Cyprus Mail

Audit boss says corruption was worse than he expected it to be

Auditor-general Odysseas Michaelides

Auditor-general Odysseas Michaelides said when he took over two and a half years ago, the corruption in public life was worse than he expected it to be.

In an interview with Phileleftheros, Michaelides answered his critics by saying he would continue to do what he is doing to expose it.
Michaelides said he expected a certain amount of corruption, especially in the public works department, when he began. “However, despite this image I had, the situation in the public sector is clearly worse than had I expected,” he said.

He said there was corruption in central government but now more stringent procedures were in place. He cited the landfills scandals as serious cases involving a large number of employees.

“At this point I want to emphasise that the vast majority of civil servants are honest, but I can not ignore that there are rotten apples,” Michaelides said.

Moving on to local government he said his position was that those in public office should refrain from awarding tenders or making decisions where they can be accused of nepotism such giving a contract to particular contractor.

In examining the involvement of elected representatives in making such decisions, the audit office had identified more cases of corruption than of decisions taken properly and correctly.

“This should not surprise us, nor should be politicians not be challenged when talking about political corruption,” he said. “The EU has recorded an increased risk of corruption in politics. These politicians should for their own protection exempt themselves from engaging in such matters.”

Asked what in his opinion was the root cause of corruption, Michaelides said there were three basic components in what he called “the triangle of corruption”.

“First, you need a worker who has the opportunity to engage in corruption, which implies reduced control systems, incomplete and opaque procedures, and concentration of power to a few entities,” he said.

“Second, there is the so-called economic or other pressure, ie have a need for money or being greedy etc. The third factor is having the necessary justification, ie someone convinces himself that what he is doing is acceptable.”

He added: “We heard, for example, a convicted former government official saying publicly that has given the country a lot more than he took, by way of justification and so it was permissible to abuse his position. Shame.”
Michaelides said the question of the justification was a matter of culture in society and that ethics needed to be raised so that if someone is thinking of acting unlawfully in this way, it should be apparent to him that what he is contemplating is illegal and immoral.

“Unfortunately today our society does not consider some things as acts of corruption and the average citizen may not realise the full implications of carrying out an unlawful act,” the auditor-general said.

“For every immoral act by a public figure society should clearly disapprove.”
Michaelides said more those more prone to being corrupted are officials who have more discretionary powers in the exercise of their duties.

“At this point must be clear that this does not imply that everyone who has discretion to handle a case means he will be involved in corruption. It’s just that some positions provide more fertile soil,” he added.
Michaelides said the audit office was currently looking at a case at a particular municipality and that the case had been forwarded to the police.

Asked about his most important cases, he cited the Paphos sewerage case scandal, in which former mayor Savvas Vergas was jailed, plus the property rental scandal at the University of Technology TEPAK. In both cases the state will be able to recoup some of the money, he said.

Other big cases involve the sewerage boards in Nicosia and Larnaca. The audit office has sent its findings to the attorney-general, Michaelides said. “Investigations are at an advanced stage.”
The next big thing for the audit service will be the tax department because it deals with the bulk of government revenue.

“If you review our annual reports in recent years, you can see characteristic references to persons with property incompatible with the income declared,” Michaelides said. “The only way to check if the tax department effectively perform its duties is to check specific taxation cases.”

He said the job had been made bigger since the merging of the income tax and VAT services and but due to the effects of the economic crisis it was important to step up efforts against tax evasion “more than ever”.
In the coming months or the beginning of next year, the audit office will for the first time general management control of taxation.

This will involve looking at tax settlement cases in the area of appeals and complaints.
For instance, he said if a company is told it owes €5million and objects, arguing that owes €1 million and a compromise ends at €2 million, the audit office will examine whether this was a reasonable compromise and if it was justified by the evidence.

Asked if he had been threatened due to his sometimes controversial handling of cases, Michaelides said he had never received direct threats but has sometimes felt intimidated and bullied.

“Unfortunately for them, I do not feel vulnerable to any intimidation and any mudslinging,” he said.
Michaelides said he appreciated the support of the public for his work which “gives us the courage to go on, but it is not an end in itself”.

“I am not a politician… the objective of the audit office is to safeguard the public interest and, by extension, the interests of citizens and the public will welcome actions that lead in this direction,” he said.
“There may be reactions, but these are mainly among the wider circle of some auditees, who consider that the audit service is an obstacle to their own aspirations.”

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