Can of Worms: Weapons and Human Rights in Georgia
Joni Simonshvili
Please find my notes about weapons drugs and politics; about corruption in Batumi and connections with Moscow, Intelligence Services, etc. The so called Kazaks are really Russians - a front (to buy up things cheap), wash money (money laundering), control Georgia, and that Russia and intelligence services is from where much of the shinning investment for Georgia comes, even what is pumped into economic free zones and fancy hotels. One would think otherwise, however, to watch CNN and its for hire over-the-top-one-sided-reports on the tourism and the business sector.
Here is to get you started, as I share with some earlier groups "stakeholders in the sphere of human rights, and 'you can write this up as an interview, and perhaps ring me up and ask me a few questions as to my sources, and how I know all of this (but I am not going to give out the names of important sources)," as it might get them blacklisted or dead. At the end, write that this is solely the opinion of the source, who the US Embassy in Tbilisi 'says is not to be trusted', and this information must be only framed the perspective of an "un trustworthy source" - American journalist, Jeffrey K. Silverman, who has lived for 18 years in Georgia and the former Soviet Union, and who has worked with the International Crisis Group, ICG, US government, OIG, and other organizations in collecting much of this muckraking information, much of it dates from 2003, and even earlier as background material.
And then come the energy connections, illegal exports of undocumented oil, and to one strategic US friend who cannot afford to live in the neighborhood, as the neighbors can cut off the tap, which is really interesting and much more serious then even what one might expect. However, that is another can of worms to open but that will be coming soon. I will send more lately, and for a bit of background, keep in mind the activities of Zurab Zhvania, the former Georgian Prime Minister, and his untimely and most convenient death. There has always been speculation behind the scenes that there was a Batumi connection with the murder of Zurab Zhvania, and his efforts to build a government-within-a-government and being 'too friendly' with those in the separatist regions and Moscow, or being too "pragmatic" and too "greedy."
His sorted history is also part of the network of those involved with the Georgian Shipping Company, Barvill, and his alleged percentage, on each ton of scrape metal exported from Georgia over the years (one dollar per ton). In simple terms, this is history and speculation but he killed himself by knowing too many things and wanting to control everything, and this was not in the best interest of US foreign policy and "bigger plans' for Georgia and the region.
There are also many Kazak connections to Georgia, especially with the unrecorded exports of oil from Batumi and Poti, and this is also connected with the Batumi Oil Terminal and key players in political and business circles. The port of Batumi; especially the political network of friends and stakeholders with the Batumi oil terminal was the gateway for the little empire belonging to Aslan Abshadze, and his 'erstwhile' supporters. It is no secret that the real owners of terminal are also the same ones that were involved in the flurry of recent privatization and investment in the "official" post Aslan Abshadze period.
I learned in passing from a Georgian woman who worked for several years with the Georgian shipping company that the relationship between Zaza Gelashvili and Davitadze, [forget first name] the former head of the local intelligence services in the post Rose Revolution period, was very close. The connection of my source here is that a friend of hers was dating his son or is a schoolmate of Davitadze's son. She knows most of the inner circle of Aslan Abshadze, including Tengiz Arshba, Soso Gogitidze (KGB under Aslan); another Gogitidze, Jemal was police chief under Aslan. The deceased wife of Aslan was the brother to the Gogitize's brother, and who now lives in Moscow. However, many of the frontline troops are still in Georgia and have found employment in the new Saakashvili government, and these are the same people tha were beating Saakashvili supporters in 2003 and now working in Georgian security agencies. How is that possible?
Zaza Gelashvil is also alleged by several sources to be working for Russian intelligence Services, and personally for the Mayor of Moscow, Uri Luzkov. His father is on his personal staff (inner circle). The sacking of him from the top position of mayor may be connected with bigger plans in the political sphere and may even be hooked up to what is going to be happening in Georgia.
I am told that all information on operations in Georgia by the Americans and Turks is being provided directly to Russian FSB and GRU (Military intelligence). Zaza was personally assigned to watch over Levan Varshalomidze (presidential special envoy and the first man in Adjaria) and to make sure that he does not make too many stupid mistakes, to many side deals, did not get too greedy, and not to let outsiders, e.g., (non-connected), know too much of what is going on with him and his family's financial interests.
Naturally such things could compromise Russian and well-placed Georgian interests, at the highest level, especially in light of the formation of new political parties, that can too hire the media spin MDs on the level of the US government and the National Party. Much is involved here, especially financial interests of various Kremlin insiders, including the former first family of Adjara. It seems that most of what is happening in Adjara is being done to support Russian and Turkisk foreign policy in Georgia, and not for the interest of the Georgian people or economic development.
