The Lagarde list and corruption in Greece

Three years ago, when the then Prime Minister of Greece George Papandreou told the president of Eurogoup, Jean Claude Juncker, that “I am ruling a corrupt country”, he provoked strong reactions. Mainly within Greece’s borders, because the country was at the time facing tough choices and its economic future and credibility were at stake, so the PM’s comment was a real coup de grace.

Portraying the country as “corrupt”, a stamp obviously referring to the Greek citizens as well, did not stop there. While talking about the wastage in the public sector, the then Vice President of the government tried to share responsibilities for the state’s failure and addressing to the Greeks said: “we all binged together”; at the same time, the major media in Greece were trying their best to make the Greeks feel uncomfortable and ashamed for the country's economic failure – make them feel so exhausted and disappointed so that they at last admit it was their fault and accept to drink the conium of austerity.

In the dirty war various European tabloids had declared against Greece (lying of course, since Eurostat’s data were proving exactly the opposite) we were reading that Greeks are lazy, that they retire at their 50s etc. At the same time, Greek media were trying to create the myth of corrupt citizens and public servants. As if the economic crisis was the result of the Greek people’s collective consciousness. Now we know the truth and know that Greece was just the weak link in a badly designed and deadlock monetary system.

The famous Falciani's list, the one containing the names of nearly 2,000 Greek holders of bank accounts in Switzerland, and perhaps some fraudsters among them, is a typical example of a dysfunctional, on many levels, state.
But let's take the story from the beginning.

In October 2010, the then Finance Minister of Greece George Papaconstantinou was given by the then Finance Minister of France Christine Lagarde a CD containing a list of names of 2.059 Greek citizens holding deposits at HSBC bank in Switzerland.

The minister copied the list to a USB stick and kept the original CD at his office. A month later, as he later claimed, instead of giving the list to the then chief of the Economic Crime Department (SDOE), he only gave him the names of 20 citizens with large deposits, in order to carry out a profile investigation. Let us not forget that France and Spain received each a similar list and had already investigated many cases and discovered many tax evaders. These lists were stolen by an employee of HSBC bank named Herve Falciani who is currently detained in Spain and faces an extradition request from Switzerland.
Papaconstantinou never ordered an investigation despite the fact that he admitted Prime Minister George Papandreou was aware of the list and had given such an order.
In June 2011 the former minister delivers the USB stick to the new head of the Economic Crime Department (SDOE), but once again does not order him to investigate the case. Shortly afterwards the head of SDOE gave the notorious USB stick with the list to Mr Papaconstantinou’s successor and current president of PASOK (Socialist Party), Evangelos Venizelos. Neither Mr Venizelos prompted investigation.
In short, almost one year later the Falciani list was still wandering from hand to hand or remained hidden in an office drawer.

At a time when Greeks are suffering a profound crisis and a sharp income drop; when unemployment has reached 25% and for young people 50%; when three out of five companies are on the verge of bankruptcy and the state owes them VAT reimbursement of 9 billion Euros, the Greek finance ministers choose to not pay attention to a list that may hide potential tax evaders and could generate revenues for the state coffers.

At a time when successive governments cut pensions and salaries for three whole years, sending thousands of people in public meals organized by municipalities and churches and thousands of people searching for food in garbage, the ministers are hiding the list in a drawer.
At a time when everybody is talking about ways of tackling tax evasion and even the European partners are pressing for adequate measures, Greek politicians and magistrates remain silent. With help by the media they give huge emphasis to a Greek restaurant owner’s omittance to give a legal invoice for a meal in Hydra island, but they do not give proper attention to the Falciani list.

The scandal, initially buried by the media with few exceptions, got high publicity just a few months ago. Politicians and former ministers appear on television trying to justify themselves; suddenly, the whole country starts talking about a list that is hidden in a drawer.
The story gets very interesting from then on.
Kostas Vaxevanis, a journalist, discovers the Falciani list and publishes it in his monthly magazine, HOT DOC. He only publishes the bank account holders’ names and professions, not the amount of money they keep in the bank.
The state panics and instead of explaining or beginning investigation for the list they do something that only undemocratic countries do. They arrest Kostas Vaxevanis on charges of exposing personal data. The issue attracts huge international interest. Vaxevanis is cleared but a few days later, after the subject is forgotten, the prosecution appeals and now the reporter is waiting for the new trial.

It is clear that it was not the exposure of 2,059 people’s personal data which disturbed the Greek politicians and businessmen. The list contains many cases to be investigated.
For instance, there are Greek businessmen seeming to handle huge sums of money, perhaps nearly 500 million Euros. Most accounts belong to businessmen associated with investment funds, or ship owners (note that ship owners in Greece were untaxed until recently. This year they will pay taxes, though, and these taxes will amount to 80 million Euros. What an irony; retirees will pay 83 million Euros and the unemployed 32 million...)
Three politicians appear as well in the list, either personally or via close relatives.
Specifically, in the 128th place of the list appears Mrs Graziella Grollo, the wife of Nea Demokratia’s secretary, Manolis Kefaloyiannis, who is also member of the House committee investigating the Lagarde list. Also, in the 919th place we see the wife of Yiannos Papantoniou, former finance minister for Costas Simitis’ governments, and in the 913th George Kandalepas, Papantoniou’s best man. According to many newspaper reports, the accounts of Mr Kandalepas and Mr Papantoniou’s wife handled 40 million Euros. Most of this money were transfered from U.S. banks.
Many housewives also appear in the list as account holders; non-working women, who nevertheless have money in Switzerland. Experience from previous investigations shows that behind a «housewife», a different name is usually hidden that does not want to be seen. Perhaps a second or third beneficiary to the same account where the “housewife”’s name appears first. Shouldn’t these cases be investigated? Same goes for many retirees as well as many civil servants. Some of them work at the Ministry of Finance. It is obvious, according to HOT DOC’s survey, that some large amounts are not justified by the account holders’ income. Obviously, no one can be accused of tax evasion, but in any other country justice would at least had started investigating. In Greece, the ministers hid the list for two years, at a time when the country is searching for food in garbage to survive.
People who keep bank deposits abroad are not thieves. Those people who hid the list, though, were probably covering thieves while at the same time the scandal tarnishes the reputation of thousands of honest entrepreneurs or individuals who own legal money and lump them together with tax evaders.

Papandreou said he was ruling a corrupt country.
What he should have been said though is that in representative democracy, people vote for their representatives and give them the authority and responsibility to make good management. What happened in Greece was just the opposite. As a Greek proverb goes, "the fish stinks first at the head".

Kostas Pliakos

Published in the slovak magazine EUROREPORT