Monthly Archives: February 2009

09TBILISI409, GEORGIA: U.S. AND GEORGIA SIGN JOINT DOCUMENT ON

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Reference ID Created Released Classification Origin
09TBILISI409 2009-02-27 15:13 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Tbilisi

VZCZCXRO5082
PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHSI #0409/01 0581513
ZNR UUUUU ZZH
P 271513Z FEB 09
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC PRIORITY 1088
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RHMFISS/DEPT OF ENERGY WASHINGTON DC PRIORITY
RHMCSUU/FBI WASHINGTON DC PRIORITY
RUEANFA/NRC WASHINGTON DC PRIORITY
RHMFIUU/US CUSTOMS AND BORDER PROTECTION WASHINGTON DC PRIORITY
RUEHUNV/USMISSION UNVIE VIENNA PRIORITY 0040
RHMFISS/JOINT STAFF WASHINGTON DC PRIORITY

UNCLAS SECTION 01 OF 02 TBILISI 000409 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KNNP PARM PGOV PREL GG
SUBJECT: GEORGIA: U.S. AND GEORGIA SIGN JOINT DOCUMENT ON 
COMBATING NUCLEAR SMUGGLING 
 
REF: A. 08 STATE 117568 
     B. 07 TBILISI 0283 
 
1. (SBU) Summary. On February 27, U.S. and Georgian 
representatives signed the "Addendum to the Joint Document of 
Georgian and U.S. Delegations on Georgia's Priority Needs to 
Improve Its Capabilities to Combat Nuclear Smuggling."  This 
document addresses both the degradation of Georgia's 
anti-nuclear smuggling capabilities resulting from the August 
2008 conflict and the additional needs which became apparent 
after the original agreement was signed in 2007.  By signing 
this addendum, the governments of the U.S. and Georgia deepen 
their cooperation on combating nuclear smuggling, and the 
Government of Georgia commits to expand an already impressive 
record of progress in improving its capabilities in this 
arena. End summary. 
 
SIGNATORIES AND CEREMONY 
 
2. (U) The Ambassador signed the agreement for the United 
States, and the following Deputy Ministers signed for 
Georgia: Deputy Minister of Foreign Affairs, Alexander 
Nlbandov; First Deputy Minister of Internal Affairs, 
Ekaterine Zguladze; Deputy Minister of Defense, Giorgi 
Muchaidze; Deputy Minister of Finance, Vazha Petriashvili; 
Deputy Minister of Environment Protection and Natural 
Resources, Davit Ioseliani; and Deputy Head of Revenue 
Service of the Ministry of Finance, Irakli Siradze. After the 
signing, the Ambassador, Deputy Minister Nalbandov, and 
Michael Stafford, U.S. Negotiator for Nuclear Security and 
Dismantlement, made remarks noting the continued cooperation 
between the U.S. and Georgian governments in fighting the 
threat of nuclear terrorism and Georgia's substantial 
progress in improving its efforts in this battle. 
 
WHY SIGN AN ADDENDUM? 
 
3. (SBU) The addendum expands upon U.S. and Georgian 
cooperation as part of the "Joint Document of Georgian and 
U.S. Delegations on Georgia's Priority Needs to Improve Its 
Capabilities to Combat Nuclear Smuggling." The original 
agreement was signed on February 2, 2007 by the Ambassador 
and Georgian Foreign Minister at the time, Gela Bezhuashvili 
(reftel B).  Following the August 2008 conflict between 
Russia and Georgia, the U.S. and Georgian governments agreed 
it was advisable to develop an addendum to the original 
document to address new needs that arose as a result of the 
conflict and to include additional needs that became apparent 
since the original was negotiated in 2007.  The addendum also 
reflects an expansion of U.S. efforts to help Georgia combat 
nuclear smuggling. 
 
GEORGIAN ACHIEVEMENTS 
 
4. (SBU) Since signing the original document, the Government 
of Georgia has made extensive progress in its efforts to 
combat nuclear smuggling, both on its own and in cooperation 
with the U.S. and other international partners.  These 
efforts include strengthening its nuclear regulatory system, 
placing additional radiation detection equipment at the 
borders, improving training for border security personnel, 
enhancing communication and cooperation among various 
response agencies, strengthening prosecution of smugglers, 
and continuing the fight against corruption.  To date, 
Georgia has completed or made significant progress on 46 out 
of 52 steps outlined in the original joint action plan. 
 
U.S. ASSISTANCE 
 
5. (SBU) This addendum also reflects an expansion of U.S. 
Q5. (SBU) This addendum also reflects an expansion of U.S. 
efforts to help Georgia combat nuclear smuggling.  Since the 
early 1990s, the U.S. has provided more than $275 million in 
assistance to Georgia to secure nuclear and radioactive 
materials, strengthen export control laws, improve border 
monitoring, support the Georgian Coast Guard, bolster law 
enforcement efforts, advance nuclear forensics capabilities, 
and enhance communication and cooperation among agencies 
responding to incidents involving radioactive materials.  As 
part of the $1 billion U.S. aid package to Georgia, the U.S. 
has already approved more than $20 million in funding for 
providing secure communications and other support to 
Georgia's law enforcement personnel and for developing a 
national response plan for responding to incidents involving 
radioactive material. 
 
TBILISI 00000409  002 OF 002 
 
 
 
6. (U) A copy of the signed addendum has been emailed to 
EUR/CARC. 
TEFFT

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09TBILISI408, GEORGIA: RUMORS OF A SPRING OFFENSIVE

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Reference ID Created Released Classification Origin
09TBILISI408 2009-02-27 15:08 2011-08-30 01:44 CONFIDENTIAL Embassy Tbilisi

VZCZCXRO5065
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHSI #0408 0581508
ZNY CCCCC ZZH
P 271508Z FEB 09
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC PRIORITY 1087
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L TBILISI 000408 
 
SIPDIS 
 
E.O. 12958: DECL: 02/04/2019 
TAGS: PGOV PREL RS GG
SUBJECT: GEORGIA: RUMORS OF A SPRING OFFENSIVE 
 
REF: MOSCOW 0224 
 
Classified By: AMBASSAOR JOHN F. TEFFT.  REASONS:  1.4 (B) AND (D) 
 
 1. (C) SUMMARY.  In recent weeks, we have detected a marked 
increase in comments, both public and private, that the 
Russians plan to invade Georgia in the spring.  These rumors 
have started to percolate into the press, assisted by 
Georgian parliamentarians such as Chairman David Bakradze who 
expressed fear on 24 February that "Russian aggression" in 
the spring cannot be ruled out.  Possibly underlining these 
rumors are renewed comments by Russian journalist Pavel 
Felgenhauer of the likelihood of Russian military action in 
April 2009.  MFA speculated that the source of the rumor 
could be a Russian special services disinformation campaign 
or it could be based on the fact of possible aggression as 
early as March.  Regardless of the validity of the rumors and 
their lack of factual basis, these thoughts have been on the 
Georgian government's agenda recently.  END SUMMARY. 
 
