Tuesday, July 16, 2013

Greece May Prosecute Former Finance Minister


ATHENS--Greece's parliament was expected to recommend late Monday that a former finance minister face criminal prosecution for his handling of a list of 2,000 wealthy Greeks with Swiss bank accounts.

The case, surrounding the so-called Lagarde List, caps a months-long investigation in parliament into the actions of former minister George Papaconstantinou, who is a step away from being the first senior Greek politician in decades to face a special court for breach of trust.

The majority of Greece's 300 lawmakers were expected to recommend that Mr. Papaconstantinou, who was finance minister from 2009 until mid-2011, face two criminal charges that could land him jail: tampering with evidence on the list of potential tax cheats and breach of trust.

Parliamentarians were also expected to agree that Mr. Papaconstantinou be charged with the misdemeanour offense of dereliction of duty. However, the final decision as to whether the former minister, seen as the architect of Greece's unpopular austerity program, will face trial will be made by a five member judicial council.

At issue is the so-called Lagarde List, named after International Monetary Fund chief Christine Lagarde, which was drawn from data obtained by former employees of the Geneva branch of HSBC, who had electronically copied details of 24,000 clients.

The information wound up in the hands of French tax authorities in 2008, as well as those of Italy and Spain. All three countries started investigations to recover unpaid taxes.

In late 2010, Ms. Lagarde, then the French finance minister, passed the data to Mr. Papaconstantinou to help Greece investigate potential tax evaders. However, the original list--contained on a CD--was passed among various officials and was eventually lost, according to a testimony given by Mr Papaconstantinou in Parliament.

Another version resurfaced late last year and was published by a Greek journalist. After being compared with a fresh version of the list re-sent from France, Greek authorities determined that several bank accounts held by Mr. Papaconstantinou's relatives had been deleted, according to public prosecutors.

Mr. Papaconstantinou, along with his relatives, has repeatedly denied the allegations.

This case has stoked public anger in Greece, which is stumbling through a sixth straight year of recession and where unemployment is close to 27%--the highest rate in the European Union.

Greek authorities have yet to complete investigating any names on the list despite holding on to it for several years as the country struggles to gather tax revenues due to the fast shrinking economy.

Many Greeks feel that the austerity program has fallen disproportionately on the poor. Greece's international creditors have set combating rampant tax evasion high on a priority list that includes a host of other fiscal and structural overhauls.

In an attempt to show crisis-hit Greeks that steps are being taken to fight tax evasion, Greek prosecutors issued charges earlier this year against two former ministers for failing to disclose family assets on their income statement.

Prosecutors said they are seeking misdemeanour charges against former Finance Minister Yannos Papantoniou--who helped engineer Greece's entry into the euro zone--and former Merchant Marine Minister Giorgios Voulgarakis, after a parliamentary committee accused them of making false statements during their terms as deputies. They both deny any wrongdoing.