A Development In The Controversial ‘Lagarde List’ Case Is Causing An Uproar In Greece Today

Yesterday, we reported that prosecutors from Greece’s SDOE financial crimes unit had turned over the findings of a new probe into the infamous “Lagarde List” of alleged Greek tax evaders to parliament.

The big questions were what the probe would reveal when the findings were made public, and how damning they would be for the political party PASOK, a key partner in Greece’s fragile ruling coalition that finds itself at the centre of the unfolding scandal.

All of this comes at a time when Greece is involved with tense negotiations with international creditors at the European Union, the International Monetary Fund, and the European Central Bank in order to secure bailout loans it needs to keep the Greek economy afloat. The disbursement of the loans is contingent upon the current Greek government’s ability to impose painful, unpopular austerity measures on the public.

Today, there is an uproar in Greece over a report that Giorgos Papakonstantinou, a high-ranking PASOK official who served as Greece’s finance minister from October 2009 to June 2011 (and was thus a key player in the euro crisis), deleted three names from the list.

George Papaconstantinou

[credit provider=”Wikimedia Commons” url=”http://en.wikipedia.org/wiki/File:Giorgos_Papakonstantinou_portrait_crop.jpg”]

Some quick backstory: in 2010, the list – which contains the names of around 2000 Greeks with bank accounts at the Swiss branch of HSBC, was sent to the Greek finance ministry for investigation by Christine Lagarde, who was the French finance minister at the time.

The implication was that the wealthy Greeks on the list may have been using the secret Swiss bank accounts to evade taxes, depriving the government of badly-needed revenues while it was forcing austerity measures on the general public that disproportionately affected the lower and middle classes.

Papakonstantinou, who was running the Greek finance ministry in 2010, sat on the list instead of turning it over to the police right away. Then, he passed it to fellow PASOK member Evangelos Venizelos in 2011 when the latter succeeded him as the Greek finance minister.

Venizelos didn’t turn over the list to the authorities until earlier this year when public outrage put pressure on him to do so. Venizelos is now the leader of PASOK. Given the time it took for the list to be turned over to authorities, sceptics rose concerns that the list may have been tampered with to protect political allies.

So, Paris sent over a new list last week so that financial prosecutors at SDOE could see whether Papakonstantinou’s and Venizelos’ version of the list had been modified.

The new report about Papakonstantinou that has everyone up in arms today comes via Skai, an Athens-based television news station.

Athens newspaper Kathimerini relays the news:

According to Skai, the new list contains three additional names to the 2000-odd on the original record. These three names are allegedly connected to Papaconstantinou, who had received the original list, and one of the three is said to have deposits at HSBC in Geneva of $1.22 million.

According to sources quoted by Skai, no other new names appeared on the new list that is being investigated by financial prosecutors.

Skai alleges that the three names removed by Papakonstantinou are relatives of his, so the implication is that he was trying to cover for them before handing over the list.

The Skai report contradicts a report earlier this week by Greek newspaper Proto Thema that nearly 600 names were actually removed from the Papakonstantinou-Venizelos version of the list.

However, today’s report arguably implicates the “big fish,” if you will.

Papakonstantinou has already denied the report in a statement. Via Kathimerini:

“I will not accept guilt being assigned where it does not exist and being made a sacrificial lamb for this issue,” added the ex-minister in his statement. “After all, it was thanks to my initiative that this information came to Greece. I gave the data to the Financial Crimes Squad (SDOE) to investigate.

“I ask that all the information comes to light and for a full investigation to take place.”

Speaking to Greek state radio from the Netherlands, Papaconstantinou said it was inconceivable that he would take such an “idiotic” risk as doctoring the list of depositors.

Meanwhile, members of SYRIZA – the leading opposition party and anti-bailout voice in the Greek parliament that narrowly lost elections in June – is agitating for further inquiries as well. They are undoubtedly seizing the opportunity to cause unrest and put pressure the coalition government.

Now, Skai is reporting that their earlier story has led to the demise of Papakonstantinou:



In other words, conflicting reports are flying around the media, the public is outraged, politicians are fanning the flames, PASOK is under fire, and all of this is spectacularly bad timing for Greece – but the issue doesn’t look like it’s going away anytime soon.

MORE: The ‘Lagarde List’ Is Back, And Things Could Get Really Explosive In Greece Again >