Greek banks always have short, powerful names. Usually they are named after their location: Athens, Piraeus or Crete. Non specific names, suggesting a beginning or an end, such as the Alpha Bank or Omega Bank.
The Proton Bank was an example where the name suggested an image of solidity, a bank where your money is managed prudently. However, appearances are deceptive; let us zoome in on the Proton Bank, until its nationalisation in 2011 it was the property of the illustrious magnate Lavrentis Lavrentiadis.
This oligarch, the owner of the Proton Bank, was in fact behaving like a typical old-fashioned Greek banker, practising creative banking, on the edge of fraudulent accounting. He borrowed 900 million Euros of his bank to keep his badly performing companies afloat. Early in 2011 Lavrentiades was sued for fraud, embezzlement, money laundering and breach of contract.
The older Greeks nicknamed Lavrentiades ‘the new Koskotás’. It maybe that George Koskotás (1954), who emigrated to America as a child, is the prototype tycoon who mercilessly used the weakness of the Greek authorities and institutions to his advantage. When this smart businessman returned to his homeland in1979 his career accelerated and, when his Bank of Crete was at its most successful, Koskotás also owned the mediaCompany Grammi and the football club Olympiakos. ‘K’, as the writer Vassilikos referred to in his novel, turned out to be a financial prodigy, a magician with accounts and interest rate spreads.
Koskotás created a power structure that Professor Pavlos Eleftheriadis of Oxford University referred to as ‘diaploki’ in his book ‘Misrule of the few’: a web of relationships between wealthy families, media, businesses and politics. Greece, he says, is in fact ruled by oligarchs (the few who prevail) with direct ties to politics and politicians.
Prime Minister Alexis Tsipras has taken on the job of the Titans to eliminate corruption in a society where tax evasion and capital flight are considered ‘normal’. Early this year the premier appointed Panagiotis Nikoloudis to Minister in charge of the fight against corruption. Nikoloudis quantified the problem calculating that Greeks have parked 120 billion Euros in overseas accounts; money on which no tax is paid and he has no access to.
In an interview with the New York Times Nikoloudis notes the anti-corruption Czar that impropriety and corruption are ‘endemic’ in Greek society and the problem has increased over the years 2000-2010 but added that ‘ not the entire Greek population is corrupt’ , adding ‘I have nothing against rich people, but I do when wealth was gained unfair’.
Nikoloudis, who was deputy prosecutor-general of the Greek Supreme Court, wants to tackle the massive problem of capital flight. He can rely on the help of the so-called Lagarde List, a list of 2000 bank accounts held by Greeks in Switserland. Christine Lagarde, when she was the French Finance Minister, sent the list to her Greek counterpart in 2010 but only just now action seems possible.
In K Vassilikos writes about a hilarious and also tragic event in 1996 when Koskotás is interviewed in prison and relates about him sending half a million dollar in cash that was delivered in a London hotel, stashed away in Pamperboxes. The receiver was then premier Andreas Papandreou (Pasok) who stayed in the hotel with his mistress. The scandal it caused in prude Greece led to the downfall of the politician.
The dismantling of the diaploki, the web of power and corruption, will be a tough job for Tsipras and his friends but ultimately there is hope: The Italians managed to remove a tycoon from his throne and now it is up to the Greeks to address their own Berlusconi’s.