Corruption pervades Greek arms contracts

Athenians are currently enthralled by the high-profile corruption case against one of the most senior members of the Pasok, “socialist” government, former Defence Minister Akis Tsochatzopoulos.

The ex-minister, his daughter Areti and his ex-wife Vicki Stamati are all in custody as evidence of complex money-laundering charges makes front-page news almost every day.

As Defence Minister between 1996 and 2001 he controlled billions of Euros in arms contracts, principally with manufacturers in Germany and Russia.

Pre-trial evidence has been given that the 73-year-old former minister and founding member of Pasok pocketed at least 2 billion euros in kickbacks for arms deals he signed while in office.

Prosecutors probing the case are said to have found evidence linking Tsochatzopoulos to dozens of suspiciously acquired properties in Greece and abroad, and to offshore companies.

His defence fell apart when his daughter Areti conceded in a letter to the investigating magistrate that “all my assets that were obtained with my father’s money and are deemed to have come from criminal activities.”

One of the Minister’s corrupt deals involved he purchase of German type 214 submarines from Ferrostaal. It led to a vote in parliament which ordered an investigation of his defence dealings – which led to the sinking of his corrupt career.


Meanwhile, Panayiotis Kouroumplis, an ex-Pasok MP who has defected to the leftist Syriza party, has rounded on corrupt arms deals during Pasok’s 20 years in office.

“Behind many Greek corruption cases you will find a German company,” the veteran politician said. “Didn’t Germany know when it gave loans to Greece that it was forcing Athens to spend half the money on arms procurements?”

He was expelled from Pasok last year when he voted in parliament against the first Euro bailout deal. He joined Syriza and won a seat at the June election. Two other Pasok MPs have followed his lead.


In the United States, the Pentagon budget is facing a cut of $500 billion over 10 years as Washington attempts to bring the economy back to solvency.

In Britain, the Cameron Government has announced a 20 per cent cut in the standing army, reducing regular army forces by 20,000 over the next eight years.

So what is the Gillard Government proposing by way of defence cuts as the crippled economies of the “Free World” bunker down to fight recession?

Ms Gillard has launched the nation’s biggest-ever capital works program by making the first commitment to a $40 billion project to build 12 submarines.

When I mentioned the Australian Government’s plan to defence correspondents in London it was received with much hilarity. Given that Australia’s coastline, including Tasmania, is 25,760km long, each of the new subs would be running protection on approximately 4,300km, or the distance between London and Tehran.

Then, of course, there’s the problem of recruiting submariners to serve on underwater coffins. Numbers are collapsing despite increased cash and bonuses.

In the sordid world of defence contracts, Australia’s involvement with the previous Collins Class submarine project in the 1980s and 1990s has a special place.

The initial contract was worth $1.3 billion but it eventually blew out to $5.6 billion. Then taxpayers shelled out another $1 billion to fix leaks, dodgy engines and periscopes – three operational items which would appear to be primary to a properly functioning sub!

Why nobody has been charged with grand larceny or corruption over this monstrous rort is one of the great Canberra scandals. What’s clear is that defence department officials, defence contractors, politicians and lobbyists made a fortune from this taxpayer-funded debacle.

Why would Gillard want to risk yet another fiasco when the Collins project is still smelling to high heaven? The Australian Financial Review gave a clue with this headline on the latest sub project: “Gillard bows to US on submarines.” (November 24, 2011)

And who is the Australian ambassador in Washington pushing this splurge of taxpayers’ money? Kim Beazley, former defence minister and chief patron of the Stars and Stripes fan club.


Editorial from the English-language Athens News which began publication in 1952: “Greece’s incredibly unfair tax system has deeply alienated the greater part of its population.  The state in this country is perceived as an enemy of citizens rather than a structure serving the interests of taxpayers.

“Wage-earners who have always paid their taxes stood by as the privileged linked to the political and financial elites evaded the taxman and amassed fortunes in the process.

“Instead of monitoring, regulating and facilitating the little man, the state became a tool for successive governments and financial elites to promote their own interests.”

Sound familiar? 

Leave a Reply

Your email address will not be published. Required fields are marked *