Novartis Witness Protection Lifted Amid Scandal Fallout
Dear Member,
This is our weekly round-up from Greece.
The Greek Justice decided to lift witnesses’ protection status in the Novartis scandal, involving doctors and public officials, following requests from politicians whose names were implicated in the case. Now, those implicated can even press charges against the whistleblowers who provided evidence in one of the biggest corruption scandals on a global scale.
It is most interesting that implicated politicians, government spokesmen, and mainstream media used the same term to characterize these whistleblowers: they called them “hoodies.” Is Greece self-exempted from the EU law calling for whistleblowers protection?
In a very important report, it was revealed that the institution established at the beginning of the crisis to sell off Greece’s public property to private investors in a supposed effort to reduce public debt is operating with murkiness and at a significant loss for at least the last five years. As to public debt? It is currently at 168% (120% when the crisis started).
Keep your mouth shut
If citizens discover corruption involving high-ranking politicians and public officials, they should keep their mouths shut and mind their own business. This is undoubtedly the message conveyed by the latest developments regarding the Novartis scandal.
In a decision marking the latest act of institutional cover-up in the Novartis scandal, the protection status for the last two protected witnesses in the case is lifted (S'ouvre dans une nouvelle fenêtre), and their immunity from criminal prosecution is also revoked, following a recommendation by the assistant prosecutor Eleni Papadopoulou serving at the Financial Prosecutor's Office.
Financial prosecutor Panagiota Fakou accepted the request to lift the protection of witnesses "Aikaterini Kelesi" and "Maximos Sarafis." Both were Novartis executives; the first was the secretary of former Vice President Konstantinos Frouzis, and the second was the company's communications director, who had also testified before the parliamentary pre-investigation committee.
Following lifting their protection status, their designation as public interest witnesses is also revoked, allowing anyone who wishes to pursue legal action against them, daily EfSyn reported (S'ouvre dans une nouvelle fenêtre). It should be noted that since 2018, it became known that the third protected witness in the Novartis case, code-named "Yiannis Anastasiou," was Nikos Maniadakis, deputy dean of the National School of Public Health. Both former Prime Minister Antonis Samaras and other politicians such as current Health Minister Adonis Georgiadis, ex-Minister and PASOK MP Andreas Loverdos, as well as the Governor of the Bank of Greece and ex-Finance Minister Yannis Stournaras, had opposed the protection status of the two witnesses.
The Novartis case goes a long way back to Greece. Initially, ten politicians were accused, including former prime minister Antonis Samaras, Bank of Greece Governor Yannis Stournaras, and Health Minister Adonis Georgiadis. However, charges against these officials were finally dropped due to insufficient evidence. The ND government had tried for a long time to persuade the public that there was no Novartis scandal but a Novartis conspiracy aimed at politically harming their party. PASOK was on the same side.
The recent decision won praise from Antonis Samaras, Adonis Georgiadis, and the government spokesperson Vangelis Marinakis.
It should be remembered that Samaras, in 2018, stated (S'ouvre dans une nouvelle fenêtre) in Parliament that he “will take them to the end,” referring to all those involved in pursuing Justice for the Novartis case.
Georgiadis described the development as “a day of vindication” in a post on X. He already announced (S'ouvre dans une nouvelle fenêtre) he will pursue legal action to punish the ‘hooded’ Novartis witnesses and “reveal their principals.”
Andreas Loverdos stated (S'ouvre dans une nouvelle fenêtre) in an interview that it is now "for these people to speak up and say who told them to say what they said." He added that "behind the masks hides a government and a prime minister," implying SYRIZA and Tsipras.
