Georgians Vote as Prison Scandal Tests U.S. Ally Saakashvili

Georgians are voting today in elections amid opposition accusations of fraud and a scandal over the assault of prisoners that threatens the nine-year rule of U.S. ally President Mikheil Saakashvili.

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 footage showing prison guards beating and raping male inmates with a broom handle and truncheon sparked mass protests in Georgia, a key link in energy-transit routes to the West. Voting stations close at 8 p.m. in Tbilisi, with exit polls due right after.

“After these revelations, the situation seriously changed and we can say that the victory of the ruling party won’t be by as big a margin as expected,” said Alexander Rondeli, head of the Georgian Foundation for Strategic and International Studies in Tbilisi. “I can’t exclude that they may lose, though they tried to improve their situation” by replacing the interior and prisons ministers and dismissing penitentiary staff.

The opposition movement of billionaire Bidzina Ivanishvili, who’s accused by the Georgian government of ties with Russia where he made his fortune, vowed to end Saakashvili’s rule in the former Soviet state with the help of “free and fair” elections. 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.

Economic Turnaround

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

Ivanishvili’s party alleged “irregularities” and “intimidation” today during the voting, urging its supporters to stay calm. About 20,000 observers, most from the Georgian Dream, weren’t accredited as polling stations opened, while a monitor in Tbilisi was attacked by an unknown person, leaving her with a broken leg, the party said in an e-mailed statement.

“Major Irregularities”

Saakashvili’s party has seen no “major irregularities” at polling stations and called the opposition’s allegations unfounded and “discrediting for the elections,” according to party spokeswoman Chiora Taktakishvili.

The Organization for Cooperation and Security in Europe, a 56-nation democracy watchdog that has supplied a quarter of the 1,600 international observers monitoring the vote, said that all parties need to allow peaceful and democratic elections.

“We have made very clear that the expectations for this election are extremely high and that they will determine the pace and intensity of our relations with Georgia,” Maja Kocijancic, a spokeswoman for European Union foreign affairs chief Catherine Ashton, told reporters today in Brussels.

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

U.S. Educated

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.

“It’s an important day for Georgia, as it’s deciding what happens to the European dream, what happens to the idea of democracy,” Saakashvili told reporters after voting.

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 after exiting politics.

Trade Embargo

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 vote. Russia, the nation’s main trade partner, banned the imports of fruits, vegetables, wine and mineral water after the conflict, hurting much of Georgia’s rural population.

The U.S., Europe and Russia all vie for sway over Georgia, which is home to the three pipelines that allow the transit of gas and oil to the Black Sea and Turkey from neighboring Azerbaijan while bypassing Russia. The Baku-Tbilisi-Ceyhan oil pipeline, owned by companies including BP Plc (BP/), Chevron, ConocoPhilips, Total SA (FP), Eni SpA (ENI) and Statoil ASA (STL), was temporarily shut in the 2008 war between Russia and Georgia.

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.

Russian Ties

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. He says he’s spent $1.7 billion of his own money on initiatives to overhaul Georgia’s police force and military, among others, and would normalize relations with Russia after five years if his party wins the election, though he denies any ties to President Vladimir Putin’s administration.

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.

“Uncertainty Remains”

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.

“Uncertainty remains significant,” Morgan Stanley analysts Jacob Nell and Alina Slyusarchuk said today in an e- mailed report.

The scandal will reduce the lead of Saakashvili’s party by some degree, though it is unlikely the opposition will pull off an upset, said Jeremy Rosner, executive vice-president principal of Greenberg Quinlan Rosner, which has been doing polling for Saakashvili’s United National Movement.

“I want is a colorful parliament, one that has more than one ruling party,” said 50-year-old pensioner Tsira Chubinidze outside a Tbilisi polling station today after voting. “It’s time for broader representation.”

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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