Speech of Bank of Greece Governor Yannis Stournaras before the Plenum of the Hellenic Parliament debating a motion to start a preliminary investigation of the Novartis case
21/02/2018 - Speeches
Mr. Speaker of the House, ladies and gentlemen Members of Parliament,
1. I hesitated momentarily as to whether I should ask to appear in person and address the Plenum or simply submit a defence brief. I wondered, would the office I hold as central banker require my absence from this room today and instead the submission of my views in writing? Or rather, in order to defend myself, should I even resign from my position, so as to avoid giving the impression, even if only to the vindictive or the ill-intentioned, that I use this office as a shield against Justice, which of course has every right to review the complaints lodged by anyone against anyone, no matter what office they may hold?
2. But, as I said, my hesitation was only momentary.
My absence from Parliament could reasonably have been mistaken for contempt of parliamentary institutions.
At the same time, it could also have been perceived as a calling into question of the independence that the EU Treaty and national law vest with central bankers in the euro area. For this independence would indeed have obviously been called into question if with every unproven accusation, every malicious suspicion and allegation made against him, the Governor of the Bank of Greece hastened to resign from his duties out of supposed self-respect.
This would confirm the erroneous assumption that the Bank of Greece and its Governor are not so independent after all from the successive governments and that unproven accusations and slanderous allegations, which of course must be investigated, are being used as a vehicle to cancel or circumvent the independence of the central bank or to hurt the Governor’s independent thinking.
3. Therefore, first of all, I am here as the Governor of the Bank of Greece to confirm the independence of the central bank and its Governor.
4. But there is also another, more personal, reason why I could not possibly have been absent from here today.
Although the Standing Orders of the Hellenic Parliament give accused Prime Ministers or Ministers, subject to the approval of Parliament, a chance to be heard, they are not so generous with other persons who are obviously, indirectly or directly, accused for the mere reason of being related to former Ministers. In my case, of course, this involves my wife, Lina Nikolopoulou.
5. My wife, Lina Nikolopoulou, founded a company called MINDWORK back in 2008, that is four years before I was asked by the then tripartite government in July 2012 to become Minister of Finance. Her business activity consists in the provision of consultancy, marketing services, public relations, advertising, communication, organisation of conferences and related services, mainly in the healthcare sector, which my wife has served for thirty-four years from many different positions. Lina Nikolopoulou is a biologist with a PhD in neurophysiology from the University of Oxford. Before starting her own company, she had worked for 24 years, first as an academic in the UK and then in multinational and domestic enterprises active in the areas of pharmaceuticals, healthcare and communication. Despite the adversities that I will mention immediately below, related to attacks targeted at me, this model company in its ten years of operation has contributed €1.7 million in taxes to public finances and does not owe a single euro.
Before addressing the charges against me, I would like to say that, since 2013, my wife and her company have repeatedly been the subject of defamation and slander, with the ultimate intent of harming me. Let me recall some incidents:
– July 2013: The information campaign of the National Organisation for Medicines (EOF) against polypharmacy was assigned to my wife’s firm jointly with another firm, following an international tender awarded in the spring of 2012, well before I was appointed minister. This did not stop the press from commenting that “Stournaras’s wife gets her way...”. Evidently, in the slanderers’ mind, the reason why they had been awarded the project was because I was minister. In fact, they had been the lowest bidder... For months though, such defamatory comments and reports continued to appear in the press.
– December 2015: Cancer awareness campaign. A newspaper headline at the time read: “They disguised cancer as a contagious disease so that the Stournaras family could make millions.” Who was the target? Yannis Stournaras. This was a two-year project, co-financed by NSRF resources. It was awarded to a joint venture of two firms, one of which was my wife’s, following an international tender in October 2010. The project was delivered in January 2013, paid out in June 2013, and was subject to an on-site evaluation by the Managing Authority in 2014. Yet, hundreds of defamatory articles were written and reproduced then, and still are.
– September 2016: the Financial Police raided MINDWORK’s offices on 15 September 2016, on the very day that the Bank of Greece was scheduled to decide, and did decide, to change the board of a bank for failure to meet the fit & proper requirements. The police carried out an unlawful search and confiscated accounting books and records, as well as the entire electronic file with the company’s financial data.
