Attorney-general (AG) Costas Clerides on Tuesday night charged President Nicos Anastasiades with supporting Deputy Attorney-general Rikkos Erotokritou, who was accused of bribery in a report by an independent investigator, released earlier.
The conclusions of independent criminal investigator PanayiotosKallis’ 90-page report were announced by Clerides earlier in the day. In it, Clerides said, Kallis had found grounds to believe that Erotokritou was bribed by law firm Andreas Neocleous& Co in exchange for ordering the prosecution of several Russian nationals to the benefit of the firm, according to Kallis.
Clerides’ called it a “grim day for the legal service”. Erotokritou called a news conference immediately, calling the whole investigation a conspiracy, saying he had powerful enemies, and would not resign. He also tried to point the finger at Clerides himself questioning the AG’s handling of the same legal case he was embroiled in, and airing a number of new allegations.
This was followed by a written statement from President NicosAnastasiades who expressed his “grief and concern”.
“I think that everything that saw the public light should be investigated swiftly, thoroughly and objectively …” Anastasiades said. He added that the cabinet on Wednesday would look into the appointment of “independent criminal investigators to probe the new data” published on Tuesday.
An angry Clerides in response to the implication that his own actions were not above board, said his written statement last night: “All legal and constitutional procedures are followed with devotion and in the end the accused turn into accusers with the assistance of the country’s supreme ruler. Shame!”.
Clerides said he had followed Erotokritou’s statements carefully, and the president’s announcement. He said he refused to respond to unfounded statements designed to create a smokescreen.
Unfortunately, Clerides said, “I see my last expectations for a better future in this country disproved.”
Kallis, a retired Supreme Court judge, had been mandated to investigate allegations made against Erotokritou on March 16.
The probe had come after comments attributed to Central Bank Governor ChrystallaGeorghadji by CBC board member SteliosKiliaris during a March 12 House ethics committee session, suggesting there had been a bribe.
At the time, Erotokritou had furiously denied any wrongdoing and asked Georghadji to publicly denounce the allegations, which she did in a letter to the deputy AG on the same day.
But according to Kallis’ report to Clerides – the result of testimony by “27 individuals, as well as other evidence collected” – Erotokritou had made a behind-the-scenes deal.
This had involved the law firm representing now-defunct Laiki Bank allowing him to win a court case he had brought against Laiki for the offsetting of his deposits and loans.
In return the deputy AG would order the prosecution of various Russians who had been in a court battle with Neocleous over the disputed management of Providencia Ltd, a Russian offshore company with “holdings of €250-€300 million” whose owner died in 2006.
Although Erotokritou had failed to inform then-Attorney-general PetrosClerides of the prosecutions, Kallis argued, “for fear of them being overturned”, they were eventually withdrawn by Costas Clerides after he was tipped off by lawyer PambosIoannides, who represented the Russian nationals.
“MrErotokritou issued instructions to the police on 31 October 2013 for the prosecution of Russian nationals, litigants against MrNeocleous’ clients in numerous cases for millions of euros in connection with Providencia Ltd, […] while instructions to the contrary had been issued twice in the past,” Kallis wrote in his report.
The instructions were overruled by Clerides a month later, on November 28. Earlier, on November 8 – after Erotokritou had issued instructions to prosecute the Russians in the Providencia case, and before they were overturned by his boss – the deputy AG won his civil suit against Laiki, meaning his seized deposits of over €0.5 million could be offset against an equal amount of loans, because the defendants’ lawyers – Andreas Neocleous& Co LLC – failed to show up at the hearing. The law firm subsequently argued it had “mixed up the case files”.
“Following a detailed analysis of related testimony, it is my opinion that MrErotokritou did not inform the Attorney-general of his instructions for fear of them being overturned, that his instructions were aimed at benefiting the Neocleous law firm, and that his decision was the result of agreement for the non-appearance of the Neocleous law firm in court so that the deputy Attorney-general’s financial interests could be served through a favourable court ruling,” Kallis said.
The offences identified by the retired judge warrant combined jail sentences of up to nine years, according to Clerides.
The Attorney-general said that some had tried to interfere with the investigation, ostensibly to acquire information on its progress and conclusions.
“But they often crossed even this line, and I would like to issue a warning,” Clerides said.
“While their attempts were obviously thwarted this time, future attempts will not merely be thwarted – they will be accompanied by appropriate measures.”
