Friday 11 December 2009

Five Questions to the Prime Minister on Corruption in Greece

Two days ago, the head of Transparency International Greece briefed the televised Cabinet of Ministers meeting. Among other points, he mentioned that Greece had among the lowest ratings on corruption of any EU Member State. The Prime Minister responded by promising a renewed fight against corruption. Yesterday, the Prime Minister met with the President, and repeated various promises to fight corruption.

Since this issue is suddenly a priority, I’ve like to ask five specific questions on specific incidents of corruption or questionable practice that have occurred, but for which it seems that not a single member of government has been prosecuted.

Testimony of Greek and German officials made during the prosecution of the Siemens corruption scandal in Germany indicate that over a period of 17-20 years, Siemens payed bribes of between EUR 2 – 6 million per year in Greece. The estimated total amount was between EUR 80-100 million, depending on different sources of testimony. This money was payed to political parties, staff of the Hellenic Telecommunications Organisation and others, in an attempt to swing public sector contracts.

Both main political parties are implicated in the scandal. Individual Members of Parliament are also implicated. In the case of PASOK, testimony of a former PASOK MP indicates that part of these bribes were paid directly into the PASOK party treasury (which PASOK of course denies).

Question: Does PASOK intend to investigate this matter and assign criminal prosecution? This past spring, it called for a full investigation. Now that it is in government, will it continue the investigation? Will any criminal responsibilities be assigned?

Between 2008-2009, the Vatopedi land exchange scandal erupted in Greece. In this scandal, the Vatopedi Monastery traded marshland to which it had questionable, even false, title deeds, for prime land in Athens, Thessaloniki, Halkidiki, and many other locations. The land exchange was made possible apparently due to a first decision during the prior PASOK administration, but gained speed and was finalized during the previous ND administration. The value of public land involved is conservatively estimated at EUR 120 million: at actual construction rates, it will be far higher.

Question: What steps is PASOK taking to reclaim the land, assign criminal responsibilities to the various parties involved, and ensure that this never happens again? On a related matter, what steps is PASOK taking to tax land owned by the Church, from which it is currently tax-exempt? This was a key electoral promise of PASOK in the October 2009 elections, but we hear nothing of it now.

Ministry of Culture / Zahopoulos
In late 2007, news came of the Zahopoulos scandal, a sordid affair in which journalists were allegedly attempted to be bought off in return for dropping their coverage of the business and personal affairs of the former Secretary General of the Greek Ministry of Culture. Equally importantly, though it was not reported as extensively, was the revelation that the Ministry of Culture, as a beneficiary of OPAP (the state lottery organisation) funds, was spending this money “off the books” on a range of highly questionable publications, conferences, events and staff remuneration.

Question: Is all OPAP money properly accounted for? If we want to reduce “public waste”, are we sure that off-budget income is actually being used for the public, as opposed to the partisan, benefit? Is PASOK going to perform a forensic audit on money spent by the Ministry of Culture which did not derive from the central government budget to determine if the money was well-spent? Will any criminal responsibilities be assigned?

Structured Bonds
In 2006-2007, it emerged that several state pension funds had been purchasing structured bonds which, before the funds became final beneficiaries, traded hands 3-4 times (each) from the time the pension fund had decided the purchase, until the final transaction. This was done to general commission income for multiple intermediaries. JP Morgan, for instance, is reputed to have earned EUR 14 million on a EUR 280 million bond, and at least two other intermediaries earned similar amounts before that bond was finally “sold” to the pension fund. Testimony-or rumours?-circulating in Greece at the time claim that part of the proceeds of these commissions flowed directly into the coffers of one of Greece’s political parties.

Question: Has PASOK taken steps to ensure that Greece’s tremendous debt burden is being purchased through transparent auction? In the current reform of the pension system, is Minister Loverdos taking steps to improve the financial competence and oversight of the state pension funds?

Parliamentary Immunity
The greatest source of immunity from prosecution for public corruption occurs because every Member of Parliament has a statute of limitations on crimes committed while in office which extends to the life of that Parliament. When a new Parliament is sworn in, the statute of limitations ends. This means that any MP who becomes a Government Minister receives a “get out of jail free” card for any crimes committed while in office.

Question: What steps will PASOK take to end Parliamentary immunity and institute real accountability for crimes committed by MPs and Ministers?

The confidence of the average citizen would be greatly restored if we saw any serious action being taken on these issues. Unfortunately, it seems that, as in many other cases, there is one law for the political elite, and one law for the rest of the country. The only difference, perhaps, is the degree of immunity offered, and what you have to pay for that immunity.

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