In Felgenhauer We Trust 
 
2. (C)  Georgian pundits, as well as officials in the 
Saakashvili government and in opposition, have been recently 
taking their concerns public about the possibility of renewed 
fighting in the South Caucasus.  Georgian Parliamentary 
Chairman David Bakradze commented that another "Russian 
military aggression against Georgia" was possible, and that 
Georgian politicians needed to be aware of their 
responsibilities in the face of such external threats. 
Defense Minister David Sikharulidze joined the chorus, 
stating that Russia may "stage new acts of provocation." 
Perhaps laying at the base of this is Russian military 
analyst Pavel Felgenhauer's articles stating his view that 
the Russians would invade in April 2009.  Some are skeptical 
of Felgenhauer's pronouncements, with military expert Kakha 
Katsitadze stating that Felgenhauer was predicting war with 
Russian "in unison" with the Georgian government to distract 
the population from real problems in Georgia now.  However, 
Felgenhauer's supposed prediction of the August 2008 war has 
taken on a life of its own in the Georgian elite, and thus 
his views are noted with interest amongst the punditocracy 
and government (see reftel). 
 
MFA Speculates About Russian Intentions 
 
3. (C) In a meeting with Poloff on 26 February, Georgian MFA 
Director of the Russian Section Irakli Toronjadze 
acknowledged the rumors, and in a microcosm of the 
wide-ranging reactions of the government, first placed the 
blame on a Russian "special services" propaganda campaign, 
followed immediately by an acknowledgment that it could be 
true, again quickly followed by a recognition that no one 
really had any idea of its validity.  Eventually, he settled 
on the fact that it was just likely rumors that have begun to 
feed on themselves, and that while an offensive in March 
could happen due to his belief that Russia certainly had war 
plans ready on the shelf, the Georgian government would just 
have to sit and wait to see what happens.  He also expressed 
his belief that Russian leadership was increasingly 
disappointed that countries such as Belarus had not 
recognized the independence of South Ossetia and Abkhazia, 
and it was the opinion in the MFA that Lukashenko would 
continue to lay the blame on Parliament as he pushed off 
making a decision for "years." 
 
4. (C) During the talks in Geneva, poloff noted that Russia 
had alleged the Government of Georgia had placed 2,000 
soldiers on the border with South Ossetia and Abkhazia, with 
additional heavy equipment in support.  Even after these 
allegations were refuted by the OSCE and EUMM, both the 
Russians and South Ossetians continued to make such claims, 
QRussians and South Ossetians continued to make such claims, 
further bolstering paranoia among the Georgians of a new 
Russian attempt to have a pretext for additional operations. 
Additionally, observers have noticed the continuing increase 
in time between talks in Geneva, with the next round 
notionally scheduled for June.  This four-month break has 
been a sharp change from recent talks, which occurred in one 
month intervals or even slightly more frequent. 
 
5. (C) COMMENT: A paucity of facts has not limited the 
willingness of the press or the pundits to spread the rumors 
of a renewed Russian offensive in Georgia in the spring. 
Public apprehension over the prospect of another Russian 
invasion in palpable in Tbilisi.  Increasingly conversations 
with our interlocutors begin with a question: "do you believe 
there will be war?".  In a society where rumors fly with 
great speed, we expect this fear to grow as long as the 
Russians continue to threaten Georgia militarily and with 
provocative statements.  END COMMENT. 
TEFFT

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09TBILISI407, GEORGIA: DOZENS BLOCKED FROM HOMES IN OTOBAIA,

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Reference ID Created Released Classification Origin
09TBILISI407 2009-02-27 15:00 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Tbilisi

VZCZCXRO5043
OO RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHSI #0407/01 0581500
ZNR UUUUU ZZH
O 271500Z FEB 09
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1085
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEKJCS/OSD WASHINGTON DC PRIORITY
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY

UNCLAS SECTION 01 OF 02 TBILISI 000407 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM MOPS RS GG
SUBJECT: GEORGIA: DOZENS BLOCKED FROM HOMES IN OTOBAIA, 
ABKHAZIA 
 
1. (SBU) Summary and comment.  Although conflicting reports 
make it difficult to establish a precise chain of 
events,dozens of individuals were blocked from their homes in 
Otobaia after a resident of the village was detained and then 
fled from Abkhazia.  The Georgian Ministry of Foreign Affairs 
called in ambassadors to protest the incident, lay blame at 
the feet of the Russians, and seek support from the 
international community.  The dispute resolution mechanism 
agreed to in Geneva is not yet operational and therefore 
unavailable to help resolve the situation.  The incident 
serves to underline the importance of the mechanism.  End 
summary and comment. 
 
2. (SBU) The EU Monitoring Mission (EUMM), UNOMIG, and 
Georgian government have all attempted to investigate the 
incident, and all have offered different versions of the 
basic facts.  Virtually all of the information available 
outside Abkhazia comes from the reports of locals involved, 
and their accounts vary widely.  The following chronology is 
an attempt to reconcile information from all three sources. 
Abkhaz de facto officials have been quoted in the press as 
denying the entire incident. 
 
INITIAL DETENTION 
 
3. (SBU) UNOMIG reported that on February 25, Ika Bigvava, a 
25-year-old resident of Otobaia (a village just inside the 
Abkhaz administrative boundary, north of Ganmukhuri), was 
detained by Abkhaz forces.  Some reports suggested the 
detention was by unidentified masked men.  The ministry of 
foreign affairs said the reason for the detention was that 
Bigvava refused to be conscripted into the Abkhaz militia; 
some press reports blamed it on the fact that Bigvava was 
carrying a Georgian passport.  EUMM reported he was shot in 
the foot while in detention and that Bigvava made public 
allegations of mistreatment at the hands of Abkhaz forces. 
On February 26, UNOMIG reported residents from Otobaia helped 
Bigvava flee from Otobaia across the administrative boundary 
into Zugdidi. 
 
MASS DETENTIONS OR BLOCKING OF ACCESS TO HOMES 
 
4. (SBU) On February 26, UNOMIG reported twenty or more 
individuals either returning across the boundary to Otobaia 
or already in Otobaia -- some of whom may have assisted 
Bigvava -- were detained by Abkhaz forces.  EUMM reported 
that some individuals were not detained, but prevented from 
crossing back into Abkhazia; EUMM also reported that some of 
those affected may have been making regular movements across 
the boundary to conduct personal business and were not 
involved in assisting Bigvava.  The Foreign Ministry reported 
Abkhaz forces went door-to-door in Otobaia, looking for 
Bigvava, and detained individuals in the process.  UNOMIG 
reported at least some of the detainees, in particular women 
and children, were released the same evening, but then 
children were again detained on February 27; one detainee was 
allowed medicine for a known medical condition.  EUMM 
reported the blocking of access/detentions were at least 
partially in response to Bigvava's departure, and that Abkhaz 
forces demanded a retraction of Bigvava's accusations of 
mistreatment while in detention before individuals would be 
allowed to return to their homes.  UNOMIG reported Abkhaz 
forces demanded custody of Bigvava or his father before 
individuals would be allowed to return. 
 
5. (SBU) The number of people affected by these events has 
been particularly hard to determine with any precision.  The 
ministry of foreign affairs said 50 families were blocked 
Qministry of foreign affairs said 50 families were blocked 
from their homes in Otobaia, but then said at least some had 
been allowed to return to their homes; most press accounts 
cite this figure.  EUMM reported 40 individuals were blocked; 
UNOMIG reported twenty or more. 
 
