Georgia Pardons Israeli Businessmen Jailed for Graft

Roni Fuchs and Zeev Frenkiel spent the past year behind bars for allegedly offering millions of dollars to Georgian deputy finance minister; released following mediation of President Peres, FM Lieberman.

Two Israeli businessmen who'd been convicted of attempting to bribe a deputy finance minister in Georgia returned to Israel Friday, after spending more than a year in prison. The pair, Ron Fuchs and Zeev Frenkel, were freed after being granted a pardon by the Georgian president, Mikheil Saakashvili.

The move followed requests from senior Israeli officials and after a settlement was reached for the waiver of more than $70 million of a $100 million arbitration award granted to Fuchs against the Georgian government.

Ron Fuchs Georgia arrest, Aviv Chofy
Aviv Chofy

A spokeswoman for the Georgian president said the pardon was granted after consideration for the age and state of health of the two men, and following a request by the Israeli government and a personal appeal by President Shimon Peres.

The case had been a source of considerable tension between the two countries. Following the release of Fuchs and Frenkel, Foreign Minister Avigdor Lieberman spoke with Georgian Foreign Minister Grigol Vashadze and invited him to visit Israel in an effort to improve relations between the countries. Vashadze is now due here in about two weeks.

Yesterday the Georgian Justice Ministry announced the parties had agreed to settle the arbitration claim for $37 million. The waiver was seen as paving the way for the release of the pair, but is also thought to have led to their arrest in the first place.

In 1991, Fuchs and a Greek partner received a government license to establish an oil pipeline network in the republic, but five years later, the Georgian government rescinded the license. Fuchs and his Greek partner then filed an arbitration action against Georgia with the International Center for Settlement of Investment Disputes, an agency of the World Bank, and were awarded a judgment of about $100 million, subsequently increased in value to $110 million.

Shortly afterward, Fuchs and Frenkel were arrested on a visit to Georgia over attempted bribery allegations.