GAB welcomes this post by Giorgi Meladze, Associate Professor at Ilia State University School of Law in Tbilisi and an invited lecturer at European Humanities University; Konstantine Chakhunashvili, PhD Associate Professor at Caucasus University; and Nadia Asaad, journalist and researcher working with the Center for Applied Nonviolent Action and Strategies and a graduate student at the Paris Institute of Political Studies (Sciences Po).

Once praised as a “Beacon of Democracy,” Georgia now faces mounting concerns over its slide towards authoritarian rule. Under the influence of oligarch Bidzina Ivanishvili, the country’s ruling elite is consolidating power through corrupt, authoritarian practices. While the United States and several European Union member states have already responded with sanctions targeting key decision-makers and their associates, Washington lawmakers are now debating legislation supported by both Republicans and Democrats to ratchet up the pressure.

The Mobilizing and Enhancing Georgia’s Options for Building Accountability, Resilience, and Independence (the MEGOBARI Act) would require the President to impose new sanctions on Georgian leaders and anyone “engaged in significant acts of corruption or acts of violence or intimidation in relation to the blocking of Euro-Atlantic integration in Georgia.” It is an essential element in defending democracy and the rule of law in Georgia. which in turn will help prevent organized crime networks operating through and in Georgia from fueling Russia’s war machine and undermining Euro-Atlantic integration.

After a decade of state capture, cosmetic “reforms”, and the consolidation of informal power networks, all documented by the Basel Institute, a sanctions regime codified by MEGOBARI Act and calibrated to the Georgian context is no longer optional: it is critical to prevent Georgia’s antidemocratic leanings from infecting its neighbors.

This post documents the Georgian state’s slide into a “cartel-state” and explains how MEGOBARI and other measures by U.S. and EU can arrest it.

Illicit Economies as a Regime-Sustaining Model

Since 2021, international “boiler-room” fraud rings have proliferated in and around Tbilisi, targeting elderly Europeans with fake high-yield investment schemes. The investigative record—see OCCRP/SVT’s “Scam Empire” leak and local reporting (here)—depicts a churn of front companies, affiliate marketers, VoIP infrastructure, and crypto off-ramps that resemble an industrial supply chain more than street crime. Enforcement remains whack-a-mole, and allegations of past political protection continue to appear in Georgian media. Meanwhile, post-2022 shifts in drug trafficking routes have pushed narcotics pipelines across the Black Sea and through the Caucasus, a pattern captured by regional risk trackers and open-source crime indices (see OC Index). The strategic risk is clear: diversified illicit revenues can cushion external pressure and subsidize patronage at home.

Cartelized Politics, Not “Normal” Polarization

The “cartel party” thesis, elaborated by Katz and Mair (here), holds that once in power a political party may increasingly function like a cartel, employing the resources of the state to limit political competition and ensure its continued electoral success. When fused with organized criminal networks, the state turns into a cartelized enterprise. In Venezuela, the security-sector-embedded “Cartel de los Soles” evolved from dispersed cells into a governing architecture that underwrites regime survival and criminal commerce alike. In then Senator Marco Rubio’s blunt formulation—“Maduro is the head of the Cartel de Los Soles”—criminal governance has subsumed formal authority.

Georgia’s trajectory exhibits familiar warning signs.

In “cartelized politics,” ruling parties do not simply compete; they monopolize the state. Warnings about the proximity of Georgia’s ruling party to organized crime are no longer abstract. Reports of coordination with “thieves-in-law,” including a notorious admission that senior figures engaged them during the 2012 campaign, point to the normalization of informal coercion in electoral politics (broadcast coverage). This culture is not accidental; it is the residue of Soviet-era nomenklatura politics repurposed for contemporary oligarchic consolidation. The effect is to blur the line between party hierarchy, enforcement arms, and criminal intermediaries—a hallmark of a cartelized state.

