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Georgian Opposition Challenges Divisive New Party-Funding Regulations

There are some who believe that new Georgian party-funding legislation is intended to hamstring the political ambitions of billionaire Bidzina Ivanishvili.
There are some who believe that new Georgian party-funding legislation is intended to hamstring the political ambitions of billionaire Bidzina Ivanishvili.
In the third and final reading on December 28, the Georgian parliament passed controversial amendments to the law on political parties, banning their financing by legal entities, including commercial organizations.

Those changes have been widely construed as intended specifically to preclude the funding of opposition parties by billionaire philanthropist Bidzina Ivanishvili, who announced three months ago his intention of coming to power in the parliamentary elections due in October 2012.

But that apparent attempt to sideline and hamstring the opposition was not the only reason for widespread criticism of the new regulations.

Georgian opposition parties have demanded a formal investigation into the legality of subsequent changes in the final text that raised questions over whether or not key provisions are retroactive.

The opposition has also questioned the rationale for the transfer of responsibility for verifying parties' compliance with the new legislation from the Central Election Commission to a specially created unit of the Audit Chamber.

As summarized by the websites and, the new provisions ban corporate donations, but raise the maximum amount an individual may donate to a political party from 30,000 to 60,000 laris ($18,003-$36,006).

If a group of individual donors share a single source of income, however, (if, for example, they are employed by the same company), their aggregate donation in any given year may not exceed 500,000 laris.

Parties that have received funding exceeding the amount specified by the amendments are required to return that money to the donor within three days of the amendments coming into force.

Otherwise, it will be confiscated and paid into the state budget. Four political parties aligned with Ivanishvili -- the Republican, Conservative, and People's parties, and Our Georgia-Free Democrats -- are known to have accepted a little over 4 million laris over the past two months from 12 different companies, 10 of them associated with Ivanishvili, according to

Moreover, in order to prohibit vote-buying, the amendments make it illegal for political parties or legal entities directly or indirectly connected with them to offer financial or material inducements to prospective voters.

U.S. Concerns

According to, the law as voted on specifies that the amendments are retroactive, meaning that political parties would have to forfeit unspent donations. The website later quoted parliamentarian Koba Khabazi as confirming after the December 28 vote that that provision was added to the text after he raised it during the debate the previous day.

The U.S. Embassy questioned that restriction on December 29, issuing a statement expressing concern "that retroactive application of certain campaign finance provisions would reinforce existing imbalances in political competitiveness."

Legislators from the ruling United National Movement immediately denied that the ban on corporate finding was retroactive.

Parliamentary Committee for Legal Affairs Chairman Pavle Kublashvili said later on December 29 that the law "has no retroactive effect whatsoever; not a single political union will be held responsible for having received donations legally [before the new regulations came into force]."

The version of the law subsequently posted on Sakanonmdeblo Matsne, the state online registry of legal acts, reads "parties that have received funding in violation of the law" (not "of this law") must return it.

Anger And Indignation

Parliamentary Foreign Affairs Committee Chairman Akaki Minashvili went on record on December 30 as denying that the retroactivity clause was rephrased after the law was voted on in response to the implicit U.S. criticism.

Republican Party head Davit Usupashvili called on December 30 for the prosecutor general's office to open a formal investigation into what he termed the illegal "doctoring" of the text of the law after its passage.

The Justice Ministry then published an edict empowering the state registry on legal acts to make any required "editorial changes" to the text of the legislation. But Tatuli Todua of the Association of Young Jurists explained to RFE/RL that the registry is empowered only to correct orthographic and punctuation errors, and that the primary purpose of subjecting draft laws to a third reading is to ensure that the final version does not contain any such errors.

"For Free Elections" chairman Irakli Melashvili told RFE/RL that enacting such sensitive legislation between Christmas and New Year, when many foreign diplomats and representatives of international organizations are on vacation, is standard operating procedure for the Georgian legislature.

Despite their anger and indignation, Ivanishvili's Georgian Dream movement, Our Georgia-Free Democrats leader Irakli Alasania and People's Party leader Koba Davitashvili have all affirmed their readiness to provide the Audit Chamber with the required financial information, according to the Caucasus Press news agency on January 5.

What impact the new restrictions will have is difficult to predict. Even before they were passed, the Council of Europe's Venice Commission expressed its fear that "if there is no adequate level of state subsidies for political parties, the banning of corporate funding coupled with strict disclosure provisions may create difficulties for political parties to fundraise." The Commission therefore recommended "revisit[ing] the broad prohibition of corporate donations to party finances."

About This Blog

This blog presents analyst Liz Fuller's personal take on events in the region, following on from her work in the "RFE/RL Caucasus Report." It also aims, to borrow a metaphor from Tom de Waal, to act as a smoke detector, focusing attention on potential conflict situations and crises throughout the region. The views are the author's own and do not represent those of RFE/RL.


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