He added that he was not in a position to announce the planned way forward in connection with the case, because it is uncharted territory from a legal standpoint.
“Criminal proceedings will go ahead as normal, but the special circumstances surrounding the case must be considered,” he explained.
“Prosecutions are carried out by legal services officials, of whom the deputy Attorney-general is a direct superior. Hence, the way forward must be carefully considered, and that is my intention.”
“But I must say that there is no clause, in the Constitution or other legislation, allowing for the suspension of an independent state official.”
Asked whether Erotokritou might be arrested, Clerides said the investigation has been fully completed, thus no arrests would be required. Arrests are usually made prior to investigations.
“But I can say that, given the facts, even merely recorded in a report, this is grim day for the legal service,” Clerides said.
During his own news conference less than an hour after Clerides’ initial statements, Erotokritou dismissed any talk of resigning and claimed that his determination earned him some powerful enemies.
“This is a clear conspiracy against me by the social and financial establishment of the capital, which never accepted me since my appointment, especially in light of everything I have done in investigating the economic collapse,” Erotokritou – a prominent Limassolian – said.
The deputy Attorney-general offered his own version of the Providencia case and lashed out at Clerides, hurling the graft and bribery accusations back at his boss.
“In August 2013 a lawyer from Larnaca showed up at my office and told me about his client – a 13-year-old Russian girl whose two step-brothers had tried to usurp her share of the Providencia inheritance since 2011, by submitting fake documents to the Registrar of Companies,” he recalled.
“The lawyer asked me to launch an investigation so that justice can be served. I studied the file and asked for some additional statements to be taken, for example from the Registrar of Companies, and in October 2013 I issued instructions to press criminal charges against five Russian citizens and a company, who had perpetrated the fraud against the 13-year-old girl.”
“On November 29, the Attorney General issued a statement announcing he had overruled my instructions, in which he admitted that he was only made aware of them after receiving a phone call from the two brothers’ lawyer, PambosIoannides.”
Erotokritou argued that if his own decision to order the prosecutions suggested graft, the same could be inferred by Clerides’ handling of the matter.
“If what I did suggests bribery, why would terminating the case after a phone call not suggest bribery for the Attorney-general himself?”
The deputy AG said that, at some point during Kallis’ probe, he sent the investigator a letter urging him to subpoena Clerides for questioning in connection with Providencia, a request Kallis rejected on the same day.
Erotokritou implicated various players in the Providencia case, saying Kallis’ conclusions must be explored further, with an expanded list of individuals under investigation.
“Firstly, former Attorney-general PetrosClerides, who first ignored complaints of fraud against the 13-year-old orphan,” said Erotokritou.
“Secondly, his successor, who suspended the prosecution of suspects after a phone call by their lawyer, PambosIoannides, thirdly, Registrar of Companies Spiros Kokkinos, who accepted the fraud, fourth, the 13-year-old girl’s lawyer, fifth, MrPambosIoannides, and lastly, the Neocleous law firm.”
“All these people’s bank accounts, and those of the people close to them, must be investigated – with mine first.”
Erotokritou offered a “converging malices” theory, whereby various powerful interests banded together against him because of his dedication to fight corruption.
“The first of these sources of malice was the law office of PambosIoannides, whose financial interests in the Providencia case had been jeopardised,” said Erotokritou.
“[Central Bank governorChrystallaGeorghadji’s daughter] Marianna Georghadji – then employed at Ioannides’ firm and working on the Providencia case – clearly transferred this malice to her mother. This is why ChrystallaGeorghadji accused me of taking bribes from the Neocleous law firm.”
“A second source was my suggestion, in August 2014, that ChrystallaGeorghadji be arrested after refusing to cooperate with investigators in connection with loans taken out by bank board members, which was leaked to her,” he added.
“A third source arose from a number of suggestions I made, including one to launch an investigation into ‘MIG [Marfin Investment Group] loans’ [allegedly paid out by Laiki Bank to support the share price of MIG, an investment firm founded and run by former Laiki strongman Andreas Vgenopoulos], another to obtain evidence on emergency liquidity funding for Laiki, and for the arrest of Vgenopoulos and [former Central Bank governor] AthanasiosOrphanides when they come to Cyprus.”
Erotokritou claimed these were “probably what he is paying for today”.
(Cyprus Mail, 15 April 2015)