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In a recent speech, former Greek Prime Minister George Papandreou argued that rebuilding “trust,” was the way for Greece to get out of its crisis. While Papandreou was referring to trust between Greece and its European partners, he should have been focusing on another type of trust.
Greece is one of many nations where the social contract is in fact being re-written. Pension payments, health benefits, employment security – austerity has put all of these on the table. Yet not only have citizens been told to expect less from the state, but to pay more. This is not only playing out in Greece. As America’s budgetary drama unfolds, does anyone have a doubt that the inevitable conclusion is cuts to entitlements AND higher taxes without more domestic spending?
Perhaps the debt-fueled consumerism of the previous decade has left no alternative to reworking the social contract in such a way. Citizens are being asked to make concessions on their side of the social contract, but it is unclear what they are being offered in return. Those making concessions are being subjected to an unprecedented level of negative press worldwide, and in many cases being blamed by their elected representatives. Former Deputy Prime Minister Theodoros Pangalos’ “μαζί τα φάγαμε” refrain is especially offensive since he and his fellow policy makers were aware of the house of cards they were constructing, and they also benefited disproportionately. The people of Greece are being asked to sacrifice for an undetermined amount of time on the basis of trust in the leaders who betrayed their trust in the first place.
The level of betrayal is staggering. The former mayor of Thessaloniki — Vassilis Papageorgopoulos – was convicted to life in prison for embezzling $24 million over his two terms. Former minister Akis Tsochatzopoulos was arrested and accused of pocketing at least $26 million in kickbacks. A parliamentary committee concluded that the country paid at least $2.6 billion in inflated state contracts that were secured via bribes by Siemens. We’re still not sure of how many kickbacks the Lagarde list has exposed. I could go on and on.
To be sure, this is not a problem unique to Greece. In the U.S., there are public corruption units at federal, state and local levels of government investigating allegations every day. Two consecutive governors of the state of Illinois are serving prison terms for public corruption. The treasurer of Dixon, Illinois – the boyhood home of President Ronald Reagan – was recently convicted of embezzling $53 million and had the following assets seized by federal authorities: 400 horses, a luxury motor home, 40 vehicles, seven fur coats, a grand piano, a hot tub and a tanning bed. Nor do Americans trust their government any more than the Greeks do. In response to an American National Election Studies poll, only 19 percent of Americans responded affirmatively to the statement “You can trust the government in Washington to do what is right just about always or most of the time.”
Yet in the U.S., there is a belief that there is some type of check on such public corruption and that the betrayers of the public trust will ultimately be caught. Former Senator, and Vice Presidential nominee John Edwards was prosecuted for misuse of campaign funds. Congressman Jesse Jackson Jr. will spend nearly five years in prison for misuse of campaign funds. Federal prosecutors – Rudy Giuliani, Chris Christie, Patrick Fitzgerald – attain near mythical status in American public life and many of them are able to turn it into elected office. Whistleblower statutes and investigative journalism are additional checks against corruption.
This specific comparison between the U.S. and Greece should be one that is comprehensively examined by both the Greek government and by the Diaspora effort with the most ambitious goal in helping Greece – the Hellenic Initiative. The Initiative’s goal of raising and investing $100 million in Greece is a massive goal that will be achieved over a long period of time. Greece needs billions in investment, and to attract such foreign investment, it needs to gain the trust of multi-national companies that they won’t have to operate like Siemens to profit in Greece; it needs to gain the trust of Greek workers that changes in minimum wage and in firing/hiring practices are not being implemented to enrich the few (especially politicians,) but to bring the Greek economy closer to full employment.
The Hellenic Initiative should consider this – some of the best federal prosecutors and some of the most accomplished inspector generals in the American system are now in private practice. Why not engage these attorneys to develop checks against public corruption in Greece? Have them design an independent inspector general system; have them draft an effective whistleblower statute; have them train prosecutors and public corruption investigators. This will not eliminate public corruption – it still is a problem in the U.S. – but it will cultivate trust. Investors will trust the rule of law in Greece more. International transparency rankings will improve for Greece. Bond rating agencies will see this as a significant move. And, it will signal the beginning of the end of business as usual.
Greece needs a kickstart to reforming its system of governance. The Greek people need to see their leaders be held accountable. The Hellenic Initiative can make a difference here. Last month, former federal prosecutors Patrick Fitzgerald and Patrick Collins – the men who successfully prosecuted Governors Blagojevich and Ryan – put on the case against Socrates in the National Hellenic Museum’s reenactment of the Trial of Socrates. Their greatest contribution to Hellenism may still be ahead of them.