Returning to Zaza Gelashvili, the source says that all information on the Central government and what is going on in Adjara is being provided directly to Moscow. I have used Irakli X, before, and he was the former head of X region Ministry of State Securirty, former KGB, and on the side of Saakashvili in the days prior to the downfall and exit of Aslan.
We knew then, as it is better understood now, so called overthrow was nothing but a carefully staged performance, a media show, and in the shadows a "deal had been cut' for Aslan to depart but it would be hands'off of his financial investments in Georgia. Naturally there is a direct nexus to the Batumi oil terminal. Then came the privatization process and locals need not apply. Adjara had not privatized property quickly and in mass as was the case with other regions was the case with other regions of Georgia, especially under Kakha Bendukudze. That is why so much was available at one time Adjara was overripe for the picking, and quickly sold off to Turks and Russians, and in many instances these were only go-between and the old clan was footing the bill.
There is a long and established connected with Central Asia with Adjara with drug dealing and oil shipments by rail. That is common knowledge and these connections may deeper than the Batumi port. The connections between Aslan Abshadze, Central Asia and drug for weapons swaps are well-established and the network continues to fully operational. With the increase poppy crop in Afghanistan, there will likely be a greater flow of drugs hitting the international market out via Georgian ports, including processing in Batumi, and the many of the main players are still in place, as were in place during the time of Aslan.
Kazakhstan This background information comes from Central Asia and will provide you insight as to how scared people are of the investment climate and how it highly possible that Kazaks are being used as fronts for Russian special interests. What is harder is to find someone in Kazakhstan with info and insights. This is a bit of feedback that was received on September 7, 2006, "I just met a guy here, Leo, and I thought could help you. He was writing articles for Almaty Herald not long ago. He told me a few minutes ago that he doesn't work there anymore. He was not clear but I inferred that it is for political reasons. When I asked him if he could help you with info on Kazakh investors in Georgia, he said, "Excuse me, I have a class at 10 and I have to go…" Classical reaction from Eurasians… He was afraid of talking about connections and this subject."
Family Connections and kinks: the father of the new KGB chief works directly for Yuri Luzhkov, Mayor of Mocow, and together with Iosif Ortzonikidze, who is the owner of Medea hotel and the sports stadium, and one of the deputies of the major of Mocow business in Adjara continues as usual. Source explains
"Iosif is something, and that he has at least two hotels and was and continues to be key adviser to Yuri Luzkkov (lives and works in Moscow). Some of his hotels were where refugees (IDPs) lived and were evacuated in the months following when the properties were privatized. The residents, per room was given 7,000 USD and tossed from the hotels (and that is not enough to buy anything in the Georgian market).
Who owns what?
Only the inner circle knows the real owners of these properties and that is what I have been able to tap this information source to a limited degree. It is interesting, and I have networked with persons working in local government, city planner, city architect - he tells that according to acting Georgian legislation, all must be transparent and under the terms of tenders that a project and the proposed design for properties have to be made up. These plans are even to be posted, which was done in the case of the hotel Intourist and other flogged off property (especially those sold to the Ukrainians), and procedures were followed with most properties with the notable exception of the so-called Kazak purchases. It is clearfrom the various sources that things are being done in two directions:
Russian and personal financial interests
Real Estate Market
Intourist – Turks run the place under a 10 year contact but this is owned by Aslan and his brother-in-law. I was told that the paperwork is under the name of Murat Turmadidze, a local. Murat is very close with Aslan.
Hotel "Medea" and "Meskheti" is privatized by Mr. Iosef Orjonikidze, vice mayor of Moscow city
Puskkin Street Trade Center – large trade Center, also belongs to Aslan (don't know what is on the paperwork). Aslan has a sense of humor and changed the name to "Moscow Trade Centre"
Tea House – former ministry for State Security or Police, near port, Tengiz Arshba, member of the Russian Duma and owner of a Russian sports team; he controls with arms smuggling and intelligence, has rank of general in Russian FSB.
Interclub "this is the old name" and next to property above, also belongs to Arshba/old police headquarters. This is owned by Tengiz Arshba, close to new government in Adjara; regularly plays tennis with Levan Varshalomidze at the Marina Hotel and Spots complex. They have been seen playing several evenings and this is confirmed by several sources, including a 15-year-old boy who practices with Tengiz.
Aslan's Kindergarten, said by same sources to be owned by Tengiz Arshba – Arshba is main player in Batumi and his brother/relative is tied in with the break away region of Abkhazia. However, this property is also said to belong to the Kazaks.
