07TBILISI2608, GOVERNMENT ISSUES STATEMENT SUPPORTING CHARGES

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Reference ID Created Released Classification Origin
07TBILISI2608 2007-10-19 11:15 2011-08-30 01:44 UNCLASSIFIED Embassy Tbilisi

VZCZCXRO4503
PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHSI #2608/01 2921115
ZNR UUUUU ZZH
P 191115Z OCT 07
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC PRIORITY 7939
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 TBILISI 002608 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EUR DAS BRYZA AND EUR/CARC 
 
E.O. 12958: N/A 
TAGS: PREL PGOV PHUM GG
SUBJECT: GOVERNMENT ISSUES STATEMENT SUPPORTING CHARGES 
AGAINST OKRUASHVILI 
 
REF: A. TBILISI 2437 
 
     B. TBILISI 2483 
     C. TBILISI 2542 
 
1. (U) Summary: On October 16 the Government of Georgia 
released an "information note" setting out the legal basis 
for charges against former Defense Minister Irakli 
Okruashvili and his subsequent bail.  The note explains the 
investigation and evidence for allegations of abuse of power 
and official negligence, extortion of a bribe and money 
laundering.  The note describes Okruashvili's interrogation 
and October 7 guilty plea on two charges,  official 
negligence and extortion of a bribe.  The note details 
Okruashvili's medical examination which found him in good 
health.  It asserts the prosecutors' and judicial system's 
commitment to transparency and respect for due process in 
this case.  End Summary. 
 
---------------------------------------- 
Charges and Evidence Against Okruashvili 
---------------------------------------- 
 
2. (U) The October 16 information note released by the 
Government of Georgia sets out the legal basis for charges 
against former Defense Minister Irakli Okruashvili. 
Okruashvili was arrested on September 27 following a lengthy 
investigation by the Office of the Prosecutor General in 
cooperation with the Ministries of Finance and Defense, as 
well as the Chamber of Control.  On September 28, the Tbilisi 
City Court ordered Okruashvili to be held for two months in 
pretrial detention to prevent the risk of flight, the 
destruction of evidence, and attempts to influence witnesses. 
 Later, Okruashvili was released on bail and has been living 
in Tbilisi. He has made no further statements since his 
release.  A brief summary of the government's charges and 
evidence follows. 
 
-------------------------------------- 
Abuse of Power and Official Negligence 
-------------------------------------- 
 
3. (U) As stated in the information note, these charges are 
connected to a series of alleged abuses of the Ministry of 
Defense procurement process with the goal to enrich 
Okruashvili and his associates.  They primarily relate to the 
illegal procurement of aviation fuel for the MOD; overcharges 
in the procurement of ammunition; and embezzlement related to 
contracts to build and refurbish the Gori and Senaki military 
bases.  Mr. Okruashvili pleaded guilty to the charge of 
official negligence only. 
 
4. (U) Evidence for these charges is based on a three month 
inspection between September-December 2006 at the MOD that 
allegedly uncovered misuse of public funds.  On the aviation 
fuel purchase, the MOD bought 4000 tons of aviation fuel at 
USD 725.7 per ton from Transport and Development, LTD., a 
company controlled by Kibar Khalvashi, a close friend of 
Okruashvili.  This purchase was done despite an existing 
contract between the MOD and Aviasatsvavservisi, which 
provided aviation fuel at USD 673 per ton.  The Prosecutor 
General also found that in December 2005, the Head of the MOD 
Procurement Department, Iason Chikhladze, a longtime 
associate of Okruashvili, purchased ammunition that was 
virtually useless at a price ten times higher than the 
quality warranted.  On the charge of embezzlement related to 
construction of the military bases, Okruashvili requested the 
Ministry of Economic Development negotiate directly with the 
newly established International Building Company (IBC), a 
company with no prior construction experience but that was 
owned by close friends of Okruashvili.  Prosecutors claim 
Okruashvili did this to gain advantage over competitors and 
to safeguard the interests of his friends at IBC.  IBC won 
the GEL 132 million contract.  Over GEL 300,000 was allegedly 
embezzled from expenses for the refurbishment of the Senaki 
base. 
 
