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13.07.2010 11:51

Three Million in Five Days

David Mchedlidze
Media Discusions

On April 1 the Public Broadcasting of Georgia (GPB) requested the government additional GEL three million for "undelayed functioning." According to the documents provided by the TV company the money was essentially spent on Sopho Nizharadze's participation in Eurovision contest and the re-broadcasting of the world championship. The broadcaster received up to GEL 17 million early this year for Eurovision, world championship and other expanses. According to the journalism investigation the broadcaster embezzled the money.

On April 1 Giorgi Chanturia, GPB Director General requested the Ministry of Finance of Georgia to allocate additional GEL 3 mln. Chanturia explained the Minister that due to the abrogated contract with the satellite provider company Uetelsat the broadcaster had to conclude contracts with other companies which resulted into the increase of the price for satellite broadcasting three fold compared with the previous year. In order to meet the commitments shouldered by the broadcaster and with the view of undelayed broadcasting the government has been requested to allocate GE 3 mln from the reserve funds.

The request was met within five days - on April 6 the public broadcaster was apportioned GEL 3 mln for "undelayed functioning" (Order #452).

The Batumelebi requested the public broadcaster to provide the ground for requesting GEL 3 mln and the funds accounts but the TV company didn't provide the copy of the letter to the Ministry of Finance (the Batumelebi received the document from the Georgian government).

Instead the TV company provided us with other documents according to which the public broadcaster embezzled GEL 2, 363, 072 out of 3 mln for other goals having nothing in common with "undelayed functioning" of the broadcaster. In particular GEL 2, 069, 473 was spent for the promotion of Sopho Nizharadze for Eurovision contest; GEL 169, 099 was paid to GFK to conduct exit polls for the municipal elections; GEL 124, 500 is registered in the world championship-related expanses.

GEL 320, 840 was spent on the audit service. For "undelayed functioning" the broadcaster has got only GEL 316,000 left.

Giorgi Chanturia, GPB Director General didn't confirm allocation of any funds for the rebroadcasting of the word championship from GEL 3 mln: "No Georgian Tetri has been spent. The contract in regard to the championship was concluded three years ago and we are paying the amount in a planned manner," he clarified.

Two Million for Eurovision

The Ministry of Foreign Affairs of Georgia informed the Batumelebi no funds had been allocated from the state budget for Eurovision. Giorgi Chanturia requested the members of the Board of Trustees to approve the expenditure of the amount allocated from the budget for the conclusion of the contact with the Turkish company for the promotion of Sopho Nizharadze (protocol #159). At the April 8 sitting he clarified the Board that the broadcaster had received three mln from the reserve fund for "undelayed functioning." Out of the allocated sum EUR 802, 100 shall be paid to a Turkish company to work on Sopho Nizharadze's promotion.

The Board of Trustees gave consent to the Director General on the same day (Decision #172). According to the Public Broadcasting the agreement with the Turkish company was concluded on April 8, 2010. In line with one of articles of the agreement the Turkish company shall be paid EUR 402,100.

"Eurovision has been funded from none of the reserve funds, neither President's nor government's," Nino Zhividze, responsible for the provision of public information of the Ministry of Finance affirms. She gave the response to the Georgian Young Lawyers Association (GYLA).

"Any information on the terms of the agreement is confidential. Providing the information to the third party is subject to sanctions," reads the May 7, 2010 GPB official letter (#2279/02) to GYLA.

Despite the restriction GPB sent the Batumelebi the copy of the agreement (English version) concluded with the Turkish company Cosmo Organizasyon. The contract provides the details related to Sopho Nizharadze's promotion. Article 7 of the contract envisages the concealment of the information to the third party. The party violating the provision shall be fined by EUR 50,000. In line with the document the concealment of information remains in force following the expiration of the contract terms. Gia Chanturia provided the following clarification to the provision of the document to the Batumelebi: "Upon the completion of the project we received consent on the publicization of information."

Eutelsat - GPB Trouble

According to the April 1 letter to the Ministry of Finance GPB hired French advocacy and audit firms to settle the court dispute with the satellite company Eutelsat. An extract from the letter: "Conducting a court dispute requires financial resources which hadn't been included in the GPB budget 2010. For now the expenditure amounts to GEL 900,000."

Through the letter Gia Chanturia informed the Ministry of Finance that GPB transferred EUR 310,000 (for the Eutelsat six-month service) to the court deposit account to prove the GPB's ability to pay."

Eutelsat provided satellite broadcasting of the GPB First Caucasian (GPB-owned Russian-language channel). Following the violation of the agreement which was due to the suspension of First Caucasian broadcasts the public broadcaster sued the French company. The trial was scheduled to be held on July 12.

Inconformity with Documents

The statements made by Levan Gakheladze, Chairman of the GPB Board of Trustees in the course of telephone conversations with the Batumelebi and official documents do not conform to one another:

According to the April 1 letter by the Director General EUR 310,000 has been transferred to the deposit account of the Paris court, while Levan Gakheladze speaks of EUR 600,000.

According to the letter to the Ministry of Finance the public broadcaster had to conclude an agreement with the satellite companies, in particular with Globalcast and Turksat. According to Gakheladze "We don't collaborate with Globalcast, I don't know where you got this information from."

In response to the question what was the amount of the agreements with new companies and whether the GPB budget could cover the increased price Gakheladze said: "It was not enough that's why we needed GEL 3 mln." According to him the public broadcaster expected a budget change to result into the budget boosting: "It was just a verbal pledge but eventually the parliament didn't approve the change. Therefore we needed additional allocation of the amount from the budget."

Triple prices mentioned in the letter to the Ministry of Finance were denied by Giorgi Chanturia too in his phone conversation with the Batumelebi: "Doubling or tripling the prices with the companies we are conducting talks with is not being discussed."

Out of two companies mentioned in the document Gia Chanturia talks about the only one. "We urgently concluded an agreement with Turksat, we refrain from publicizing the information in regard to others until the completion of the court dispute," he said.

GPB Calculation

GPB has posted the report of the first quarter of 2010 on its web site. The report includes no financial problems (at least possible). According to the document dating back to April the public broadcaster at the beginning of the year has got GEL 7 mln for technical expanses (including satellite service) and GEL 7, 303, 245 for the production expanses (including Eurovision and world championship).

According to the annual report 2009 the public broadcaster spent GEL 33, 297, 727 in total. GEL 26,5 mln out of the given figure was received from the state. GEL 25 mln was apportioned from the country budget.

Levan Gakheladze, Chairman, GPB Board of Trustees: "For undelayed functioning" - it's a formal term. When receiving money from the reserve funds the government doesn't demand the target specification in return. We wrote to the government we needed additional money to function, the target of the funds were later defined by the Board."

Tamar Gurchiani, GYLA lawyer: "In the legal definition there is no such term as "for undelayed functioning." One can come across the terms of the kind in the ordinances by President and the Georgian government. This is the term applied to veil actual goals of funding since no one could have access to the real reason of raising funds and afterwards to have no mechanism to keep control over the expenditure.

According to the ordinance #425 issued by the Prime Minister of Georgia we have the data which is not subject to either legal assessment. Any legal act should be substantiated - when spending something there should be a ground for it.

The material was prepared within the framework of the Verification for Democracy project implemented with the financial backing of NED and B|S|T. The copyright belongs to the Batumelebi Newspaper Ltd. When using the material the copyright shall be reserved.

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