The Russian Connection—And a Shadow Supply Chain

Oligarch Bidzina Ivanishvili’s rise is inseparable from the 1990s Russian business milieu and its adjacent security networks, chronicled by independent reporting from The Guardian, Spiegel, Politico Europe, and Vedomosti among others.  U.S. authorities have explicitly tied him to corrupt influence operations and as a result  sanctioned the founder of the ruling party, Georgian Dream, for facilitating Russian leverage in Georgia. Investigations into his inner-circle—which include prosecutors-turned-oligarchs and politically connected businessmen (e.g., David Khidasheli)—show how informal networks have captured commanding heights of the economy.

This gang of newly created elites now collaborates with a web of sanctions-dodgers that move dual-use components north to Russia via Caucasus way-stations. Watchdogs and data journalists—including iFact/OCCRP, regional outlets, and trade-data analysts—have mapped flows of drones, chips, and radio-navigation devices. The trend confirms  Washington’s warnings: that Georgia is one of the jurisdictions abetting sanctions dodging, no matter what it says about minor, incidental matters such as its 2023 curbs on vehicle re-exports.

The bottom line: without aligned enforcement and credible costs, a profitable shadow supply chain will continue to underwrite Moscow’s war economy—while deepening Georgia’s own governance risks.

Do Sanctions Work? Early Signals, Real Limits

Sanctions are not a silver bullet, but early signals show they can help break the Georgian government’s criminal activities and sanctions busting. In 2024, coordinated U.S.–EU measures triggered portfolio reshuffling, conspicuous asset moves (including large-ticket art imports), and elite turnover in sensitive posts. A number of enforcement-linked figures were removed or reassigned; others saw their operational latitude constrained.

At the same time, macro indicators underscore fragility: foreign direct investment slid, and capital parked offshore fled to sheltered channels at home. In parallel, localized bursts of intimidation and coercion—up to and including incidents implicating senior regional officials (case reporting)—suggest a narrowing inner-circle reacting to financial and legal pressure. Sanctions do not replace domestic politics, but they can shrink the regime’s margin for impunity and buy time for pro-democracy forces.

What Washington Should Do Now

1) Pass—and rigorously implement—the MEGOBARI Act. The Act’s design fits Georgia’s problem set: it targets individual architects and financiers of democratic erosion (including family networks), rather than imposing broad trade pain on citizens. Paired with existing listings against sanctioned figures and facilitators, it can impose the kind of predictable, escalating cost structure that cartelized elites respect.

2) Focus on mid-tier enablers. Sanctions should move beyond marquee names to mid-level officials in law enforcement, revenue, and municipal structures who sustain intimidation, procurement rackets, and licensing favors.

3) Squeeze the logistics spine. The sanctions-evasion web relies on specific brokers, corridors, and third-country interfaces. Align U.S.–EU technical standards, expand end-use monitoring, and coordinate targeted designations across jurisdictions where Georgian entities transact or bank.

4) Defend civil society’s investigative capacity. Georgia’s most important compliance asset is its watchdog community and independent press—from Civil.ge to cross-border collaborations with OCCRP. Protecting that ecosystem is a force multiplier for sanctions and rule of law.

5) Treat illicit finance as a strategic threat. As former UNODC chief Antonio Maria Costa argued in the wake of the global financial crisis, criminal liquidity can become systemic. The Georgian risk is it will replicate this dynamic domestically, using illicit flows to stabilize an emerging cartel-party state. (Reuters summary).

The Stakes

The question is not whether Georgia is “pro-West” or “pro-Russia” in the abstract. It is whether Georgia remains a rule-of-law state at all. The model taking shape—a party cartel fused with criminal networks, shadow logistics, and strategic corruption— is what caused instability in Venezuela and would be even more dangerous at the hinge of the Black Sea and Caucasus. Smart, sustained sanctions, anchored by the MEGOBARI Act, linked to EU conditionality, and enforced against the logistics spine—offer the best near-term chance to halt that slide and create political space for a constitutional reset.