“Tightly” tightened belts

                                                                                                                           Journalistic investigation 
At the end of January of 2009, when the postwar country’s economy was further threatened by the world financial crisis, Mr. Nika Gilauri, the Prime-Minister of Georgia offered the initiative to “tighten ones’ belts”. This, as he explained, meant economizing on the budgetary funds for fuel, business trips and cars. “The economic difficulties make us tighten our belts; prior to common people, the government should be the first to do this by cutting the administrative expenses," - said the country President Mikheil Saakashvili in his annual appeal to the Parliament on February 12, 2009.
The belt tightening politics is an internationally recognized principle and means reducing administrative expenses by the country government, with the saved finances spent to stimulate the economy of the country in case of crisis.
This initiative was still valid when (from 2007 through October 8 of the current year) the self-government of Poti purchased 13 cars with the city budget. Each car cost 28 to 84 thousand Gel. The “acquisition” included Toyota Land Cruiser Prado of 2010 with cross-country capacity purchased for the new city mayor Vakhtang Lemonjavva, which cost 77.030 Gel.

The newly purchased 77.030-Gel-cost car for Poti mayor

How much does the local officials’ travel cost the budget and how the 80 thousand-Gel-cost Bumer fumed away
“…new …cross-country capacity ...expensive” - these are the common features of the cars the self-government of Poti has been regularly buying recently for the city officials, regional administration and law machinery at the expense of the city budget. These organs are mostly given these cars for permanent use.
Since 2007, approximately 600.000 Gel has been spent from Poti budget for this purpose. The only reason we could not get a more exact figure is that we could not receive thorough documents with the relevant figures from the local offices.
According to the information, which was obtained from the Municipality in small pieces and for months on end (if considering the effective legislation, the information was provided by violating all procedures; it is presented as a table, is inaccurate and incomplete. Therefore, we had to apply to the Municipality for several times to examine the accuracy of the information provided).
According to the table, on April 5, 2007, by virtue of decrees Nos. 572 and 24 of the city mayor, the Municipality administration purchased two new cars – Volkswagen Jetta of 2007 at 42.518 Gel and Volkswagen Passat produced in the same year at 58.744 Gel and handed them to city Sakrebulo. Volkswagen Passat (with the state number LOF-001) was exploited by Vano Saginadze when he was a city mayor and is still used by him when is a chairman of Sakrebulo.
According to the same document, BMW (engine power of 5,0, produced in 2005), which the Municipality administration purchased at 80.000 Gel in 2007, is still registered as the assets of the administration. However, nobody at the Municipality knows who is using the car now. As the head of the Municipality administration, Ia Tugushi explains, she did not work with the Municipality when the car was purchased and knows nothing about the car. Sulkhan Tolordava, head of the Department of Financial and Economic Policy by the same reason, does not know where the car is.
Surprisingly, the list of cars provided by the Municipality administration does not show Volkswagen Passat, which was purchased at 73.403 Gel by the Municipality administration as capital expenses; the Municipality never used the car, but it gave it to Zaza Gorozia, the regional governor. “It was purchased for the administration, but it is used by the governor,” – said the then-time city mayor Vano Saginadze and explained this fact by “natural human needs” (“The Free Word”, issue #9(99), 24-31 December, 2008).
According to the information obtained by us then, Dima Markoidze, head of the governor’s guarding staff, had an accident with this car. The then-time head of the Municipality Davit Basilaia gave the following explanation: “The car was insured and the insurance company purchased a BMW at 80.000 Gel in lieu of the broken car, which is still used by the state representative to present.” If the mentioned BMW and the car on the list of the administration are the same vehicle, is hard to know. According to their price and model, the new BMW may be the car Markoidze had an accident with, but why this car got registered under Poti budget, is unclear (as Poti high officials did not allow us to examine this fact, we hope the controlling authorities will identify the location of the car and its present user).

The black Bumer bought with Poti budget and presumably owned by Zaza Gorozia, the President’s confidant, roughly looks like this car


