ONE OF THE main reasons used to justify the high pay of public employees is that good wages make them much less vulnerable to bribery and corruption. It is probably true that there is more corruption in poorer countries where civil servants are paid low wages and try to supplement their income through corrupt actions.
This theory, sadly, does not apply to Cyprus in which high pay and corruption go hand in hand. Here, despite the fact public employees are by far the best paid group of workers, enjoying benefits and perks that people in the private sector could not even dream of, corruption is endemic. And we are not talking about petty corruption, but the large-scale type that costs the taxpayer many millions every year and is a contributing factor to the constantly rising cost of living.
The culture of backhanders and commission payments are deeply-rooted in public life and suppliers know they have to play the game in order land government contracts. They have nothing to lose as they pass the cost on to the taxpayer, who ends up paying premium rates for everything purchased by the state and every project it contracts out. The late president Tassos Papadopoulos described the construction of Nicosia General Hospital that went ridiculously over-budget as the ‘scandal of the century’ and he had a point, even though going over-budget on every public project has become routine.
This sick state of affairs was highlighted once again this week after new Auditor-General Odysseas Michaelides appeared before the House watchdog committee and spoke about three cases of dubious dealings at hospitals and the health ministry that the authorities had covered up. Nothing surprising or new as the state health sector has always been a nest of corruption and dishonesty, but it is good to remind people.
He spoke about the authorities’ refusal to take any action against doctors who were abusing over-time pay, the failure to take action against officials that had protected the interests of a supplier of hospital equipment at the expense of the taxpayer. He also mentioned that the drug pricing committee had not adjusted its pricing policy when price conditions had changed, with the result that we were paying top prices; the health minister said the total cost of the overpricing was between €20 and €30 million.
These are just a few examples of the waste. For instance, state hospitals pay much higher prices for consumables than private clinics and it is not difficult to guess the reason why. Former health minister Stavros Malas, who decided to join the debate on Thursday, demanded credit for amending the procedures for sending patients abroad and saving the taxpayer millions. But why did he not investigate the reasons so many patients were being sent abroad for treatment and at extortionate prices? Why was there no investigation into this scam to establish who was benefiting?
Malas was minister when the abuse of over-time by Limassol doctors was covered up, both the proposed criminal and disciplinary investigations were called off. The state doctors’ union probably had a word with then president Christofias and the theft was forgotten. There was never an investigation into the hospital equipment scam, nor into high drug prices. The drugs companies association on Thursday asked why there had been no investigation into the extortionate prices the state paid for medicines between 2004 and ’08 (allegedly five times higher). Prices remain much higher than they are in Greece and in the north, but companies gave no explanation about this.
The politicians might express outrage about these scandals when they hit the news but, at best, do nothing and, at worst, cover them up. The thieving public servants are almost never brought to account because they have the backing of an ultra-powerful union and are protected by collective agreements and laws that make it extremely difficult to prosecute them. The case of the head of the state pharmaceutical services was indicative of these problems – he was prosecuted in 2008 but acquitted and returned to his job. The government was not even able to move him to another department or ministry because PASYDY does not allow transfers of top civil servants.
The collective agreements also help corruption as do the public service rules that make it so difficult to take disciplinary action against a state employee. All the agreements, laws and regulations would have to change if we are ever to tackle the corruption in the state sector that costs the taxpayer tens, if not hundreds, of millions every year. Politicians must focus on changing the legal framework – make it possible to prosecute and punish the thieves – because expressing outrage whenever allegations hit the news will not end corruption.