Marina Hotel and Sports Complex – Arshba, 40 percent; some unknown MP but think it is Jemal Inalishvali, vice speaker of Georgian Parliament and head of Georgian Chamber of Commerce, former head of Porti Port, 30 percent and Levan Varshalomidze. The Georgian Minister of privatization may also have a share or at least financially benefited in all these deals says the source; this history and connections of these players is like a barrel of fishhooks. This facility was basically paid for with drug money.
Universalmag (Universal Trade Centre) – also said to be owned by Kazaks and is being torn down right now, this is also close to the port and located on prime real estate.
Red Fisherman Market and Shipping Company, two properties in very close proximity – Kazaks are claimed to have purchased these lots.
"Mtsvane Kontskhi" (Green cape) is privatized by Mr. Iosef Orjonikidze, vice mayor of Moscow 10 properties in Green Cape Nature Area stayed in one for these properties for two nights (Kazaks). I am currently waiting to get list of these properties from source and some paperwork. However, one staff member told me that they were losing their jobs and this would be the last year since the Kazaks would be coming for the next season and would hire all their own staff fresh.
I was told by one of the staff member that the purchase price of these 10 hotels was 1 million dollars and this paid for whole nine yards (lock, stock and barrel). It is clear that these properties could have been sold individually for higher prices and some of them were operating and not in the red.
Tsikhisdziri" - is privatized by Tina Kandelaki, TV anchor on Russian television and radio. She is half Armenia and used to work for the 2nd Georgian TV channels. Don't know if this is her investment In order to show that the Kazaks are not buying up everything some properties have been sold to Ukrainians and some to Turks and with these properties, everything is said to have been transparent and that the plans and proposals for development were submitted with the tenders. However, this is not the same ocean side real estate. Included in this partial list of properties include:
Properties near the Makhinjauri Railway Station, the partially completed new train station that will not be completed (Ukraine);
HOPA Bazar, not far from the Turkish Border (Ukraine).
Analysis and Commentary
Not even those who are supposed to be in the know as who owns what and the things that are going on in Batumi are sure of anything. The so-called Kazak investors are becoming to be known as what belongs to the old team that was "run-out-of-town" and that the Russians are really the Kazaks and this also means that the "old team" and the "old money" from the family business in the fiefdom of Adjara. Kazak is a description used for public consumption. It is likely that only those very close to Levan Varshalomidze and the Georgian Minister of Privatization in Tbilisi really understand the full story. It is possible that those in the know involve Saakashvili as well. As previously noted Levan Varshalomidze and president-elect Saakashvili were college mates and studied together in Kiev. Family and friendship connections are strong in Georgia, and even stronger when money is involved. Guarm Varshalomidze, father to Levan, was the prime minister under Aslan; they are alleged to have taken part in stealing money together over the years, like foxes in the hen house.
Levan was also connected but stole some money from Aslan and this act officially put him on the "outs" with Aslan Abshadze but not thrown completely away. However, this standoff for getting caught with his hand in the cookie jar was enough to present him as being close enough to be in bed with the National Party and Saakashvili for political consumption. Aslan Abshadze and those in fact own the properties that that the Kazaks own. Those closest to him, and this includes his Russian and mafia networks of patronage, are also owners and stakeholders in these properties. It is difficult to comprehend how all this can go on without the Central government knowing and unless this was part of the deal that was cut over Adjara in the first place.
What do you think?
What about the Adjarian regime, who's who in Adjara, clan connections, kinship and family links, possible links with organised crime, drug trafficking and drug weapon swaps. What were the perspectives for political change in the region: and what has been the actual alternatives to Aslan Abashidze, its former leader, all about the Adjarian economy? Who owns what? Who pays what? Ties with Russia, and whether or not there was any direct and permanent support for the former regime from the Russian and Georgian government side? How the fall of the regime would impact Russian networks of influence (in politics, business, security forces and special services)?
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Rats Everywhere, can you fill in the gaps?
Intercepted correspondence from USAID, OIG
RE: Everyone looks bad, so everyone looks the other way.'
"Can you please advise a telephone number and let me know of a few convenient times, which I may try to contact you in reference to the information about USAID programs and activities?"
