The Political Party Finances Monitoring Service of the State Audit Office regularly publishes information on political party donors. We took interest in the connections among political parties, their donors and winning companies contracted for state procurement.

Using documents published by the State Audit Office we created a database of donors of political parties and produced a list of companies linked to the donors using the company owners’ database. In addition, with the help of Transparency International Georgia’s online procurement monitoring platform tendermonitor.ge and simplified procurement database, we tracked down tenders won by the companies linked to political parties’ donors.

In the report published on June 13th, 2014 we presented general information relating donors of political parties and their connections with legal entities and discussed tenders won by these companies. Today we present further, detailed information, regarding this issue.

From January 1st, 2013 to May 30th 2014, Georgian Dream coalition received GEL 8,216,448 from 683 donors. Donors contributed GEL 4,503,633 in 2013 and GEL 3,712,815 – from January to May 30th 2014.

In the same period, Nino Burjanadze’s party Democratic Movement – United Georgia received GEL 2,643,534 from 297 donors. The largest part of the donors’ donations were transferred in 2013 - GEL 2,632,619. By May 30th 2014, the party had only one donor who transferred GEL 1,520 to the party.

From January 1st 2013 to May 30th 2014, the United National Movement received GEL 702,942 from 306 donors. The donors transferred GEL 431,793 in 2013 and another GEL 271,149 in 2014.

One significant change in this regard compared with the previous years is that although most of contracts were won by the companies affiliated with Georgian Dream donors, donors of the opposition parties were also present. The last years’ trend of the ruling party donors almost exclusively winning tenders and simplified procurement contracts in 99% of cases did not repeat itself this time. Moreover, in some of the cases the donors connected to companies were donating to opposition parties too. However, donations made for the ruling coalition are of higher value.

Awarding competitive tenders and simplified procurement contracts to the companies connected to political party donors’ does not constitute a violation of the law, but it is important that the State Audit Office pays close attention to this fact and study contracts signed in such circumstances.

Donors of the Georgian Dream coalition were most active in April of 2014 when GEL 1,804,625 was transferred to the coalition’s account. The day with the most donations was April 24th 2014 when GEL 470,000 was deposited by 49 donors on the coalition’s account. In another instance, on April 22nd, GEL 347,000 was transferred by 21 donors. 

From January to October 2013, the United National Movement received GEL 17,600 overall. In October same year, the party received GEL 414,993 from 92 donors. The party donors were most active on May 26th 2014, when 211 persons transferred GEL 256,500 to the party’s account.

October of 2013 was the most active time for Democratic Movement – United Georgia’s donors, when the party received GEL 1,879,306 from 228 individual persons. September 6th 2013 stood out in terms of the donors’ activeness, when 14 donors deposited GEL 283,068 to the account of Democratic Movement – United Georgia. Donors were also active on October 25th 2013 when GEL 189,580 to the party’s account 14 donors.

Transparency International Georgia took an interest in companies owned or managed by donors of political parties. We studied if such companies had received competitive or simplified procurement contracts. We found that 387 donors were connected to 875 companies. Among them, direct links can be established between 20 donors with 22 companies*.

1. Direct connections of donors with companies (manager, shareholder, member of supervisory board, owner) who have obtained contracts with the overall value of more than GEL 50 000, through tenders or simplified acquisition process.

Companies with the direct connection with the Georgian Dream coalition donors have received GEL 10,342,239 through competitive and simplified acquisition processes. The simplified (non-competitive) procurement amounted to GEL 5,600,171.

In case of the United National Movement, the overall amount of competitive and simplified procurement contracts is GEL 1,390,679. The simplified procurement numbers stand at GEL 140,102.

Companies linked to Democratic Movement – United Georgia donors have received GEL 166,538 in total with simplified procurement contracts amounting to GEL 67,538. (The numbers for all three parties include only companies with the cumulative value of procured contracts exceeding GEL 50,000).

Overall, 123 companies directly and indirectly related to political party donors have received GEL 43,512,348 through competitive tenders between January 1st 2013 to June 30th 2014. In addition, from January 2013 to February 2014, they received GEL 11,041,007 through simplified (non-competitive) procurement.

2. Indirect links of donors with companies (company representative etc.)

Companies connected with the donors of the Georgian Dream coalition have received GEL 39,945,465 worth of contracts, while companies linked with the donors of the United National Movement received GEL 1,997,209. Companies linked to Democratic Movement – United Georgia donors came in third with the total value of procured contracts – GEL 1 569 673.

These figures have been deduced based on, Transparency International Georgia’s online tender monitoring platform tendermonitor.ge oand the database of simplified procurement contracts. The latter database contains data from January 2013 to February 2014.

The procurers in aforementioned contracts were various state companies without a favorite contractor agency that could be singled out.

For example, company Caucasus Motors participated in 13 tenders in 2013. As the only candidate, it won 11 tenders whose overall value amounted to GEL 901,466. In addition, Caucasus Motors received GEL 1,608,306 through simplified procurement process. Mikheil Alkhanishvili, the director of the company transferred GEL 40,000 to the Georgian Dream – Democratic Georgia on October 23rd 2013.

In the period of 2013-2014, a company named Modern-Villa, whose 25% shares are owned by Zurab Shubitidze, won 19 competitive tenders with the cumulative value of GEL 529,956. Zurab Shubitidze donated GEL 45,000 to Georgian Dream – Democratic Georgia on 4th of September 2013.

Davit Darchiashvili, member of a board of directors of Georgian Educational Computers Network Association Grena, donated GEL 10,000 to the United National Movement on 8th of October 2013. In the period of 2013-2014, the Association won 21 competitive tenders worth GEL 232,078 and received 38 simplified contracts with the total value of GEL 65,986.

The research is made possible by the generous support of the United States Agency for International Development (USAID). The contents are the responsibility of TI Georgia and do not necessarily reflect the views of the International Foundation for Electoral Systems (IFES), USAID or the United States Government.