6. (SBU) It also remains unclear how many of those affected 
were actually detained and how many were only prevented from 
crossing back into Abkhazia or accessing their homes.  At the 
Foreign Ministry, when asked where exactly the affected 
individuals were located at present, Deputy Minister 
Alexander Nalbandov could not give a precise answer.  A UNHCR 
representative, however, said the organization had agreed to 
provide shelter and provisions for 60 individuals in Zugdidi. 
 
POLITICAL IMPLICATIONS 
 
7. (SBU) Nalbandov laid blame for the incident squarely at 
the feet of the Russians, saying that Abkhaz forces acted 
with Russian permission, and that furthermore the Russian 
Federation, as an occupying power, bears responsibility for 
any actions carried out in Abkhazia.  He noted that, although 
 
TBILISI 00000407  002 OF 002 
 
 
the dispute resolution mechanism agreed to in Geneva would 
have been a useful mechanism to r
esolve such a situation, the 
Abkhaz de facto authorities today issued a statement saying 
that they would not cooperate with the mechanism until the UN 
changes its mandate and sends an independent mission to 
Abkhazia. 
 
COMMENT 
 
8. (SBU) Nalbandov is indeed correct -- this is precisely the 
kind of situation that a dispute resolution mechanism would 
be ideally suited to resolve.  As we feared in Geneva, it has 
proven difficult to implement the mechanism so far, and 
today's comments by Abkhaz de facto authorities suggest they 
have little intention to make a serious effort to do so. 
TEFFT

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09TBILISI398, GEORGIA: ACTION REQUEST FOR DEPARTMENT GUIDANCE –

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Reference ID Created Released Classification Origin
09TBILISI398 2009-02-27 12:15 2011-08-30 01:44 CONFIDENTIAL Embassy Tbilisi

VZCZCXRO4746
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHSI #0398/01 0581215
ZNY CCCCC ZZH
O 271215Z FEB 09
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1078
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 TBILISI 000398 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: DECL: 08/25/2018 
TAGS: PGOV PHUM PREL GG
SUBJECT: GEORGIA: ACTION REQUEST FOR DEPARTMENT GUIDANCE - 
IMEDI TV 
 
Classified By: AMBASSADOR JOHN F. TEFFT.  REASONS:  1.4 (B) AND (D). 
 
1.  (C)  Summary:  Mark Hauf, attorney for Ina Gudavadze, 
widow of Badri Patarkatsishvili, has repeatedly approached 
the Ambassador and other Embassy officials and requested that 
Post advocate on behalf of Gudavadze with the Government of 
Georgia.  Specifically, Hauf requests that Post demand that 
the GOG return Imedi TV to Gudavadze.  Imedi resumed its news 
broadcasts in fall 2008 after being off the air for nearly a 
year after the Government closed it down in November 2007. 
Rak Georgia Holding (a subsidiary of Rakeen Group 
headquartered in the United Arab Emirates) purchased a 90 
percent stake in Imedi TV from the previous owner Joseph Kay, 
an American citizen and distant relative of Patarkatsishvili, 
on February 25.  Kay retains a 10 percent stake in Imedi. 
Gudavadze claims an ownership stake in Imedi by virtue of 
being the widow of Patarkatsishvili who controlled the 
company through a nominal third party owner; however, 
Gudavadze has not filed a case in the Georgian courts to 
recover this asset.  Because of its connection to the 
November 7 demonstrations, Imedi and its legal status has 
become a rallying cry for the opposition. 
 
2.  (SBU)  Action Request.  Post requests that Department 
provide clear guidelines to respond to requests for political 
advocacy on behalf of Gudavadze and other interested parties. 
 Suggested Department Guidance for Post is as follows: 
Start Suggested Text:  The control of Imedi TV is a legal 
dispute between private parties.  As a matter of policy, the 
USG does not intervene is such disputes and is unable to 
advocate on behalf of any party.  The proper venue for the 
settlement of this legal dispute is through the court and 
arbitration system. End Summary and Suggested Text. 
 
BACKGROUND 
 
3.  (SBU)  Prior to his sudden death and consistent with his 
normal course of doing business, wealthy Georgian businessman 
and government opponent Badri Patarkatsishvili created a 
complex structure of ownership of Imedi media in order to 
disguise his ownership interest in the network.  Joseph Kay 
claims to be and is generally recognized under Georgian law 
as the current rightful owner of Imedi.  Kay is a relative of 
Patarkatsishvili by marriage.  Although virtually unknown to 
the Georgian public, he had long-standing business and family 
ties with Patarkatsishvili.  Giorgi Jaoshvili, the previous 
nominal owner of Imedi at the end of Patarkatsishvili,s 
life, confirmed that he has known Kay since the early 1990s, 
and that Kay was a confidant of Patarkatsishvili. 
 
4.  (SBU)  According to Kay,s lawyers, Kay was given 
Patarkatsishvili,s will which specified how the estate was 
to be divided and named Kay as the executor.  Kay claims that 
he is the executor of Patarkatsishvili,s estate, but is not 
an heir to any of Patarkatsishvili,s holdings.  Jaoshvili 
also confirmed that when Kay told him that he was named as 
executor of Patarkatsishvili,s will and estate, it seemed 
logical.  Kay had been granted conservatorship (a temporary 
injunction giving Kay power over the estate but limiting his 
ability to formally dissolve the estate) over 
Patarakatsishvili,s estate by a Tbilisi court.  On February 
20, Kay was formally adjudicated executor of 
Patarkatsishvili,s estate by a Tbilisi court.  On February 
25, Kay sold 90 percent of Imedi to Rak Georgia Holding (a 
subsidiary of Rakeen Group headquartered in the United Arab 
Emirates). 
 
TRANSFER OF IMEDI 
 
5.  (SBU)  Kay,s lawyer claimed that Kay told him that 
Patarkatsishvili was engaged in some kind of political 
QPatarkatsishvili was engaged in some kind of political 
negotiation with the Government of Georgia shortly before his 
death and that Imedi was the focus of the government's 
interest.  The nominal head of Imedi, Jaoshvili, confirmed 
that Patarkatsishvili had told him directly that he 
(Patarkatsishvili) directed Kay to negotiate with the 
Government of Georgia in November 2007 after Patarkatsishvili 
was exposed as plotting a coup d,etat.  In order to 
facilitate Patarkatsishvili,s settlement with the 
government, Kay purchased the ownership of Imedi from 
Patarkatsishvili, 14 days before Patarkatsishvili,s death. 
Patarkatsishvili sold his majority stake of Imedi (held by 
Jaoshvili) to Kay for four reasons: Kay is a US citizen; Kay 
was a relative of Patarkatsishvili,s; Kay was a businessman 
who knew how to run a business and could keep the station 
alive; and the government knew that Kay had no political 
ambitions and may have agreed that Kay was an acceptable 
owner of Imedi from their perspective. 
 
6.  (SBU)  Following Patarkatsishvili,s death, Kay came 
forward with a document signed by Patarkatsishvili which 
 
TBILISI 00000398  002 OF 003 
 
 
directed Jaoshvili to transfer his majority shares of the 
Imedi holding arrangement to Kay.  Jaoshvili transferred the 
shares to Kay but now claims he did so under duress.  No one 
with direct knowledge of what went on re
garding the transfer 
of Imedi has told Embassy Tbilisi anything other than 
Patarkatsishvili transferred the company to Kay.  Former 
Imedi broadcaster, Giorgi Targamadze (Member of Parliament 
and leader of the opposition Christian Democratic Party) 
believed the transfer was legitimate.  Bidzina Baratashvili, 
long-time manager of Imedi, told Post the same thing: 
Patarkatsishvili explicitly directed Jaoshvili to transfer 
Imedi to Kay. 
 
