certain types of enterprises only. These restrictions usually prevent political corruption and protectthe shareholder rights. The main purpose of a commercial enterprise is to obtain financial gain.Consequently, there is always a danger that political donations from businesses are aimed atestablishing close ties with some politicians in order to obtain undue advantages.Funding political parties by businesses is always fraught with risks of corruption. Therefore, it isabsolutely essential to have correct legal regulations in place for donations. Complete ban ondonations, on the other hand, would result in unjustified and disproportionate restrictions of the legalentities’ constitutional rights of expression and political activity. The fact that there is no documentdeveloped by any international organization with respect to Georgia recommending the Georgianauthorities to impose a complete ban on legal entities funding political parties is also to be accountedfor.Instead of imposing a complete ban on legal entities to finance political parties, it would be preferableif the legislation included: special regulations to avoid the existing risks in order to prevent oneperson to bypass the donation limit by founding several legal entities; receiving funding from a legalentity whose shareholder may be a foreign national or another state, a company registered in anoffshore zone etc.∎∎∎∎It is necessary to formulate the law in such a way as not to allow one and the same person totransfer more than GEL 100,000 to one party through ownership of different legal entities.The government should restrict or prohibit contributions not only from the enterprises inwhich it has a stake, but also from those enterprises that provide goods or services to a publicinstitution.To reduce the risk of corruption, it is desirable to prohibit businesses winning publicprocurement contracts to make donations in the year preceding elections as well as electionyear, and prohibit the companies financing political parties to participate in publicprocurement throughout the election year and the year after the elections. This requirementis preconditioned by the fact that such enterprises have direct financial ties with thegovernment, which yields a risk of illegal transactions between a political party andbusinesses – the risk of "winning the bid in exchange for a donation," or "Making a donationin exchange for winning the bid"Ban should be imposed on the receipt of donations from such companies whose shareholdersare not Georgian nationals or are off -shore-registered companies24
3. Financial Accounting FormsPrimarily, the State Audit Office introduced a special form 32 for filling out the declarations. Theabove form is quite convenient for public use as the data are typologically segmented and the partycosts are more detailed and complete. Secondly, all costs became, in fact, completely identifiableincluding the amounts of “Other Costs”, which deserves a positive assessment.3.1. Shortcomings in the Income section of DeclarationsWhen researching the previous reporting periods, we have repeatedly noted that a significantshortcoming concerned the use of "other" category when indicating the type without possibleidentification. As regards the revenues, an additional category of “other revenues” is supplied. In2011, two parties entered solid sums in the category of “other revenue”. The same occurred in 2012 aswell. Under the amendments to the organic law of Georgia on Political Unions of Citizens entered on28 December 2011, the total sum of “other revenues” except for state financing, donations, publicevents, and revenues received from distributing party symbols should not exceed GEL 60,000.Subsequently, after the enactment of the law, any unidentifiable revenue receivable that exceeds theamount of GEL 60, 000 may be deemed illegal.To eliminate the above problems, the following recommendations should be taken into account:∎The State Audit Office declarations should indicate all possible types of revenues received bypolitical parties, including the categories that were reflected in the party reports fromprevious years, such as disposal of non-financial assets, interest capitalization, and so on;∎ Since all types of revenues cannot be exhausted in declarations, when using the “otherrevenues” category, it should become mandatory to indicate the source of the revenue inquestion. Namely, if specific revenues are not covered by the indicated types, the declarationform should have a reference to how the party received them, just like the detailed boxes of“other costs”3.2. Shortcomings in the Expenses section of DeclarationsDeclaration forms contain categories detailing which would improve the degree of transparency andeven satisfy certain interests. It has been remarked that the State Audit Office has supplied thedeclaration forms with additional elaborate boxes further detailing such expenses as salaries, bonuses,32http://sao.ge/?action=page&p_id=179&lang=geo25
- Page 4 and 5: Executive SummaryThe present resear
- Page 6 and 7: I. RevenuesThis part of the researc
- Page 8 and 9: Figure 2. State financing received
- Page 10 and 11: 3. DonationsLegislative amendments
- Page 12 and 13: Figure 4. Political party donations
- Page 14 and 15: Figure 5. Political party donors co
- Page 18: costs for this purpose, the Nationa
- Page 22 and 23: III. Basic Findings, Tendencies, an
- Page 24 and 25: ∎We believe that the State Audit
- Page 28 and 29: usiness trips, lease costs, and so
- Page 30 and 31: AnnexFigure N1 33 . Parties funded
- Page 32 and 33: Table N1. Connection between Donors
- Page 34 and 35: MudmivmokmediArbitrazhi BT Chompany
- Page 36: 72 TeimuraziTsurtsumia73 GiorgiGhug
- Page 40 and 41: 139 Archil Jakeli 3,000 Ltd Its Sht
- Page 42 and 43: Khidi174 Lasha Davituri 8,000 Ltd T
- Page 44 and 45: 208 Ivane Beradze 8,000 Ltd Osheane
- Page 46 and 47: 246 NikolozGhoniashvili247 TamaziSa
- Page 48 and 49: 273 ValerianKhapirashvili274 NodarC
- Page 50 and 51: Inoveisheni " “Geo TikonInnovatio
- Page 52 and 53: 350 Giorgi Ramishvili 60,000 Enji S
- Page 54 and 55: 387 Davit Imerlishvili 58,000 Ltd S
- Page 56 and 57: Table N3. Connection between Donors
- Page 58 and 59: Surname(Market Price)1TsitsinoSakhv
- Page 60: Vadatchkoria2627282930313233Bidzina