The man who bought a country

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The man who bought a country

Georgia’s richest man, Bidzina Ivanishvili, is tilting his country toward Moscow ahead of an election on Oct. 26.

By DATO PARULAVA
and EVA HARTOG
in Tbilisi, Georgia

Illustration by Danielle Del Plato for POLITICO

High on the hill above the capital sits a castle. Outside the perimeter walls, guards patrol the grounds. Inside, watchtowers offer a commanding view of the city below — ramshackle lanes and central squares. In the distance to the west is the Black Sea, and beyond it, Europe. To the north, across the mountains, Russia.

The castle — a neo-modernist glass and steel construction complete with a helipad, art gallery and shark tank — belongs to one of the world’s richest oligarchs.

Of the 20 wealthiest people across the globe, 14 are American, according to the Bloomberg Billionaire Index. Their combined wealth is just north of $2.1 trillion — or about 7.5 percent of the annual economic output of the United States. Bidzina Ivanishvili, the owner of the castle and the most powerful man in the country of Georgia, is estimated to be worth about $7.6 billion, or a quarter of the country’s GDP.

The 68-year-old tycoon has dominated politics in the South Caucasus nation for more than a decade. Bidzina, as he is universally known, was once an elected politician. Voted into office as prime minister on a wave of popular discontent in 2012, he served just a year before stepping back into the shadows. 

The populist party Ivanishvili bankrolls — Georgian Dream — has an almost unchallenged hold on government. According to his critics, the party’s lawmakers and ministers owe fealty only to Ivanishvili himself. And as Georgia heads for an election on Oct. 26 that many see as a stark choice between Russia and the West, Ivanishvili is increasingly seen as a force pulling Georgia out of the EU’s orbit to appease Moscow. 

After a referendum on joining the bloc came close to being rejected in Moldova last week, the West is warily watching Georgia for signs of Russian influence in another former Soviet republic-turned-EU candidate country.

In the streets beneath Ivanishvili’s castle, angry crowds are growing. This election will be the toughest challenge yet to Georgian Dream’s reign, as discontent rises over the country’s pivot toward Russia at a historic time of tension with the West over the war in Ukraine. And many are asking: Just how did Ivanishvili — a former metals and banking mogul with long-standing ties to Moscow — come to wield so much power in a country known for its revolutionary spirit?

Ivanishvili and the Georgian government declined requests for interviews. But, by studying their path to power, POLITICO has compiled the Ivanishvili playbook for how to seize control of your country and turn it against the West.

Build an empire

Elevating yourself into a position of power usually requires cash — and, in the days of casino capitalism and chaos that followed the collapse of the Soviet Union, there was plenty of it to be made.

Ivanishvili was born the son of a miner in an impoverished rural village in what was then an outpost on the periphery of the Soviet Union. “I was raised almost barefoot, I didn’t have shoes to wear. But I was absolutely happy, way happier than my children are,” Ivanishvili said in 2014.

The youngest of five children, he worked sweeping the floors at a factory while studying, first for an engineering degree in the Georgian capital Tbilisi and later economics in Moscow. But by the time he graduated, academic credentials were worth little more than the paper they were printed on, with the Soviet empire limping toward its end.

From these humble beginnings, the young Georgian paved his way to unimaginable prosperity, selling electronics and ultimately founding his own bank, Rossiyskiy Kredit, headquartered in Moscow. 

That came with its challenges — his rivals, and organized crime, took notice. Ivanishvili would later tell a Russian newspaper that his brother was kidnapped in an extortion plot. In response, the young tycoon turned to a different gang for protection: the Russian government, making powerful friends in the country’s new anti-organized crime taskforce — even if their methods differed little from those they were meant to be fighting.

“Its people worked for bribes and did not shy away from torture, beatings and killings,” said Irina Borogan, a leading expert in the Russian security services. But they appear to have gotten the job done for Ivanishvili, who set up shop between France and Georgia while maintaining his vast and opaque business interests in Russia.

Those with expertise in Russia in the ’90s said that, as a rule, such cooperation with the security services meant a lifelong commitment. “Once you cooperate with the government or the security services, they will never let you out of their sight,” said Borogan.

Ivanishvili’s opulent glass castle is now filled with expensive art; a Picasso he bought at Sotheby’s for $95 million, was at the time of its purchase the second most expensive painting ever auctioned. 

Pick your moment

Billions of dollars may offer influence, but, to achieve true control, the levers of power must be wrested from rivals.

In 2003, tens of thousands of Georgians took to the streets to oust longtime leader Eduard Shevardnadze, the former Soviet bureaucrat who had governed the country since the fall of the USSR. In his place came the bombastic revolutionary Mikheil Saakashvili, who vowed to forge closer ties with the West, join the EU and become part of NATO.

