TheYugoslav corn scandal (Greek:σκάνδαλο του γιουγκοσλαβικού καλαμποκιού), also known asGreek maize, was a politicalcorruption scandal inGreece between 1986 and 1990.[1] A total of 20,000 tons[i] of corn was imported fromYugoslavia in 1986 and falsely labeled as Greek through forged documents. The corn was then exported to otherEuropean Economic Community (EEC) countries, allowing the fraudulent claim of $1.5 million in EEC subsidies intended for domestic Greek corn. The state-owned company International Trade Company (ITCO), a government-controlled entity responsible for managing agricultural trade, played a key role in facilitating the fraudulent shipments. After the EEC initiated an investigation, Greek government officials were involved in efforts to cover up the scheme. In 1989, Greece was fined over $3.8 million by theEuropean Court of Justice. Investigations by theGreek Parliament followed, leading to a trial in Greece in 1990, where six individuals, including a deputy minister, were convicted for their involvement.
On 8 May 1986, a ship calledAlfonsina (Greek:Αλφονσίνα)[ii] reached the port ofThessaloniki carrying 9,000 tons[i] of corn fromKoper inYugoslavia.[2] However, the documentation stated that the origin of the corn cargo was fromKavala.[2] The company responsible was International Trade Company (ITCO), a state company founded under thePASOK-led government for price control purposes.[2] Its president was Soulis Apostolopoulos.[2] The corn was sold initially to Granomar (a company located inSwitzerland) and then to Genk, aBelgian company.[2][3] There were the following benefits from this scheme: the Greek state would avoid paying compensatory (import) levies to the EEC,[4] the state would get the benefit of elevated corn prices at $245 a ton instead of $101 a ton for Yugoslav corn,[3] and, by reporting artificially inflated agricultural productivity, the state would gain access to additional EEC subsidies.[2][5]
News of the corn sale and, allegedly, complaints reached the EEC inBrussels within days. Subsequently, on 17 August 1986, a European committee arrived in Greece to investigate the state's documentation regarding the transactions.[2] Greek officials, under DeputyMinister of FinanceNikos Athanasopoulos [el],[iii] assured the committee that the corn was of Greek origin, and forged documents to cover it up.[2] Athanasopoulos also tried to create ways to delay and confuse the inspectors.[3] At some point, Athanasopoulos complained to Emile Mennens, a Belgian member of the investigation committee:[6] "When we the Greeks were buildingParthenons, you the barbarians were eating acorns."[2][4]
In November 1986, theEuropean Commission pressured the Greek government to provide an explanation for the scandal. However, their request was publicly denied by theMinister of Foreign Affairs,Karolos Papoulias.[2] In 1987, the European Commission imposed a fine on Greece of $2.5 million for the illegal transaction.[3] The European Commission brought the case before theEuropean Court of Justice, marking the first instance of the 12-nation European Community being defrauded by one of its members.[3] The particular scandal placed the Greek diplomats and bankers in a difficult position within the European Community, since the culprit was the Greek government rather than an individual; a Greek banker stated, "This really hurt our image".[3] The Greek government refused to participate in the trial proceedings. European investigations found at least two fraudulent corn shipments; the second shipment was 11,000 tons[i] of corn arriving by train to Thessaloniki and loaded onto a cargo ship to be sold in Belgium as Greek corn.[3] On 21 September 1989, the trial concluded without the participation of the Greek government, which was fined $3.8 million, which included the initial fine, the expenses of the court, and interest.[7][8]
PASOK lost in theJune 1989 elections due in part to theKoskotas scandal, which implicated PASOK members, and the over 200 scandals reported over the course of PASOK administrations from 1981 to 1989.[9] The conservativeNew Democracy and the united leftist parties underSynaspismos, despite being on opposite ideological sides and having fought against each other in theGreek Civil War (1946–1949), formeda coalition government [el] committed to cleansing the state ("Catharsis") of corruption scandals associated with members of PASOK.[10][11]
