Probe widens in Greek tourism scandal

17/01/2013

Fraud is alleged in the handling of missing money.

By Andy Dabilis for Southeast European Times in Athens -- 17/01/13

Greece's crucial tourism industry had a difficult year in 2012, and the National Tourism Organisation is dealing with an emerging scandal. [AFP]

Auditors have uncovered a series of improper transactions at the Greek National Tourism Organisation (GNTO) in an investigation that has resulted in the arrest of five people on fraud charges involving 12 million euros.

Allegations of improper transfers go back 10 years and may involve political appointees from the two major parties, the New Democracy Conservatives of Prime Minister Antonis Samaras, and the PASOK Socialists.

Alex Sakellariou, a sociologist and researcher at Panteion University in Athens, said the arrests show the government and Greeks want an end to impunity after waves of scandals in which few were punished.

"People are very angry with the politicians and the ruling parties and that is why many of those involved in such scandals are going to prison," he told SETimes.

The scandal comes as unrest is brewing over austerity measures that have worsened the country's six-year recession. Analysts said it also could damage the image of Greece's most important revenue engine at a time when the government hopes tourism will rebound from 2012.

According to the Association of Hellenic Tourism Enterprises, arrivals at Greece's main airports declined 3.3 percent in 2012, and tourism revenues decreased by 400,000 euros. Tourism contributes about 16.5 percent of Greece's gross domestic product of more than 234 billion euros.

The agency's problems began when police arrested Costas Vasilakos, former special adviser to ex-GNTO general secretary Nikos Karahalios, charging that he issued a check for 147,600 euros from GNTO for services that were never provided at a hotel on the island of Syros.

When one of those arrested tried to cash it at Greece's central bank on December 21st, a bank official called the tourism agency and was told to stop payment. The suspects face felony charges of embezzlement, fraud, forgery and setting up a criminal organisation.

Karahalios, a New Democracy veteran, denied any wrongdoing and said he was being set up after uncovering the previously undetected hole in the agency's accounts. The investigation is reportedly looking into years of overspending.

Tourism Minister Olga Kefaloyianni, also from New Democracy, ordered the case referred to a public prosecutor but hasn't spoken publicly. She has been promoting the lagging Greek tourism industry, including a trip to the United States to lure more Americans and the critical diaspora.

The GNTO incident comes as 52.5 billion euros of new aid from the EU-IMF-ECB Troika is starting to flow into the country, and as Samaras has promised a crackdown on corruption.

Stan Draenos, a former historian at the Andreas Papandreou Foundation in Athens, told SETimes that the GNTO scandal "has dangerous potential for Samaras and his government. We seem to be entering a period of scandals. Too many interests seeking to exploit the poisonous atmosphere to their own benefit are at play."

Effi Lambropoulou, professor of criminology at Panteion University in Athens, said Greeks are weary of scandal but doubted whether the GNTO investigation will undermine the government.

"People can't trust anybody anymore, the media and politicians playing blame games have exhausted people and overestimated their tolerance," she told SETimes. But she said Greece has a charm that even scandal can't tinge. "If people are interested in the natural beauty of Greece, this won’t harm tourism."

(Kathimerini, 29/12/12, 28/12/12, 27/12/12, 26/12/12)

This content was commissioned for SETimes.com.