Four current and one former high officials from the Ministry of Defence have been arrested for allegedly misspending 4.1 million GEL.
The money was allegedly used in a sham tender in 2013, which resulted in a private company gaining an unfair pecuniary advantage.
Former head of the Ministry’s Procurements Department Gizo Glonti, who held the post from July 2013 to January 2014, and two currently serving officials from the same department, Giorgi Lobzhanidze and Archil Alavidze, were arrested today.
Head of the Communications and IT Department of General Staff of the Georgian Armed Forces Nugzar Kaishauri and Davit Tsipuria from the same department were also arrested.
The Chief Prosecutor’s Office of Georgia claimed the men arranged a sham tender in 2013 to lay a fiber optic cable and procure networking equipment. The Office claimed the Ministry officials violated the Georgian tender laws when they "gave an advantage” to Silknet, one of the country’s largest telecommunications operators.
The Ministry signed a 6.7 million GEL contract with Silknet while the "actual market price” of the services was 2.6 million GEL, prosecutors said.
"An investigation is ongoing to reveal other officials of the Ministry of Defence who participated in this crime,” read the statement released by the Chief Prosecutor’s Office today.
If found guilty, the alleged offenders could face a prison sentence from seven to 11 years.
Meanwhile, the controversial procurement was classified as a secret. In a written statement released after the officials’ detention today, the Ministry of Defence offered to declassify details of the procurement in order to provide transparency to the process.
"The Procurements Department of the Ministry of Defence carries out procurement processes in full compliance of the Georgian legislation,” the Ministry said.
"Numerous steps have been undertaken in the Ministry to make the procurement process maximally transparent.”
The Ministry’s statement noted representatives of non-governmental organisations attended tender commission meetings as observers. Moreover, the Ministry was part of NATO’s Building Integrity Program.
"In 2013 experts from the North Atlantic Council gave a positive assessment to the anti-corruption reforms carried out by the Ministry of Defence and asked to share its successful experience with other NATO partner countries,” read the statement.
"Even in case of covert procurement, even though the Ministry of Defence has the right to negotiate with a single company, examination of pricing is still being carried out. That was the case with fiber optic tender too,” the Ministry said.
After the Ministry suggested it would declassify details of the procurement, it said it was interested in a "thorough investigation” and expressed "full readiness to continue intensive cooperation with all stakeholders”.
Defence Minister Irakli Alasania is currently on an official trip to France, after which he will head to Germany. He is not expected to return to Georgia until November 7.
The Chief of General Staff of the Georgian Armed Forces, Major-General Vakhtang Kapanadze is also abroad. He is on a three-day visit to Estonia.