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DE RUEHSI #1066/01 1721316
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R 201316Z JUN 08
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC 9665
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 03 TBILISI 001066 
 
SIPDIS 
 
STATE FOR EUR/CARC AND DRL 
 
E.O. 12958: N/A 
TAGS: PREL PGOV GG
SUBJECT: 2008 PARLIAMENTARY ELECTION CAMPAIGN FINANCING 
 
¶1. Summary: Pursuant to campaign funding disclosure 
requirements, all four parties that crossed the 5 percent 
election threshold in the May 21 parliamentary elections 
have submitted campaign funding reports to the Central 
Election Commission (CEC).  An audit group contracted by 
the CEC studied the reports and approved them as adequate. 
The United National Movement (UNM), which received 59.18 
percent of votes in the election of proportionally 
distributed seats in Parliament, reported spending GEL 12 
million (USD 8.33 million).  The United Opposition (17.73 
percent of votes) spent GEL 481,800 (USD 334,583). 
Christian Democrats (8.66 percent) spent GEL 241,500 (USD 
167,708), and the Labor Party, GEL 284,000 (USD 197,222). 
The reports do not include spending by individual 
candidates for majoritarian seats in Parliament, thus 
revealing only a portion of the overall campaign financing 
picture.  End Summary. 
 
Election Fund and Mandatory Disclosure Requirement 
--------------------------------------------- ----- 
 
¶2. The Election Code of Georgia mandates disclosure of 
funds spent by parties and election blocs, and that the CEC 
develop additional procedural requirements.  Information 
concerning campaign contributions is required to be 
reported to the CEC and made publicly available.  The law 
requires political parties to set up an election fund and 
provide an accounting for it.  They must also report all 
goods and services obtained free of charge (at estimated 
market prices).  Free air time received from television and 
radio is exempted from the rule.  Majoritarian candidates, 
special interest groups established by parties and special 
interest groups for election of local self-government 
bodies report voluntarily.  Individual campaign 
contributions are limited to GEL 30,000 (USD 20,833) for 
individuals and GEL 100,000 (USD 69,444) for corporations. 
Election subjects may not use any funds other than their 
election campaign funds.  Foreign contributions from 
citizens or legal entities from foreign countries, persons 
with no citizenship, international organizations and 
movements, non-entrepreneurial legal entities, religious 
organizations and Georgian companies in which the state 
owns a share are prohibited. 
 
¶3. No later than one month after the publication of 
election results, parties and election blocs must submit to 
the CEC a report on expenditures, together with an audit 
report by and independent auditor, stating the sources of 
the campaign funds and accounting for expenditures. 
Parties and election blocs, who according to preliminary 
data received the necessary number of votes, must report 
not later than eight days after Election Day. 
 
National Movement 
----------------- 
 
¶4. The United National Movement (UNM), as the ruling party, 
was able to conduct a more lavish campaign than other 
parties, and did not suffer from lack of donors.  The UNM 
reported spending GEL 12 million (USD 8.33 million).  After 
the presidential election, the UNM was the only party that 
disclosed any companies openly supporting its campaign.  52 
companies contributed, including Aldagi BCI (an insurance 
company), Galt & Taggart, Bank of Georgia, Center Point 
(construction), Aword Capital (construction), Teliani (wine 
producer), and Georgian Mint.  The UNM contributed GEL 9.5 
million (USD 6.60 million) from its party funds, 80 percent 
of their total cash spending for the election.  The UNM 
spent only half as much on the parliamentary election as it 
did on the presidential campaign in January, suggesting 
that either the party was confident of victory or that it 
could not afford higher spending.  There is also a 
widespread suspicion among the population, the print media, 
and the opposition that the UNM's actual spending was much 
higher than reported, and that access to administrative 
resources gave the ruling party significant advantage over 
its rivals.  Presentations of new governmental programs, 
especially those with social and economic benefits, were 
timed to coincide with the elections and added the polling 
results of the ruling party. 
 
¶5. GEL 386,000 (USD 268,055) or 3.2 percent of the UNM's 
spending went to salaries for campaign activists.  GEL 1.1 
million (USD 763,889) or 9 percent was spent on public 
opinion surveys.  The rest was used for purchase of goods 
and services, which includes production of commercials, 
organization of meetings, TV and radio advertisements, and 
production of printed materials. 
 
