Cyprus Mail

Storm over party donation revelations

Andreas Vgenopoulos.

By Angelos Anastasiou

Reports on Wednesday that ruling DISY and opposition AKEL received a total of €2 million from  Focus Maritime Corporation, owned by Greek shipowner Michalis Zolotas, caused a storm in the political arena, given the connection to former Laiki strongman Andreas Vgenopoulos.

Daily Politis revealed that €1.5 million was donated to AKEL and €500.000 to DISY – in late 2007 and early 2008.

Zolotas is widely perceived as a “close associate and friend” Vgenopoulos. Among other business connections, Zolotas participated in MIG’s – Vgenopoulos’ investment group – €5.2 billion capital increase in 2007, partly using funds allegedly loaned to him by Marfin-Laiki and collateralised only by the MIG shares bought, a claim Vgenopoulos has repeatedly denied.

Rumours of money funnelled to the two most influential political parties in Cyprus by Focus Maritime – with the implication that Vgenopoulos was behind the donations in order to secure favourable treatment from the political establishment – have been circulating since December 2013.

But on Wednesday Politis claimed to have nailed down specific transactions. Focus, it reported, paid €500.000 directly to DISY in ten instalments of €50.000 each in January and February of 2008, and almost €1.5 million to AKEL – of which €1 million was paid through offshore Abendale Management Corporation in two equal instalments in September 2007, and €450.000 in June 2008 through audit firm Kyprianides, Nicolaou & Partners. The transfers were made around the time of Cyprus’ 2008 presidential elections.

But Kyprianides, Nicolaou & Partners were swift to deny their involvement in any donations made to AKEL. In a statement issued later on Wednesday, the audit house confirmed receipt of the amount of €450.000 but claimed the transaction related to services rendered.

“The report in Politis newspaper is false and slanderous,” the firm said. “We have never received any amount on behalf of AKEL or any other political party.”

“The transactions in question relate to services provided by our firm with regard to appraising the value of businesses that Focus was interested in buying, including the Ygeia hospital in Limassol.”

“But at no point was the above amount, or part of it, transferred to AKEL,” the firm’s statement concluded.

Focus had also been reported as having paid former Governor of the Central Bank of Cyprus Christodoulos Christodoulou €1 million in July 2007 – two months after he had stepped down as Governor. Christodoulou justified the payment as “consultancy services for 10 years, paid in advance” and clarified that the account the funds were paid into was not his own but belonged to a company run by his daughter.

While legislation enacted in 2012 limits donations to parties up to the amount of €50.000 annually, the legal framework governing the financial affairs of political parties during the time in question did not assign any legal responsibility to parties for instances of suspect funding.

The paper’s revelations caused a flurry of reactions from smaller political parties in Cyprus, which issued statements condemning AKEL and DISY. Socialists EDEK went as far as equating the issue with Judas’ betrayal of Jesus for thirty pieces of silver, while centrist Citizens’ Alliance urged the two parties’ deputies to suspend their participation in the House Ethics committee, which is currently drafting a report on the causes of the country’s financial meltdown. Former partners with both AKEL and DISY in the last two governments DIKO suggested that though the transactions may not violate of the law, they nonetheless raise moral questions.

“What is legal is not necessarily ethical,” DIKO leader Nicolas Papadopoulos said.

But despite public outcry, AKEL leader Andros Kyprianou denied that his party received any donations from Focus and asked Politis to substantiate its claims, maintaining that business transactions to AKEL members do not necessarily constitute donations to the party.

“They are saying that a member of AKEL has received some money,” Kyprianou said. “So, does this mean that if a member of DISY, DIKO or EDEK is a businessman, any funds his business receives end up in his party’s accounts?”

Meanwhile, in response to the reports, DISY issued a statement reiterating its position of December, when it had admitted to having received a donation of €500.000 prior to the 2008 presidential elections, originating from a “team of shipowners based in London and Greece.” These funds, DISY argued, were donated and used for the explicit purpose of transporting overseas students to Cyprus for the upcoming election, but if their origin proves to be non-performing Laiki loans, then they will be returned to Laiki’s depositors, the party said.

“In light of a persistent claim that the origin of the funds is different to what we thought,” DISY said of Politis’ report, “we have asked the Attorney-general’s office for any pertinent evidence it may have.”

“If the claim is corroborated and we learn that the true source of the funds was Focus, which we now know has received huge loans from Laiki Bank which are not being repaid, then we need to find a way for these funds to be returned to the bank’s depositors.”

When the claims had first surfaced, Vgenopoulos had denied the attributed association and close friendship with Zolotas. He repeated as much on Wednesday and called on AKEL and DISY to clear up the issue.

“I am tired of repeating that I have no connection to Focus or Mr Zolotas, nor am I aware of their actions,” Vgenopoulos said in a statement. “If it is true that money was donated to AKEL and DISY, then the two parties should offer explanations, which will fully confirm my position.”

Vgenopoulos also categorically denied suggestions of influencing the political elite through donations or favours, once again accusing those behind the “merciless smear campaigns” of trying to cover up those responsible for the country’s financial meltdown.

“The truth is that I have never given money to politicians, nor have I done favours to politicians or any businessmen under their wings, despite having been asked repeatedly,” the statement said. “That is the reason behind their merciless smear campaigns, as well as their incessant efforts to silence me. But the time when the true culprits of Cyprus’ economic collapse will be revealed is nearing.”

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