Cyprus Mail

Rift widens between minister and auditor-general

Former interior minister Socratis Hasikos

By George Psyllides

Interior Minister Socratis Hasikos on Wednesday accused the auditor-general of not doing his job properly, overstepping legal boundaries and publicising issues without substantiation.

The minister even suggested changing the constitution to limit the term of independent officials.

The auditor issued a lengthy statement later on Wednesday, responding to the minister point by point. Odysseas Michaelides also described the suggestion to cut officials’ terms as unjustified intervention.

The accusations were part of a sustained assault launched by Hasikos against Michaelides following publication of the latter’s annual report, which included a series of alleged transgressions by the interior ministry.

“Especially before speaking out, he must he must be fully documented, he must feel very certain about the investigation he carried out and by publicising he will not vilify and humiliate anyone,” Hasikos said during a news conference. “Unfortunately, he failed in this.”

The minister denied having personal differences with Michaelides and added that he did not think any other interests were behind his actions.

“He is not doing his job well. He oversteps the bounds of the law and the constitution,” Hasikos said.

He accused Michaelides of publicising his reports without substantiating what he had investigated and of insinuating that the minister had vested interests.

The minister said a limit should be set to the terms of independent officials.

“It’s not like we are appointing an archbishop or a king or an emperor,” Hasikos said, adding that in other countries independent officials were appointed for five year terms.

In his lengthy response, Michaelides said criticism was “fully legit and acceptable” but when it included concealed threats to supposedly change the constitution to cut the auditor’s term short, then they “blatantly constitute unjustified intervention”.

Hasikos was irked in particular by references in the auditor-general’s 2014 report released on Monday regarding the sale of Turkish Cypriot properties and the Kofinou slaughterhouse.

There is also bad blood between the two officials over the bill paid by taxpayers to the administrator of a waste disposal plant in Koshi and the case of Bangladeshi students who appear to have been allowed to enter Cyprus using forged documents.

In his report, Michaelides cited cases where Turkish Cypriot land was sold at below-market values to Greek Cypriot entrepreneurs, who went on to re-sell them at far higher prices, pointing to profiteering.

The auditor-general said that in a letter to Hasikos, he urged him to launch a disciplinary probe into the case of two employees at the Guardian of Turkish Cypriot Properties who appeared to recommend the exchange and did not only play an administrative role as was suggested.

Hasikos said a probe had been carried out but no wrongdoing was found.

Hasikos also accused Michaelides of double standards by omitting to highlight aspects of a case relating to the Kofinou slaughterhouse, which closed down in 2013.

The minister said Michaelides had missed that the state treasurer’s husband was the number one opponent of selling or even leasing the slaughterhouse.

Hasikos suggested that Treasurer Rea Georgiou had access to inside information which might benefit her spouse.

According to Hasikos, Georgiou’s husband worked for a company called Cypra, which was the main competitor of the Kofinou abattoir.

Cypra has been engaged in legal wrangles with the state, alleging that the slaughterhouse was the recipient of state aid in breach of EU regulations.

The minister said he had previously secured a court order allowing the state to sell or lease the Kofinou slaughterhouse after it closed.

On Tuesday, Hasikos said the auditor-general had sent him a letter saying ‘stop what you are doing with the leasing of the slaughterhouse’ apparently not informed of the fact that a court decision permits its lease.

“Later, a meeting was held at the office of the Commissioner for State Aid Control, in which there took part representatives of the interior ministry, the treasurer, the attorney-general’s office and the auditor-general in person. A few hours later, the court issued a new order forbidding the state to lease the slaughterhouse,” Hasikos said.

Michaelides said there was nothing improper with a treasury rep being present at the meeting. There would have been a problem if she herself was present, he added.

“If the minister believed that the treasurer was violating a law or committing a disciplinary offence, he ought to have reported her to the finance minister or the attorney-general,” Michaelides said.

The auditor said the treasure’s husband had secured a court order against the interior ministry in June 2014, but only now an issue is raised, at a time when she chairs the review board looking into the state’s agreement in with the operator of the Koshi waste plant.

This bone of contention between the two men relate to their disagreement over the amendment of a 2006 agreement between the government and the Koshi contractor, which resulted in high processing fees – €75 per tonne of waste – for the residents of Larnaca and Famagusta.
Hasikos engaged with the contractor and negotiated a fee reduction to €39.9, in exchange for an extension of the contract for seven years.

But the arrangement, Michaelides countered, risked a fine, or being annulled by the European Union, on the grounds that it benefitted the contractor.

The review board found that the contractor had made excessive profits, subcontracted jobs to connected companies without permission, expelled the Cypriot partner without permission and concealed the fact from the cabinet, and others.

It also found that the figure used by the minister was misleading since currently, the price per unit is around €64 per tonne, due to the drop in oil prices, and not €75.

“This shows that the agreement was not only illegal, it was also unfair for the public interest, which the minister cited as the reason to break the law,” Michaelides said.

The two men are also at loggerheads over counterfeit documents used to secure Cypriot visas.

The affair came to light in October when it emerged that in late September, Michaelides wrote to the attorney-general asking him to look into “possible criminal offences” by the interior ministry regarding the approval of visas to students from non-EU countries based on forged documentation.

The visas in question were issued this year.

From information he received from the foreign ministry, Michaelides said, the Cypriot Honorary Consulate in Dhaka, Bangladesh had reason to believe that the bank statements provided by several visa applicants were dodgy.

In addition, health certificates were in some cases signed off by the same Bangladeshi doctor, but bore different signatures; in other cases the dates were off.

Hasikos conceded that, on his initiative, a number of potentially suspect visa applications from Bangladesh were approved.

Michaelides said his office’s intervention prompted a change in procedures. That was something the minister should have done; instead, “he ignored the existence of counterfeit documents and opted for unlawful procedures that are now abandoned. Those who benefited with certainty are the college owners and not in the public interest,” Michaelides said.

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