I say unlawful raid, because the request of the Anti-Corruption Public Prosecutor of the Athens Court of Appeal makes a vague reference to “a case being investigated”, without identifying the case, and the case remains unidentified to this day.
This was a patent abuse of authority, given that a thorough on-site tax audit was carried out without the necessary formal requirements for one. That is, without prior notification of a tax administration decision and without an official document signed by the head of the competent tax service. Absolutely null and void. Even today, 17 months on, my wife’s files and records have not been returned to her. Needless to say, as the press published “Investigation of Ms Stournaras comes up empty-handed” ...
Let us now turn to the case at hand. The accusations against my wife and her company by unidentified protected witnesses, with me always as their ultimate target, are as follows:
1) MINDWORK was used for consultancy, market research and other services ... For example, a trip to Greek islands was organised for journalists ....The trip involved overbilling through MINDWORK .... The latter two sentences appear in the now well-known FBI document, which by the way refers to me as Greece’s central banker from June 2012 to the end of 2013, i.e. the period during which I was actually Minister of Finance. This document also contains other gross inaccuracies, e.g. that I founded IOBE! As you know, IOBE (the Foundation for Economic and Industrial Research) was founded in 1974! And the document goes on to state that MINDWORK was the organiser and was remunerated for its involvement in the conference. The amount of €4,000 was low compared with amounts seen in previous years. That is, the author admits that MINDWORK’s remuneration was low compared with other years! Couldn’t this simply mean that there was nothing wrong with the particular project in the first place? But I will come back to this point later.
One of the protected witnesses with the code name AIKATERINI KELESI states in her testimony of 1 December 2017: “... the amount of remuneration [the firm] received was disproportionately high in relation to the services it provided for the organisation of conferences and mostly covered money offered as a gift to Ioannis Stournaras ...”.
The truth, the whole and undeniable truth, is this:
- MINDWORK has never received remunerations that were higher than appropriate, by the standards of the market in which it is active. MINDWORK’s services were purchased by other companies too, for their conferences. All of them paid the same prices as Novartis. There are contracts, deliverables, purchase orders, all payments are made through a bank. Novartis sponsorships to MINDWORK conferences are no different from other companies’ sponsorships. Novartis is one of MINDWORK’s 100 major customers.
- The share of Novartis in the turnover of MINDWORK during its 10 years of operation is just 3.62%. This proves that Novartis was of little relevance to MINDWORK’s financial results.
- Note that during the period at issue, i.e. July 2012-June 2014, when I was Minister of Finance, Novartis sponsorships to MINDWORK conferences accounted for only 2.3% of its turnover, much less than the percentage of 3.62% referring to the entire 2009-2017 period.
- MINDWORK’s total fees for services provided to Novartis in 2010-2015 actually declined, they did not grow.
- It is worth noting that the share of Novartis in MINDWORK’s turnover peaked in 2010, well before my time as minister (July 2012-June 2014).
- MINDWORK’s turnover from Novartis sponsorships for the 16 conferences it sponsored since 2009 is €155,085 (an average of €9,693 per conference). Please note, ladies and gentlemen MPs, that this figure refers to turnover, not fees. Out of this turnover, third-party fees and costs (accommodation, food, printed material, etc.) are paid, representing on average 60%-65% of turnover, and are deducted to determine the company’s gross profit. The company’s operating costs (wages, rent, social security contributions, maintenance, etc.) are then deducted from gross profit to derive net pre-tax profit. Finally, taxes on profits are deducted to determine net after tax profit.
- In Greece, based on data published by EOF for the year 2016, more than 1,700 medical/pharmaceutical conferences and events are organised annually, amounting to roughly €33.5 million. Of these 1,700 conferences held each year in Greece, MINDWORK organises only very few, about 0.3% of the total.
- In this total annual market of €33.5 million, Novartis has a share of €2.5 million. That is, in nine years, Novartis spent €22.5 million for conferences, while 0.7% of its total budget represented sponsorships to 16 MINDWORK conferences (€155,085 in a total of €22.5 million).
(I am hereby providing, for inclusion in the minutes, detailed tables illustrating the cooperation of MINDWORK with Novartis.)
- As for the event for journalists which I mentioned earlier, this was an educational event organised by MINDWORK for Novartis on 8 July 2013, on the island of Poros. MINDWORK billed Novartis for €20,090 in total. Of this amount, third-party fees and costs came to €14,909.20 and MINDWORK’s gross profit was €5,181.