However, the hope ordinary people had for Saakashvili’s government soon faded as his party grew increasingly authoritarian and its tendencies for corruption became more evident. In 2008, tensions with Russia exploded into a bloody five-day war in which Moscow placed a fifth of Georgia’s territory under the control of the Kremlin and its local proxies in the breakaway regions of Abkhazia and South Ossetia.

Georgia needed a savior, and Ivanishvili was happy to step in, casting himself as a more austere, self-controlled figure than Saakashvili, whom he had once openly backed. “I will create such a democracy in Georgia, I may truly astonish Europe,” he promised in October 2011.

It wasn’t just Georgians who were happy to be rid of the increasingly unpredictable Saakashvili. In 2012 “a running joke [among Georgian pundits] was that U.S. Ambassador John Bass had his own slippers at Ivanishvili’s home, because he went there so often,” said Gela Vasadze, an independent political analyst. “Ivanishvili came to power with the full support of the United States and Europe.” Georgian Dream won the 2012 election, taking 85 seats to Saakashvili’s 65.  

Giorgi Gakharia, a former member of Georgian Dream who served as prime minister between 2019 and 2021, said he was confident Ivanishvili originally believed in his promise of democracy. 

“He is organized, goal-oriented, with a clear work ethic. But he has no idea how a state works, unlike business,” said Gakharia who said he resigned after the tycoon started pulling strings behind his back. “He failed to pass the power test and continues on the same track, trying to maintain power at all costs.”

Buy support

Every good ruler knows that it’s important to share the wealth, especially when the value of your business empire rivals that of the entire country, where the annual GDP per capita is just $6,674.

In the early days of his rise, Ivanishvili was at pains to show off his philanthropy, claiming he’d donated “close to a billion” dollars, personally financing public infrastructure such as roads, parks, churches, and cultural heritage sites, including Tbilisi’s landmark Holy Trinity Cathedral. 

Chorvila, the backwater town where he was born, served as a live-version campaign promise, a miniature version of a socialist utopia. Ivanishvili renovated people’s homes, offered them free gas and redid the roads. Villagers reportedly were given access to Ivanishvili’s private zoo where they could fawn over his zebras, and exotic birds.

“Lemurs roamed free in my yard like cats,” he said in a 2014 interview.

“Bidzina gave us everything,” said one Chorvila resident, speaking on condition of anonymity, adding that Ivanishvili had paid for his house down the valley, as well as a new stove and the gas it runs on. Ivanishvili, he added had also funded “the school, this house” — he pointed to a white house in front of him with a green tile roof — “that house” — he pointed to the bright green house behind him.  

As time progressed, Georgian Dream became widely seen less as a political party than an extension of Ivanishvili’s deep pockets and, more darkly, his ability to take it all away. With access to both the public purse and control of key industries, many voters owe their livelihoods to Ivanishvili and his inner circle. 

While Georgians continue to express widespread support for joining the EU and deep resentment of Russia, a September poll estimated that a third of the country supports Georgian Dream despite its turn toward Moscow, making it by far the country’s most popular party.

Raise an army 

Like its neighbor Russia, Georgia has the surface traits of a democracy including a parliament, a president and prime minister, and elections. But under Ivanishvili, the country’s supposedly representative institutions have become increasingly centralized into one pair of hands.

“Ministers, including the prime minister, struggle to make decisions during negotiations with partners because decisions need to be approved by Ivanishvili,” Gakharia, the former prime minister said.

Any aspiring leader needs loyal foot soldiers, and Ivanishvili has gathered a veritable army of politicians, security guards and other cronies, ready to do his bidding. 

According to a report from the European Council on Foreign Relations, “Ivanishvili’s domestic control is considerable, including of the ruling party, key state institutions, (especially the judiciary and the security services), and the economic arena. Arguably, all key members of the government and party officials are dependent on him.”

When POLITICO visited Tbilisi’s botanical garden, which borders Ivanishvili’s grand Tbilisi residence, earlier this year, men lurked in the bushes around the perimeter. Wearing jeans and black leather jackets, concealing walkie-talkies, the sentries tailed anyone who came too close or looked suspicious.

The castle — a neo-modernist glass and steel construction complete with a helipad, art gallery and shark tank — belongs to one of the world’s richest oligarchs. | Marco Fieber/Flickr via Creative Commons

Eka Beselia, currently an opposition politician who co-founded Georgian Dream with Ivanishvili and later served in high positions in the parliament, was one of his faithful supporters until 2018, when she said Ivanishvili crossed a red line by pressuring her to drop planned reforms of the judicial system. 

“I declared my unconditional support to him, convinced he was an idealist,” Beselia said. “But as became evident, the most important thing for him is power.”

