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Simitis Distances Himself, Party from Kokkalis Scandal

By John Psaropoulos, Athens News
Reprinted By Permission

HAS Prime Minister Costas Simitis turned his back on businessman Sokratis Kokkalis?

It is almost inconceivable that Simitis should not have known of the serious charges that were being prepared by prosecutor Dimitris Papangelopoulos. Partly thanks to a family tradition in the law going back to his father, a respected Piraieus lawyer, Simitis has always had good contacts in the Athens prosecutor's office.

This was amply demonstrated during Pasok's political crisis in July last year, when Greece's top-selling Sunday newspaper To Vima published a series of editorials calling on the government to resign over the sclerosis in social reform. Simitis did not respond directly, but the prosecutor's office accused Christos Lambrakis, publisher of To Vima as well as of the Athens News, of being in contravention of a law which forbids media owners from being government suppliers. The editorials stopped and the charges went away.

Something similar happened with respect to Dimitra Liani, last wife of Andreas Papandreou and sworn enemy of the reformists, when she threatened to print extemporaneous diatribes of Simitis allegedly made behind closed doors by the late prime minister. A prosecutor promptly appeared at her sumptuous villa in Kastri to probe her title to the property. The diatribes never appeared.

Simitis may have been unable or unwilling to stop the legal action against Kokkalis, but his prior knowledge of it seems highly likely.

Why might the Prime Minister be a willing spectator in the strongman's undoing?

Kokkalis has been a pivotal figure in Greek politics and business. In 1993 Prime Minister Konstantine Mitsotakis granted him the first private license to organise lottery tickets, and Kokkalis ushered in the revolution of Xysto ?scratchable tickets which immediately told the bearer whether they had won. Under the final premiership of Andreas Papandreou, Kokkalis' business flourished. Under Simitis, Intracom became OTE's exclusive supplier, not just in Greece but also in OTE's acquisitions abroad, and a major defence contractor. In the popular imagination, Kokkalis epitomises special interests.

But last December Simitis stunned journalists by publicly announcing at a luncheon hosted by the Foreign Press Association that he had turned down Mr. Kokkalis' application for a merger between OTE and Intracom. With hindsight, that could be read as the first sign of a souring relationship.

Kokkalis has caused the government no small amount of trouble. An afternoon on his yacht, made public by the tactless Theodoros Pangalos, cost Thodoros Tsoukatos his job in December 2000. Tsoukatos was a key architect of Simitis' rise to power and a senior Pasok strategist. Now he leads four dozen-odd populist backbenchers to periodically sting Simitis on minimum wage and pension issues.

In October 2000 the Conservative opposition shouted down a government proposal to help fund the Olympic Games with fruit machines. The so-called Videolotto was to have brought profits of 3.5 trillion Drachmas (about 10.27 billion euros) over 14 years, opposition leader Constantine Karamanlis said.

Although Kokkalis was not mentioned by name, Karamanlis launched a massive polemic against Pasok's relationship with special interests and its condoning of a society of easy virtue. So vehement was the rhetoric that Pasok ministers warned the opposition, "This is 1999, not 1989", in a reference to the ugly demise of Pasok's first spell in power with the Koskotas scandal.

On the heels of its Videolotto victory, New Democracy immediately pursued Kokkalis by name, demanding a probe into the terms of his contract for Xysto (negotiated by the Socialists). The probe was refused, but New Democracy's arrows were clearly aiming for a Socialist weak spot.

Ever since the parliamentary debates of 1999 that led to Videolotto's withdrawal, Pasok has been unable to shake off the aura of a party mired in cosy deals with a ring of powerful men. If anything, the impression has become ingrained with time.

It is possible that Simitis has decided to sacrifice Kokkalis to cleanse the government's image. And many speculate that in this exercise Simitis has found allies in the business world who would profit from the light provided by the felling of an oak.

Even if Kokkalis is acquitted of the charges of espionage, money laundering, embezzlement, fraud and felonious bribery, their import is at least as much political as criminal. Kokkalis has probably lost his ability to be considered a candidate for government contracts for a very long time.

Simitis and Kokkalis ha ve a close relationship which goes back to their parents. Simitis' mother, Fani, was a leader of the feminist movement of the communist resistance during World War Two. Those who knew her describe her as a powerful personality and fiercely intelligent Marxist ideologue. Simitis' father, George, was a leader of the communist youth movement during the same period.

Both were close friends of Kokkalis' father, Petros, a venerated surgeon who abandoned a lucrative practice in Athens to cater to wounded communist guerrillas during the War and during the Civil War that followed. Fani, the more devoutly ideological of the couple, is said to have been especially close to Kokkalis.

Petros Kokkalis raised Sokratis in the communist bloc, turning him into an unhesitating capitalist. Costas Simitis grew up in the shadow of the royal family (his father was a lawyer for Princes Nicholas and Christoforos, who baptised Costas) becoming a socialist, (though not a communist, much to his mother's chagrin, according to some family friends).

Not only did their parents' ideological roots not hold Simitis and Kokkalis together; their upbringing and political pressures may now be pushing them apart. The Socialists' survival in power depends on a restitution of their image. If Kokkalis has been chosen to provide it, he will not go down without a fight.

(Posted 23 January 2003. Reproduced with permission.)

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