This was the only educational event that my wife’s company undertook to organise onbehalf of Novartis outside Athens. My wife’s company has therefore not “organised trips to islands for journalists”, as alleged in the MP proposal being discussed. The plural [in the word trips] is probably attributable to the kind “generosity” of the MPs signing the proposal, and not to the case file forwarded to Parliament.
It is clear from the above that the service assignments by Novartis to my wife’s company are official, known and transparent; they are substantiated by the legal transaction documents and tax records which are available to the authorities and in fact are already in their hands, since, in addition to the usual tax audit, as I already mentioned, the electronic file with all the accounting records were seized on 15 September 2016. The fee payable to my wife’s company for these assignments is reasonable and in line with the standards of the market for such services. Moreover, it is of a negligible size and could not possibly have been used to bribe me or other politicians!
Besides, nowhere does the FBI document state that something like this has emerged. On the contrary, it states that the fee of my wife’s company was low in relation to the amounts paid by Novartis in previous years, as I mentioned earlier.
Therefore, whoever invokes that document to corroborate his/her suspicions or allegations had better come up with other arguments, events or methods and not the lawful transactions of my wife’s company with Novartis.
2) There is, however, another specific reference to a particular transaction of my wife’s company with Novartis:
Once again, it involves the testimony of the same witness with the code name AIKATERINI KELESSI dated 1 December 2017 and 5 January 2018.
According to this testimony, my wife’s company organised the closing event of the Harvard Project in late 2013 at Athens Concert Hall (Megaron), which allegedly bribed, among other persons, me, Mr. Adonis Georgiadis and Mr. Antonis Samaras. This witness testifies that part of the bribe money was laundered through the fees paid to my wife’s company.
The closing event for the Harvard Project was indeed organised by my wife’s company, not in late 2013 as the witness claims, but on 21 March 2014, not at the Athens Concert Hall as the witness says, but at the King George hotel, and was held under the auspices of the Medical School of the University of Athens.
It was billed by MINDWORK at €20,875, of which €18,449.24 went to third-party fees and costs.
This left MINDWORK with a gross profit of €2,400.
Thus, according to the protected witness, this amount of €2,400 was used to launder some of the millions that were allegedly given as bribes to Antonis Samaras, Adonis Georgiadis and me!
6. Well, what more do we need to prove the calumnious nature of the allegations against my wife and her company, allegations that also prove to be stupid.
Yet, in order to demonstrate the stupidity of the wicked, calumnious and in many ways dangerous nature of the testimony of the “protected witness”, or whoever she may be acting as mouthpiece for, it was necessary for me to come here today, to the Hellenic Parliament, and apologise to my wife for the wicked and calumnious attacks she has suffered all these years just because she is married to Yannis Stournaras.
This, apparently, is part of the fate reserved for the spouses and family members of public figures in this country: to be subject to humiliation, slander, pillory, or even threats, in the aim of harming their husbands ... I apologise to her and ask her to show patience.
7. Now, allow me to turn to the broader issue of pharmaceutical expenditure. It is noteworthy and surprising that the charges are also against those politicians who drastically reduced both the public pharmaceutical expenditure from 2010 onwards and Novartis’s market share! May I remind you that the public outpatient pharmaceutical expenditure peaked at €5.1 billion in 2009 and started to decline from 2010 onwards. In particular during my tenure as Minister of Finance it reached a low of €2 billion in 2014 and has remained at that level ever since. Significant reductions in pharmaceutical prices, structural measures such as e-prescribing, the reinstatement of the positive list of reimbursed medicines and interventions in retail and wholesale mark-ups have all contributed to a drastic decline in pharmaceutical spending. From a different perspective, in 2009, public pharmaceutical expenditure per inhabitant was €460 and dropped to €183 by 2014, putting Greece in one of the lowest positions among EU Member States. As far as Novartis is concerned, not only did its turnover decline dramatically during those two years, but also, according to IMS data, its market share shrank: from 9.2% in 2011 to 8.9% in 2012, 7.7% in 2013 and 7.5% in 2014.
8. After having explained the two reasons why I chose to appear before Parliament, let me come to the indictment proposal concerning me, or else to the indictment proposal submitted by 30 Syriza MPs, under paragraph 2 of Article 154 of the Standing Orders of the Hellenic Parliament, which is being discussed today in accordance with Article 155 of the Standing Orders.
