GEORGIA: BURJANADZE'S TAX SAGA CONTINUES

C O N F I D E N T I A L SECTION 01 OF 02 TBILISI 001784 SIPDIS E.O. 12958: DECL: 09/28/2019 TAGS: PGOV PHUM PREL GG SUBJECT: GEORGIA: BURJANADZE'S TAX SAGA CONTINUES REF: A. TBILISI 1674 ¶B. TBILISI 1568 Classified By: CHARGE D'AFFAIRES A. I. KENT D. LOGSDON. REASONS: 1.4 (B) AND (D). ¶1. (C) Summary: Former Speaker of Parliament, Nino Burjanadze (Democratic Movement - United Georgia) has indicated that she may challenge President Saakashvili to arrest her on what she believes are trumped up tax penalties in connection with a property she received for one lari (60 cents) in 2008 (ref A). Burjanadze spoke to Poloff and then subsequently with the Charge and indicated her frustration with western silence regarding what she terms Saakashvili's unfair and vindictive treatment of her. The Charge d'Affaires raised concerns about the appearance and propriety of the lawsuit with Deputy Foreign Minister Giga Bokeria. Burjanadze has requested another meeting with the Charge to discuss the case further. End Summary. ¶2. (C) Comment: It has been an open secret that the GoG has been waging an aggressive campaign to collect taxes, which has affected more individuals than just Burjanadze (ref B). If Bokeria's response is any indication, this legalistic argument will likely make up a large portion of the GoG's response to concerns about the propriety of the prosecution. Burjanadze's own unclean hands, particularly in accepting the property in the first place, hardly make her a sympathetic figure to the public. Nonetheless, any arrest of Burjanadze or other over the top treatment of her would seem disproportionate to the nature of the dispute, and post will continue to urge the GoG to proceed in an open, transparent and proportional manner. Our European colleagues are preparing similar approaches to the Government, but have also taken a private approach to the issue. Regardless of our interventions, at this point, it looks likely that the GoG will move ahead with the seizure and auction of the property in question as scheduled on October 7. End Comment. The Phone Calls ¶3. (C) Burjanadaze called Poloff on September 22 to ask what the USG response (if any) would be regarding the GoG's lawsuit against her for failure to pay taxes on a dacha she received for one lari (60 cents) (ref A and ref B). When asked as to what specific response Burjanadze wanted from the USG, she admitted that she was not sure. Burjanadze complained about being abandoned by her western friends in the face of an unfair and vindictive smear campaign against her. Burjanadze told Poloff she would demand that President Saakashvili arrest her and that "then maybe my western friends will comment." During the course of the 20 minute phone call, Burjanadze repeatedly apologized for being overly emotional. ¶4. (C) Charge spoke with Burjanadze on September 23 and had a similar conversation. Burjanadze complained that she had been accused of collusion with Russia, money laundering, and misappropriating state assets -- all without the GoG substantiating the allegations. She also accused the Government of planting false information in the Ukrainian press about her recent visits to Kyiv (including allegations that she was trying to borrow money from Ukrainian banks and Ukrainian oligarch Viktor Pinchuk) and said that her lawyers were investigating libel laws in Ukraine. The Charge noted that post had regularly raised the issue privately with senior Georgian leaders. Burjanadze replied that she appreciated the private support post provided, but since the people of Georgia only read "the lies" in the press, no one knew that post had been engaged on the issue. According to Qknew that post had been engaged on the issue. According to Burjanadze, her supporters routinely ask her "where are your western friends?" Burjanadze said a lack of western response has been particularly difficult for her since some of her supporters have been arrested or forced to pay money to the tax police (to the point of having to sell their houses and cars to stay out of jail) over the past few months. Burjanadze again raised the issue of her potential arrest. DFM Bokeria Hears Concerns - Says Little ¶5. (C) The Charge and Polchief relayed our concerns to Deputy Foreign Minister Giga Bokeria and noted that, regardless of the merits of the case (ref A),the optics of quickly auctioning off the property (scheduled for October 7) were not good. The Charge stressed that arresting Burjanadze in connection with the tax case would also likely be viewed in the West as overly zealous. Bokeria responded that the GoG had a legitimate legal case and pursuin it against Burjanadze, like any private citizen, was well within the GoG's normal rights. When the Charge asked specific questions about the legality of moving against just this property or the inability of Burjanadze to provide her own TBILISI 00001784 002 OF 002 experts' assessment of the value of the property to the court, Bokeria said that he could not guess as to the legal issues involved. The Charge noted that even if one conceded the legal argument, the GoG should consider that any arrest of Burjanadze would cause a political reaction from the West and urged the government to proceed cautiously. LOGSDON