VZCZCXYZ0002
RR RUEHWEB

DE RUEHSI #3002/01 3341312
ZNY CCCCC ZZH
R 301312Z NOV 07
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC 8343
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

C O N F I D E N T I A L TBILISI 003002 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EUR/CARC AND EUR/FO 
 
E.O. 12958: DECL: 11/29/2017 
TAGS: PGOV KCRM KBIO GG
SUBJECT: WHY PATARKATSISHVILI SCARES THE GOG 
 
REF: TBILISI 2978 
 
Classified By: Ambassador John F. Tefft, reason 1.4(b) and (d) 
 
¶1. (C) Summary.  The Georgian government accuses oligarch and 
presidential candidate Badri Patarkatsishvili of moving from 
ordinary politics to fomenting revolution over the course of 
¶2007.  It has taken steps against him personally and against 
his business interests in an attempt to blunt his influence 
and power, although it insists he will be allowed to campaign 
freely before the January 5 presidential election. 
Patarkatsishvili is wanted in Russia for a variety of white 
collar crimes and is suspected of much more dangerous and 
unsavory activities.  His most important tool to achieve his 
political ends is the independent television station Imedi. 
Imedi's true relationship with the American company News Corp 
is unclear, and the government wants an assurance News Corp 
is really in charge before it will trust the station to go 
back on the air.  The evidence against Patarkatsishvili 
personally, on claims of conspiracy to overthrow the 
government, is so far largely circumstantial, but some 
independent experts are uneasy about him.  Patarkatsishvili's 
popularity with Georgian voters will be tested by the 
election in January.  Even if he loses, he will likely 
continue to be a formidable opponent to Saakashvili.  End 
Summary. 
 
¶2. (C) The Georgian government, headed by former President 
Saakashvili, took a number of drastic and seemingly 
counter-productive steps to protect itself since the 
appearance of a major political challenge, first from former 
Minister of Defense Irakli Okruashvili and then from oligarch 
Badri Patarkatsishvili.  The arrest of Okruashvili, the 
forceful response to demonstrators on November 7, the closing 
of Patarkatsishvili's Imedi television station, and the 
harassment of some Patarkatsishvili businesses (reftel) has 
cost the GOG dearly in its standing with its friends in the 
international community.  The government is sincerely 
convinced that Patarkatsishvili constitutes a threat to its 
existence, and has been willing to sacrifice years of 
progress and accumulated international goodwill to avert that 
threat.  To the government of Georgia, the struggle is one of 
life and death.  Why is Patarkatsishvili viewed in such 
apocalyptic terms? 
 
WHO IS BADRI PATARKATSISHVILI? 
------------------------------ 
 
¶3. (C) Patarkatsishvili was born October 31, 1955 in Tbilisi 
to a Jewish family.  In the early 1990's, he moved to Moscow 
and became associated with Boris Berezovsky, who helped him 
to become very wealthy, attaining an estimated net worth of 
USD 12 billion, according to the Georgian Times newspaper. 
Estimates of his wealth vary widely.  Patarkatsishvili was a 
deputy director of Berezovsky's LogoVaz group, which 
distributed and sold Russian cars.  He was a director of 
Russia's ORT TV and TV6 when they were controlled by 
Berezovsky.  He was a director of the oil company Sibneft, 
which Berezovsky bought for an estimated USD 100 million but 
was later found to be worth billions.  Also associated with 
Roman Abramovich, he helped manage a $3 billion investment in 
the aluminum industry.  In 2001, he and Berezovsky were 
charged by the Russian government with stealing hundreds of 
millions of rubles from Aeroflot, and Patarkatsishvili was 
accused of embezzling millions from LogoVaz.  Faced with 
prosecution in Russia, he returned to Georgia in 2001.  In 
Georgia, he set up the independent media company, Imedi, and 
bought the country's national circus, soccer clubs, other 
sports franchises and a great deal of property.  He was the 
president of the Georgian Federation of Businessmen, and 
served on Georgia's Olympic committee.  He is known for grand 
philanthropic gestures, such as a million dollar loan to the 
City of Tbilisi to pay for gas for its citizens in 2003, and 
financing the Georgian Olympic team's participation in the 
games in Athens. 
 
