Cyprus Mail

AG to probe whether Georghadji withheld information in helicopter purchase

AG Costas Clerides with House Speaker Yiannakis Omirou

The Legal Service will investigate whether former Auditor-general Chrystalla Georghadji withheld information from parliament, which is a prosecutable offence, during discussions for the purchase of five Agusta helicopters, Attorney-general Costas Clerides said on Wednesday.

Clerides also said it would be investigated whether there had been any foul play in what has been described as a “photographic” tenders process.

He was speaking after a meeting with House Speaker Yiannakis Omirou, and the chairmen of the House Defence and Watchdog Committees, Giorgos Varnava and Giorgos Georgiou.

“The law states that it is an offence to withhold information from parliament, and this will be investigated with regard to these allegations,” Clerides said.

“But the investigation will not be limited to this isolated aspect. We will also investigate the broader issue of the alleged overpricing of the five helicopters, and whether any offences were committed in the process.”

Clerides added that he was in close contact with Auditor-general Odysseas Michaelides, who will “investigate the issue further and furnish the Legal Service with additional evidence”.

Michaelides’ chief technical auditor, Andreas Hassapopoulos, on Tuesday revealed that a note he drafted prior to the House session that discussed whether to go ahead with the purchase in November 2008, which contained objections and reservations with regard to the selected tender, was withheld from deputies by then Auditor-general and current Central Bank Governor Chrystalla Georghadji.

Two separate purchases were made of five AW-139 helicopters from the Italian company Agusta; three for the National Guard for €45m – double the price the government had estimated to pay – and two for the police, at €31.5m where the estimated costs were €28m.

Speaking on state radio on Wednesday, Michaelides said the issue came to the fore last year, after Agusta demanded an “outrageous amount” for pilot training.

“We found, then, that we didn’t have the option of commissioning another company to train our pilots, and so we realised that something was wrong with this contract,” he said.

“So we went back and saw that there is a broader issue with the entire tenders process. And reading through the minutes from the parliament session in November 2008, one can see that, despite objections raised by Socratis Hasikos, then a deputy, and Fytos Constantinou over the excessive cost, [Georghadji] was reassuring.”

According to Michaelides, the terms of the tender were “photographic”, since they excluded any other bidder.

“What we need to establish is whether the chain of events – the minutes of the House committee in November 2008, the minutes of the justice ministry’s Tenders Council a month later, where Georghadji argued that the purchase must be done, and the photographic tender terms – should have raised red flags for the Audit Service,” Michaelides said.

“The Audit Service’s job is to identify and assess risks, not downplay them and wave off reservations. In the December minutes from the justice ministry meeting Georghadji appears to argue strongly in favour of going ahead with the purchase.”

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