Finance ministry accused of breaking the law

Auditor-general Odysseas Michaelides has accused the finance ministry outright of criminal offences by committing to spending taxpayer money without first securing parliamentary approval for the funds, it emerged on Tuesday.

According to daily Phileleftheros, which ran the story, Michaelides flagged two spending items relating to two agreements concluded by the finance ministry with consultancy firms.

The ministry signed the agreements before getting the nod from parliament to spend the funds. Moreover, the government watchdog alleges that the ministry deceived the legislature by withholding the fact it had already concluded the contracts.

The two contracts related to paying private firms for consultancy work regarding Hermes’ concession over the two airports.

Having investigated, Michaelides duly briefed the attorney-general. The newspaper also noted that the attorney-general was already in the know about the case, which could further complicate matters.

In his letter to the attorney-general, Michaelides explains that the finance ministry had signed two agreements for the provision to the state of consultancy services. The first (dated November 18, 2021) was worth €80,000, and the second (dated July 14, 2022) was worth €191,000. The finance ministry had not previously secured the credits for either agreement.

In the first instance, the ministry filed a request for the funds to be released after the fact (on December 1, 2021), with the House finance committee giving the green light six days later.

In the second case, the request for releasing funds was again filed after the fact (September 8, 2022). Here, parliament did not approve the funds release.

The auditor-general pointed out: “In neither of the two cases did the finance ministry inform the parliamentary committee that the contracts for which it was asking for the release of credits, had already been signed.”

Michaelides went on to cite the relevant law, under which any public functionary who either authorises in writing payments, or who conducts payments without prior approval of the funds, is committing a criminal offence.

Other than the irregular commitment of public funds, the auditor-general also found that the ministry had concluded both agreements without asking for tenders.

In awarding the no-bid contracts, the ministry later argued it was invoking an emergency clause. But in his letter to the attorney-general, Michaelides is unconvinced such a loophole exists, noting that in his opinion the ministry’s action was unlawful and could potentially entail abuse of power.

“Based on the above, there arises the possibility of commission of criminal or civil offences, and to this end we relay to you this letter for any actions you may wish to take.”

By Tuesday afternoon the finance ministry had yet to respond to the allegations.