Why is Georgia’s ruling party so intent on adopting ‘foreign influence’ bill?

According to its critics, Moscow’s destabilising influence has been laid bare this week in neighbouring Georgia, with the passing of the “foreign influence” bill by parliament.

But why is the ruling party there so intent on pushing this law through? After all, hundreds of thousands are protesting against it and it could put the brakes on EU membership which most Georgians say they want. Other recent, less noticed legislative changes, may perhaps hold the key.

The demonstrations over the “foreign agents” bill have been full of vivid moments, competing visions of a country’s future literally clashing with each other. One of the focal points is the Georgian parliament, Rustaveli Avenue, Tbilisi, the fulcrum of a country seesawing between Europe and now Russia. All the fury has been directed at this building because of the “foreign agents” bill. But the question that keeps niggling is, why are the ruling party so hell bent on pushing this legislation through in the face of mass demonstrations, in the face of possibly jeopardising EU membership? Is there more to all of this than meets the eye?

Real seat of power

The real seat of power is up in the hills overlooking the city, one of the homes of Georgian oligarch Bidzina Ivanishvili – the glass house built with millions made in Russia, where he grew the Georgian Dream Party from seed. Ivanishvili is an enigma – depending on who you ask, Putin puppet, pragmatic man of the people, knows which way the wind is blowing. And for him, for now, the wind is blowing from Russia.

Gia Khukhashvili was Ivanishvili’s adviser when he was prime minister in 2012. While all the attention has been on the foreign agents bill recently, he wants to talk about tax. Last month, Georgian Dream MPs passed an amendment to the Georgian tax code. It meant that very rich people could transfer their assets to Georgia without incurring any tax. While no one stormed the parliament, for this former adviser it’s all about what he calls Operation Ivanishvili, to create a tax haven in Georgia for Russian money.

“Bidzina Ivanishvili sees this as an opportunity for the Kremlin’s money men to move their assets to Georgia’s jurisdiction,” he said. “He’s promising them that it will be a tax haven, a quiet, sheltered place. He sees this as an opportunity and that’s why this operation has started. ”

Safe for all that money

According to him, that’s one stage of the operation. The other stage is making sure that Ivanishvili s political system is secure to act as a sort of safe for all that money, no questions asked, which is where the foreign agents bill comes in.

“For this, Ivanishvili needs political stability. If the guarantor is Bidzina Ivanishvili, he should have enough resources to make sure it stays that way. For this, he needs to be in power indefinitely. There shouldn’t be any critics or questions.”

In other words, his thesis is this: Ivanishvili wants to make it easy for his oligarch mates to move their assets to Georgia, and he wants to guarantee the safety of those assets in a country where annoying journalists and anti-corruption groups won’t be asking awkward questions. We’ve tried to put all this to Ivanishvili, but being a reclusive oligarch, we haven’t heard back from him yet.

Fired from his job

During the week, we’ve met several critics of the government who’ve been attacked or intimidated by people they describe as Georgian Dream thugs, something the party denies. Yesterday we spoke to Professor Ioseb Berikashvili. He was fired from his university job as dean of economics just a few days ago. He says a call was made to his boss.

“Did somebody actually call your boss and pressurise him directly?”

“Yes.”

“And who called your boss?”

“State security service of Georgia. He told so.”

“Your boss said?”

“Yeah.”

So why? Berikashvili has always been a vocal critic of the government, but in the last few weeks appeared on Georgian TV shows to talk about a certain policy specifically.

He said: “I think that my comments on TV about so-called, we call it offshore law, which is actually an amendment to the Georgian tax code – my comments about these was the trigger, I think.”

His working assumption is that with sanctioned Russian oligarchs finding it harder to move assets around because of the war in Ukraine, this new tax policy is a gift for them. At all the demos this week, the Georgian national anthem is followed by Ode to Joy. For the more mature demonstrators all the way down to the younger ones, this place is not a tax haven, it is home, and for them that should be in Europe for generations to come.