ATHENS
— When Antonis Kantas, a deputy in the Defense Ministry here, spoke up
against the purchase of expensive German-made tanks in 2001, a
representative of the tank’s manufacturer stopped by his office to leave
a satchel on his sofa. It contained 600,000 euros, about $814,000.
Other arms manufacturers eager to make deals came by, too, some guiding
him through the ins and outs of international banking and then paying
him off with deposits to his overseas accounts.
At
the time, Mr. Kantas, a wiry former military officer, did not actually
have the authority to decide much of anything on his own. But corruption
was so rampant inside the Greek equivalent of the Pentagon that even a
man of his relatively modest rank, he testified recently, was able to
amass nearly $19 million in just five years on the job.
Greeks
are hardened to stories of corruption. But even they have been
transfixed by Mr. Kantas’s confessions since he was arrested recently on
a litany of charges including money laundering and behavior that was
detrimental to the Greek state. Never before has an official opened such
a wide window on the eye-popping system of payoffs at work inside a
Greek government ministry. At various points, Mr. Kantas, who returned
to testify again last week, told prosecutors he had taken so many bribes
he could not possibly remember the details.
Mr.
Kantas’s admissions, prompted by his hope that if he tells all he will
be eligible for leniency under a new law, has left many Greeks hoping
that they are finally witnessing the beginning of the end of the
unchecked graft that helped plunge Greece into its current crisis. In
the past, few officials have been convicted of corruption related
charges and those who were went to jail without saying a word. There was
no benefit in doing otherwise.
But
as details of his back-room deals emerge, Mr. Kantas is also fueling a
broader outrage here, particularly toward Germany, which has berated
Greece for the financial mess it finds itself in. Mr. Kantas’s
testimony, if accurate, illustrates how arms makers from Germany,
France, Sweden and Russia passed out bribes liberally, often through
Greek representatives, to sell the government weaponry that it could ill
afford and that experts say was in many cases overpriced and subpar.
The
€600,000, for instance, bought Mr. Kantas’s silence on the tanks, which
were deemed of little value in any wars Greece might fight, according
to Constantinos P. Fraggos, an expert on the Greek military who has
written several books on the subject. Greece went ahead and bought 170
of the tanks for about $2.3 billion.
Adding
to the absurdity of the purchase (almost all of it on credit), the
ministry bought virtually no ammunition for them, Mr. Fraggos said. It
also bought fighter planes without electronic guidance systems and paid
more than $4 billion for troubled, noisy submarines that are not yet
finished and sit today virtually abandoned in a shipyard outside Athens.
At the height of the crisis, when it was unclear whether Greece would
be thrown out of the euro zone and long before the submarines were
finished, the Greek Parliament approved a final $407 million payment for
the German submarines.
“First,
you have to blame the rotten Greek system,” Mr. Fraggos said. “But the
sellers bear a very big part. They were bribing officials and lending
money to an almost bankrupt country so they could sell their products.”
The
Defense Ministry is hardly the only ministry suspected of being a
hotbed of corruption. But the Defense Ministry makes a particularly rich
target for investigators because Greece went on a huge spending spree
after 1996 when it got into a low-level skirmish with Turkey over the
Imia islets in the Aegean Sea.
One
former director general of the Defense Ministry, Evangelos Vasilakos,
calculated that Greece spent as much as $68 billion on weaponry over the
next 10 years, much of it borrowed money. To win these deals, which
involved the approval of military and Defense Ministry officials, as
well as Parliament, arms dealers probably spent more than $2.7 billion
on bribes, according to Tasos Telloglou, an investigative reporter for
the Greek daily newspaper Kathimerini, who has written extensively on
the subject.
Mr.
Kantas, he said, could not make deals, but had the power to disrupt
deals because he was considered knowledgeable about weaponry. “He was
basically a toll station,” Mr. Telloglou said.
Mr.
Fraggos and other experts worry that the prosecution team behind Mr.
Kantas’s arrests is being starved of the resources it needs to deal with
an ever-widening pool of information. The four prosecutors work in a
windowless converted storage room with their desks jammed together. The
unit’s chief, Eleni Raikou, appointed last August, paid for the
installation of new wall outlets and light switches herself.
But
the team appears undeterred. In the wake of Mr. Kantas’s first
testimony in December, they have made several more arrests, including
the representatives of several German arms manufacturers and a
subcontractor in the German submarine deal, who recently provided
prosecutors with details of the bank accounts he used to transfer about
$95 million worth of “useful” payments.
In
an odd twist, Mr. Kantas, 72, was apparently tripped up by his own
banker, according to his lawyer, Yannis Mantzouranis. Like many other
Greeks, Mr. Mantzouranis said, Mr. Kantas would bring bundles of cash to
his banker, who would fly to Switzerland to make the deposits when
enough cash had accumulated to make the trip worthwhile.
At
one point, however, Mr. Kantas’s banker lent €500,000, about $680,000,
of Mr. Kantas’s cash to representatives of the German telecommunications
giant Siemens. Then, the banker allowed Siemens, which is under
investigation for bribing officials over various contracts in Greece, to
wire a deposit directly into Mr. Kantas’s Swiss account with Dresdner
Bank.
Investigators
looking into Siemens found Mr. Kantas’s name on a list of people the
company had sent money to, his lawyer said. Mr. Kantas was forced to
explain where the €500,000 in his account came from. At first, he told
investigators it was from the sale of some paintings. But they raided
the home of the supposed buyer and found evidence that the paintings had
been in his possession since the 1980s.
In
his various depositions since his arrest, Mr. Kantas, who was a deputy
in the Defense Ministry’s procurement department, has described a tangle
of bank accounts and offshore companies used to store his bribes, one
named Kourkoumpini, after a Greek sweet. When the so-called Lagarde list
— a roster of Greeks with Swiss bank accounts — became news, Mr. Kantas
quickly moved most of his money to Singapore.
At
one point, he said, even he was astounded at the money offered. One
dealer promised him “3 million dollars or euros,” to support the
purchase of antitank missiles, a figure he could not believe. But the
dealer came through, putting some of it into his Swiss accounts and
giving him €700,000 in cash, which he hid in the basement till he could
get to the bank.
Prosecutors
say the 2010 leniency laws Mr. Kantas hopes to take advantage of are
giving them new leverage. But, they said, a plea bargaining system would
be even better.
In
all, Mr. Kantas admitted to taking bribes over 12 contracts, six with
German companies, and two each with French, Swedish and Russian arms
dealers. Some companies Mr. Kantas named have been convicted in other
cases of bribery in the past. But others maintain that they have done
nothing wrong. The makers of the tanks Greece bought, Krauss-Maffei
Wegmann, say they are looking into the matter.
When
investigators tallied up all the bribes Mr. Kantas admitted taking,
they found he had still not accounted for all the money in his accounts.
Asked
about this, Mr. Kantas said he had €2 million in bribes from his time
in the military. On top of that, he told investigators, he invested
well. “I will prove it to you when the statements from the banks come,”
he said.
Mr. Mantzouranis says that his client, who is in jail awaiting trial, has met the criteria for leniency.
Law
enforcement officials believe Mr. Kantas knows more and may have more
money stashed away. “He gave us nothing that we did not know,” one
investigator said. “He has to tell us about the rest.”
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