07TBILISI2424, OKRUASHVILI ALLY ARRESTED FOR CORRUPTION

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Reference ID Created Released Classification Origin
07TBILISI2424 2007-09-27 11:39 2011-08-30 01:44 CONFIDENTIAL Embassy Tbilisi

VZCZCXRO9745
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHSI #2424/01 2701139
ZNY CCCCC ZZH
P 271139Z SEP 07
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC PRIORITY 7743
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 TBILISI 002424 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EUR/CARC 
 
E.O. 12958: DECL: 09/24/2017 
TAGS: PREL PGOV PHUM GG
SUBJECT: OKRUASHVILI ALLY ARRESTED FOR CORRUPTION 
 
REF: A. TBILISI 2291 
 
     B. TBILISI 1370 
     C. 06 TBILISI 2938 
 
Classified By: Ambassador John F. Tefft for reasons 1.4 (b) and (d). 
 
1. (C) Summary: On September 11 and 12 four local government 
officials from Gori District were arrested on corruption 
charges.  The same day, the presidentially-appointed Governor 
of the Shida Kartli region, Mikheil Kareli (ref A), led a 
public protest outside the government building, which was 
sealed off by police.  On September 13, Prime Minister 
Noghaideli decried Kareli's actions and announced his 
dismissal by President Saakashvili.  On September 23 Kareli 
was arrested for corruption while trying to board a flight to 
Turkey.  Few in the opposition voiced personal support for 
Kareli, who had a reputation for corruption, but many seized 
on the timing as an indication the government was targeting 
allies of former Defense Minister and likely presidential 
candidate, Irakli Okruashvili.  Saakashvili declared that the 
governments' anti-corruption drive would follow the evidence 
wherever it led.  On September 24 Saakasvhili's own 
representative in Parliament, Dimitry Kitoshvili, was 
arrested for corruption.  End summary. 
 
---------------------------- 
Arrests and Protests in Gori 
---------------------------- 
 
2. (U) On September 11 late at night, Gori Municipality 
Deputy Sakrebulo Chairman Nugzar Papunashvili was arrested. 
On September 12 three more local officials from Gori 
Municipality, including Mayor Vasil Makharashvili, were 
arrested on corruption charges.  Deputy Governor Khvicha 
Okropiridze and Kareli District Gamgebeli Gaioz Dzanadia 
completed the quartet.  Police sealed the Gori government's 
building in order to "protect evidence."  The arrests were 
carried out quite publicly, as in similar such cases. 
 
3. (U) Regional Governor Mikheil Kareli (ref A) led a public 
protest outside the government building on September 12, 
which was sealed off by police.  He was joined by Teo 
Tlashadze, an MP from the ruling United National Movement 
(UNM).  They protested the police's refusal to allow Kareli 
and the Sakrebulo (municipal council) to use the building's 
chambers to hold a hearing regarding the arrests.  Kareli is 
a known supporter of former Defense Minister Irakli 
Okruashvili, who is from the Gori region.  Okruashvili had 
stirred intense interest with his as-yet-unannounced 
presidential campaign (ref B), and following the arrests he 
went public with his opposition to Saakashvili in a harshly 
worded speech September 25 (septel). 
 
4. (U) On September 13, Prime Minister Noghaideli expressed 
anger and disbelief at Kareli's actions, and announced 
Kareli's dismissal by President Saakashvili.  MP Tlashadze 
publicly tore up her UNM membership card and announced she 
was leaving the party to join Okruashvili's party.  Media 
reported that Kareli spent the whole day of September 14 with 
Okruashvili. 
 
------------------- 
Kareli Arrested Too 
------------------- 
 
5. (U) Kareli was arrested for "taking bribes and illegally 
participating in private business activities" on September 23 
while trying to board a flight to Turkey.  He was sentenced 
to 2 months pre-trial detention.  President Saakashvili 
expressed regret at placing "excessive trust" in his former 
regional representative, Kareli.  Saakashvili said that 
Kareli's arrest was "part of the fight against the mafia in 
Gori" and reiterated no one in Georgia is above the law.  He 
said he has full confidence in the prosecutor's office and 
trusts their decisions.  The UNM strongly denied any 
political motives regarding Kareli's arrest. 
 
--------------------------------------------- --------- 
Equal Prosecution?  Parliamentary Secretary Kitoshvili 
--------------------------------------------- --------- 
 
6. (U) In a separate incident on September 24, Dimitry 
Kitoshvili, the President's secretary (or liaison) in 
Parliament was detained following an investigation by the 
Ministry of Finance Special Department and Procuracy.  The 
charges stem from October 2006, when Kitoshvili was head of 
the National Communications Regulatory Commission. 
Kitoshvili allegedly forced a shareholder in Geocell (a 
mobile phone company) to sell his shares to a fictitious 
party and profited from the transaction.  Kitoshvili denied 
the allegations, claiming that he merely introduced a buyer 
 
TBILISI 00002424  002 OF 002 
 
 
and seller.  Speaker of Parliament Nino Burjanadze and Deputy 
Speaker Mikheil Machavariani both publicly announced that 
Kitoshvili's arrest was further progress in the fight against 
corruption.  Furthermore, they claimed this latest arrest 
shows that the recent arrests are not politically-motivated 
and the government is unbiased against any political 
opponents, as Kitoshvili himself is a member of the UNM and 
advisor to the President.  While it is true that Kitoshvili 
(unlike Kareli) was not generally
seen as a political ally of 
Okruashvili, opposition commentators stressed possible 
financial links between Okruashvili and parties in the 
Geocell case. 
 
------- 
Comment 
------- 
 
7. (C) It is well-known that Kareli has a tarnished past and 
few knowledgeable observers doubt that the corruption charges 
will bear out.  A recent documentary, which received a 
Democracy Commission grant from the Embassy, shows that in 
2005 and 2006 Kareli and regional officials confiscated 400 
hectares of wheat grown commercially by a group of 10 farming 
families who had together legally leased the government land 
for 9 years beginning in 2000.  The farmers were not 
compensated for their crop, being told by Kareli that the 
land and its produce "belongs to everybody."  In 2006 Embassy 
officials observed another example of how business is done in 
Gori, meeting the director of a large enterprise who had no 
business credentials other than obvious connections to the 
regional government (ref C).  Nevertheless, the timing of the 
arrests has guaranteed that all discussion is about a 
possible political motivation.  Media report that Okruashvili 
himself is under investigation regarding his party's 
headquarters building, and that he may have purchased it 
below market price and evaded taxes in the process.  With 
Okruashvili now out in the open as an opponent of the 
government, any such investigations will be even more 
politically charged. 
TEFFT

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