NEWS

Spotlight turned on laws fostering graft

A top priority of the former opposition’s and current government’s war on corruption was the abolition of the laws that fed it and the establishment of transparency. In the coming fall, when Parliament reconvenes, the government, through Justice Minister Anastassis Papaligouras, aspires to introduce the first major legislation that will ensure the proper management of public finances and transparency in public life. In its final shape, the law will be ready by July. The Justice Ministry, together with an ad hoc committee, is scrutinizing five laws that were adopted by the PASOK governments during 1993-2003 and have been cast as the chief institutional culprits for the lack of transparency in key sectors of the state service (such as public contracts, the mass media and the stock market). At the same time, the Ministry of the Environment, Planning and Public Works (YPEHODE) is considering replacing the notorious «mathematical formula» for calculating tender bids. This had degenerated into a tool for vested interests to distort the competition process. Steeper penalties The first blow against corruption was struck by the minister of the interior and public administration, Prokopis Pavlopoulos, who, with the aim of slashing red tape and restoring relations between the State and citizen, abolished Law 2172/1993. He also transformed the offense of a breach of trust from a misdemeanor into a felony, threatening terms of imprisonment of up to 10 years for state officials who had sworn an oath of office. Up for partial abolition is Law 3021/2002 on conflict of interest, which legalized ownership of media companies by firms with contracts for public works or state procurements through the «basic shareholder» clause. This will mark the start of a series of institutional changes which will close every loophole in the existing legislation. According to sources, the number of shares in a media company held by persons involved in state contracts will be reduced to 1 percent, so as to close any back door to media ownership. Currently, there is a 5 percent limit on the number of shares anyone involved in deals with the State can hold in a media firm. Also envisaged is banning the use of friends, acquaintances and relatives holding share capital in the firm, or sitting on the management boards of media companies. The current, entirely porous, clause which allows the aforementioned practice as long as those involved can prove financial self-sufficiency will also be abolished. Basic provisions New Democracy’s draft bill, as set out by Pavlopoulos (in May 2003), contains the basic provisions that apply to the finances of political parties and persons. In accordance with, and after a presidential decree is issued, the percentage of share capital owned by anyone connected with state procurements or projects will gradually be reduced to 1 percent. Besides this, the words «as long as they cannot prove financial self-sufficiency in relation to that person» will be excised from Paragraph 2, Article 2 of Law 3021/2002. Since spouses or relatives are regarded as related persons who are not defined by their lack of self-sufficiency or otherwise, as stipulated by Article 14, Paragraph 9 of the Constitution, this provision, by raising the issue of financial self-sufficiency, is unconstitutional. A second reason for removing the provision is that it establishes in practice yet another loophole. «A big contractor or large supplier to the State cannot at the same time own a media channel,» the justice minister has repeatedly said on the question of public contracts being assigned to relatives of mass media barons. Laws to be abolished Parts of legislation that will be rescinded include: 1. Law 2843/2000, which is regarded as an obstacle to the judicial authorities carrying out legal investigations into stock exchange transactions and punitive offenses committed in relation to them. This law removed the right from prosecutors to institute an investigation or preliminary investigation into possible stock market offenses unless they had the permission of a council of judges. 2. Law 2446/1996, especially Article 16, which allowed for broad-ranging deviations from the legislation on procurements. These permitted direct assignments of procurement contracts and agreements at prices double those pertaining worldwide. The government is examining whether these agreements, limited to Greek companies, at least as regards organizations in the sectors of water, energy, transport and communications, can be met under the provisions of Law 2286/1995 and other legislation on supplies 3. The provisions of Article 4 of Law 2522/1997 are regarded as a prime breeding ground for lack of transparency. They provide for the non-execution, even of irrevocable judicial decisions, that cancel illegal assignments of public contracts. As a result, public contracts are assigned to anyone without fear of sanctions, as plaintiffs can only appeal to the courts for compensation, while those that illegally acquired the contract are allowed to continue to execute it. The instructions the Ministry of Justice gave at the start of the committee’s deliberations under General Secretary Panos Panouris were clear and severe. To its members (Nikos Sakellariou of the Council of State, Audit State Council member Christos Dakouris, Appeals Court Chairman Michalis Margaritis, consultant to the Interior Ministry A. Sarivalasi, legal adviser to the Minister of State Ilias Theodorakos, lawyer P. Vassilakos and General Secretary of the Non-Governmental Organization International Transparency Greece Z. Hadzidimitriou) Panouris emphasized that there was no room for any kind of delay. Characteristically, he said: «We must signal another ethos to society. Combating the sources of corruption is the most basic prerequisite for reconstructing the State. Over the last few years, the legislative structure has legalized an unacceptable climate, essentially of impunity, in the whole sector of state procurements contracts and public works and has rendered public life as a whole a vast area of wheelings and dealings. It must be brought down.»