7.  (SBU)  Kay,s lawyers claim that no one has challenged 
the ownership of Imedi in any court. Three out of four cases 
contest Kay,s executorship of the estate. The fourth case 
contests the identity of Patakartsishvili,s legal spouse. 
All disputes and discussions regarding Imedi,s ownership 
have been carried out in the media.  Each of the four law 
suits has been filed in a separate country. 
 
THE COURT CASES 
 
8.  (SBU)  Case One: Filed in Moscow by Ina Gudavadze, 
Patarkatsishvili,s first wife, against Olga Saponova the 
second wife. The Moscow court ruled in Gudavadze,s favor 
that Saponova was not Patarkatsishvili,s legal wife at the 
time of his death, but Gudavadze was.  Adding further 
complications, in 1994 Patarkatsishvili and Gudavadze signed 
a document in which they stated that they had no marriage 
relationship, but for the sake of the children they were not 
divorcing, however; Gudavadze agreed to waive any and all 
property rights beyond what Patarkatsishvili specified in 
other documents. Gudavadze has admitted to signing this 
agreement. 
 
9.  (SBU)  Case Two: Filed in New York against Kay by 
Gudavadze who claims that Kay is not the executor of the 
estate.      This case is currently pending dismissal on 
jurisdictional grounds.  Kay,s U.S. attorneys say this case 
will be dismissed; Patarkatsishvili was not a U.S. citizen, 
so a probate case for Patarkatsishvili should not be tried 
there. 
 
10.  (SBU)  Case Three: Filed in Gibraltar by Boris 
Berezovsky and Gudavadze questioning Kay,s status as the 
executor (there may be additional claims).  Kay has his own 
holdings which are administered in Gibraltar and some of 
Patarkatsishvili,s holdings are also administered there 
(these include real estate in Gibraltar and elsewhere). 
Gudavadze claimed that Kay,s holdings were in fact 
Patarkatsishvili,s and filed suit to get control of them. 
According to the lawyers she brought a witness who claimed 
Kay,s holdings were really Patakartsishvili,s but then 
later admitted he received a bribe to testify falsely against 
Kay.  This case is currently pending with the court having 
placed the burden of proof on Gudavadze, who has so far 
produced no evidence that Kay,s holdings were 
Patarkatsishvili,s. 
 
11.  (SBU)  Case Four: Filed in Tbilisi by Gudavadze to take 
control of all Patarkatsishvili properties and remove them 
from Kay,s control (this does not include Imedi). This case 
was decided in favor of Kay on February 20.  The court held 
that Kay is the proper executor of the estate.  Gudavadze has 
protested the decision in the press and may choose to appeal. 
 
 
POSSIBLE ARBITRATION CLAIM 
 
12.  (SBU)  Gudavadze, per information from her lawyer Mark 
Hauf, has sent notice of intent to pursue international 
arbitration against various organs of the Government of 
Georgia to regain Imedi.  However, the Government has not 
responded to this notice, nor has it confirmed it has 
Qresponded to this notice, nor has it confirmed it has 
received such notice.  Kay,s lawyers claim they know nothing 
about this, but they are not respondents on the notice of 
arbitration.  The claim on the notice alleges the GOG 
conspired to wrongfully expropriate Imedi.  The 
jurisdictional basis for the claim is that foreign investors 
per Georgian law can file for international arbitration in 
certain business disputes.  However, Gudavadze is Georgian so 
it is unclear if the arbitration provision applies in this 
case regardless of the merits.  Additionally, notice claims 
that Gudavadze has some ownership right in Imedi by virtue of 
being Patarkatsishvili's widow which would appear to make it 
a probate claim, rather than investment claim, also rendering 
it improper for arbitration. 
 
GUDAVADZE VERSION OF EVENTS 
 
 
TBILISI 00000398  003 OF 003 
 
 
13.  (SBU)  Hauf dismisses the GOG's claims that the 
temporary seizure of Imedi was necessary because of evidence 
that Patarkatsisvili was leading a coup d'etat.  Hauf says 
the GOG wanted control of Imedi to silence an independent 
voice.  Hauf claims that straw owner, Jaoshvili was 
forced/coerced into handing over Imedi to Kay by the GOG 
after Patarkatsishvili's death.  Hauf maintains that Imedi 
was illegally seized and rightly belongs to Gudavadze. 
 
RECENT SALE 
 
14.  (SBU)  On February 25, Joseph Kay sold a 90 percent 
share to UAE-owned AK, a subsidiary of a prominent investor 
in Georgia Rakeen group.  A representative of RAK Georgia 
Holding, Mark Monem publicly stated RAK intends to run Imedi 
as an independent channel.  Monem said he was certain that 
Imedi would turn into a financially strong organization with 
the help of RAK investment.  Monem said RAK intends to allow 
Imedi to pursue an objective and unbiased editorial policy. 
 
EMBASSY COMMENT 
 
15.  (C)  Embassy Comment: Because Patarkatsishvili operated 
mostly in the shadows and hid his assets under various shell 
companies and legal fictions, it is very difficult to 
ascertain to any degree of certainty what Patarkatsishvili 
did or did not control and how he distributed it.  Despite 
this fact, all of the evidence available to Post suggests 
that Patarkatsishvili knowingly and purposely effectuated the 
transfer of Imedi TV to Joseph Kay.  Gudavadze has pursued 
court proceedings regarding Patarkatsishvili's estate in four 
different legal fora.  However, all of the evidence available 
to Post is that Imedi TV has never been subject to any legal 
proceeding initiated by Gudavadze or any other potential 
claimant.  As such, we believe it would be improper for Post 
to politically advocate for the transfer of Imedi TV to 
Gudavadze, especially considering Gudavadze is asking Post to 
pursue a claim politically that she has not pursued legally. 
End Comment. 
TEFFT

Wikileaks

09TBILISI395, GEORGIA: PARTIES SIGN CODE OF CONDUCT PAVING THE

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Reference ID Created Released Classification Origin
09TBILISI395 2009-02-27 11:25 2011-08-30 01:44 CONFIDENTIAL Embassy Tbilisi

VZCZCXRO4652
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHSI #0395/01 0581125
ZNY CCCCC ZZH
P 271125Z FEB 09
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC PRIORITY 1076
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 TBILISI 000395 
 
SIPDIS 
 
E.O. 12958: DECL: 02/26/2019 
TAGS: PREL PGOV PHUM GG
SUBJECT: GEORGIA: PARTIES SIGN CODE OF CONDUCT PAVING THE 
WAY FOR ELECTORAL REFORM 
 
Classified By: AMBASSADOR JOHN F. TEFFT FOR REASONS 1.4 (b) AND (d). 
 
1.  (C)  Summary and Comment.  In a low-profile working 
meeting on February 26, Georgian political party leaders met 
to sign a "code of conduct" which represents the first step 
in forming a working group of party leaders from inside and 
outside of Parliament to develop an Election Legislation 
Working Group (ELWG) which will draft Georgia's long-awaited 
electoral code reforms.  The code calls on the signatories to 
commit to a process intent on "furthering the goal of free, 
fair and transparent elections in Georgia in accordance with 
OSCE/ODIHR and Council of Europe/Venice Commission election 
standards."  The Speaker of Parliament has supported the 
National Democratic Institute's efforts to develop a code of 
conduct and has encouraged a range of parties to sign to take 
part in the ELWG. 
 
