The institutional weakness poisoning Greek politics

Agora Contributor: Nick Malkoutzis

It appears that the leader of ultra-nationalist LAOS, Giorgos Karatzaferis, will stand trial in connection to kickbacks he allegedly received as part of a deal signed to supply Greece with Super Puma helicopters. While this week's developments provide some hope that those guilty of corruption (time will tell if Karatzaferis is one of them) will be brought to justice, they also highlight the inability of Greek institutions to fulfil their role as guardians of fairness and democracy.

Despite Greece's dramatic plight over the last few years and the decisive role that the country's politicians played in triggering it, not many have been held to account for their role in plundering taxpayer's money or undermining the democratic process. Ex-Thessaloniki Mayor Vassilis Papageorgopoulos and former Defense Minister Akis Tsochatzopoulos are among the few who have faced the consequences of their actions. In fact, it was only during the investigation into the latter's under-the-table deals for arms procurements that authorities followed a trail that seems to lead to Karatzaferis. The LAOS leader is alleged to have accepted a payment of 1.6 million euros from middlemen in the sale of the helicopters to Greek armed forces, which was agreed in 2000. The money was allegedly paid into an offshore company owned by the politician and his son.

If we comfort ourselves with the thought that some judicial officials are doing their jobs, we will miss the most worrying aspect of this affair, which is that others failed to spot anything suspicious for many years even though it was their job to do so. Karatzaferis was first elected, with New Democracy, in 1993. He served the party until he was ousted in acrimonious circumstances in 2000, going on to form LAOS. He then sat in the European Parliament between 2004 and 2007, when he returned to the House in Athens with LAOS. Karatzaferis served as an MP until the summer of 2012. His party was also part of the interim government between November 2011 and February 2012.

During this time Karatzaferis, like all other MPs, was obliged to fill in an origin of wealth form (known as pothen esches in Greek). This document was meant to be the public’s safeguard against politicians trying to get rich while supposedly serving voters. The forms are published online each year but in reality they are just a catalogue of each member’s assets rather than an explanation of how they obtained their wealth. In 2003 MPs were banned from owning offshore companies. In 2010 this ban stretched to the MP’s relatives as well.

According to reports, Karatzaferis found an easy way of getting around the system. After declaring his interest in the offshore firm in his initial origin of wealth forms, he then simply stopped including it in his declarations. The pothen esches forms submitted by MPs each year are checked by certified public accountants but nobody thought, or took the trouble, of checking whether Karatzaferis had actually severed his ties from an offshore firm that appeared on his records one year and not the next. Also, nobody thought that Karatzaferis’s substantial personal wealth (which may be completely legitimate) deserved a closer look, even if it was for the sake of dispelling any suspicions. In the pothen esches forms published in 2011, he was the party leader with the healthiest bank balance and owned six apartments, two houses (one with a swimming pool), three massive plots of land and an underground garage. His wife owned three apartments, one house, two shops, a storeroom and a large plot of land.

To make matters worse, Parliament’s accountants recently conducted a review of all the pothen esches forms submitted by MPs between 1974 and 2012. The review was launched as part of the political system’s effort to convince voters that it is straightening up its act. The checks uncovered less than 10 cases in which anything untoward was found, suggesting the whole process was nothing more than a sop. Karatzaferis was not among the cases in which discrepancies were found.

The irony is that the parliamentary committee which voted this week for the LAOS leader’s case to be referred to a prosecutor is the one responsible for dealing with matters relating to source of wealth declarations. After years of inaction, this institution has been alerted to a possible offence by the judiciary and its only contribution in the process is to refer the case back to the judicial system. Greeks who are looking for a sense of accountability must now rely on the erratic and bogged down judiciary to deliver results.

Given this case study, is it any surprise that Greeks’ faith in their institutions is minimal? An annual Public Issue poll on voters’ confidence in key institutions published recently showed that just 11 percent trust political parties and 26 percent Parliament. The justice system fares slightly better at 49 percent, although the public’s faith in another potential watchdog, the media, is extremely low: 13 percent for newspapers and television. Instead, the most trusted institutions are the army (80 percent) and police (70 percent).

The Hellenic Statistical Authority’s (ELSTAT) annual survey on income and living conditions published on Thursday found that only 0.6 percent of Greek trust the political system “completely,” while 45 percent do not trust it at all.

This atmosphere of mistrust is toxic. It undermines any confidence in those within the country’s institutions who perform their duties, while providing a cloak of darkness behind which charlatans and thieves can operate with impunity. In turn, this poisons Greek politics and leads disappointed and desperate people to turn to populists in the hope they can form a barrier against accountability slipping away completely. Without institutional refrom, Greece will only breed more political salesmen who trade in false dreams and profit at other's expense.

Follow Nick: @NickMalkoutzis

2 Comment(s)

  • Posted by: Nick Malkoutzis, MacroPolis

    But that's the point, Mike. It shouldn't be up to Leventis or anyone else to raise suspicions when there are institutional bodies there to check on exactly these things.
    Where I would agree with you is that the media has done a poor job of ensuring that these bodies are doing their job properly.

  • Posted by: Mike

    Actually Basilis Levant is always raised the issue of his suspicious wealth. But the Media refused to discuss it.

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