Christian Democratic Movement 
----------------------------- 
 
TBILISI 00001066  002 OF 003 
 
 
 
¶6. The Christian Democratic Movement reported donations in 
the amount of GEL 241,570 (USD 167,708).  Corporate 
donations were not reported; 13 individual donors filled 
the purse of the newly created political party.  Individual 
donations ranged in size from GEL 335 (USD 232.64) to the 
maximum GEL 30,000 (USD 20,833).  Top contributors were 
from the party leadership.  However, no contribution was 
disclosed from party leader Giorgi Targamadze. 
 
¶7. As for spending, 66 percent, or GEL 159 thousand (USD 
110,416), was paid for goods and services, mostly fuel, as 
well as purchase of cell phone cards.  Campaign commercials 
consumed over GEL 26,000 (USD 18,055) or 11 percent, 
billboard and newspaper advertisements cost GEL 11,000 (USD 
7,639), and production of campaign materials such as 
posters, leaflets and brochures took another GEL 38,450 
(USD 26,701) or 16 percent.  TV advertising time purchased 
by the party accounted for GEL 19,000 (USD 13,194).  No 
spending is reported for public opinion polls, election- 
related surveys or campaign advisors. 
 
United Opposition 
----------------- 
 
¶8. The United Opposition built up GEL 481,800 (USD 334,583) 
in its election fund.  As was the case with other 
opposition parties, all 24 of its donors were private 
individuals.  Prominent members of the opposition coalition 
such as David Gamkrelidze, David Saganelidze, Mamuka 
Katsitadze, Paata Davitaia, Pikria Chikhradze and Irakli 
Iashvili, who were running for the parliamentary seats, 
contributed from GEL 20,000 (USD 13,889) up to the allowed 
maximum of GEL 30,000 (USD 20,833).  However, the list does 
not include Levan Gachechiladze or Goga Khaindrava, two 
wealthy and prominent opposition leaders. 
 
¶9. The United Opposition's expenditures included printed 
materials (25 percent of total spending).  12 percent was 
spent on ads and commercials; three percent was used for 
billboards and newspaper space, and 19 percent on 
organization of public events and meetings.  Though the 
United Opposition claimed to have a full-scale picture of 
public opinion and party ratings during the election 
campaign period, in fact it spent no more than GEL 510 (USD 
354), or 0.1 percent of its available funds, for canvassing 
public opinion.  Spending patterns disclosed another 
interesting fact: the United Opposition relied on the free 
time provided by the leading channels and did not spend its 
party funds to buy time on the air on the three nationwide 
channels.  It did spend GEL 54,525 (USD 37,864) to put 
commercials on regional TV channels and Tbilisi's local 
Kavkasia TV, the latter accounting for 60 percent of the 
United Opposition's spending for television.  They reported 
no spending on campaign activists.  Most likely the bloc 
relied entirely on volunteers. 
 
¶10. Compared to the presidential elections, the United 
Opposition's campaign spending decreased by 33 percent. 
Composition of the election bloc has changed.  It does not 
include the Republican Party now, but includes the New 
Rightists who brought with them bigger campaign coffers. 
During the presidential election campaign earlier this 
year, "Gachechiladze's Society", donated 13 percent of the 
United Opposition's total cash contributions.  It is 
unknown whether or not this group still operates as they 
reported no donations for this election. 
 
Labor Party 
----------- 
 
¶11. Eighteen individual persons, most of them party 
leaders, contributed GEL 283,962 (USD 197,196) to Shalva 
Natelashvili's Labor Party.  However, as usual, none of the 
contributions came from Shalva Natelashvili's own pocket. 
Almost all of Labor's money, 98 percent, was used for 
printing materials, campaign activists were paid GEL 300 
(USD 208).  The party helped to construct a church at 
Kharagauli by contributing GEL 500 (USD 347) from its 
campaign fund.  Apparently, Natelashvili was more 
persuasive with potential donors this time, because Labor's 
funding for the parliamentary election increased eight-fold 
compared to the presidential elections. 
 
Price Per Vote 
-------------- 
 
¶12. On a per capita basis, the ruling UNM paid the highest 
price to attract voters: GEL 11.5 per voter (still much 
less than the GEL 21.68 (USD 15.05) per voter the UNM spent 
in the presidential election).  Next was Shalva 
 
TBILISI 00001066  003 OF 003 
 
 
Natelashvili's Labor Party, which traditionally claims the 
title of Georgia's poorest party.  It paid GEL 2.15 (USD 
1.49) or 7.7 times more than during the presidential 
election.  The United Opposition and Christian Democrats 
spent only GEL 1.52 (USD 1.05) and GEL 1.56 (USD 1.08) per 
voter, respectively. 
 
TEFFT