2.  (C)  On February 26, eight parties, including the ruling 
UNM, signed the code, and five other parties have indicated 
they may choose to sign before a deadline of March 12, 
including members of Irakli Alasania's new Alliance and 
Burjanadze's party.  Their signatures pave the way for their 
participation in the ELWG.  The parties who signed the code 
have taken an important step in contributing to Georgia's 
election code reform.  Those who have not yet chosen to 
participate may miss their best opportunity to forge the 
rules of the game for Georgia's next elections.  Post hopes 
that Georgian-ownership and control of the Working Group will 
yield a process which the political parties support, as 
opposed to a process either imposed by international 
organizations and embassies or one run exclusively by the 
Government.  End Summary and Comment. 
 
3.  (C)  At NDI's offices in Tbilisi on February 26, 16 
parties met to sign a "Code of Conduct for Political Parties 
Willing to Participate in the Election Legislation Working 
Group."  NDI had worked for weeks to find acceptable language 
for all parties to enable the Speaker's working group to 
begin its work.  Out of the 16 parties present, eight chose 
to sign (listed below).  Each made statements supporting the 
process as a first step in Georgia's efforts to bring its 
electoral code in line with international norms prior to 
local elections in 2010, parliamentary elections in 2012 and 
presidential elections in 2013.  The document was signed 
without the media present, although all parties were welcome 
to distribute the document and make their own comments about 
the code.  OSCE, COE, UNDP and Embassy observers attended and 
observed the discussion and signing. 
 
4.  (C)  NDI brought the group together -- the challenge now 
is for those who have chosen to participate in the ELWG to 
undertake the challenge of reforming the code.  Those parties 
deciding not to sign the code noted that they are concerned 
about the rules process for the ELWG.  They feared the 
political liabilities of the appearance of cooperation with 
the ruling party without the assurance of how decision-making 
processes will work.  None of their representatives raised 
objections to the language in the code, but rather are 
focused on how to minimize the role of their future 
opponents.  Many of the parties not joining the ELWG are 
placing their hopes on protests in April to remove the 
President, rather than tackling the heavy lifting necessary 
to reform Georgia's electoral code. 
 
5.  (U)  Parties which signed the code (all parliamentary 
parties except as noted): United National Movement (UNM), 
Christian Democrats (CDM), We Ourselves, Industry Will Save 
QChristian Democrats (CDM), We Ourselves, Industry Will Save 
Georgia (non-parliamentary opposition), Labor (technically a 
parliamentary party although they do not participate), 
Democratic Party, Georgian Troupe, National Democratic Party 
(non-parliamentary). 
 
6.  (U)  Parties which attended the meeting but did not 
choose to sign (all of which are non-parliamentary): 
Republicans (Usupashvili), Conservatives, Democratic 
Movement/United Georgia (Burjanadze), People's Party, 
National Forum. 
 
7.  (U)  Parties which were notably absent (all of which are 
non-pariamentary):  New Rights (Gamkrelidze), Georgia's Way, 
Freedom Party. 
 
8.  (U) Text of the code: 
 
Code of Conduct for Political Parties Willing to Participate 
in the Election Legislation Working Group 
 
Towards furthering the goal of free, fair and transparent 
elections in Georgia and in accordance with OSCE/ODIHR and 
Council of Europe/Venice Commission election standards, the 
signatory parties will adhere to the following principles 
during the election code reform process: 
 
TBILISI 00000395  002 OF 002 
 
 
 
-- All participants should participate in the process in good 
faith and without pre-conditions.  They should conduct all 
election code discussions in a constructive manner and aim 
for consensus. 
 
-- The media is excluded from a
ll sessions and any comments 
made during the sessions are to be treated as private. 
Political parties should advance positions only if they are 
official party positions, rather than the private opinion of 
individual participants.  Parties should aim for consistency 
of representation, nominating one representative each plus 
one substitute member.  All representatives of the parties 
should aim to attend all the sessions.  If they are not able 
to attend their substitute should attend in their place and 
the organizers should be informed. 
 
-- Political parties should avoid any form of threatening or 
disrespectful behavior during the process. 
 
-- Political parties accept that any agreement reached should 
be supported no only during the legislative process but also 
afterwards as reforms are implemented on the ground. This 
means upholding the spirit, as well as the letter, of any 
agreed reforms. 
 
-- The ultimate objective for Georgia is a stable environment 
for the conduct of elections.  This means that a period of 
stability will be needed after the enactment of any reforms. 
 
-- Participating parties will adhere to any other rules 
agreed by consensus by the Election Legislation Working 
Group.  End Text. 
TEFFT

Wikileaks

09TBILISI392, INFORMATION ON IBERIA REAL ESTATE

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Reference ID Created Released Classification Origin
09TBILISI392 2009-02-27 05:08 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Tbilisi

VZCZCXRO4122
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHSI #0392 0580508
ZNR UUUUU ZZH
R 270508Z FEB 09
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC 1072
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS TBILISI 000392 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EUR/CARC, EEB 
 
E.O. 12958: N/A 
TAGS: EINV EFIN GG
SUBJECT: INFORMATION ON IBERIA REAL ESTATE 
 
REF:  STATE 15786 
 
1. Summary: In response to reftel, Post's inquiries into Iberia Real 
Estate (Iberia) and its umbrella company JSC Iberia Group revealed 
no negative information that would preclude OPIC financing.  End 
Summary. 
 
2. Iberia enjoys a strong reputation in Georgia's business arena. 
Iberia is a diversified company; its branches operate in 
construction and real estate development, and food and beverage 
manufacturing.  Iberia was an exclusive dealer of Peugeot in 
Georgia, but has recently sol its automobile import business. 
 
3. Iberia has substantial foreign investment.  On the construction 
side, its main shareholder is Firebird Aurora Fund.  On the food and 
beverage side, EBRD holds 30 percent of Iberia's shares. 
 
4. Post is unaware of the failure of any of Iberia's construction 
projects.  On the contrary, the company is known for its high 
quality performance.  This view was confirmed by a competitor 
company (CID Architecture). 
 
5. The owners of Iberia have a good reputation, and Post is unaware 
of any negative information concerning involvement in corruption, 
money laundering or any other violation of the law.  The only 
controversial figure amongst Iberia's shareholders (more 
specifically, Iberia Refreshments) was Khibar Khalvashi, a close 
ally of Georgia's former Defense Minister, Irakli Okruashvili, who 
is currently living in exile.  However, Khalvashi sold his shares 
shortly after Okruashvili's political scandals unfolded in 2007. 
Ramaz Mosiashvili, chairman of the supervisory board, is a key 
figure in the company and is said to be a highly competent 
businessman surrounded by professionals. 
 
