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Venizelos Squeezed To Oust Papandreou

Former PASOK leader George Papandreou (L) with its new leader Evangelos Venizelos
Former PASOK leader George Papandreou (L) with its new leader Evangelos Venizelos

PASOK Socialist leader Evangelos Venizelos has reportedly been urged by party members to eject former Prime Minister George Papandreou, the man he replaced, for alleged financial mismanagement over 114 million euros ($149.2 million) in funds reportedly missing from party coffers during a time when Papandreou headed the party and was said to have approved expenditures.
The two met for less than an hour on April 30 with Venizelos reportedly upset over the financial condition of the party that has fallen to about 5-7 percent support from 44 percent of the vote in 2009 when Papandreou won the elections. His father, the late Andreas Papandreou helped found PASOK and was a prime minister.
Papandreou resigned in November of 2011 after more than 18 months of relentless protests, strikes and riots against austerity measures he imposed on the orders of international lenders putting up a first bailout of $152 billion. ‘
That has been spent and Greece is now relying on a second bailout of $173 billion while Venizelos has agreed to be a partner in the coalition government of Prime Minister and New Democracy Conservative leader Antonis Samaras, along with the tiny Democratic Left (DIMAR).
Venizelos and Papandreou did not agree on the party’s financial statements and Venizelos’ claims that there was excessive borrowing and spending during the time that Papandreou headed the Socialists. They issued separate statements giving completely different versions of where the money went, although neither said they knew.
Venizelos said that PASOK’s borrowing between 2003 and 2011 reached 116.5 million euros, some $152.34 million. “This combined with a 90 percent reduction to party funding leaves PASOK with virtually zero subsidies,” he said. He added that it had been necessary to implement stricter rules for financial management and transparency after he replaced Papandreou as PASOK leader in March 2012.
Venizelos called for the meeting because Papandreou, who is now a Member of Parliament, has been in the United States where he’s also being paid to give lectures at Ivy League colleges about the financial crisis he helped create. The newspaper Kathimerini reported that the tension has become so great that Venizelos was being pressured to dump Papandreou from the party. The two often clashed over the years and after Papandreou lost a second consecutive bid five years ago to become Prime Minister, Venizelos tried but failed to unseat him as party leader.
Papandreou issued a statement denying there was any money missing. He described the reports as “wretched, unacceptable and unethical leaks based on falsehoods and aimed at morally discrediting” him. He added that the reports “intentionally fail to mention that the financial data of PASOK, as that of other parties, has been checked by the competent parliamentary committee which comprises certified accountants.”
Responding to claims that one of his recent trips, to Costa Rica, cost 200,000 euros ($263,000), sources close to Papandreou said it actually cost 20,000 euros ($26,300) for the entire delegation and that PASOK had not covered the cost of his subsequent trip to Johannesburg.
The two reportedly also discussed a Parliamentary probe into the so-called Lagarde List of 2,062 Greeks with $1.95 billion in secret Swiss bank accounts that still hasn’t been checked for tax cheats after nearly three years.
Venizelos, as a former finance minister, had a copy of the list but Papandreou, in a written deposition to a parliamentary committee investigating the erasure of the names of three relatives of former finance minister George Papaconstantinou, said he knew nothing of it. He refused to testify in person.
But the focus was on whether there was money missing. Political parties in Greece are allotted money from the treasury but don’t have to account for how it’s spent. PASOK and New Democracy have also borrowed 250 million euros ($329.2 million) from banks but aren’t repaying it.
Parliament has given immunity to bank officers for giving money to the parties without collateral or seeing that it was repaid, creating a kind of legal slush fund in which PASOK and New Democracy essentially have been given free money while banks are chasing taxpayers buried under pay cuts, tax hikes and slashed pensions to repay all their loans in full.
The banks are also reliant on the political parties to approve recapitalization plans as they await a 50 billion euros injection ($65.8 billion) to keep them solvent after they were driven to the edge of ruin when Venizelos, as finance minister, imposed 74 percent losses on banks and holders of Greek bonds to write down Greece’s debt. At the same time, the government has yet to act on promises to relieve Greek households, which have lost 46 percent of their disposable income, of debts.
The newspaper Efimerida ton Syntakton reported that  Venizelos had appointed five accounting firms (Grant Thornton, Ernst & Young, KPMG, Deloitte & Touche and PWC Greece) to audit the party and try to find out where the money went although there aren’t any records.
The newspaper alleged that their report would show that millions had been spent between 2007 and 2010, when Papandreou headed the party, without proper documentation.  PASOK borrowed 116.5 million euros ($153.4 million) between 2003 and 2011, while its state funding steadily decreased.

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