DISY, AKEL appear to have received around €1.5mln from shipowner (Update 2)

By Angelos Anastasiou

Ruling DISY got €600,000 and AKEL appears to have received around €880,000 from a company thought to be linked to former Laiki strongman Andreas Vgenopoulos, the attorney-general said on Wednesday, announcing the main findings of a probe.

The cash, transferred by Focus Maritime Corporation, a company belonging to Greek shipowner Michalis Zolotas, appeared to have been used by the two biggest parties to fly in voters ahead of the 2008 presidential elections.

Attorney-general Costas Clerides said undeclared donations to parties at that time was not a crime. The law on party financing has since been amended, requiring that parties declare all donations over €500 on an annual basis, and banning donations over €50,000.

In a news conference, the AG said the police report with the findings of the investigation was delivered to him last week, but he requested additional statements from four individuals named, and the final report was handed to him on Monday.

“According to the report, on January 25, 2008, a letter signed by Michalis Zolotas was found, instructing his bank, Marfin Egnatia, to cancel his earlier instructions from four days earlier to wire €500,000 to DISY’s account due to an ‘error’,” Clerides said.

“According to the letter, the correct amount to be transferred was €50,000.”

Indeed, the AG added, on February 13, €50,000 was transferred from the account of Focus with Marfin Egnatia to DISY’s account with the Bank of Cyprus, justified as “financial support”.

“You may recall that this amount was recently returned by DISY to Laiki Bank’s special administrator,” Clerides said.

The incident with the cancelled €500,000 payment, followed by a €50,000 transfer, is consistent with President Nicos Anastasiades’ – DISY’s leader at the time – claim that the initial transfer was sent back by the party and only €50,000 was eventually received by the party. But the balance, police investigators found, was paid to DISY indirectly.

“On February 12, 2008, and June 4, 2009, two more payments were made out of Focus’ account, for €450,000 and €100,000, respectively, to Rizokarpaso Shipping Ltd,” Clerides said.

“The €450,000 was then transferred from Rizokarpaso to A&L Ship Holding Ltd and from there to a travel agency, on instructions from DISY, for the issuance of air tickets for students to be flown in from Greece. In his statement to the police, the director of the two companies said Anastasiades had told him that a group of ship-owners was going to raise money for the campaign.”

With regard to the June, 2009, transfer for €100,000, Clerides said it had been justified as ‘shipping dividends’.

“Rizokarpaso’s director said that, on instructions from DISY, he wired the €100,000 to a Cypriot businessman, whom he named,” the AG said.

“The businessman said he paid the money to the travel agency on instructions from a DISY representative.”

According to Clerides, police investigators concluded that the sum of €600,000 in total was paid to DISY from Focus, while the only pending issue relates to a request for legal assistance from Greece over the reason the original €500,000 payment was made and then cancelled.

With regard to the probe into whether AKEL received money from Focus, Clerides said four transfers were found, but a direct link to the party was not – instead, the only evidence that the payments were made to the party is that they involved its student branch, Proodeftiki.

“On December 24, 2007, Focus paid €250,000 to an unknown account, under ‘transfer for air ticket expenses’,” Clerides announced.

“On January 31, 2008, a further €276,000 was paid, and on February 13, 2008, an additional €326,000, both under the same reference to an unknown account.”

All three transfers, he added, end up with Egnatia Bank Travel – a travel agency in Greece, later taken over and renamed Marfin Travel.

“Marfin Travel’s employees said they could not produce documentation on these transactions, claiming the files had been lost, but did come up with a list of travelers for whom the tickets were issued,” Clerides explained.

On the AG’s instructions, police investigators sifted through the list for uncommon names, and identified 20 individuals. Of these, half declined to give a statement to the police, and most of the rest said the tickets were paid for by Proodeftiki, with one claiming the tickets were paid for by AKEL.

“In addition to the three aforementioned payments, another was found for €29,430, also for air-travel expenses, bringing up the tally to €881,430,” Clerides said.

But while most passengers did not directly implicate AKEL in the transfer of funds, contractor Miltiades Neophytou, who sat on a committee to raise funds for Demetris Christofias’ 2008 presidential campaign, said in his statement that he was told at one of the fund-raising committee’s sessions that Vgenopoulos offered to pay “over 2 million Cyprus pounds” to the campaign.

“The committee also comprised AKEL’s financial director, two MPs, and three other individuals,” Clerides said.

“Neophytou said he believes the money was eventually paid, as the fund-raising effort was soon abandoned.”

On the back of Neophytou’s statement, the AG asked for statements to be taken from the two parliamentarians and two committee members.

“Both MPs refused to give a statement and answer any questions, whether orally or in writing,” he said.

“Instead, they each handed investigators a written statement, in which they deny that Vgenopoulos or Focus were ever mentioned at committee meetings.”

The deputies, Clerides noted, had every right to decline to answer questions, since this was not a criminal investigation and they were not suspected of any wrongdoing.

Rumours of money funnelled to the two parties by Focus – with the implication that Vgenopoulos was behind the donations to secure favourable treatment from the political establishment – have been circulating since December 2013. Vgenopoulos is widely held responsible for the collapse of the island’s banking system.

Focus had also been reported as having paid former Governor of the Central Bank of Cyprus Christodoulos Christodoulou €1 million in July 2007 – two months after he had stepped down as Governor. Christodoulou justified the payment as “consultancy services for 10 years, paid in advance” and clarified that the account the funds were paid into was not his own but belonged to a company run by his daughter.

Christodoulou was sentenced to five months in jail in 2014 for failing to pay taxes on the amount received from Focus.