Thank you,
KC Smith
Special Agent
USAID Europe & Eurasia
RIG Frankfurt, Germany
OFFICE: 49-69-7535-7845
FAX: 49-69-7535-7841
SmithKC2@state.gov
1) A source under contract to USAID, as employed business development expert, Mr. X, who may be the source on ADCI corruption with good access states the following: ACDI started a rural credit SME program funded by USAID about 2001 in Azerbaijan. It was the largest of the USAID funded credit projects. About $4 million was in loans. They made loans to rural enterprises, farmers, etc. They had offices in most areas of the country (Lenkoran, Imishli, Ganja, etc.) ACDI/VOCA, an international development organization dedicated to empowering people worldwide.4
2) However, regardless if this source will be forthcoming, he can give more information about the basis of Azerbaijan Business Assistance and Development Program (ABAD), and how things were flawed (how there was bid rigging, and how it was the contract was awarded to a group with weak organizational credentials in business development at best. You just need to look into how the project was solicited, and it may not have been a RFP, and the winner did not win in full and open competition, and thus USAID participated in corruption and did not acquire the services of the most capable technical assistance provider.
The ACDI system in Azerbaijan was established to provide local control and a local company was set up to run all the local offices. The company was called CreditAgro This system was unlike that in Georgia, where credit associations were formed. This was more centralized, with offices reporting to a central office in Baku. However, the same propensity to hand the operation over to corrupt locals was observed. In this case, ACDI/VOCA hired a man called Eldar Jafarov, initially as credit officer, but he eventually became head of CreditAgro. Soon problems developed between Eldar and the ACDI/VOCA Chief of Party and other expatriates, who considered that Eldar was taking too much power and hiring cronies for every position in CreditAgro. Despite numerous attempts by ACDI/VOCA expatriate staff to remove Eldar Jafarov these attempts were consistently blocked by ACDIVOCA Washington. An internal audit proved many allegations against Eldar. Still, ACDI/VOCA refused to fire Eldar or change human resource personnel practices.
In 2005, however, enough was enough and ACDI decided to fire Eldar. Then Eldar told all managers of Creditagro to go on strike in his support. As a result, ACDI/VOCA Washington completely caved in (ACDI's VP Dennis DeSantis), and gave the position back to Eldar. The fallout was immediate and the ACDI/VOCA Country Director resigned in disgust, [check out this source] and Eldar, now much more powerful, personally fired the other principal expatriate himself, cleaning up loose ends. The impression was that Creditagro was now a private enterprise of Eldar.
The United States Agency for International Development, USAID was well aware of this scandal but decided to turn a blind eye, and often sided with Eldar in subsequent criticism of ACDI/VOCA. However, they still made a grant of the USAID funds (about $4 million) to ACDI/VOCA/Credit Agro. ACDI continues to be the owner of CreditAgro, yet it forced into a curious position where they are telling all potential investors and lenders to stay clear of CreditAgro because of the above-mentioned shenanigans, and not to taint their reputation more than it is already.
It was obvious that ACDI/VOCA had really mishandled the project, setting up a private company serving one individual. Still, even though USAID was for a very long time aware of the problems, never penalized ACDI/VOCA, but instead, in 2005, rewarded ACDI/VOCA with a major rural enterprise development project in Azerbaijan, which is now employing the old second in command fired by Eldar.
Successful Track Record
This is not the first incidence of ACDI/VOCA incompetence in running credit projects. The Georgia ACDI rural credit project was a well-known complete disaster, as local credit associations created by ADCI and funded fully by USAID and USDA were taken over by the local managers selected by ACDI/VOCA and turned into a private money making racket with accountability to none. A later USAID project to assist these entities found out later that the managers had illegally fleeced the associations of most of their funds. Most of the funds disappeared as "dividends" to the local project managers, who normally had been selected due to their power within the local community (for example, some of them were heads of the local tax inspectorate and well known bandits, including members of state security, and not because of any credit or relevant knowledge.
Professional skills are not the decisive factor. The result is that senior local bureaucrats, politicians, and businessmen gain positions. This was part of the problem with the credit unions set up by ACDI/VOCA in 1993 and funded by the US government.
ACDI/VOCA hired these people ostensibly because their muscle could be used to guarantee repayment from poorer farmers. Even as far back as 1998 the then Agriculture Deputy Minister Nugzar Duchidze had remarked that ACDI/VOCA's setup was a "rich farmer's club designed to help these well connected individuals. The Georgia operation was obviously even worse than the Azerbaijan setup. Still, USAID encouraged the Azerbaijan operation was to be patterned after Georgia by the USAID program officers who controlled aid programs in both countries.
One International TV network producer wrote an email dealing with accountability in international organizations 'Ahh – there is the problem. Nobody is interested in corruption. Western agencies would be very embarrassed to be seen dealing with a bunch of second-rate crooks. After all, you must remember that it looks bad if your programme which is funded by the US or Europe has no correct oversight. Everyone looks bad, so everyone looks the other way.'
