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Decline and fall of the demagogues

Decline and fall of the demagoguesTHIS ARTICLE could have been entitled ‘The Bonfire of the Vanities’ (with apologies to the book’s author Tom Wolfe) as it too is all about ruthless ambition, political sleaze and rampant greed.

However, as vanity in others is regarded in Cyprus as something normal and acceptable, even praiseworthy, and the more so the higher an individual claws their way up the demagogic ladder, calling this article ‘The Bonfire of the Vanities’ would have been a waste of wit.

Dismantling Sovereign Corruption

As noted in my 2013 book Corporate Risk and Governance, for a very long time Cyprus has suffered from a pernicious form of corruption that goes far beyond petty and even grand corruption, namely ‘sovereign corruption’. Widespread collusion occurs over a very long period between, on the one hand, unethical companies and their bosses (for example, those engaged in wholesale cheating of customers, suppliers and/or the taxpayer) and, on the other hand, party hacks across the political spectrum and officials of successive administrations and local authorities. This is to the detriment of the public interest in general and particular classes of persons or corporate entity or particular individuals and organisations. If the government fails to radically correct the tainted system and the collusion, it creates an impression that corruption has become an accepted and institutionalised fact, i.e. an instrument of state policy. That is sovereign corruption.

Prior to 2013, it was unimaginable that any government in Cyprus would ever change this corrupt status quo since they were all assumed to be ‘up to their necks in it’ for reasons of personal gain, greed, lust for power and, no doubt, a good old dose of vanity. No one wanted to rock the boat, no one wanted to derail their own gravy train and no one had the courage to take on the powerful demagogues who were the biggest patrons, drivers and beneficiaries of the corrupt system. However, a combination of the national financial crisis of March 2013, the EU/IMF/ECB bailout terms and the immediate arrival of a new government under President Nicos Anastassiades appears to have provided an almost unique opportunity for the corrupt mould to be broken. The new President made it clear through numerous public statements that this was precisely one of his policies and one that would be carried through. Many thought it was just a political PR stunt without any likelihood of implementation but, after a somewhat faltering start, we began to see clear examples of investigations, arrests and criminal proceedings against very senior exemplars of the corruption.

The Gathering Storm

Let us consider the growing list of scandals in Cyprus that have hit the headlines in the past year or so that involve individuals who arguably could be described as demagogues. They are demagogues not only because they are recognised as being from the patrician class of wealthy and powerful Cypriots, but also because of arrogant statements and behaviour of some of them in the face of public scrutiny and disapproval. Typically, judging by their words and actions, they believe themselves not only to be untouchable and unaccountable but also to have a right to be so because they are who they are. Sound familiar? Remember the notorious American businesswoman Leona Helmsley who in 1989 was convicted of federal tax evasion and sentenced to 16 years in prison? She was quoted in evidence as saying ‘We don’t pay taxes. Only the little people pay taxes’.

Here is a short list of recent cases involving serious allegations against erstwhile powerful individuals in Cyprus:

The conviction in June 2014 of Akis Lefkaritis, a senior figure in the Lefkaritis petroleum business, for sexual exploitation of under-age girls. Sentenced to 12 years in prison. It is widely believed that his predatory behaviour had been known for years by the authorities but had been ignored because of his powerful status.

The conviction in September 2014 of a former Governor of the Central Bank of Cyprus, Christodoulos Christodolou, on six counts of tax evasion which he admitted. Fined EUR 13,500 and sentenced to five months’ imprisonment. In statements surrounding the trial, he implied that he was being unfairly treated as half the population engages in tax evasion.

The on-going trial of Theodoros Aristodemou, chairman and MD of Aristo Developers, his wife, an employee and a municipal engineer for allegedly altering title deed documents in the Land Registry to increase the area of land plots usable for development. Further investigations continue. Aristo is former chairman (while chairman and MD of Aristo) of the Bank of Cyprus and resigned on ill-health grounds in 2012 prior to the near collapse of BoC in March 2013. Unanswered questions remain about his BoC tenure, including possible conflicts of interest and the probity of a personal BoC loan of over EUR 200 min.

The on-going trial in Greece of a former Cyprus Interior Minister, Dinos Michaelides, on corruption charges alleging the laundering of bribe money.

