Doubts over competence
Not a single prominent tax evader has yet been convicted
Greece’S elite used to see stashing funds in Swiss bank accounts as an insurance policy. Until the country joined the euro zone, fears of a sudden devaluation or a freeze on capital movements loomed large. Then came a rush to transfer money made in the black economy to financial havens abroad.
After many years of turning a blind eye to this illegal practice, a desperately broke Greek government is at last cracking down. The tax declarations of almost 2,000 Greeks with accounts at the Geneva branch of HSBC, a bank, are being scrutinised by officials at SDOE, the financial police. Their names were on a computer disk sent in 2010 by Christine Lagarde, then French finance minister, to her Greek counterpart, George Papaconstantinou.
The “Lagarde list” went missing in mid-2011 but turned up again recently when Evangelos Venizelos, Mr Papaconstantinou’s successor as finance minister, sent a copy to the office of Antonis Samaras, who is now prime minister. Hot Doc, a Greek investigative magazine, then got hold of another copy and published all 2,000 names.
Several politicians and their wives and many members of prominent business families appear on the list. Yet most attention has focused on Maria Panteli, an office manager whose account contained 550 million euro ($719m), about one-third of the total in all the accounts. Ms Panteli was suspected at first of acting as a front for a Greek shipowner. Then Nikos Lekkas, deputy chief of SDOE, claimed in testimony to a prosecutor that her account was controlled by the 89-year-old mother of a former prime minister, George Papandreou.
Margaret Papandreou, who lives modestly near Corinth, a provincial town, and her son, now a backbench MP, swiftly denied the allegations. Mrs Papandreou, a feisty feminist, threatened to sue newspapers that published Mr Lekkas’s claim.
The Papandreous felt vindicated when Sabby Mioni, a Greek-Israeli financier, came up with an explanation. Mr Mioni said he had never met any Papandreou family member. The account in question belonged to an investment fund listed on the Irish stock exchange, he said, and he used to manage the fund on behalf of EFG International, a Greek financial group based in Switzerland. According to one of Mr Mioni’s former colleagues, Ms Panteli was a trusted employee permitted to sign documents on Mr Mioni’s behalf.
A day later Mr Lekkas made a U-turn, claiming that he had never linked the Papandreous with Ms Panteli’s account. The embarrassing incident has raised fresh doubts about the financial police’s professional competence. Critics say there has been foot-dragging over investigations of politicians, footballers, prominent lawyers and doctors suspected of tax evasion. SDOE officials complain they are overloaded with new cases.
Greece has still not convicted any prominent tax evaders, despite promising international creditors that the worst offenders would go to jail. The government is about to name a special secretary for tax affairs, in line with a request from officials from the European Commission, the IMF and the European Central Bank who are supervising economic reforms. The new tax supremo will have his work cut out.