-------------------- 
Extortion of a Bribe 
-------------------- 
 
5. (U) This charge relates to the extortion of 2.5 percent of 
the shares of Geocell, the second largest mobile phone 
company in Georgia, from a former Member of Parliament, Jemal 
Svanidze.  Okruashvili pleaded guilty to these charges. 
 
6. (U) Okruashvili and President Saakashvili's Parliamentary 
Secretary, Dmititri Kitoshvili, allegedly threatened Svanidze 
 
SIPDIS 
with government-created problems for his business, and 
arrest, if he did not sell the shares to Kitoshvili for a 
price far below their market value.  Okruashvili confessed to 
 
TBILISI 00002608  002 OF 002 
 
 
this extortion attempt and Svanidze and Kitoshvili also 
testified to it. 
 
---------------- 
Money Laundering 
---------------- 
 
7. (U)  This charge was brought because of the April 2007 
purchase for USD 1.8 million of a building located in Tbilisi 
by Okruashvili, four public officials who are his close 
associates, and five friends or relatives.  The price paid 
for the building
, according to the purchase and sale 
contract, was only USD 250,000.  Mr. Okruashvili has pleaded 
not guilty to this charge. 
 
8. (U) Evidence of money laundering during the purchase of 
the building by Okruashvili and ten associates for only USD 
250,000 was given by Teimuraz Gogitidze, an employee of 
Okruashvili in 2002 at the Ministry of Justice, who 
negotiated the purchase of the property from the owner, Koba 
Amirejibi.  Both testified the actual selling price of the 
building was USD 1.8 million, and that the contract falsely 
listed the sale at USD 250,000.  Records at the Bank of 
Georgia indicate the mortgage and interest of USD 697,000 was 
later paid in cash by Mr. Gogitidze, who testified he 
received USD 1.75 million in cash directly from Okruashvili 
to pay for the purchase.  Okruashvili's personal worth was 
allegedly not enough to cover even the fictitious USD 250,000 
price of the building. 
 
------------------------ 
Entering the Guilty Plea 
------------------------ 
 
9. (U)  On October 7 Okruashvili pleaded guilty to charges of 
extortion of a bribe and official negligence (committed 
during his capacity as Minister of Defense that caused 
material damage to the State), as recorded by the Office of 
the Prosecutor General during his interrogation.  He 
confirmed his guilty plea in an open court hearing on October 
8.  Both statements were made in the presence of his lawyer. 
 
10. (U) The information note details the extent to which 
prosecutors went to confirm Okruashvili's confessions were 
not made under duress or other illegal form of pressure or 
influence.  These include videotaping the confessions from 
three angles and medical examinations of Okruashvili by both 
the Medical Division of the Ministry of Justice's 
Penitentiary Department and six independent medical doctors. 
Okruashvili was found to be in good health with no signs of 
bodily injury and no presence of narcotic or psychotropic 
drugs in his system.  He signed the medical examination 
records. 
 
11. (U) The note outlines the October 8 setting of bail for 
Okruashvili at 10 million Lari (6 million US) and Mr. 
Okruashvili's payment on October 9, partially in funds and 
partially in real estate.  The note concludes with a 
commitment of prosecutors and the judicial system to meet the 
highest legal standards and says the case of Okruashvili will 
continue with the utmost fairness, transparency and respect 
for due process consistent with Georgian legislation. 
 
Comment 
 
12. (SBU) The government's note recapitulates information 
that has largely been reported in the press and adds little, 
if any new information.  It is unlikely to mollify or 
persuade any of Okruashvili supporters, who are convinced 
that Okruashvili's statements were made under duress.  Both 
Okruashvili and his supporters have been remarkably quiet 
since his dramatic televised confession.  How many such 
supporters there actually are, and whether they will emerge 
in the future, is difficult to gauge. 
TEFFT

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