ABKHAZIAN BUDGET OD PALMTREES

Maia Razmadze

Not long ago, separative government of Abkhazia had celebrated the overfulfillment of Y2000 Budget. Content with results, Abkhazians approved the Y2001 Budget with higher parameters and are sure that will manage it more successfully.

Abkhazians, brave with last year’s figures, fill budget with export. So do they planning Y2001 one. However, directions of budget fulfillment and social improvement do not correspond to restoration of any field of economy. Export products for Abkhazia, as we know, is natural wealth gained for tens of years, which they have acquired after Georgians’ departure. Most of revenues are collected from scrap metal and wood export, especially palm-trees.
Budget of Abkhazias is enough symbolic – it encompasses the grants accepted from abroad, some with permission of Georgians and some not. Abkhazians do their best to establish international economic relations, however, succeed only with Russia. Despite Russians invest certain amounts in Abkhazia, it doesn’t mean much to improve environment.
Vakhtang Kolbaia, Vice-speaker of Parliament of Georgia: the economy that Ablhazians have announced, as the basis of their development, is similar to communist projects, thereof, inspire pity. Modern appeal to economy has disappeared in Abkhazia and changed into old communist mentality with an administrative method. Therefore, their efforts are weak and economy – dead with no prospect. Generally, talking about Abkhazian economy is nonsense, but despite our political will, they have an opportunity to exist still.One can easily make money on grants and humanitarian aids, especially when the donors are neighboring countries, as it’s easier and more profitable to relate with them and transport the goods therefore. A huge amount of Turkish grants serves as a proof of it.
For not being surprised by Turkish generosity, it is better to find out whether grants are profitable for Turks.
Turkish side interests: It’s quite possible to run illegal financial machinations and, like us, evade taxes. The best way of doing so is to associate their business with charity. Turkish government takes care of country’s industrial development. Companies those export goods benefit some allowances, particularly if relate their businesses to charity. According to law body of country, organizations like this are freed of some tax, are able to take credits easily etc. However, it’s much more expensive than sending products to Georgia.
Georgian side interests don’t differ greatly from those of neighbors. Goods, imported as a grant, on the background of our “hardest” Tax Code, are not imposed with customs duties. If consider the experience of past years, there’s a big probability that none will insist on an explanation from those embezzling grants, as they’re excellently familiar with dealing to law-enforcement structures.
Consequently, Georgian-Turkish charity organizations have formulated a well-developed system. Millions of dollars cost product has been brought in Georgia from Turkey as a grant during last years and, no doubt that nobody received it as a present.
The structure of grant embezzlement is so familiar and well tested that only the person of rare innovative gift can introduce novelty in it. Levan Totadze appeared to be such a person.
Shades for Portrait: Levan Totadze was born in 1949, biological physiologist, candidate of biological sciences. During the presidency of Zviad Gamsaxurdia Governed the Samgori region of Tbilisi. In 1992-97, after new power seized the governance in Georgia, Totadze left for Moscow, as an advisor of one of the Russian Parliament members. From 1993 worked for some charities and apparently had some connections with Georgian organizations, though only from 1998 took an active part in this affair. In 1999, he took a participation in Parliament Elections as one of the candidates in Samgori region of Tbilisi. Until that, during his activity in Moscow, he got acquainted with representatives of Turkish charity organizations and their system. So, he returned home full of new ideas.
In 1998, he registered the fund “Mecenati”, which directed himself. In July, he put a contract with “Artvini Branch of Iavuz Selim Fund” of Turkey. “Mecenati” brought in Georgia $249 000 cost 520 tones of sugar and 520 tones of flour as a grant, to carry out the program of financial aid for socially unprotected population. But he sold these products for own profit, misappropriated the income in his favor and registered false data in accountant book as if the product was granted to the Councils of Chokhatauri, Khelvachauri, Kobuleti and Gori regions of Georgia to hand to population. Later, Totadze suggested to Head Councils of 16 villages the grant of sugar and flour, if those agree beforehand. Totadze used these blank signed sheets for drawing up the false acts of acceptance on 350 tones of sugar and 370 tones of flour for the Chokhatauri region. Indeed, population of this region got nothing from Fund “Mecenati”.
Embezzlement methods differed in case of another charity fund know as “Sapience” one of the founders of, which the same Levan Totadze is. Russian charity fund “Migrant” purchases $470 000 cost 2000 tones of flour from Turkish, “Fatogly” Company, which was proposed for granting the “Sapience”. Indeed, fund did those of $365 000, which have already been wasted as the result of what Georgian Ministry of Internal Affairs had arrested the director of fund, Sagirashvili.
The same came upon the executives of non-profitable organization “Abkhazian Survival Fund” Dzotsenidze and Goniashvili those have involved refugees in their business. In 1999, they’ve accepted $460 000 cost 2300 tons of flour and 450 tones of sugar from Turkish charity organization “Bakara”, which have been seen for socially unprotected population programs in Mestia region of Georgia as the end in view. Indeed, amounts were embezzled as the others in past.
Avtandil Kvernadze, Detective: All these crimes have one likeness; each of them relates to Levan Totadze. Each of contracts accord with part of liabilities, which allows to employ 35-60% of grant for future development of “charity organization”. But that’s permitted if the donor agrees. Georgian side is due to reporting all of the payments to donor. If donor discards the scales of outgo, it may appeal to media and TV. However, none of donors did as owed, after violators have been revealed. Moreover, trial processors couldn’t even find “Bakara” and “Artvini Branch of Iavuz Selim Fund” in addresses given by contracts.
Levan Totadze: It’s true that I’ve founded other funds as well. Some of them have simply cooperated with me. As to management, I’ve been executing the only of own possession and it’s wrong, when violations of others are blamed on me. It’s not my fault! I’d have been arrested long ago if so. How am I to blame? I haven’t staled, rubbed or anything else. I’ve brought the grant up from my private contacts and wasted it in accordance with contract clauses. The only thing I’ve done wrong is that have drawn up the false acts of acceptance, but without that, I could have no chance to make money, which I had in view to enlarge in millions lately. For seven years, I learned much about tax codes worldwide, then invited refugees to help in finding the optimal partners for grants abroad for, which they accepted 50 GEL per program. I’ve accepted $250 000 and, with an agreement of donor, employed them for future development of my fund. I had visited US, Europe, Canada etc. to find the ways of cooperating with charity funds.
You want to make money? That’s not a problem. Our tax code gives innumerable opportunities to do it. First $250 000 were proposed for future millions, but I failed, as government that embezzles billions could make an authority arresting me. However, it’s not so easy to prove my fault.
The thing is that court really could not prove the fault of Totadze and he is still free thereof. Trial documents verify that, according to contract, grant acceptor (Totadze) had an opportunity to act for own favor. Some consider that those documents are false and made up later. Thus, neither Georgian, nor Turkish side can prove that.
Iavuz Evirgen, Secretary Second to Turkish Ambassador in Georgia: You’d be better seeking for criminals home, as have the image of corrupted country. If Turkey gives a grant and you embezzle it, our Country is out of it of course.
Kenan O. Ildrim, Chairman of Turkish-Georgian Entrepreneurs’ Association: We’re used to the fact that Georgians come to us and declare that Turkish companies have deluded them, however, later, appears that those companies are even do not exist in our country. Unfamiliar with Turkish Legislation Georgians think that if person presents the hallmark and assigned paper, it’s the owner of prestigious company. That’s not right.
More interesting in this issue is that Totladze and all others are the presenters of middle social layer, which totally differ from person who embezzled huge amounts. Thereof, we may consider that enumerated amounts are flowing to other directions.