The on-going trial of numerous individuals allegedly involved in the CYTA Pension Fund land fraud, involving ramping of land value, manipulation of investment decisions, bribery and corruption. Defendants include Stathis Kittis, former CYTA board chairman; Charalambos Tsouris, former CYTA board member; Orestis Vasiliou, former secretary general of the CYTA employee union; Nicos Lillis, businessman and football club chairman; an AKEL official and a Land Registry official.

The on-going investigation and prosecution of numerous individuals allegedly involved in bribery, corruption and financial irregularities connected with the Paphos Sewerage Board. These include the Mayor of Paphos Savvas Vergas (now resigned), an AKEL Deputy, an AKEL Councillor, an EDEK Deputy, the CEO of Medcon Construction and the MD of Nemesis Construction. Thus far, Vergas has admitted receiving bribes. Further charges are pending.

With such a growing list, maybe some demagogues do in fact have feet of clay. Some signs of their belated humility would certainly not go amiss. Let us hope that exemplary sentences are handed down to those convicted. A paltry five months in Christodolou’s case makes it look as if the judiciary are still part of the sovereign corruption. I hope I am wrong.

Who Next?

It is starting to look as if the cleaning of the Augean Stable is gaining a momentum that will spare no one having even a whiff of corruption about them.

There are still plenty of big shots and big organisations awaiting the exquisite investigatory ‘tortures’ of the Auditor General and it is a fair bet that, as 2015 rolls on, yet more cases will be revealed to the public. But, as Auditor General Odysseas Michaelides has stated clearly, the requirement for honesty and integrity transcends all levels of person and organisation and so even lesser demagogues are likely to come under the microscope.

For example, there are plenty of examples of very dubious civic projects and transactions in the villages where public transparency on the awarding of contracts and the costs of projects has been deliberately blocked by the local council. Local residents and taxpayers are, apparently, not entitled to know. For example, how much did the new council offices cost to build? Who were the bidders, what were their bids, why was a particular bid successful, did prior due diligence exclude any bidder on the grounds of family or other connections with council officers? Indeed, were council officers required to declare any connections they may have had with bidders or any financial interest in the land or the bids?

Similar questions might arise over, say, a new civic cemetery as well as why the purchase price of the land was so high, what alternative sites were considered and why building a wall round it cost hundreds of thousands of Euros. The financial probity in all such cases surely warrants investigation.

Roll on 2015!

About the author

Dr Alan Waring Is an International risk management consultant with extensive experience in Europe, Asia and the Middle East with industrial, commercial and governmental clients.

His latest book Corporate Risk and Governance is at http://www.gowerpublishing.com/isbn/9781409448365.

Contact waringa@eytanet.com.cy

©2014 Alan Waring


  1. A good start by the President.

    As in all things, corruption at lower levels takes the lead from those with the greatest power. This is a long journey, there is a lack of education for the general population with regards corruption and malpractice, how it destroys integrity, and when you loose that, you loose everything that is worthwhile. Promoting those who have high integrity and vision, dismissing those whose level of narcism knows no bounds helps.

    But the moral maze addresses us all, most of all for those in positions of responsibility and power. Good governance in Government, Public Services and Business is essential and not fully promoted nor rewarded in Cyprus.

    Along with the President’s attempt to clear out some of the corrupt – there needs to be a promotion of good governance and business practice. Trade Unions, Political Parties, Business Owners, Company Directors and Senior Managers should be made to attend seminars, conferences and training on good governance practices – before being allowed to take up their positions of responsibility. Why should we allow people the right to take up positions of responsibility if they will not sign on to probity in everything that they do?

    Being a good talker, or coming from the “right” family matters not – what counts is what you do and, as important, what you refuse to do in life. It is time to “licence our leaders” in our communities, businesses and public services – at the very least their attendance to and signing up for lessons and certification to good governance would allow us to hold them to their signature. Which is where integrity starts and ends.

    Nobody should be allowed to take up a senior role in Government, the Public or Private Sector until they have completed a good governance course and signed to commit to honesty and probity in their work.

    In of itself it will guarantee nothing – but we will be able to hold them to what they say they believe in, which is not the case today.

