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Ex-Greek Defense Minister, Wife Jailed On Money Laundering Charges

Αssociated Press

Former Greek defense minister Yiannos Papantoniou. (Photo by Eurokinissi/Stelios Misinas)

ATHENS – Having bought out jail time after being convicted for hiding their income, former Greek Defense Minister Yiannos Papantoniou and his wife Stavroula Kourakou found themselves in the high-security Korydallos Prison as they faced charges of laundering money tied to alleged bribes from a state defense contract.

Papantoniou had followed another former PASOK Socialist Defense Minister Akis Tsochatzopoulos, who was also jailed after being convicted of stealing scores of millions from defense contracts but was let out of prison because he said he didn't feel well.

Papantoniou was remanded after testifying over a period of nearly 18 hours. He and his wife were then taken into custody before being taken to prison for pre-trial detention. They had been barred from leaving the country but an investigating magistrate and prosecutor said they were flight risks because they have a second home in Switzerland and bank accounts there where they hid their money and judicial officials feared they would keep committing offenses unless jailed, said Kathimerini.

Papantoniou denied charges he laundered 2.8 million euros ($3.19 million) in value in the equivalent of Swiss Francs that he's charged with taking as bribes from a 2003 contract to upgrade six Hellenic Navy frigates. There was no report why whomever paid the bribe wasn't also being prosecuted. A friend of the former minister has reportedly admitted to having deposited money in Papantoniou’s bank accounts without knowing it was illicit gains and is being quetioned further, along with other suspects, the paper said.

As he was being led away in handcuffs, Papantoniou told reporters he was political victim and said there was a “utilization of justice that is damaging our democracy.”

“The Polakis doctrine is being implemented in general,” he added, apparently referring to comments by Alternate Health Minister Pavlos Polakis who said the ruling Radical Left SYRIZA, trailing badly in polls after Prime Minister Alexis Tsipras kept reneging on anti-austerity promises, could still win re-election “if we put certain people in prison.”

Responding on Facebook, Polakis accused Papantoniou of belonging to what he called the “Simitis doctrine,” hinting at corruption in the government of former Socialist premier Costas Simitis, during Tsochatzopoulos' time.

Papantoniou could be tried not only for money laundering but possibly for bribery if it's found the statute of limitations hasn't expired.

The 69-year-old Papantoniou, a Cambridge-educated economist, served as Greece's minister of finance and national economy from 1996 to 2001 and then moved to the Ministry of Defense for three years under Socialist governments.

He denies the charges, accusing Greece's left-wing government of orchestrating a political witch hunt.

A spokesman for the government, which faces a general election next year, described the decision as "proof of the corruption and degeneration of the old political system." No trial date has been set. From the early 1980s and for more than two decades, Greece spent billions of euros (dollars) on an arms race with neighboring Turkey and on infrastructure works co-funded by the European Union. Allegations of corruption were rife.

These programs were deeply curtailed after the country's debt crisis broke out in 2009, and Greece was forced to implement harsh spending cuts in exchange for international rescue loans. Action was also taken to investigate past cases of potential corruption.

The centrist To Potami party says answers are needed as to why former government officials were allowed to get away with wrongdoing for so long.

"When two defense ministers are arrested for enriching themselves through kickbacks ... then we cannot speak of coincidence but of generalized corruption," a party statement said. "And some people need to assume the political responsibility for what the judiciary is now confirming."

(Material from the Associated Press was used in this report)