Volkswagen Passat

Cut health programs and inflated police costs
At approving the budget of 2008 (this process was personally controlled by Zaza Gorozia, President’s confidant), the self-governors of Poti allotted 150.000 Gel of the budget to purchase 4 cars for Poti patrol force. Later, this amount was registered as the capital expenses of the administration. The members of Sakrebulo were quite candid in their informal conversation saying that they would buy the cars promised to the patrol police, but without any “loud” formulation and officially, the cars would be used by the Municipality administration of Poti.
As the documents at hand prove, Volkswagen Jetta (engine capacity 1,6; production year 2008), which was bought by the Municipality administration at 35.377 Gel on April 16, 2008, after some weeks, by decree of the Municipality, was rendered to the Ministry of Internal Affairs. The document contains no additional explanations about this fact.
In addition to 100.000 Gel allotted from Poti budget for the law enforcement agencies, by virtue of some budgetary amendments Sakrebulo made during the year, the local law agencies (police department, patrol police, Department of Constitutional Security, Special Operative Department) received 400.000 Gel from the budget mainly to purchase fuel, undertake capital repairs, façade repairs, yard improvement and cover telephone and other expenses.
At approving the budget of 2009 by the Municipality administration, one of the budgetary articles showed 192.000 Gel, which, according to Sakrebulo, was the fund allotted to purchase the cars for the law machinery. However, no one spoke about the given intention openly.
The document we received shows only one car. In April of the same year, Poti Municipality purchased cross-country Skoda Octavia of 2009 at 34.650 Gel for the patrol police. In the same year, Poti self-government had acute financial problems. The planned incomes could not be raised and at the beginning of the year, the city government borrowed 1,5 million Gel from the Ministry of Finance. The problems were so severe that the self-government was forced to give out the compensation to the population injured in the storm in February and wages to the employees at the expense of equalizing transfer. In the beginning of December, at the end of the year, the local government owed different Municipality departments 1,1 million Gel  on the one hand and 3 million Gel to the Ministry of Finance on the other hand.
At planning and approving a 12-million-Gel budget, several social programs (further measures to fight tuberculosis, provision of the poor and pensioners with medications, inpatient treatment of osteopsathyrosis or so called “glass children”, research and prevention of gynecological diseases, etc.) were annulled because the programs were additionally financed by the state (central) budget resulting in doubled costs. On the other hand, the local self-government considered 241.000 Gel in the same budget to cover the self-defence and police expenses (in addition to the purchased car). All these bodies are subordinate to the Ministry of Internal Affairs and are financed with the state (central) budget as well.

Volkswagen Jetta

Skoda Octavia

The “benevolent” self-government of Poti and the “modest” Ministry of Internal Affairs
Eight cars and 358.330 Gel – this is the booty of Poti government in 2010. Two Skoda Octavias (each costing 34.650 Gel) were purchased on February 19 of the current year as the capital expenses of the Municipality administration, while in some months they were handed to the patrol police.
Another car Toyota Prado (engine power 4,0) was given to the Ministry of Internal Affairs by Poti self-government as a present on March 12 of the current year and it cost the budget 84.800 Gel. The document handed to us by the Municipality does not mention the concrete body of the Ministry of Internal Affairs having received the mentioned car.
By the moment the city authority was drafting the documents to purchase the car, the budget was recharged by 700 thousand Gel instead of 3,5 million.
Three Chevrolet Cruzes (two of them cost 28.000 Gel and one of them cost 30.400 Gel) were purchased with Poti budget on March 15 of the current year and were handed to the Ministry of Internal Affairs at the end of the same month. The Municipality administration does not specify the recipient body within the Ministry. The Municipality decree says that the cars were granted to the Ministry of Internal Affairs “to help efficient and organized discharge of their duties”.
On March 15 of the current year, Poti Municipality purchased the fourth car, Ford Ranger, which cost 40.800 Gel and handed it to the Emergency Situation Management Department of Samegrelo-Zemo Svaneti Regional Administration just in two months. “One new Ford Ranger 2.5 with the cross-country capacity produced in 2010 to be purchased. The mentioned car to be rendered to the state representative-governor office to discharge their duty efficiently and in a highly organized manner”, - this is what decree #187 of the Municipality says. The decree is signed by Gela Lagvilava, acting as the city mayor.

Ford ranger of 2010
As the table provided by the Municipality shows, Poti government purchased 4 cars on the same day, the 15th of March, 2010, paid 127 thousand Gel for them and later, handed them to different offices. According to the data of the Financial and Economic Department of the Municipality, neither of the planned monthly budgets from January through March of the current year could be executed. The data for three months show the deficit of 900.000 Gel of the city budget.
Here too, the local government was saved by the equalizing transfer in the subsequent months.
According to the data of the Economic Policy Department for June, the Municipality departments had to pay office and communal expenses, as well as infrastructure service costs as an outstanding debt. Building vendors could pay the workers’ wages only with bank credits. The data for 6 months (from January 1 to July 1) show the budgetary deficit of 3,518,200 Gel.

Car “carousel”
At the beginning of July, in his interview with the newspaper “The New Word”, the newly selected city mayor Vakhtang Lemonjava, to the question of the newspaper correspondent about the ways to overcome the budgetary crisis, stated that he would refrain from making forecasts as he is not fully aware of the problem. On the other hand, before becoming fully aware, the new mayor had made certain arrangements and on July 15, bought Toyota Land Cruiser Prado of 2010, with cross-country capacity at 77.030 Gel. “The price of the car was covered partially through the capital expenses of the administration and partially at the expense of the economy made through the construction and infrastructure tenders,” – says Sulkhan Tolordava, head of the Economic Policy Department. As per his explanation, from January through September of 2010, the budgetary deficit amounted to 1.900.000 Gel leaving the branch of construction and infrastructure underfinanced.
Why the new mayor disfavoured the above Volkswagen Passat (engine power 2,0; produced in 2007, state number LOF-001) used by his forerunner is unknown.