    To all you Members of Parliament, Business Owners, Company Directors, Senior Managers, Public Sector Managers, Trade Union Leaders, Political Party Leaders and Committee Members and anyone who has a position of responsibility and power – let’s stop these corrupt practices that have for too long been associated with our Cyprus, which demeans our world reputation and integrity as a nation.

    Put probity first – show you are not afraid to be open about your success. Organise for a commitment and certification to good governance practice – let’s be the first nation to do so, let us gain a new reputation, one for having a “licence to lead”.

  2. All

    Don’t get too excited because they go in through the front door of the prison, so joy public can see them, but who is watching the back door?

    Rest my case my Lord


  3. Who’s Next?
    If you really want to take these crooks out its simple, I give you a clue “Al Capone”
    Lots of money, new lots of people in the right places etc, bla bla bla, Jail them all for tax evasion.
    Very simple!

    • @Road Warrior on 2014/12/12 at 5:41 pm – There’s another one in the pipeline (yet to appear in the English language press). Hasikos has received complaints about unapproved debt write-offs and discounts given to individuals by employees in Municipal Authorities. He’s called for an investigation.

      And a former city councillor has been arrested by the Police in connection with the construction of the second phase of the sewerage system in Paphos. The report (in Greek) refers to 13 offences.

  4. So “the requirement for honesty and integrity transcends all levels of person and organisation.”

    In 2012 the then president, Christofias, was named at the conclusion of the official investigation into the explosion of Iranian munitions as the person who was aware of the danger, yet took no precautions and bears a heavy personal responsibility for the deaths of thirteen and dozens of injured. The president mumbled something about exceeding terms of mandate and walked away protected by the immunity from prosecution afforded to the president of Cyprus. However, that left room for other top politicians and officials who advised him to be prosecuted for manslaughter. I remember the case being adjourned in August 2012, but since then…..nothing?

    The point of this tale is that it is the Attorney General who decides who is prosecuted, not the police or the Auditor general. I will be listening for what the first mentioned has to say, if he ever says anything.

  5. The problem with Cyprus is shown the Belbin Test.

    In the 50’s when Russia launched Sputnik it gave the US a shock. What they perceived as a backward country had overtaken them in technology. And they needed to know why.

    Belbin gave them the answer. All their conglomerates and large businesses were headed by middle-aged, white males, thinking and acting as one unit. What was needed were teams made of different thinkers, and he gave these team members different names.

    In Cyprus we have a plenum driven by GC males, all with the same rhetoric, same values in honesty and joined at the hip. Kick one and they all walk with a limp.

    Successful countries have a multi-national Parliament, different thinkers, different perceptions and driven by different values. Until expats enter the House nothing will change. Maybe. “No taxation without representation” should be whispered in the corridors of power?

    For those who think I’m only here as a visitor, I’m not a guest. I’m a taxpayer supporting my Country financially, a place I have chosen to call home. But I’m denied the basic rights of a vote and representation, unlike the GC in the UK.

  6. A damning catalogue of corruption if ever there was one.

    However, one can’t help feeling that in the final analysis, these examples are but the tip of the proverbial iceberg and that what we have here are mere scraps which are being ceremoniously thrown to appease public opinion. This is perfectly depicted in the accompanying painting attached to this article with the sans culottes, i.e. the hoi polloi or literally those without breeches, dancing with joy at the execution of a French aristocrat.

    We’ve witnessed so many cases in the past whereby those caught with their fingers in the cookie jar only receiving derisory sentences – if not exoneration. It’s more a question of watch this space and I for one am not holding my breath that much will change.

    Perhaps the guillotine should be brought back into use. Unfortunately or otherwise, we’ve become far too ‘civilized’.

  7. A respected researcher, author, consultant – and one of the most telling articles so far published that really turns the spotlights on ingrained Cypriot cultures and (mal) practices.

    I think Dr.Waring is right insofar as we have only been seeing the ‘First Wave’ of these manifold and often inter-connected malpractices. One can only wonder how the Cyprus police and judiciary systems are going to be able to cope with the veritable Flood of further cases, allegations, investigations that will now almost certainly emerge.

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