Nonetheless, it does appear that the US government and the Bush Administration were a bit concerned about the "total" lack of accountability NGOs (including a host of international organizations) have when receiving grants and cooperative agreements from USAID. These NGOs can do what they want, and are "assumed" to be doing well, because they are "fellow travelers" with USAID. They all claim to be helping in improving the livelihood of local farmers, small business, etc.
No noise was made of this incredible debacle of ACDI/VOCA in Georgia because none other than Rusty Schultz a very close friend of Gerry Anderson, high-ranking USAID official in Tbilisi, ran the ACDI/VOCA project in Georgia. Many sources (including a those close to a Chemonics run project of assistance to credit organizations) confirm that Anderson did everything in his power to protect Rusty and his corrupted minions. And finally because of their disastrous management, Jim Holderbaum, ACDI Country manager was lost as what to do. Many claim that those working in NGOs only to come to Georgia in order to get laid regularly, something Rusty was good at arranging. Then visiting experts had access to the Rusty castle where they could be entertained, and the rest is history.
Gerry Anderson, USAID Georgia, directly instructed even those visiting experts that were involved in proposal writing when he was in Georgia in mid-2001 that they needed to hook up with ACDI. Now that is interesting and what authority would Gerry have in making such recommendations? He was proposing to work with a specific group and the instructions were outlined in such a way in terms of value chains, and that the only clear choice was that ACDI as the company that they he needed to work with. A month or so later on other business, same instructions were provided to visiting experts to make sure that there was a connection with ACDI.
It should also be noted that ACDI/VOCA has a policy of putting on its payrolls mainly old USAID hands. That is why ACDI/VOCA is a favorite in all parts of USAID's world. Others need not apply. Financially ACDI/VOCA is a disaster, but it is doubtful that any of the board members have the brass to go against the entrenched senior employees, for whatever reason. – and AgVantage is doing well as can be expected. SAVE, the original project in Georgia, which was renamed AgAdvantage and this project was doomed from the start because of the problems with ACDI. First their money problems: Then there was a lack of any clear direction or focus, other than to pander to Gerry Anderson and USAID.
It is clear that what happened is Azerbaijan and Georgia is par for the course; Gerry Anderson had gone to great pains to cover up USAID scandals and to protect his friends. What is less clear is the motivation. He has made sure that many project evaluations are stacked with the people that will come back with results that conform that all went well and program objectives were achieved. In one instance, he had bumped off a person from an evaluation that may not have brought back the desired results. Allegations of his morals are well documented, and there is a large age difference between him and his Asian mail order bride, and there are still allegations of sexual harassment of staff of USAID floating around Tbilisi (he demanding that some USAID staff works share in housekeeping responsibilities, such washing his plates).
Eventually it is known, as part of damage control Rusty Schultz, the program coordinator in Georgia, was sent to head up a high profile ACDI/VOCA operation in Iraq. It was clear that criminal activity had proliferated unchecked in the Georgia project and the cover up was complete. And still, with similar noise filtering out of the Azerbaijan project, and still USAID does nothing other than praise a bankrupt project and continue to dole the pork to an incompetent but rich organization.
Moreover, there are serious allegations of money being used to support the trafficking of weapons. One source shares the following: "If there was money going to arms I rather suspect it would have been more likely to have been connected to Rusty's sidekick, the New Zealander mercenary who had been all over Africa and Asia soldiering in places they would pay. I heard lots of stories about how he and Rusty got hooked up, but I suspect all of them were at least partial fabrications just to make both of them look good."
There are many stories in Tbilisi about how he and Rusty got hooked up, but in all likelihood most of them were at least partial fabrications just to make both of them look good. The bottom line, Rusty needed the soldier of fortune (he may have officially been his deputy but it is difficult to say if he had that title) because he made the parties and the stories so much more fun for Rusty to use to encourage people like Gerry that he wanted to co-opt the parties. Gerry is all about spin and control and the soldier wanted everyone to know that though he was in the background it was he who was still the one carrying the entire buzz.
The most notorious corruption in Georgia involved Micro and SME Credit activities in the South Caucasus countries of Georgia and Azerbaijan. It is hardly accidental that program have been so unsuccessful that there is even doubt if they were even intended to be effective from the very start.
How long can USAID continue to support an organization with such a record of negligence and criminal malfeasance as ACDI/VOCA and others? ACDI/VOCA continues to win all the contracts it wants and nobody brings their record to the public light. ACDI/VOCA works in approximately 40 countries and claims to foster vibrant communities, organizations and enterprises that can manage and finance themselves.
See acdivoca.org for more information. All this is a matter of record with USAID, OIG, Office of Inspector General.