¶4. (C) Patarkatsishvili is suspected of having an even darker 
side than that reflected by his alleged white-collar crimes 
in Russia.  He is alleged to have been Berezovsky's enforcer, 
and even to have committed murder in his service.  He is 
associated with some extremely unsavory figures, including 
Andrei Lugovoi, suspected of poisoning Russian dissident 
Alexander Litvinenko.  Lugovoi was head of ORT's security in 
Russia and Patarkatshishvili has described him as a "close 
friend."  Despite his differences with the Government of 
Russia, Patarkatsishvili is believed to be closely allied 
with Russian intelligence services, probably through Lugovoi. 
 
 
INTO THE OPPOSITION 
------------------- 
 
¶5. (C) Patarkatsishvili enjoyed a warm relationship with 
former Georgian President Shevardnadze.  Immediately after 
the Rose Revolution in 2003, he remained on good terms with 
President Saakashvili.  However, beginning in 2006, 
Patarkatshishvili began to take issue with the new 
government's policies toward business.  He may have been 
motivated by the new government's aggressive tax enforcement, 
which greatly increased the government's revenue but upset 
many businessmen in Georgia, not only Patarkatsishvili.  MP 
Giga Bokeria has been quoted as saying the reason for the 
oligarch's discontent was his inability to gain privileges 
and suppress his rivals so that he could become the "Don 
Corleone of Georgian business."  In an interview, 
Patarkatsishvili marked the turning point as the death of his 
friend and former Prime Minister Zurab Zhvania in 2005. 
 
¶6. (C) By 2006, Patarkatsishvili had begun to finance the 
opposition parties more or less openly.  Although many of 
them urged him to run for an office, such as Mayor of Tbilisi 
in the 2006 local elections, he did not put himself forward 
personally until November 2007, when he announced his 
intention to run for President.  By that time, he was 
describing Saakashvili as "fascist" and "a despot".  Before 
that however, Patarkatsishvili was backing Irakli 
Okruashvili, who famously accused Saakashvili of plotting 
Patarkatsishvili's murder, and then retracted the accusation. 
 The government says Patarkatsishvili paid the demonstrators 
who battled police on November 7 and directed their efforts 
via intermediaries on the scene in Tbilisi. 
Patarkatsishvili's last public appearance in Georgia was at 
the opposition demonstrations on November 2, after which he 
departed for Israel and the UK.  From Eilat, he repeated the 
vow to "free Georgia from this dictatorial junta," echoing 
his call for Saakashvili's ouster that led to the closure of 
Imedi television on November 7.  Since that time he has 
allegedly been funding the travel of opposition figures to 
Europe, where they have been meeting government officials and 
pressing their case against Saakashvili as a faux democrat. 
Government pressure on Standard Bank and other 
Patarkatsishvili enterprises may make it more difficult for 
him to fund the parties within Georgia. 
 
¶7. (U) Patarkatsishvili's political program, as announced on 
October 17, would seek a balance in Georgia's policy toward 
Russia and the United States.  He says NATO and EU membership 
is fully in line with Georgia's interests, but "should not 
occur at the expense of others' interests."  He envisages 
Georgia as a federal state, without a president, or possibly 
with a constitutional monarch.  The central government would 
be responsible only for defense and economy and all other 
functions would be distributed to the regions.  To ensure 
both Georgia's independence and its economic prosperity, he 
would encourage maximum self-realization and security for the 
rights of entrepreneurs. 
 