Stournaras had not, till the moment of writing, proceeded with statements. Let us retrieve, however, a ‘detail’ from the past. In 2022, the five senior judges who had formed the Judicial Council of the Special Court on the case named in their decision Stournaras. Specifically, they pointed out that the Governor of the Bank of Greece threatened protected witnesses and the Anti-Corruption Prosecutors, recognizing the allegations made by witness Nikos Maniadakis, which TVXS reported (S'ouvre dans une nouvelle fenêtre) back then as true. On page 267 of the decision by the Judicial Council, it was stated that Maniadakis informed the Greek Police Witness Protection Department that “he had been invited to lunch at the office of Mr. Stournaras at the Bank of Greece one afternoon [in 2018], where Mr. Stournaras told him he knew Maniadakis was one of the protected witnesses and that once the government changed, he (Stournaras), along with two other political figures under investigation for the case, had decided to crush both the prosecutors and the witnesses.'”
In 2018, SYRIZA was Greece’s ruling party. It was during that government the Novartis scandal had been legally investigated.
In 2019, ND ascended to power. Indeed, now all implicated in the case can proceed to legal action against these witnesses.
What Rule of Law?
The European Union issued Directive 2019/1937 on protecting persons reporting violations of EU law (whistleblowers). The directive sets minimum common standards upon which Greece was called to draft an effective protection system by the end of December 2021. “The EU Directive was an excellent opportunity to modernize the relevant Greek legal framework and take a significant step towards combating corruption. However, in Greece, the protected witnesses in the Novartis case were pursued as ‘hooded individuals’ by members of both the New Democracy and PASOK parties, despite being awarded by the left-wing GUE/NGL group in the European Parliament in Brussels,” EfSyn reported (S'ouvre dans une nouvelle fenêtre).
As the report mentioned, in 2022, the Group of States against Corruption of the Council of Europe (GRECO) noted "that whistleblower protection is a key element in uncovering corruption schemes. This was evident, for example, in the judicial investigation of the Novartis case. It is clear that in Greece, the framework for whistleblower protection needs to be developed and strengthened."
Greece reportedly began implementing the directive with delay in 2022. As EfSyn noted, contrary to a 2022 Supreme Court decision, which defended the Novartis protected witness status, and a previous decision of the Financial Prosecutor’s Office, “the judiciary now satisfied the request of the former prime minister and other implicated politicians… The timing can hardly be considered coincidental. For this political concession, a first-instance prosecutor had to override the decisions of Supreme Court judges.”
Note that the US Department of Justice had rule (S'ouvre dans une nouvelle fenêtre)d that Novartis AG and its subsidiary would pay $345 million in criminal and regulatory penalties to resolve violations of the Foreign Corrupt Practices Act (FCPA). The biggest amount of this fine, namely 233 million dollars, would be paid by Novartis Greece. This happened, thanks to witnesses.
“After two years, the fate of the (incomplete) lawsuit for €214 million filed by the Greek State against Novartis in 2022 for moral damage from the actions admitted by the company in the U.S. concerning the bribery of doctors remains unknown,” EfSyn reported. “Senior government officials today claim ignorance of the lawsuit's progress, in which the government had removed the most ‘serious’ aspect of the FBI's case file, namely the proven overpricing and bribery of officials and individuals in Greece.”
“The independent Greek Judiciary today issued a landmark decision, removing the ‘hoods’ from the fake witnesses of the Novartis plot,” government spokesman Pavlos Marinakis stressed in a statement following the court’s decision.
Mainstream media echoed Marinakis. If you google “Novartis protected witnesses” in Greek, titles like these will appear: “Hoods removed in the Novartis case - ‘Kelesi’ and ‘Sarafis’ unveiled,” Kathimerini wrote. “Novartis: Why the prosecutor removed the hoods from the protected witnesses” - Proto Thema. “Novartis case: Hoods are removed from protected witnesses” - Mega TV. “5 am - The hoods are removed from the Novartis case” - TO VIMA.
What a coincidence, indeed, that the word “hood” is used in most titles. Just note that a hooded person in Greek mentality is connected with traitors during the Second World War, who were collaborating with Nazis and were wearing hoods to give away partisans in the Greek Resistance Movement publicly. It’s a negative connotation. As is hoodie in English, of course.
