Obstacles have emerged over how the findings of the Anti-Corruption Authority’s “Mafia State” investigation will be handled, after it became clear that the legal framework governing tax investigations cannot reach back far enough to cover when some of the report’s allegations are said to have occurred.
The Authority’s 3,000-page report will be forwarded to Tax Commissioner Sotiris Markides, so that the seven former Republic officials for whom the report identifies potential liabilities can be examined, under a legislative amendment passed specifically to allow tax scrutiny of a current or former official for the period in which the report alleges they had possible involvement in corruption cases.
However, under the legislative framework governing tax investigations, inquiries into some of the individuals to be examined cannot reach back further than 12 years from today. Since some of the offences alleged in the report relate to periods further back than that, the Tax Department cannot carry out a substantive investigation into them.
In other words, the tax investigation into the seven officials, under the new provision in the Anti-Corruption Authority’s legislation, will reach back only as far as 2014, meaning it is not feasible to examine officials for the period in which the report identifies potential criminal liabilities.
The seven officials
The seven officials placed under the Tax Commissioner’s scrutiny, following the report’s identification of potential criminal offences against them, are: former President Nicos Anastasiades, former Deputy Attorney General Rikkos Erotokritou, former District Court President Haris Solomonides, former Agriculture Minister Nicos Kouyialis, former MP George Varnava, former head of the Unit for Combating Money Laundering (MOKAS) Eva Rossidou Papakyriakou, and former senior police officer Ioannis Sotiriades.
Cases and timelines
The report sets out the following cases as the basis for its recommendations that officials be investigated, with the names it recommends for scrutiny in each:
- Judge Haris Solomonides’s rulings in the Rybolovlev case, with the events in question dated between 2013 and 2014 (report recommendation: Solomonides).
- The Rybolovlev case, including an arrest on February 24, 2014 (report recommendation: Nicos Anastasiades, Rikkos Erotokritou and Ioannis Sotiriades).
- The transfer of state land to the Archbishopric, with the alleged offences dated to late 2013 (report recommendation: Nicos Kouyialis).
- The Focus case, with events dated to 2008 (report recommendation: Nicos Anastasiades and Rikkos Erotokritou).
- Bank commissions, with events between 2011 and 2013 (report recommendation: Nicos Anastasiades).
- An OCCRP report published in August 2019, concerning events between 1997 and 2013 involving the law firm “Nicos Chr. Anastasiades and Partners” (report recommendation: Nicos Anastasiades and Eva Rossidou Papakyriakou).
- An ICIJ report dated October 3, 2021, concerning events between 2007 and 2013 (report recommendation: Nicos Anastasiades).
- The Dromolaxia property, with events during 2012-2014 (report recommendation: Nicos Anastasiades and George Varnava).
Where the 12-year limit comes from
In Cyprus, an individual can normally be investigated for tax purposes for up to six years after the end of the relevant tax year. Where there is reasonable suspicion of fraud or deliberate omission, the Tax Commissioner has the right to proceed with an investigation and retroactively impose tax.
Recusals at the Law Office
Attorney General George Savvides has decided to abstain from any evaluation of or decision on the report, the Law Office leadership said in a statement yesterday, due to former President Nicos Anastasiades’s involvement, citing both his personal relationship and friendship with the former President and the need to safeguard objective impartiality in handling the matter. Deputy Attorney General Savvas Angelides has likewise decided to abstain from any evaluation of or decision on the report, for the same reason of safeguarding objective impartiality.
Elena Cleopa, head of the Law Office’s Criminal Law Sector, has also recused herself, the statement said, because she “was called and testified as a witness” before the Anti-Corruption Authority’s inspectors, on one aspect of the case.
The task of evaluating the report has been assigned to senior Law Office officials, according to the same statement. Separately, government spokesman Constantinos Letymbiotis said yesterday that the Council of Ministers intends to appoint one or more independent criminal investigators to assist with the investigative work.
Concerns over the evaluation process
Despite these developments, Phileleftheros found, speaking with circles familiar with such procedures, that there are reservations about safeguarding the integrity of the report’s evaluation.
They point out that two of the officials under scrutiny, Rikkos Erotokritou and Eva Rossidou Papakyriakou, previously served in the Republic’s Law Office, Rossidou Papakyriakou as head of MOKAS, which reports to the Attorney General, without this raising any question over the integrity of the Prosecutorial Council’s own members.
The Providencia precedent
The Providencia case is cited as indicative of how such conflicts have been handled before. Rikkos Erotokritou was convicted in that case on March 1, 2017, and sentenced to three and a half years in prison, found guilty over his role as Deputy Attorney General, a position from which he had been removed on September 24, 2015.
At the time, his criminal investigation and prosecution were assigned to lawyers independent of the Law Office, with Panayiotis Kallis appointed as criminal investigator and Ilias Stefanou as private prosecutor in the case.
Based on these considerations, the Attorney General convened an emergency Prosecutorial Council today, made up of senior Law Office officials, and tasked them with evaluating and further handling the report once it is received from the Anti-Corruption Authority, as well as taking any further measures or decisions.