IMEDI, THE THORN 
---------------- 
 
¶8. (C) Although Patarkatsishvili has many business interests 
in Georgia, the one that makes him the number one thorn in 
the government's side is Imedi television.  Founded in 2002, 
Imedi has grown to be the most popular television station in 
Georgia.  Although one would expect it to be a lucrative 
venture, the government has claimed it is reporting losses in 
the range of USD 20 million a year.  As Patarkatsishvili 
became more critical of the government, so did his television 
station.  Imedi broke the news that Ministry of Internal 
Affairs officials were involved in the beating death of 
Sandro Girgvliani in February 2006, a news story that shocked 
the nation and seriously undermined the government's 
reputation for respect for rule of law.  It is widely 
believed in Georgia that Patarkatsishvili had made a deal 
with the GOG earlier in 2007 to sell Imedi to an owner more 
amenable to the government in return for taking control of 
Georgian Railways.  That deal fell apart, however, reportedly 
angering Saakashvili.  By November 7, the government was 
convinced that Imedi was not only reporting, but encouraging 
revolution and disorder in the streets.  Imedi's news anchor, 
Giorgi Targamadze (a former chief of staff to ousted Adjaran 
strongman Aslan Abashidze), was a bitter government foe and 
was not shy about letting it show in his newscasts. 
President Saakashvili branded the station a "factory of 
lies." 
 
¶9. (C) The government does not seem willing to allow Imedi to 
reopen until it is satisfied that Patarkatsishvili cannot 
influence its editorial content and an ombudsman is in place 
to call a foul if it exceeds the bounds of journalistic 
ethics.  The government' suspicions of Imedi are heightened 
by questions about the station's relationship with the 
American communications company News Corp.  In April 2007, 
News Corp, Imedi and Patarkatsishvili trumpeted the sale of 
an undisclosed portion of Imedi to News Corp.  However, the 
government says that News Corp's purchase has never been 
registered and that on the official books Patarkatsishvili's 
companies remain the station's full owners.  The government 
wants to be assured Patarkatsishvili is out of the station 
and News Corp fully in before it allows Imedi to reopen. 
News Corp has provided the Prime Minister with a document 
wherein it admits it "does not fully own" Imedi; rather, it 
has an agreement to purchase a minority interest.  It is 
unwilling to do more than promise full transparency of its 
stake, whatever it is, in Imedi.  The government is also 
seeking to impose some duties of disclosure about management 
and Imedi's finances.  News Corp seems ready to accept these, 
so long as they are applicable to all media in owners in 
Georgia.  Similarly, it appears ready to accept oversight of 
journalistic ethics on an industry-wide basis.  It rejects 
allowing the government to name "tainted" journalists whom 
Imedi must not employ. 
 
IS HE REALLY A THREAT? 
---------------------- 
 
¶10. (C) Patarkatsishvili is, if nothing else, a shrewd and 
powerful opponent of the Saakashvili regime.  He has more 
than enough money to fund the opposition, as he has promised 
to do.  Although he has been named a suspect in a case of 
conspiracy to overthrow the government of Georgia, he has 
apparently been careful not to commit any treasonous acts 
that can be easily traced to him personally.  The government 
can investigate for 30 days before it must drop the 
investigation.  Officials insist he is free to return to 
Georgia to campaign while their investigation is ongoing.  At 
the same time, the government believes that 
Patarkatsishvili's turning of control of Imedi over to News 
Corp was a sham, and that he was directing its employees to 
foment revolution, and will continue to do so if allowed. 
The most serious allegations, such as stockpiling of weapons 
and organizing a militia by the station's security director, 
touch on employees' actions, and the recorded statements by 
Patarkatsishvili himself are ambiguous.  Nevertheless, not 
only the government, but also a level-headed observer such as 
Alex Rondeli, head of the Georgia Foundation for Strategic 
and International Studies, believe Patarkatsishvili is 
dangerous.  Rondeli recently told the Ambassador that in his 
opinion, it was necessary for the GOG to arrange for Irakli 
Okruashvili to be taken into custody in Germany to prevent 
his being assassinated on Patarkatsishvili's orders, which 
would create a further scandal for the beleaguered 
Saakashvili. 
 
¶11. (C) Patarkatsishvili remains a huge wild card in the 
January 5 election.  It is unclear how many people would vote 
for him, but polls taken before this fall's political crisis 
showed him personally among the most popular figures in the 
country.  The government genuinely fears that he could employ 
his fortune and his network of associates to launch 
provocations or violent demonstrations.  These concerns may 
be overblown, and Georgia does not have the feel of a country 
on the verge of a revolution.  Nevertheless, this drama is 
likely to take more unexpected turns both before and after 
January 5.  It is not clear at this point who will win the 
election, or how Patarkatsishvili and the rest of the 
opposition would respond to a Saakashvili victory. 
TEFFT