6. Post notes that the situation in Georgia's construction sector 
has deteriorated considerably due to the combined effect of 2008 
August War and the world economic crisis.  Since August, mortgage 
lending has declined by nearly half, respective interest rates have 
increased from four to six percent, and collateral requirements have 
been tightened.  Prices on real estate have dropped, reportedly by 
20 percent and are expected to decline further in the near future 
(Embassy Note: Accordingly, companies might be forced to recalculate 
projections on sales revenues.  End Note).  One benefit of the world 
economic crisis on Georgia's construction sector has been a 
reduction in the prices of construction materials, mainly imported 
from Turkey and Ukraine.  After a short stagnation, the sector has 
started picking up, although slowly. 
TEFFT

Wikileaks

09TBILISI391, SANTE GMT PRODUCT PROJECT

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Reference ID Created Released Classification Origin
09TBILISI391 2009-02-27 05:07 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Tbilisi

VZCZCXRO4119
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHSI #0391 0580507
ZNR UUUUU ZZH
R 270507Z FEB 09
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC 1071
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS TBILISI 000391 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EUR/CARC, EEB 
 
E.O. 12958: N/A 
TAGS: EINV EFIN GG
SUBJECT: SANTE GMT PRODUCT PROJECT 
 
REF:  STATE 15789 
 
1. Summary:  In response to reftel, Post's inquiry into Sante GMT 
Products (Sante) revealed no negative information that would impede 
issuance of OPIC credit to the company. End Summary. 
 
2. Sante is the largest dairy manufacturer in Georgia.  Its juices 
enjoy a good reputation among Georgia's consumers.  Sante holds a 50 
percent share of the market in terms of dairy products, and roughly 
five to ten percent of the juice market.  The juice market is 
currently dominated by imported goods (mostly Russian). 
 
3. Sante has suffered from the effects of the August war, as its 
distribution to conflict areas has been limited.  Despite this, its 
sales revenues are still higher when compared to the same period in 
2008. 
 
4. In general, compared to other sectors of the economy, dairy 
manufacturing remains resilient.  The dairy industry has been 
largely unaffected by the economic crisis, and the overall outlook 
for the industry is positive.  Consumption has not decreased in a 
visible way due to the conflict or economic crisis. 
 
5.  Post is unaware of any negative information concerning the 
financial standing of Sante.  Additionally, Post has no negative 
information regarding terrorism, money laundering, corruption or 
other charges about the owners and managers of Sante. 
 
TEFFT

Wikileaks

09TBILISI389, GEORGIA REAFFIRMS COMMITMENT TO JOINING NATO

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Reference ID Created Released Classification Origin
09TBILISI389 2009-02-26 14:15 2011-08-30 01:44 CONFIDENTIAL//NOFORN Embassy Tbilisi

VZCZCXRO3351
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHSI #0389/01 0571415
ZNY CCCCC ZZH
O 261415Z FEB 09
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1068
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEKJCS/OSD WASHINGTON DC PRIORITY
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 TBILISI 000389 
 
NOFORN 
SIPDIS 
 
E.O. 12958: DECL: 02/26/2019 
TAGS: PGOV PREL MOPS GG
SUBJECT: GEORGIA REAFFIRMS COMMITMENT TO JOINING NATO 
 
REF: A. HTTP://WWW.MOD.GOV.GE/2007/DOWNLOADS/VISION(P ERCE- 
        NT SIGN)20ENGLISH(UNDERSCORE)2009.PDF 
     B. TBILISI 313 
     C. TBILISI 23 
     D. TBILISI 169 
     E. TBILISI 165 
 
Classified By: Ambassador John F. Tefft for Reasons 1.4 (b) and (d). 
 
1. (C/NF) Summary and comment.  Georgian officials continue 
to express through both public and private channels their 
continued commitment to NATO membership.  On February 17, the 
Minister of Defense released his "Minister's Vision 2009," a 
public document that identifies NATO membership as one of 
Georgia's top foreign and security policy priorities.  The 
Defense Minister and the Chief of Defense have privately 
expressed this same commitment to the DATT; the Foreign 
Minister reaffirmed Georgia's commitment in a February 25 
meeting with the Ambassador; and President Saakashvili did so 
publicly in his February 12 state of the nation address. 
Although the President's message did not focus on membership 
to the same extent his 2008 address did, this change in 
emphasis reflects the prominence of the economic difficulties 
currently facing Georgia as well as advice from the Allies 
not to raise expectations unrealistically.  The Government 
has also made a more general shift from public, political 
pronouncements about NATO membership to a more practical 
focus on taking the specific steps required to join the 
alliance.  Government efforts are currently focused on the 
internal reforms necessary to prepare for membership and the 
adjustments necessary to move from the Individual Partnership 
Action Plan (IPAP) to the Annual National Plan (ANP).  End 
summary and comment. 
 
DEFENSE MINISTER'S VISION: NATO MEMBERSHIP IS CENTRAL 
 
2. (SBU) On February 17, Defense Minister Sikharulidze 
publicly unveiled his "Minister's Vision 2009" (ref A), which 
lays out the Minister's key priorities for improving the 
Ministry's ability to provide for Georgia's defense and 
security.  The document notes in particular the importance of 
balancing longer-term strategic interests with more immediate 
needs arising from the still unstable post-war environment. 
An entire section of the document is devoted to NATO 
membership: "One of the main priorities of Georgia's foreign 
and security policy is integration into NATO."  While 
membership itself is clearly a strategic goal, the steps 
necessary to qualify for membership appear as prominent 
shorter-term objectives.  The NATO section's specific 
objectives include several that focus on continuing to work 
through bilateral and partnership programs to prepare for 
NATO integration.  The document notes the importance of using 
both ongoing and new formats, such as the Planning and Review 
Process (PARP), the Annual National Plan (ANP) and the 
NATO-Georgia Commission, to improve compatibility and 
interoperability. 
 
OFFICIALS REINFORCE COMMITMENT 
 
3. (C) Both Sikharulidze and Chief of Defense Chachibaia have 
told the DATT in recent conversations the Ministry and the 
Government remain fully committed to NATO membership.  The 
Ministry of Defense continues to listen carefully to NATO 
international staff suggestions on developing the ANP, a 
process with which the government of Georgia is still 
unfamiliar.  U.S.-funded defense advisors indicate that 
Ministry officials continue to dedicate a lot of effort to 
understanding what the ANP calls for.  During a February 16 
NATO Ambassador's briefing, NATO SYG Special Representative 
Bob Simmons noted that the Georgian first draft of an ANP 
QBob Simmons noted that the Georgian first draft of an ANP 
needed more work, mainly to include longer-term goals. 
According to Simmons, there were no fatal flaws in this first 
draft and he found continued Georgian commitment to produce a 
good document.  While guilty of not understanding how the ANP 
differs from the IPAP, there is no less staff effort to make 
the kind of process reforms required than there has been in 
the past.  Both the Minister and the Chief of Defense agree 
that NATO membership is the only realistic strategic security 
provider.  Both are eager to contribute forces to work in 
ISAF as a way of proving to the Allies that Georgia would be 
a useful member of the Alliance. 
 
4.  (C)  Foreign Minister Vashadze likewise reaffirmed to the 
Ambassador on February 25 Georgia's continued commitment to 
NATO membership, and pledged that the Government would do its 
best to draft a good ANP. 
 
5. (SBU) On February 12, in his state of the nation address, 
President Saakashvili reaffirmed Georgia's goal of 
integrating into NATO in order to ensure Georgia's security. 
 