Ladies and gentlemen MPs, I am no legal expert.
Yet, I can read in paragraph 3 of Article 154 of the Standing Orders of the Hellenic Parliament that the indictment proposal shall clearly specify the acts or omissions that are punishable under the Law on Minister Responsibility and shall mention the provisions that have been violated. In my strong opinion, although with the submission of the case file its content has become known across Greece and beyond, the MPs’ proposal lacks the clarity required by this provision.
No part of this proposal mentions which criminal acts are attributed to me by the honourable MPs signing the motion.
Instead, the following are proposed:
1. Non-indictment for any acts of abuse of trust which I, among other persons, may have allegedly committed, due to a peremptory time-limit. However, with all due respect for the promoters of the motion, a “non-indictment proposal” is not within their competence and is not envisaged by the Standing Orders, even if the promoters have established the existence of a “peremptory time-limit”; rather, what is envisaged is only an “indictment proposal”.
2. For the acts of active and passive bribery which I, among other persons, may have allegedly committed, “the setting-up of an Ad hoc Parliamentary Committee to conduct a preliminary investigation in order to determine whether Parliament has competence to indict or not, and if not, to confirm the competence of Greek criminal justice”. However, the indictment proposal cannot limit the task of the Parliamentary Committee to be set up to the question of its competence only. Its duty under the Constitution is to examine the accusations, allegations and evidence and issue a report that will be introduced for debate in the Plenum, which will decide whether to indict or not.
Regarding the lack of the necessary clarity of the proposal, I feel obliged to say the things that your colleagues avoided including in their proposal:
Unidentified witnesses who have been placed under protection by the Public Prosecutor’s Office have testified about me (I spoke earlier about my wife’s company) during my time as Minister of Finance from July 2012 to June 2014 the following:
That I was bribed with at least one million euros delivered to me by Konstantinos Frouzis at my office in the Ministry of Finance in a briefcase, so that I would offset Novartis’ tax debts against government arrears to Novartis. Also, that by my decision an amount of €65 million was disbursed to Novartis.
These testimonies are in their entirety and completely FALSE.
Never have I signed such decisions, nor did I have the capacity to do so. I have been asking for weeks now, in vain, to be shown the decisions in question and my signatures on them. They simply do not exist.
It is no coincidence that the witnesses accurately duplicate in their testimonies what for a long time now has become the standard refrain of a well-known Sunday paper which has almost made it its mission to defame me and my wife. Unfortunately for them all, THE THINGS THEY TESTIFY TO HAVE NEVER HAPPENED.
9. I request from the Hellenic Parliament and from the Committee to be set up to verify my assertion, i.e. that these testimonies are in their entirety completely false, by applying the procedures that are provided for.
I have the right to request this from you because, by using the procedures provided for in the Constitution and the Standing Orders, these false accusations, which have brutally and maliciously hurt the very core of my being, honour and dignity, presenting me as a faithless state official who took bribes to harm his country, have been spread to the Greek people. They have also been propagated abroad, dealing a heavy blow to the reputation of the country’s central banker.
The same procedures that have effectively been used to spread the poison of slanderous lies need to be used to undo, to the extent that this is possible, its impact.
For this reason, even if the lying witnesses choose to remain under the hood of anonymity, it is imperative that the Hellenic Parliament not surround with the hood of vagueness or murky and dubious petty politics the proceedings being opened today with the proposal, among other things, for my indictment. I would therefore like to request:
- no peremptory time-limit;
- no “non-indictment proposal” due to a peremptory time-limit, which masks a vile motive to keep the poison of slander active without the antidote of defence;
- the setting-up of a Committee as provided for in the Constitution, today, to ensure the immediate examination of all the allegations which, for as long as they remain without proof, are nothing more than calumnies.
10. Ladies and gentlemen Members of Parliament,
I call on you to fulfil the moral and constitutional obligation that you are vested with and to protect the social system from the consequences of a choice to leave the allegations hanging and unexamined, thereby preventing calumny from becoming, with your own involvement, entrenched as an institution in the country’s public life.
Because, as Emil Zola once said: “If you shut up truth and bury it under the ground, it will but grow, and gather to itself such explosive power that the day it bursts through it will blow up everything in its way.”