Cyprus Mail

‘Still more questions than answers’ in Georghadji case

By Angelos Anastasiou

Central Bank governor Chrystalla Georghadji, acting on informal legal counsel, was the one who removed a clause relating to conflicts of interest from her appointment contract, and inserted another that ostensibly raised her annual salary by €10,000, lawmakers heard on Tuesday.

In a House ethics committee that was convened to discuss the issue, also invited were Attorney General Costas Clerides, Auditor General Odysseas Michaelides, Accountant General Rea Georgiou, Director of the President’s Office Panayiotis Antoniou, and legal advisor to the Central Bank of Cyprus (CBC) Alecos Evangelou.

According to state radio, Georghadji told deputies that she had amended the contract herself prior to signing it, in line with legislation governing the operation of the Central Bank of Cyprus, and returned it for President Nicos Anastasiades’ signature, along with an “informal” memo informing him of the amendments.

This referred mainly to replacing a clause forbidding the governor’s first-degree relatives from being employed in any firm that is in any way involved with Central Bank processes with another applying such restriction only to the governor’s person.

She also said that she had not been handed two different template contracts to choose from as had originally been reported, but rather she obtained copies of her predecessors’ contracts for comparison purposes.

“After informal consultations with both the Attorney General and the CBC’s legal advisor, I amended the conflict-of-interest clause to match the pertinent clause found in the law governing the CBC’s operation, as well as my compensation clause to include increments found in previous contracts,” she said.

However, Georghadji said she subsequently asked the Accountant General’s office to waive the salary hikes, and furnished deputies with copies of her October payslip and that of her predecessor Panicos Demetriades from October last year, indicating the former governor was actually paid €1,700 a month more than she was.

Attorney General Clerides backed Georghadji, saying the clause governing conflicts of interest in her contract “does the job well,” but conceding the earlier version could also have been included.

“It’s all allowed by law,” he said.

In any case, he added, Georghadji’s current contract raises no issues of conflict of interest.

Evangelou also told the committee that, prior to signing the contract, he had advised Georghadji that matters of conflict of interest are covered by a clause found in CBC legislation.

Antoniou, head of the President’s Office, offered his side but did little to clear things up. He said that Georghadji had been sent a copy of Demetriades’ contract with only the names changed, but he had to leave on a trip abroad on April 10, before the contract had been finalised and signed.

In his absence, he claimed, communication with Georghadji had been assigned to then-Presidential aide Makarios Droushiotis, who has since left government to join Commissioner Christos Stylianides in Brussels.

After the session, deputies said they had been left with more questions than answers.

Committee chair Fidias Sarikas said everything in this case continues to be “murky.”

“The issue of who bears the responsibility for drafting this contract has not been cleared up,” he said.

“Nor has the issue of who removed the conflict-of-interest clause, or whether the President knew and sanctioned the removal, or who added the paragraph raising the governor’s salary,” he added, although some of these were actually answered by Georghadji during the session.

Sarikas said the people who now appear to have been involved in drafting this contract will be invited to the next committee session that will resume discussion of the issue.

AKEL deputy Aristos Damianou said that the most important aspect of Tuesday’s revelations was Antoniou’s “honest admission that on April 10, when he would be travelling abroad, there had been no signed contract, even though Georghadji would be taking over as governor the next day.”

A separate topic on the committee’s agenda – whether Georghadji’s daughter Marianna being employed by a law firm that represents ex-Laiki boss Andreas Vgenopoulos, who is currently embroiled in legal tangles with the Central Bank of Cyprus, constituted a conflict of interest for the governor – was stricken off after Marianna Georghadji announced she was leaving the firm last week.

During the session that last examined this issue on October 31, Georghadji had angrily denied any conflict and spoke of extortion and pressure exerted on her without naming names, before storming out of the room mid-session.

The incident was followed by a harsh written statement by President Nicos Anastasiades, who denied any knowledge of Georghadji’s potential conflict of interest or any alterations to her contract and accused her of lying to the committee about having informed him.

Subsequent calls for her resignation by political parties were ignored and quickly subsided as the government tried to reel in Anastasiades’ initial outburst.

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