TBILISI 00000389  002.2 OF 002 
 
 
He spent little time discussing NATO membership, however, 
devoting most of his attention to meeting Georgia's economic 
challenges.  This represented a marked contrast to his 2008 &#x000A
;address, in which he made NATO membership the centerpiece of 
his remarks (ref B).  This shift in emphasis is not 
surprising, considering that Georgia faces serious economic 
difficulties, and that polls consistently show economic 
issues to be among the chief concerns of the population (ref 
C).  Government interlocutors, including the president, have 
made clear they intend to focus first on those concerns (ref 
D). 
 
FOCUS ON CONCRETE PROGRESS 
 
6. (SBU) In addition, the lower-key public approach on NATO 
reflects a more practical focus by the Government on the 
concrete work required to prepare for membership.  For 
example, at the parliamentary address (ref B), Saakashvili 
spoke of increasing transparency in government, strengthening 
the judiciary and reforming the national security structure. 
In another move reflective of Alliance advice, Saakashvili 
engaged members of the opposition and took questions from 
them following his speech.  He has visibly increased his and 
his parties' efforts to engage in a dialogue on a range of 
domestic reforms, including: improving the media climate, 
bringing the Criminal Procedure Code in line with western 
standards, and adopting a new election code (ref E).  In 
short, the Georgian Government appears to be taking the kind 
of holistic approach to NATO membership that the U.S. and 
other Allies have long advocated. 
TEFFT

Wikileaks

09TBILISI379, GEORGIA: PENDING CHANGE AT NATIONAL BANK OF GEORGIA

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Reference ID Created Released Classification Origin
09TBILISI379 2009-02-25 14:39 2011-08-30 01:44 CONFIDENTIAL Embassy Tbilisi

VZCZCXRO2177
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHSI #0379 0561439
ZNY CCCCC ZZH
O 251439Z FEB 09
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1058
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L TBILISI 000379 
 
SIPDIS 
 
E.O. 12958: DECL: 08/25/2018 
TAGS: ECON EFIN PREL PGOV GG
SUBJECT: GEORGIA: PENDING CHANGE AT NATIONAL BANK OF GEORGIA 
 
Classified By: AMBASSADOR JOHN F. TEFFT.  REASONS:  1.4 (B) AND (D). 
 
1. (C)  Embassy Summary/Comment:  Acting head of the National 
Bank of Georgia (NBG), David Amaglobeli told us that he will 
be replaced by the current head of the Financial Sector 
Authority, Giorgi Kadagidze.  Amaglobeli believes the 
decision is in connection with his view that the National 
Bank of Georgia should float the lari, which is at odds with 
President Saakashvili, Prime Minister Gilauri and others' 
view that the lari should be defended at its current level, 
primarily by spending down Georgia's foreign currency 
reserves.  The personnel change has not been announced 
publicly, but at least one leading banker was unconcerned by 
the report, arguing that Kadagidze would be a capable 
replacement at the Bank.  End Summary/Comment. 
 
Upcoming Change 
 
2.  (C)  Amaglobeli has been the acting head of the National 
Bank of Georgia since November in 2007 and will be replaced 
by Giorgi Kadagidze who currently heads the Financial Sector 
Authority (an autonomous agency which regulates all financial 
institutions).  Amaglobeli surmised that his dismissal was a 
direct result of his belief that the lari must either float 
or be devalued again to slow expenditures of foreign 
reserves.  According to Amaglobeli, President Saakashvili, 
Prime Minister Gilauri, and others want the currency to be 
maintained at its current rate, believing that a stable lari 
is key to attracting and keeping foreign direct investment. 
Amaglobeli has been offered the job of head of the 
macroeconomics section in the NBG and has temporarily agreed 
to accept the position. 
 
Key Banker Not Worried 
 
3.  (C)  Badri Japaridze, Vice Chairman of the Supervisory 
Board of TBC bank, one of Georgia's largest, was unconcerned 
with the news.  Japaridze thought the change of leadership 
would simply reflect the actual reality of the NBG's decision 
making processes.  Japaridze said that he has been in regular 
consultations with the NBG about the effect of a currency 
devaluation and predicted that a devaluation would not affect 
his bank negatively.  However, he acknowledged that the 
potential political effect of a devaluation was real. 
Japaridze said that Georgians do not have strong faith in the 
lari and a devaluation could trigger a panic and ensuing run 
on dollars (or euros).  Japaridze said that he has been told 
that the NBG has enough reserves to buy every lari in 
circulation so even a run on foreign currencies could be 
dealt with, but the psychological effect on the public and 
investors would be difficult to manage.  Japaridze knows 
Kadagidze personally and says he thinks he is a smart, able, 
and solid choice to replace Amaglobeli. 
TEFFT

Wikileaks

09TBILISI378, GEORGIA: ALASANIA ANNOUNCES ALLIANCE, CALL FOR

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Reference ID Created Released Classification Origin
09TBILISI378 2009-02-25 14:39 2011-08-30 01:44 CONFIDENTIAL Embassy Tbilisi

VZCZCXRO2173
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHSI #0378/01 0561439
ZNY CCCCC ZZH
O 251439Z FEB 09
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1055
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 TBILISI 000378 
 
SIPDIS 
 
E.O. 12958: DECL: 08/25/2018 
TAGS: PGOV PREL GG
SUBJECT: GEORGIA: ALASANIA ANNOUNCES ALLIANCE, CALL FOR 
 
REFERENDUM ON NEW ELECTIONS 
 
REF: A. TBILISI 357 
     B. TBILISI 324 
     C. 08 TBILISI 2189 
 
Classified By: AMBASSADOR JOHN F. TEFFT.  REASONS:  1.4 (B) AND (D). 
 
1.  (C)  Summary:  Just a week after presenting his new 
political team and with much fanfare, former Georgian 
Ambassador to the UN Irakli Alasania announced February 23 
that his political team would join forces with the Republican 
party, led by David Usupashvili, and the New Rights party, 
led by David Gamkrelidze.  The combined forces will make up a 
new Alliance for Georgia (Alliance) which will be led by 
Alasania.  Alasania issued an ultimatum to President 
Saakashvili to call for a referendum on new Presidential 
elections within ten days.  Less than 24 hours later, David 
Usupashvili publicly stated that the Alliance had no 
intention of actually pursuing the referendum because the 
procedure was too time consuming.  While united in their 
desire to see Saakashvili resign, the non-parliamentary 
opposition is unable to agree on tactics.  At least one part 
of the non-parliamentary opposition, led by former Speaker 
Nino Burjanadze and former FM Salome Zourabichvili, has 
announced that they will take their grievances to the street 
in April rather than engaging in constitutional processes and 
civic discussion.  End Summary. 
 
The Alliance 
 
2.  (C)  After having publicly declared their desire to unite 
with Alasania late last year (Ref C), Usupashvili and 
Gamkrelidze joined with Alasania to announce a new Alliance 
and to publicly present their plan to force new Presidential 
elections; namely, the issuance of an ultimatum to President 
Saakashvili to call for the holding of a referendum on new 
Presidential elections within ten days.  Otherwise, Alasania 
would have to take unspecified actions, although he was 
careful not to call for street actions or protest.  At the 
same event, Usupashvili and Gamkrelidze announced that they 
would support Alasania for President.  (Embassy Note:  Having 
kept them at arms length since his return to Georgia in 
December and despite earlier private statements that he would 
not join "the two Datos", Alasania apparently decided that 
the New Rights/Republicans party infrastructure (and funds) 
outweighed potential negative consequences of a formal 
association with two relatively unpopular political figures. 
Rumors abounded that former Presidential candidate Levan 
Gachicheladze and the Conservative Party were in discussions 
about joining the Alliance, but ultimately declined.  End 
Note.) 
 