A traitor, however, operates for their own interest against the public good, while a whistleblower leaks information to defend the public good.
It should go without saying, but in Greece, we must keep reminding the basics.
What a carve-up
“The Hellenic Republic Asset Development Fund’s philosophy is to act as a strategic partner for the Greek State to attract investments, enhance the Greek economy’s growth potential, strengthen its international credibility, and produce national wealth.”: This is what we read in the HRADF’s homepage.
What is HRADF? The Fund was established at the beginning of the Greek crisis in 2011 “with an initial mandate (S'ouvre dans une nouvelle fenêtre) to leverage the State’s private property assigned to it by the Hellenic Republic.” In simple words, it was the institution Greece was instructed by its creditors to set up to sell off public property to “investors” - from public companies to ports.
“HRADF operates to serve the public interest, according to the rules of the private economy,” it stated on its website. “HRADF is also assigned the maturation of contracts that are part of the Development Programme for Contracts of Strategic Importance.”
Well, it is not much of a service to the public interest.
“After selling off the public ‘silverware’ to private interests, it ‘disappeared,’ leaving new debt in the public treasury. However, the unit that distributes ‘cash’ to consultants through direct contracts is still alive and well!” EfSyn revealed in a very important report (S'ouvre dans une nouvelle fenêtre) this week. “It is the Strategic Contracts Unit, under Mr. Stamboulidis, which manages the projects and resources from the [EU] Recovery Fund, operates with a lack of transparency, is ineffective in implementing projects, but useful for the Maximos Mansion (i.e., Greek government headquarters).”
This organization has been aggressively privatizing and selling public assets - supposedly to pay off public debt. However, HRADF did not even save itself, and because it is not held accountable, it added new debt to the public treasury, recording losses of a full 4 million euros for 2023 alone! Furthermore, the proponents of reducing public spending managed to... come out on top, as during the 2019-2023 period, the total operating expenses of HRADF increased by 80% compared to the previous five years! In other words, HRADF updated Brecht's verse: "Those who take the food from the table preach austerity.”
HRADF’s Strategic Significance Contracts Unit was created in 2022, and by December 31, 2023, it had cost the Greek taxpayer 22.2 million euros. It is considered a heaven for "consultants." According to EfSyn, it excels in awarding direct contracts: “In just 14 months (May 2023 - July 2024), it proceeded with 61 direct contracts for forest protection projects, totaling 229,766,834.59 euros (!!!), citing a law... from 1979 for areas in a state of emergency.”
On 27 June 2024, the financial statements for the fiscal year 2023 were approved. They were only published on the HRADF’s website three months later. They were also published two months after HRADF was absorbed into the Hellenic Growth Fund (S'ouvre dans une nouvelle fenêtre).
According to these statements, HRADF is reportedly now operating at a loss. In 2023, HRADF's losses amounted to 4,070,911 euros, representing an increase of approximately 65% compared to 2022, according to EfSyn. Accumulated losses amounted to 17,700,544 euros, resulting in 2023 in the total equity of HRADF (12,299,456 euros) less than 50% of the initial share capital (30,000,000 euros). Thus, the decision to absorb HRADF from HCAP was not a choice but a forced act of "concealment" of the poor financial condition in which it had fallen.
These financial statements explain why the ND government absorbed the fund into another institution.
According to the newspaper’s data, from 2019 (when ND was elected in power) to 2023, the total operating expenses of HRADF doubled, resulting in a surge in losses. It is stated that this expense increase cannot be justified by the operation of the Strategic Significance Contracts Unit (SSCU): even if the expenses of this Unit (22.2 million euros) are excluded, the total expenses remain increased by 80% compared to the previous five years.
This is how Greece is ‘recovering’ from the crisis.
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That’s all for this week; please forward this email to anyone you think might find it interesting and ask them to join our international community!
The AL team
