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Neither side backs down in audit spat

File photo: Finance Minister Harris Georgiades (L) with Auditor-general Odysseas Michaelides

NEITHER Auditor-general Odysseas Michaelides nor finance minister Harris Georgiades mean to back down in their ongoing quarrel over the seconding of a finance ministry employee – who also happens to be an official in the ruling Disy party – to the European Investment Bank (EIB).

The audit office said on Thursday that unless it is satisfied with the findings of a disciplinary probe to be carried out into the appointment, it will refer the case to the attorney-general.

Earlier, in a letter to Georgiades, Michaelides asked the former to launch a probe into ministry employee Savia Orphanidou’s appointment to the EIB in January, and likewise to explain how she came to be selected for appointment to the bank, a move widely seen as being politically driven.

For its part, the finance ministry is reportedly also considering engaging the attorney-general. It intends to ask the top law enforcement official to look into the wider issue of people working for the public sector but who also hold an office with a political party.

The finance minister argues that several people – thought to be in the hundreds – have this dual identity. Based on that, he accuses Michaelides of having singled out Orphanidou.

Michaelides pointed out that Orphanidou did not secure permission from the Public Service Commission (PSC) to hold a party post and was therefore in violation of the law.

Georgiades replied that Orphanidou had been in no conflict because her election to Disy’s political bureau had preceded the 2015 law that made PSC permission for political and public-service office mandatory. Orphanidou has held the Disy post since 2012.

Under the 2015 law, government employees above the A8 pay scale must seek permission from either the PSC or other relevant body if they are seeking office with a political party.

A political party office is defined as a position that has influence on party decisions or policies. The term, under the law, does not cover simple party membership.

Individuals must also seek permission for holding or keeping an office with a party if they are transferred to another post in the civil service or are seconded, as in Orphanidou’s case.

That the legal obligation to seek permission is not retroactive – does not apply where an individual held a party office prior to 2015 – has created a big loophole.

But in the auditor-general’s opinion, the fact that the law has no retroactive force should not be taken to mean no checks and balances should be enforced.

Nor does the 2015 law explicitly state that government employees holding a political party office prior to passage of that law, are off the hook.

The question of government employees who are also party officials might never have come up, were it not for a complaint lodged with the Audit Office by Akel MP Irini Charalambidou.

The MP had asked the auditor-general not to look into Orphanidou’s dual identity, but rather to probe whether Orphanidou’s appointment to the EIB was above-board.  The matter of Orphanidou also being a Disy official subsequently emerged almost as an after-thought, but has become the main subject now.

It’s understood that Orphanidou landed the job without the finance ministry first having circulated a memo to ministry employees who might be interested in working for the EIB.

This in itself raises flags, sources told the Cyprus Mail.

Orphanidou has been seconded to the EIB for two years. During this period, though not offering her services to the finance ministry, as she is an employee of the EIB, the government will continue to pay her full civil servant salary.

Moreover, the same source said, during her time with the EIB in Luxembourg Orphanidou will likely receive an overseas allowance, such as that given to ambassadors and civil servants serving at diplomatic missions.

The overseas allowance is no negligible sum, often amounting to what is almost a second salary. However, precise details of Orphanidou’s allowance were not immediately available.

The Mail understands also that this is the first time a Cypriot government employee has been seconded to the EIB.

“Does Cyprus even need someone to work at the EIB? These are all pertinent questions,” the same source said.

Orphanidou, a government employee, is now effectively and at the same time an employee of a private company, the EIB.

Though not a commercial lender, the investment bank nevertheless is a private-law entity – but is generally regarded as being part and parcel of the ‘EU structure’.


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