What Was That All About? 
 
3.  (C)  Two days after Alasania delivered his public 
ultimatum calling on the President to agree to a referendum 
in ten days, the Alliance's strategy appears to be dead on 
arrival.  Alasania political team member and former 
Ambassador to Turkmenistan Alex Petriashvili admitted to 
poloffs that the referendum process was going nowhere. 
According to Petriashvili, the Alliance had no expectation of 
a response from the President or his administration. 
Petriashvili acknowledged the potential Constitutional 
hurdles to calling for new elections (Ref A) and the simple 
logistical problems that the Alliance would face in trying to 
collect the required 200,000 signatures to begin the 
referendum process.  He agreed with Poloff's observation that 
the petition process could be drawn out indefinitely, saying 
the President would make sure the process lasts until 2013. 
Surprisingly, a day after announcing the ultimatum, 
Alasania's ally Usupashvili publicly said "that achieving a 
referendum through the collection of 200,000 signatures was 
Qreferendum through the collection of 200,000 signatures was 
not the option the alliance would follow."  Usupashvili said 
publicly what Petriashvili had said privately: the process 
was simply too time consuming.  Usupashvili did leave open 
the possibility that the Alliance would collect signatures 
outside of the referendum process as a public effort to 
further strengthen their position. 
 
4.  (C)  Even more surprisingly, immediately after announcing 
the ultimatum, Alasania left for Brussels and a number of 
other European capitals.  According to Petriashvili, Alasania 
will not return to Tbilisi until the day the ultimatum 
expires (March 5).  Petriashvili indicated the Alliance may 
collect some signatures, but they had not discussed the 
logistics of such an operation.  Petriashvili expected the 
ultimatum to fail and he admitted that the Alliance had no 
plan to encourage or even pressure the President, the PM or 
members of Parliament to support a referendum process. 
Alasania had not written any letters to encourage support. 
He said that the Alliance would probably eventually join 
whatever street protests might be organized,but had not yet 
decided on a coordinated plan.  Petriashvili did not know how 
 
TBILISI 00000378  002 OF 003 
 
 
the protests would turn out saying "we'll see together."  He 
also confirmed that the Alliance had no polling data to 
support his contention that the public wanted new elections, 
preferring to rely on his and his teams
' instincts about the 
Georgian population as a guide. 
 
Non-Parliamentary Opposition Sniping Begins 
 
5.  (C)  The non-parliamentary opposition beyond Alasania's 
new alliance is moving ahead with plans for street protests 
beginning April 9.  Former Speaker of Parliament Nino 
Burjanadze (Democratic Movement/United Georgia) made a 
statement February 24 calling on President Saakashvili to 
resign or call for new presidential elections by April 9. 
Kakha Kukava (Conservatives) said that no referendum should 
be held under Saakashvili's presidency and called for 
Saakashvili's immediate resignation.  Zviad Dzidziguri said 
the Conservatives would also engage in street rallies on 
April 9, vowing to "live" on Rustaveli Avenue.  Koba 
Davitashvili (People's Party) criticized Alasani's referendum 
proposal and warned that differences in tactics might confuse 
supporters and serve to undermine the entire process of 
forcing Saakashvili to resign.  Usupashvili shot back that 
the Alliance did not want to become a hostage to 
pre-announced dates for protest rallies.  Usupashvili added 
that the Alliance was different than the other 
non-parliamentary groups because "the process" is more 
important for them than any specific date for protest. 
Adding that the process should lead to a date and not vice 
versa, Usupashvili acknowledged that the undefined "process" 
might lead to joining in the April 9 protests.  Salome 
Zourabichvili (Georgia's Way), tried to make sense of it all 
saying that a difference in tactics did not mean 
confrontation between the various opposition parties.  She 
said the goal was the same and "multi-pronged" tactics could 
be used to force Saakashvili's resignation.  As an 
interesting note, Petriashvili told poloffs that former PM 
Noghaideli had declined to join the Alliance or the calls for 
a referendum, telling Alasania that he believed the public 
would not support those efforts at this time. 
 
Delving Deeper Into Alasania's Political Team 
 
6.  (C)  According to Patriashvili, the August war was the 
breaking point for this team whose foundation is former 
Ambassadors.  Ambassadors Alasania, Petriashvili, Dolidze, 
and Mikeladze (Ref B) have spent much of their diplomatic 
careers working to remove Russian troops from Georgia and 
reunite their country.  Dolidze, Mikeladze and Petriashvili 
were key members of Georgia's team which negotiated the CFE 
Istanbul Commitments in 1999.  In their view, the 2008 August 
war had needlessly undermined their painstaking work of many 
years.  Petriashvili indicated there were many other 
professionals in the MFA and other ministries who shared this 
view and that the Alliance hoped for their support. 
Petriashvili constructed a compelling case against 
Saakashvili's foreign policy decisions, but seemed much less 
sure on his feet when speaking of domestic economic and 
political issues.  Petriashvili was convinced that President 
Saakashvili needed to be replaced, but, like others in the 
non-parliamentary opposition, was short on practical, 
constitutional ways to make it happen. 
 
7.  (C)  Petriashvili was mostly silent when asked about the 
long term goals of both the Alliance and Alasania's political 
team.  He believed a lagging economy will hurt Saakashvili's 
popularity, but was not sure it will be enough to force new 
elections.  Petriashvili demurred when asked if allying with 
Qelections.  Petriashvili demurred when asked if allying with 
New Rights/Republicans and engaging in street protests could 
tarnish the moderate image that Alasania has been careful to 
maintain.  Petriashvili said the public understands that they 
are diplomats and not rabble rousers, and noted the Alliance 
will only decide on its next steps after the 10 day period is 
over.  When asked about other possible cooperation, 
Petriashvili said that consultations with all parties 
continued.  An important issue which remains unclear is 
whether Alasania's team is committed for the long haul. 
Petriashvili told poloff that if elections would not be 
forthcoming, the members of the team would have to find other 
jobs. 
 
8.  (C)  In a separate conversation with Emboffs, Alliance 
team member Levan Mikeladze told emboffs that he was not 
resigning his position with Tethys Oil in Geneva and did not 
yet have plans to return full time to Tbilisi.  He spoke in 
terms of a grave crisis confronting the country and 
widespread public dissatisfaction with Saakashvili and his 
government, but acknowledged that his views were based on 
conversations with family and friends in Tbilisi rather than 
polling data or public discussions. 
 
Where is the Alliance Heading? 
 
TBILISI 00000378  003 OF 003 
 
 
 
9.  (C)  Embassy Comment:  Alasania's decision to head for 
Europe immediately after announcing the Alliance and 
referendum ultimatum is curious, leaving some to question his 
commitment to engaging in politics here.  Rather than 
bringing the non-parliamentary opposition together, 
Alasania's political actions thus far have further divided 
it.  Rumor has it that Burjanadze is furious that Alasania 
has usurped what she sees as her rightful position -- 
succeeding Saakashvili as President -- driving herinto the 
arms of her former adversary Zourabichvili.  With no clear 
vision for further action, Alasania and his new Alliance have 
gotten off to an awkward start.  End Comment. 
TEFFT

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