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Alleged fraud at anti-landmine NGO part of wider scandal

About 35% of Hellenic Aid funding to NGOs from 2000-04 unaccounted for

Konstantinos (Kostas) Tzevelekos, director of the International Mine Initiative, was detained following his testimony to a special investigating magistrate, who has been handed the results of a 20-month inquiry by the financial police into €9m funding fraud at the NGO

The remanding in custody on Monday of a former head of a Greek anti-landmine NGO on suspicion of involvement in defrauding the state of €9m in funding has brought back into the public realm a wider scandal at the Greek foreign ministry in which millions of euros in subsidies disappeared into a myriad of developmental aid organisations under Pasok and New Democracy governments from 2000 to 2010.

Konstantinos (Kostas) Tzevelekos, one-time the director of the International Mine Initiative, was detained following his testimony to a special investigating magistrate, who has been handed 20,000 pages of evidence gathered in a 20-month inquiry by the financial police.

Tzevelekos' wife, a former civil servant, is among seven suspects also implicated in the fraud. The others include three serving diplomats and three retired civil servants.

The NGO had received funding from the foreign ministry to clear mines in countries such as Bosnia-Herzegovina, Lebanon and Iraq, without following the proper procedures for obtaining NGO funding.

They also employed various scams, with staff handing over 20-30% of their salaries as "donations", enabling the NGO to apply for more funding. Under Greek rules, a quarter of the funds for development projects should be met by charities to enable the government to cover the remaining sum.

The alleged fraud at the IMI is believed to by a symptom of a much wider problem in Greece, where hundreds of similar organisations existed for decades, without proper oversight on their activities and, more importantly, their finances.

Until recently, about 600 NGOs were registered with Hellenic Aid, which is run by the finance ministry's directorate general of international development cooperation. In 2011, it was revealed that these organisations had received an estimated €140m in state funding, from 2000 to 2010.

As an Eleftherotypia article which exposed the scale of the problem for the first time pointed out, countries with similar populations to Greece, like Holland and Denmark, had only 200 or so international developmental organisations.

It was only following the onset of the crisis in Greece that parliament, through its committee on institutions and transparency, attempted to cast light on the funding of these NGOs by the state. In a report, two MPs noted that there was an absence of a clear institutional framework governing the NGOs and a lack of coordination when it came to funding them.

The situation was so cloudy that the MPs were unable to determine the actual number of NGOs nor the amounts of subsidies that they had received. But they estimated that it ran to several hundred million euros.

A subsequent foreign ministry report, commissioned by then deputy minister Dimitris Dollis, came to a similar conclusion: that the foreign ministry had donated millions to these organisations but was unable to say what became of a significant chunk of it.

Millions unaccounted for

The homepage of the International Mining Initiative used to contain an image of the then foreign minister, George Papandreou The homepage of the International Mining Initiative used to contain an image of the then foreign minister, George Papandreou That report (see table below) found that of the €86.6m given in Hellenic Aid subsidies in the five years from 2000-2004, when George Papandreou was foreign minister, about 35% - or €30.7m - could not be accounted for.

The scale of the problem was so great that Dollis ordered a freeze on all subsidies, pending checks on management at the NGOs.

That report found that IMI was in receipt of €9m from 2000 to 2004.

Year Hellenic Aid subsidies to NGOs (in €) Accounted for (in €) Unaccounted for (in €)
2000 11,358,540  6,808,025  4,550,515
2001 13,012,310  6,164,601  6,847,709
2002 16,076,332  7,642,973 8,433,359
2003 24,120,083  18,096,076  6,024,007
2004 22,033,356  17,093,715  4,939,641
Subtotal 86,600,621 55,805,390 30,795,231
2005 15,958,178    
2006 15,752,399     
2007 10,891,133     
2008 5,141,003     
2009 3,208,570     
2010 1,949,096    
Total 139,501,000    
 

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Kostas Tzevelekos
Hellenic Aid