“He saw that if you want to maintain power without embracing democracy, you have to control the courts,” she added. “He decided to put the control of courts in the hands of the ruling party.”

Ivanishvili’s control of Georgian Dream was evident when the party installed Irakli Kobakhidze, a critic of the West, as prime minister in February. Before taking the podium, Kobakhidze paused before Ivanishvili, who was sitting in the front row, and appeared to ask him permission to proceed to the stage.

“He can dismiss a prime minister within an hour and then bring him back with one phone call,” said analyst Kornely Kakachia, director of the Georgian Institute of Politics.

Divide the country

With power, as the saying goes, comes responsibility, particularly when the public is looking for someone to blame for corruption and stagnating living conditions. And so it’s useful to be able to pin your problems on enemies at home and abroad.

Saakashvili was among the first to feel Ivanishvili’s wrath. After a spell in self-imposed exile in Ukraine, having been sentenced in absentia to six years in jail for misuse of his powers as president, he returned to Georgia in 2021 only to be swiftly arrested. He and his allies claimed he was being poisoned in prison.

As time progressed, Georgian Dream became widely seen less as a political party than an extension of Ivanishvili’s deep pockets. | Irakli Gedenidze/Reuters

Ahead of this year’s election, the crackdown is widening. Georgian Dream has vowed to outlaw the entire parliamentary opposition if it wins, disbarring any members elected on those platforms. 

At a rare public appearance at a rally in Tbilisi earlier this year, Ivanishvili said Saakashvili and his party had been “ordered and directed from the outside by their masters.” 

Parroting Russian-style state propaganda, he accused the West of seeking to use the country to open a “second front” against Moscow in the war with Ukraine, blaming what he described as a “Global War Party” for the conflict.

He has also campaigned against what he describes as LGBTQ+ “propaganda” pushed by the West. In a recent interview with a pro-government television channel, Ivanishvili claimed that in the West “men’s bathrooms are being equipped with hygienic pads, and men’s milk is equated to female milk.” According to Ivanishvili and his lieutenants, the EU is actively supporting civil society initiatives designed to promote values contrary to Georgia’s “unique history, traditions and identity.” Georgian Dream has passed a bill effectively banning all public references to same-sex relationships and outlawing Pride events.

“I promise that with a convincing victory in the elections, violent attempts from foreign countries to impose pseudo-liberal values on our people will come to a permanent end in Georgia,” Ivanishvili declared last month at a campaign speech in the town of Akhaltsikhe, in a region blighted by poverty and emigration.

Meanwhile, the government has adopted a tough line with the tens of thousands of ordinary Georgians who have taken to the streets to oppose a Russian-style law branding Western-backed NGOs and media outlets as “foreign agents.” 

Night after night over the summer, security forces deployed tear gas and batons against peaceful crowds, arresting and beating the organizers of the protest. Civil society leaders, meanwhile, say the new rules will effectively marginalize their organizations or see them shut down altogether, as has been the case in Russia.

Seal the deal

Ivanishvili has always maintained Georgian Dream is working to take the country into the EU, and indeed some of his early reforms paved the way for the country to be made a candidate to join the bloc last year. 

With some 80 percent of Georgians in favor of EU membership, Georgian Dream has been careful to say they still want to join the bloc — only on their own terms.“Georgia will have a bright European future,” Prime Minister Irakli Kobakhidze said in September. “Achieving this is possible only through maintaining peace and protecting our dignity.” 

Authorities in the West remain unconvinced. In response to the foreign agent law and the subsequent crackdown, Washington has imposed sanctions on leading officials. The EU, for its part, has effectively frozen Georgia’s entry into the bloc, with its foreign policy chief Josep Borrell describing October’s election as “a crucial test for democracy in Georgia and its European Union path.”

Gakharia, the former prime minister, said  the key to understanding Ivanishvili — and thus, depending on how the election goes, the future of the country — is simple. “Ivanishvili is not pro-American, not pro-European, not pro-Russian nor pro-China,” he said. “Unfortunately, he’s not pro-Georgian either. He’s pro-himself.”  

For Georgia’s richest man, being denied entry into the EU or NATO would not be a setback. Indeed, as Belarus’s Aleksandr Lukashenko can attest, a pivot away from the West and toward Moscow offers a would-be autocrat the opportunity to cement total control.

For regular voters, however, dreaming of prosperity and personal freedom, the calculation is different. Indeed, while many in the country owe their income to Ivanishvili’s system of patronage, many others rely on development assistance and investment coming from the United States and Europe. 

Ivanishvili may have the money, but it could be ordinary Georgians who end up paying for his decisions.

Gabriel Gavin contributed to this report.

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