Georgia Abuse Outcry Lifts Russia-Linked Billionaire in Vote

Public outcry over the rape and beating of prisoners in a Georgian prison is threatening the nine-year rule of U.S. ally President Mikheil Saakashvili in Oct. 1 parliamentary elections.

While Saakashvili’s ruling party held a lead of more than 20 percentage points in a poll conducted last month, the release on Sept. 18 of graphic footage showing prison guards beating and raping male inmates with a broom handle and truncheon brought thousands to the streets of many cities in Georgia. The first survey of public opinion since the scandal is expected today.

The opposition movement of billionaire Bidzina Ivanishvili, who’s accused by the Georgian government of ties with Russia, where he made his fortune, is vowing to end Saakashvili’s rule in the former Soviet state. Georgia, which has been allied with the West since the so-called Rose Revolution swept Saakashvili to power, fought a 2008 war with Russia in a failed bid to regain control of a breakaway region.

“This prison scandal is a serious blow to President Saakashvili’s government,” Matthew Bryza, a former U.S. deputy assistant secretary of state for European and Eurasian affairs, said Sept. 25 by phone from Istanbul. “He seems to have taken decisive steps to deal with it and will need to convince his electorate he is indeed doing so.”

Photographer: Daro Sulakauri/Bloomberg

The opposition movement of billionaire Bidzina Ivanishvili, seen here, who is accused by the Georgian government of ties with Russia, where he made his fortune, is vowing to end Saakashvili’s rule in the former Soviet state. Close

The opposition movement of billionaire Bidzina Ivanishvili, seen here, who is accused... Read More

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Photographer: Daro Sulakauri/Bloomberg

The opposition movement of billionaire Bidzina Ivanishvili, seen here, who is accused by the Georgian government of ties with Russia, where he made his fortune, is vowing to end Saakashvili’s rule in the former Soviet state.

Premier’s Job

Up for grabs in the election is the prime minister’s post, which will become more powerful than the presidency once Saakashvili ends his term next year because of legislative changes two years ago. Ivanishvili said that his past business experience and management skills would make him a good premier, adding that he will leave business altogether after exiting politics.

Saakashvili, a 44-year-old U.S.-educated lawyer who disbanded the traffic police after taking office, has won plaudits from international organizations for reducing corruption and eliminating red tape in his country of 4.5 million people.

Economic growth accelerated to 8.2 percent from a year earlier in the second quarter from 6.8 percent in the previous three months. Georgia is ranked 16th out of 183 countries in terms of ease of doing business, according to the World Bank’s 2012 survey, ahead of Germany, Japan and Switzerland. In 2006, the Black Sea nation ranked 126th.

Squashing Dissent

While Saakashvili is credited with enacting policies to create the economic turnaround, Ivanishvili, 56, and other critics say he has curtailed free speech by squashing political competition. Former allies of the president including ex-Foreign Minister Salome Zourabishvili and former parliament speaker Nino Burjanadze, a key figure in the Rose Revolution, turned against him and joined the opposition.

Last year, a Georgian court sentenced Burjanadze’s husband to 5 1/2 years in prison in absentia for organizing disobedience against the police. In 2008 a French court refused a Georgian request to extradite former defense minister Irakli Okruashvili, who was sentenced to 11 years in jail in absentia for extortion charges he said were retaliation for his decision to break with Saakashvili.

“Georgia is not a democracy,” Ivanishvili said in comments e-mailed by his office on Sept. 26. “The people of Georgia will have the opportunity on Oct. 1 to stand against authoritarian rule and stand up for democracy and the rule of law.”

Banking, Metals

Ivanishvili, who was stripped of his Georgian citizenship and holds a French passport, is worth $6.4 billion, according to Forbes magazine, equivalent to almost half of Georgia’s $14.4 billion economy.

He made his money in banking and the sale of metals before giving up his Russian citizenship and selling his assets there this year to focus on Georgian politics. Ivanishvili says he expects to normalize relations with Russia after fiver years if his party wins the election, though he denies any ties to President Vladimir Putin’s administration.

Saakashvili accuses the Russian government of spending billions of dollars, which the Kremlin denies, and staging a military build-up in a bid to influence the Oct. 1 vote.

“I call on our friends and allies in the international community not to ignore or dismiss these worrisome developments,” Saakashvili said in a speech before the United Nations General Assembly in New York on Sept. 25. “Your vigilance and engagement is required to make sure that 2012 does not become a repeat of 2008 or especially 1921, when our independence was violently terminated for the last time by Russia.”

‘Kremlin Project’

In remarks to foreign reporters today in Tbilisi, Ivanisvili rejected the idea that he’s a “Kremlin project,” saying he’s spent $1.7 billion of his own money on initiatives to overhaul Georgia’s police force and military, among others.

Saakashvili may keep power as prime minister next year if his party wins the election, mirroring a move by Putin, who remained at Russia’s helm as premier from 2008-2012 after completing the constitutional maximum of three consecutive presidential terms. Putin returned to the Kremlin in May for a new six-year term.

If Saakashvili, who will step down as president next autumn after serving the maximum two terms, “took that step, if he followed Putin, it would really damage his reputation,” said the former State Department official, Bryza.

‘Harsh’ Penalties

The Organization for Cooperation and Security in Europe, a 56-nation democracy watchdog which is monitoring the election, said last month that Georgia’s authorities were targeting political opponents with investigations and levying “harsh” penalties.

Saakashvili’s party holds 112 out of 150 seats in the current parliament, with the rest controlled by the Christian Democrats, Powerful Georgia and Unity for Justice.

Fifty-five percent of likely voters supported the United National Movement, compared with 33 percent for Ivanishvili’s Georgian Dream, according to a survey last month by Washington- based research firm Greenberg Quinlan Rosner.

The National Movement had 37 percent backing, compared with 12 percent for Ivanishvili’s party, according to a poll conducted in August by the National Democratic Institute. Twenty-two percent of voters were undecided, it said.

New Ministers

After thousands of Georgians took to the streets to protest the rape allegations, the government replaced the interior and prisons ministers and dismissed several hundred penitentiary staff. The opposition are still demanding the prosecution of ex- Interior Minister Bachana Akhalaia and have vowed to keep up their rallies.

The prison abuse scandal has “seriously changed” the situation, and while it’s still too early to say if the opposition will win the most votes, it “expects to be ahead with the help of these scandalous events,” according Alexander Rondeli, head of the Georgian Foundation for Strategic and International Studies research group in Tbilisi.

The Georgian authorities have gone on a counter-offensive, with Ivanishvili’s campaign also plagued by scandal.

A week after the prison rape footage was released by opposition TV channels, prosecutors said they foiled a plot involving former Cabinet member Giorgi Khaindrava and a French- based group of criminals to destabilize the nation before the vote. The Interior Ministry also released taped conversations between Georgian Dream members and alleged criminals, which Ivanishvili’s party said were fabricated.

If the result is close and the ruling party claims victory, Georgian Dream is likely to mount around-the-clock protests to demand a recount, IHS Global Insight analyst Lilit Gevorgyan said Sept. 26 by e-mail.

“The authorities have become used to seamless power and a lack of accountability,” said Mark Mullen, chairman of Transparency International Georgia. “It’s not yet clear if they are committed to relinquishing some of that power, and if they do, do they have the ability to share with an opposition or with more independent institutions.”

-- Editors: Andrew Langley, Paul Abelsky

To contact the reporters on this story: Helena Bedwell in Tbilisi at hbedwell@bloomberg.net Henry Meyer in Moscow at hmeyer4@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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