Only days after the formation of the coalition government, theHellenic Parliament commenced procedures to lift the parliamentary immunity of Athanasopoulos. A 12-member committee began an investigation of the alleged fraudulent activity surrounding the importing and export sale of Yugoslav corn.[11] Witnesses who worked at the ports through which the corn shipment passed, testified that Athanasopoulos gave instructions to not report the corn.[11] On 23 August 1989, Athanasopoulos confessed during the procedures but argued that the decision for the cover-up was taken after discussions with his colleagues (without naming them) on the grounds of "national duty and obligation".[2][12] Specifically, he argued, "responsible ministers had decided to cover up the scandal in the country's interests [...] Otherwise, it would have been disclosed that a state-controlled company was violating Community regulations, which would have been damaging to the country's prestige in the E.C. [European Community]".[13]Akis Tsochatzopoulos, a PASOK deputy, argued that the scandal was due to tense competition betweenmultinational corporations.[4] In January 1990, Athanasopoulos and the company's president, who owned the corn cargo, were remanded in custody.[4]
The Greek courts indicted Athanasopoulos for exporting Yugoslav corn as Greek, so that ITCO, the state-controlled export company, could pocket $1.5 million in European Common Market subsidies.[14] The specific charges wereinstigation in issuing false certificates,forgery andcomplicity in forgery.[4] The trial was conducted by a 12-member special court by theSupreme Court of Greece, Areios Pagos.[13] In addition to the "national interests" argument, Athanasopoulos' defense rested on the assertion that thestatute of limitations had expired, as well as claims of procedural irregularities.[12] Thirteen former ministers were witnesses for the defense, and they all used the "national interest" argument.[15] HistorianRichard Clogg described Athanasopoulos' defense as an effort to portray the defrauding of the EEC as a patriotic duty.[16] However, the court unanimously rejected Athanasopoulos' defense arguments. On 11 August 1990, Athanasopoulos was found guilty and sentenced to three and a half years in prison.[17][12] The president of the company was sentenced to three years and eight months in prison.[4] Four officials tried with him also received prison sentences ranging from 10 to 18 months.[17][18]
The trial was broadcast live with state and private television channels focusing on different aspects of the developments inside and outside the courtroom, depending on their political affiliation.[19] In the pro-PASOK press and radio strongly criticized witnesses for the prosecution as traitors to the nation.[15] During the trial, PASOK supporters gathered outside the court, and they disapproved of the court's decision by shouting "Shame" (Greek:Αίσχος) and chanting the Cretan songPote Tha Kanei Xasteria.[4]
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The decision on Athanasopoulos, according to judicial sources, gave "the green light" to initiate trials against other former PASOK government members, including Prime MinisterAndreas Papandreou, for their involvement in the "mega-scandal"[20] Koskotas scandal and widespread surveillance of political opponents.[12] Athanasopoulos served nine months,[6] at theKorydallos Prison.[21] He was the only politician imprisoned for PASOK's scandals of the late 1980s.[6] A few months later, Menios Koutsogiorgas spent three months in jail pending the Koskotas trial but died on the witness stand, and all prison verdicts were redeemable through monetary compensation. Athanasopoulos was re-elected to Parliament following his release, representingAthens B constituency in the1993 Greek parliamentary election.[21] On 17 January 1994, the newly installedPASOK government [el] granted apardon to Athanasopoulos.[4]
Levels of corruption in Greek politics remained consistently high under administrations in the 1986-1997 period, regardless of their political orientation, according to a 2003 study,[22] which saw this as symptomatic of the institutionalization of corruption in the country and leading to widespread distrust of political parties and the political class in general.[23] Press stories relating to corruption reached a peak under the conservativeNew Democracy government [el] that followed PASOK in 1990–1993, featuringits own "mega-scandal", involving theAGET Heracles cement company, but also many scandals from PASOK era were unfolded in early 1990s.[22]
The legal case[8] in the European Court of Justice regarding the scandal became a reference point concerning how the member states settle violations of European law.[24] Specifically, the court decided that sanctions must be "effective, proportionate and dissuasive," with the European Community determining the minimum and maximum range of the crime penalties, while the member state must transpose the directive from the European Courts by deciding the specific maximum penalty for the crime in their respective jurisdictions.[24]
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