In Georgian politics, political parties can exist without a political ideology or doctrine. Yet money is a key ingredient for success. There are many parties in the country - almost 300 of them, but there is not enough money to support all of them. Therefore, every time a new character with a big wallet appears in the country, ready to invest in politics, the entire political spectrum will immediately rally around such a person. Moreover, to become a political leader, or to be at the very top of the party structure- it is no longer necessary to have experience in political activity, or even to have a reasonable interest in politics and charismatic abilities. These requirements are now a relic of the 1990s. Today in Georgia, the key to a successful political career is financial support.

When billionaire Bidzina Ivanishvili entered Georgian politics in 2011-2012, everyone rallied around him – the right, the left, liberals, traditionalists, former communists and former dissidents, supporters of both the first president and the second president.

Another clear example of this rallying around money instead of ideology was when, on the eve of the last parliamentary elections in 2020, Georgian businessman and millionaire Mamuka Khazaradze created a party with the Georgian name Lelo. Capitalists, socialists, liberals, even deputies from other parties, public figures of all stripes became party leaders. In 2023, free money has again appeared for investment in politics. This time, in form of David Kezerashvili, the former Georgian Minister of Defense under President Saakashvili, and now a businessman and millionaire living abroad. In a matter of days, he was able to de facto split the main opposition party, the United National Movement, and put his ‘guy’ (Levan Khabeishvili) at the top of the party. Three other parties have already rallied around this new business-political project.

In the last decade in Georgia, figures completely unknown to society have come and gone in the sphere of politics. Many, after a short-term activity in the realm of politics, disappear and usually revert to the private sector. This is especially true of top political leaders and members of the country's parliament. Georgia is a parliamentary republic, so the post of prime minister is the most important political position in the country. Since the current ruling party Georgian Dream came to power in 2012, not one prime minister has had a political background. Since the first Georgian Dream administration in 2012, the country had five different prime ministers: Bidzina Ivanishvili (2012-2013), Irakli Garibashvili (2013-2015), Giorgi Kvirikashvili (2015-2018), Mamuka Bakhtadze (2018-2019), Giorgi Gakharia (2019-2021). Currently, Irakli Garibashvili has been holding the post of Prime Minister of Georgia for the second time since 2021. It is noteworthy that all five figures in politics came from business and returned to business after resignation, except for one, Giorgi Gakharia, who formed his own party and is still trying to create momentum in politics, although to no avail. All these five prime ministers were staunch right-wing capitalists but led the government of the ruling party towards the left.

Currently, the Georgian government has eleven ministers and one state minister. Among these, there should be at least a few millionaires, although local media suggest that the ministers do not declare all their income and property. On the other hand, there is not one professional politician among them, except for the Minister of Culture, Tea Tsulukiani, who has been the only one who has been in the government since 2012. According to their education or work experience, almost none of the ministers were connected to politics in their previous activities.

As for the salaries of ministers, they have a very complex structure so that ordinary citizens do not understand what income ministers derive from the state budget. Approximately the monthly salary of ministers is 5,000 Lari.  In reality, ministers receive at least the same additional amount as an addition, similar to a bonus. It is noteworthy that only 0.5% of the Georgian population has an income over 5,000 Lari.

According to the constitution, the country's parliament should have 150 deputies. Due to permanent political crises, there are only 139 parliamentary deputies. Among them, at least 23 deputies are millionaires. And Georgia is a poor country, where, according to statistics, approximately one million people live below the poverty line. Among the millionaires are both members of the ruling party and various opposition parties. It is noteworthy that there were 37 millionaires in the parliament of the previous convocation, but most of them were from the ruling party and only four were from the opposition. The growth of the number of millionaires from the opposition is a new trend that is becoming especially noticeable. From the beginning of the election of the current parliament, there were nine millionaires among the opposition. Later, their number was reduced to seven due to the loss of deputy mandates. 

According to the legislation of Georgia, entrepreneurial activity is prohibited for deputies and civil servants, although some deputies enter politics precisely because of the desire to earn big money, strengthen an existing business or start a new business. Usually, they register their own businesses in their relative’s names. Some deputies hide behind academic activities, which are not prohibited by law. Some are simultaneously engaged in civic activity and receive grants from international funds for this. Others earn income from creative activities. For example, Zaza Khutsishvili, a former singer and deputy from the ruling party of the previous convocation earned about 6,200 Lari for performing concerts in Baku and Tbilisi in 2018. It is noteworthy that the salary of an ordinary deputy is 4624 Lari per month. In addition, many deputies receive a monetary supplement in addition to their salary. The official salary of the speaker of parliament is 6,740 Lari per month. For comparison, in the second quarter of 2022, the average monthly nominal wage in Georgia was 1,541.3 Lari.    

