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Greece faces tough struggle to fight resurgent organised crime.

GREECE has usually been at the better end of any crime statistic league table, but the picture has darkened recently, writes David Haworth. The country is the European Union's second most corrupt (after Poland), while money laundering and drugs have also made their ugly marks.

IT'S no surprise that Greeks take a rather worldly view of corruption when, for example, more than 20 members of the judiciary are currently under criminal investigations of one kind or another, but even those seasoned in local ways were shocked by the arrest in September of Panayiotis Adamopoulos.

He is currently in jail awaiting trial with two others for alleged blackmail and extortion. What makes his case remarkable is that he is, or rather was, the director of Greece's competition watchdog. His responsibility was to oversee a level playing field in trading matters and come down hard on any suspected cartels.

Through two go-betweens, who were also civil servants, Adamopoulos is alleged to have approached Greece's Mevgal dairy company, which was under his department's investigation for price-fixing and being threatened with a Euro 25 million fine.

The prosecution's case is that this penalty would somehow be smoothed away on payment of a bribe of between Euro 2.5 million and Euro 3.2 million (estimates vary). Not only are these allegations shocking in themselves, but have serious political implications for the centre-right government of Kostas Karamanlis which was elected two years ago on a specific mandate to get tough on sleaze.

He has already strengthened anti-corruption laws but some commentators suggest they have not gone nearly far enough. They say there is a systemic problem in a state which still controls 55% of the economy, the biggest slice than anywhere else in the EU, including former Communist states.

Furthermore the nation's grey economy is reckoned to be 28.6% of the GDP or Euro 52 billion, according to the latest guesstimates.

In such a context the temptations for bureaucrats, who are generally not well rewarded with salaries, are therefore strong and with this in mind some of the "deals" proposed by would-be contractors have mouth-watering scope for instant wealth. Last year the World Bank estimated that some Euro 400 million was expended to make sure that some Greek state contracts went to certain people. And such a figure is deemed to be annually routine, not outlandish. The bank believes one of the most effective reforms would be to attack the lack of transparency which surrounds the awarding of public projects. But this would confront directly a Greek cultural/professional phenomenon of mutual obligation and favours. Even at the lowest end of everyday transactions back-scratching is not only expected, but almost obligatory.

That is why the bank makes no bones about its view that: "Corruption in Greece reaches, and sometimes exceeds, that of developing countries" it states. Not surprisingly a recent poll found that 65% of the public were dissatisfied with the government's efforts to sharpen things up. More legislation is promised--but cynical voters have yet to learn when this can be expected.

They note that in the past year a number of parliamentary inquiries into defence contracts placement have come to nothing.

Greece is vulnerable to crime for two geographic reasons: first, with its multiplicity of islands scattered across heavily used marine routes and, second, it is part of the so-called Balkan Route for trafficking of many kinds, notably drugs, guns and humans, the three largest money-spinners for Greek organised crime.

One observer commented that such criminal activity is managed on hierarchical lines and therefore finds it relatively easy to undermine state guidelines, especially as far as corruption is concerned.

But there are few convictions and as a case can take as long as three years to be heard, absconding is frequent.

Greece has a frontier with Bulgaria, is close to Albania and Romania where local and Russian mafias have long been active. It is also proximate to the Middle East.

Partly for these reasons money laundering, with an estimated "take" last year of US$11.5 billion, is a rampant activity but here, too, partly because of prodding by the European Commission, the law was tightened in 2005 exposing criminal assets to confiscation and reversing the onus of proof on a defendant who has to demonstrate the provenance of funds or other property he holds. Financial institutions by law now have to report any suspicious cash movements and as a result over Euro 30 million of suspect capital has since been seized.

But some laundering is made easier because profits from sales of stocks are not taxed so the recipient can explain a bonanza in his accounts by claiming he got lucky on the market. But casinos, especially in the north of the country, are frequently used as are "cover enterprises" which disguise the true source of profit.

As part of its campaign against dodgy deals the government established an independent authority with a remit to counter money-laundering. This initiative was a response to the perceived vulnerability of members of the judiciary to bribe offers, but it's too soon to judge how successful the new body is going to be.

In a current case in Crete a lawyer is being held over a suspicious transfer of Euro 50,000 from a nightclub owner to lawyers representing known drug dealers; 10 were arrested last autumn over an alleged scam in the OPAP lottery game in which the suspects are believed to have bought tickets with "dirty" cash and then swapped them for clean money. The case is till pending.

In addition to smuggling, there are several other commonplace frauds connected to Greek shipping, the most frequent of which is voyage deviations without telling the charterers. This is backed up by falsification of a ship's log often claiming poor weather or a sick crew member as reasons for a detour.

Such irregularities are reported to the International Maritime Bureau, part of the International Chamber of Commerce, but--by definition--they often take place in territorial waters other than Greece's even though the scam may have been hatched in Piraeus. It's similarly the case with fictitious letters of credit and other fraudulent trade deals.

Is Greece a sort of black hole for commercial chicanery, corruption and money-laundering? A Greek economist told this reporter no one is quite sure: is the country in the grips of a crime wave or has there just been an increase in reporting because of better (EU) regulation?
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Author:Haworth, David
Publication:International News
Date:Nov 1, 2006
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