efforts to achieve NATO membership and Western integration.
Saakashvili's tenacious standoff with Moscow and his groomed, U.S.-educated English have made him the public face of pro-democracy efforts to many in the West -- especially after political chaos had taken the bloom off the Orange Revolution and Viktor Yushchenko in Ukraine.
Will the Okruashvili scandal strike a blow to Saakashvili's reputation both at home and in the West? Robert Parsons, a South Caucasus affairs analyst and foreign-affairs editor at France-24 TV, says while the controversy is a definite setback, the Georgian president is still likely to spring back with most of his popularity intact.
"Mud is going to stick, there's no doubt about it. Whether justified or not, mud is going to stick," Parsons says. "On balance though, I think things are still pretty much in Saakashvili's, and the Georgian government's, favor. He will be judged over what has been achieved over the past years, and what he's likely to achieve over the coming years, given reasonable stability. Not, I think, by this particular case -- unless it becomes clearer that there really is substance behind Okruashvili's charges."
Many observers say it's significant that Okruashvili made his charges on the same day he announced he was forming a new political opposition group. His immediate arrest, therefore, is seen by many not only as punishment for his claims, but also the best way to silence a potentially popular political threat ahead of presidential and parliamentary votes in 2008.
However, some government officials have said that Okruashvili knew he was the subject of a major corruption investigation, and suggested that he made his sensational accusations as a preemptive publicity move ahead of his impending arrest.
Antigovernment protests that followed Okruashvili's arrest were the largest Tbilisi has seen since the Rose Revolution -- a fact that may be unsettling Saakashvili and his political circle.
Thousands protested Okruashvili's arrest (TV screen shot)
Still, says Ghia Nodia, a leading Georgian political observer, the ultimate loser in this war for power is neither Saakashvili nor Okruashvili, but the "prospect for Georgian democracy."
Saakashvili's government has already come under criticism from the political opposition for tightening control of television broadcasters, consolidating power in a single ruling party, and failing to push through much-needed judicial reforms.
Now, Nodia says the perception that the government is "selectively deploying" corruption charges will also take a heavy toll on its reputation.
"Of course, anyone familiar with the condition of democracy in Georgia will regard this statement with irony," he says. "But the country will remain a beacon, at least in the regional context. Regardless of everything -- in comparison with Russia, for example, or other countries in the region -- Georgian democracy still looks all right."