Where does the parties’ money come from? Parties use legal sources to generate income but there is a suspicion that they also laundered money. Political parties, in a traditional understanding, should be financed, among other things, through regular membership fees. Parties in Georgia though, usually refrain from taking such membership fees. One reason is that the parties do not have enough members so that their membership fees cannot support the party bureaucracy. Secondly, in a poor country, the introduction of membership fees can frighten potential applicants to join a particular party. At the same time, membership in Georgian parties is a very informal concept. Sometimes it happens in the form of an oral agreement, without any formalities. Very often, a person can identify themselves with several parties at once. For example, in February 2023, the chairman of ‘The Movement State for the People’ party, member of parliament Nika Machutadze, stated that the mayor of the small town of Tsalenjikha was elected a member of the political council of the United National Movement, despite the fact that he is an active member of the political council of ‘The Movement State for the People’.

One of the main sources of income for the parties is donations. Traditionally, in Georgia, the ruling party receives the most donations compared to the opposition. Usually, large scale businesses finance the ruling party. In Georgia, ordinary citizens tend to not have a direct personal interest in a particular party and do not donate money to the party. The leaders of these parties, deputies, or their family members and relatives also commonly donate money. For example, the prime minister's  father-in-law donated 10,000 Lari for the ruling party in 2022.

According to the report of the political financing monitoring service of the State Audit Office of Georgia, the political parties of Georgia received 2.8 million Lari in the form of political donations in 2022. A large share (1 million GEL) of this total is accounted for by the ruling Georgian Dream party, Lelo is in second place when it comes to funding. The party was created by two Georgian businessmen and millionaires in 2019. They received 619,000 Georgian Lari as a donation. As for the largest opposition party, the United National Movement are in third place with 217,000 Lari. The party of former Prime Minister Gakharia is in fourth place with 49,176 Lari.

Of course, in the pre-election periods, the circulation of money in politics and the amount of donations increases sharply. During the last parliamentary elections in 2020, electoral subjects received 35,376,394  Lari (approx. 11,495,546 USD) in donations. Of this total amount, the ruling Georgian Dream Party received 48%,, which  is 17,086,626 GEL (approx. 5,552,292 USD). During the last local self-government elections in 2021, electoral subjects received 11,905,640 Lari (3,868,733 USD) in the form of a donation. The ruling Georgian Dream party received 70%, which amounted to 8,288,650 Lari (2,693,393 USD).

Another source of funding for political parties in Georgia is state funding. Parties that have managed to overcome the 1 percent barrier in all national elections within the last 4 years may qualify for such funding. Before the 2020 parliamentary elections, the procedure for providing state funding to parties changed. According to the new formula, the parties annually receive 15 Lari for the first 50,000 votes and 5 Lari for each vote received past that. Such funding can be separately received by parties that entered the parliament not independently, but within the framework of a party bloc, thus currently 13 parties receive funding from the state in the total amount of 12, 544, 598 Lari. The ruling party receives the most significant amount from the state funding in the amount of 5,140,020 00 Lari.

What do parties spend money on, except for election campaigns? A significant amount is spent on the maintenance of party offices and party bureaucracy. As usual, political parties keep the salaries of their chairmen secret. According to an unofficial source, the top management of the ruling party receives more than 10,000 Lari in the form of a salary. As for the opposition, one of the former officials in the Saakashvili government accused the chairman of the UNM, Nika Melia, that his monthly salary amounts to 10,000 Lari and that the party spends 1,471,000 Lari per year only on his expenses (salary, travel expenses, other expenses). Nika Melia categorically denied this. The salary of the new chairman of this party, Levan Khabeishvili, will also remain classified.

One of the main characteristics of hybrid regimes is the strengthening of oligarchic structures and the dominance of businessmen in politics. In Georgia, this became especially obvious after 2012, when the only Georgian billionaire, Ivanishvili, came to power. The EU condemns this development and demands from Georgia to start a process of de-oligarchization. It is noteworthy that in November 2022 the ruling elite of the country approved the law on de-oligarchization.According to the authors’ view, it will not affect millionaires and a billionaire from the ruling elite. Yet, this law, which is likely to be approved this year, will seriously disturb the political plans of millionaires from the opposition camp. 
 

Dr. Beka Chedia is Researcher and Assoc. Professor of Political Science from Tbilisi, Georgia. He is a Country Expert (Georgia) in the several international research programmes, political analyst and writing contributor to several leading think tanks, research centers in Europe in US. He had been a visiting scholar at several higher educational institutions and think tanks in Western and Eastern Europe.