Car of Sakrebulo chairman

By decree of July 1, the ex-mayor Vano Saginadze, who has now moved to Sakrebulo, was given the car together with the driver. Presumably, Vano Saginadze too, did not wish to use the car used by his forerunner. By the decree of the same day, Volkswagen Jetta (state number IES-555) owned by Poti Sakrebulo was rendered to the Municipality Infrastructural Department. The latter, by virtue of the letter by the mayor, rendered the car (state number MSM-070) registered as its assets to Vice-mayor Avtandil Babilua to discharge his official duties.
The material provided does not mention Mercedes-Benz-C280 (produced in 1999), which by decree #245 of the mayor of June 24, was purchased for the local self-government and presumably, is used by one of the local offices. Besides, the information providers said nothing about two Scooters designated for patrolling along Anaklia coastal line. We learned about the scooters from one of the officials during our unofficial interview.
The list does not include two garbage trucks (Toyota Dyna and Mitsubishi Canter), either, which were purchased at Toyota Center in Tbilisi with the local budget and are exploited by “Infrastructure” Ltd.
For reference, we would say that this Company was established with a 100% share of the local self-government and is financed by 407.000 Gel from the local budget to clean the city, serve the infrastructure, isolate ownerless animals, etc. The original aim to establish this company was to gain income and profit for the budget; however, for its several-year-long existence, the company has been fully financed by the budget.

The car of Poti Vice-mayor

“Big cars” for big projects and august goals!
The experts say that lately the budgetary institutions have borne the expenses unjustified by the declared “belt tightening” policy. Poti government on its hand has one more serious reason to refrain from spending freely - it fails to execute the budget. “We try to purchase the necessary things by considering the income. For instance, when I want to purchase something for the office, I try to do this when there are sufficient budgetary funds. On the other hand, if there is a budget deficit, we try to avoid large expenses,” – states Sulkhan Tolordava, head of the Financial and Economic Policy Department whenever he is reminded about the problem of spending the deficit budget. He explains that not only Poti budget, but the state budget has the deficit too, but the state spends abundantly for the police and cities and towns also have to make their own contributions. “If considering the present crime rate, these expenses are fully justified. This is the material-technical aid rendered to different organs and we have an official right to it,” – replied Mr. Tolordava to our question as to why the above-mentioned principle is ignored when purchasing expensive cars for different organs.
“He is the state representative not only in Zugdidi, but also in Poti, and I cannot see any problem if we buy cars for him with Poti budget. If you look carefully, you will see that the crime rate has decreased, and this is the merit of the police. I do not understand what the problem is if our city helps their efficient operation,” – such are the arguments of the city ex-mayor Vano Saginadze. Whether his approach has changed since he became the chairman of Sakrebulo, is unknown, as he categorically avoids any contact with our media.
In reply to our question, as to why it was necessary to purchase expensive cars in terms of the budgetary deficit, the city mayor Vakhtang Lemonjava, started to talk about the perspectives and large-scale projects of Poti: “Several streets in the city have been dug to be repaired and large-scale projects will be under way soon. This needs particular supervision and strict control. By considering these large projects and hard labour, we needed the cross-country cars, like the ones we have purchased.”

What do experts think and why is the Presidential appeal abided?
“For sure, purchasing cars in such great numbers and purchasing generally contradicts the policy of “tightening one’s belt”, as such arrangements need great budgetary resources. In terms of “belt tightening”, mainly the old car fleet should be renewed by way of repairs (with minimum expenses), not by purchasing expensive new cars,” – says Davit Darmania, expert of the Center of Economic Research when evaluating the given fact.
The experts of the Institute of Economic and Social Studies of Caucasus, after a several-year-long survey of the budgets of self-governing units, talk about some tendencies, which are much more dangerous than the waste of budgetary funds: “The center has significant influence on local self-governments; local budgets are planned and spent in line with the directives of the central authority; considerable self-governmental funds are spent to finance the powers of the central authority and often, this is done on the initiative of self-governments (to show their benevolence to the center), while their own powers remain underfinanced. On the other hand, self-governmental budget is the financial instrument, which determines the local policy and which must help solve the problems of the people. In reply to the experts’ permanent remarks about the violation of the legislation of the country, the authority has made amendments to the law, “legalized” the improper expenses and thus, made one more step backwards in reaching the declared aim of strengthening of self-governments and country’s decentralization.”

P.S. At the open-air meeting with the majority in Anaklia (on 3.10.2020), Mikheil Saakashvili offered his team members to “move from business class to economy class” and refrain themselves from expensive cars. He once again summoned the government to “tightening their belts”. “Let everybody fly in an economy class. The state staff should not purchase cars costing more than 15 000 euro. Many cars are not a bit necessary,” – said the President.
The President wagged his finger in the live at high officials, who cannot oppose the temptation to live in comfort at the expense of common people. However, it is the fact that officials of Poti never perceived the Presidential appeal as a threat or advice. Temptation No. 1 at every level of management is foreign expensive cars!

Eliso Janashia
Nino Tuntia
This article has been produced within the project "Investigative Journalism in Samegrelo" in terms of a project "Strengthening the Media's Role as a watchdog institution in Georgia", funded by the European Union and implemented by Eurasia Partnership Foundation.

The contents of this article are the sole responsibility of the newspaper “Free Word” and cannot be taken as to reflect the views of the European Union and Eurasian Partnership Foundation.