The Ad Hoc Committee opened on Tuesday, January 19 a new series of public hearings to investigate the issuance of Golden Passports under the Citizenship by Investment Program.
The first to be summoned to testify was former Treasury Secretary Harris Georgiades.
During the event, Georgiades admitted that while working as finance minister, he met with all major investors. However, this has nothing to do with the processing of their citizenship applications.
Georgiades said that in 2017, then Interior Minister Konstantinos Petrides discovered serious flaws in the procedures for the citizenship by investment program. The minister developed a code of ethics that would strengthen them, and introduced a register of service providers for citizenship applicants.
According to Georgiades, Petrides told about his suspicions and ideas to him and other members of the cabinet, as well as to the President of Cyprus Nicos Anastasiades. However, the Ministry decided not to work on the issue of the shortcomings of the investment program.
The former finance minister also said he could not recall any of his cabinet colleagues declaring a conflict of interest when discussing applications.
'If I knew about such a case, I would have declared a conflict of interest and abstained from voting,' - Georgiades emphasized.
Georgiades noted that the statements were not discussed in the Council of Ministers, as they were sent to the House of Representatives after consideration and approval by the Ministry of Internal Affairs.
When asked about the contribution of the investment program to the Cyprus economy, the former minister said that it is relatively small, but important enough for the real estate sector. He pointed out that this is one-tenth of the annual increase. That is, if the growth rate was 4%, the program contribution was 0.4%.
The member of the Committee Pavlos Ioannou noted that the first amendments in 2013 were made to the citizenship scheme, but no rules were adopted that would determine the essence of the program. He emphasized that in the absence of normative acts, the criteria were based on the provisions of the two lines of the Population Register Law.
'No rules were adopted to mitigate risks,' Ioannou pointed out.
Kalogirou also confirmed that the program was not legally insured as there were no rules, but only criteria.
Georgiades said in response that the opinion of the Attorney General should be sought on this issue. However, he noted that the law on the population register "gives the Council of Ministers almost complete freedom to naturalize a director, lawyer, businessman."
'This is my understanding, but I cannot argue on legal issues. Better ask the Attorney General's opinion,' - said Georgiades.
Committee Chairman Myron Nikolatos asked the former Foreign Minister if there is a code of conduct in the Council of Ministers to avoid conflicts of interest, given that the President of Cyprus also has a law office and some ministers have law firms or relatives in law firms that handled the statements about naturalization.
'As far as I know, there has never been a conflict of interest,' Georgiades replied.
The chairman of the Committee, Myron Nikolatos, presented Georgiades with a letter sent by him to the Minister of the Interior, in which he said that although the applicant did not comply with all the provisions of the program, his application could be approved and he was entitled to receive a passport. In the letter, there also was an applicant's wife, who had been asked to obtain a passport because her husband had made a major investment in Cyprus, despite the fact that she was nowhere listed as a shareholder.
When asked if he knows about cases of issuing passports in violation of the law and decisions of the Council of Ministers, Georgiades replied that these are not violations, but deviations, of which there are about ten out of 2,900 approved applications.
Another Commission member, Kyriakos Kyriakou, told Georgiades that the program created a distortion in the real estate market due to rising prices. However, Georgiades dismissed his claim, saying the program had supported the construction sector and helped to keep property prices down, which also affected banks' balance sheets.
When asked by the chairman of the committee, whether the Council of Ministers, when Georgiades was a minister, consulted with the Legal Service (with the exception of legislative control, which should have been received by any bill) regarding the work of the program and the legality of the criteria and decisions, he replied that “this was carried out at the request of the minister internal affairs ".
Demetra Kalogirou told the former minister that the program, while helping the economy, was used by many for profit without due diligence, which led to the discrediting of Cyprus. Then she asked if anyone from the ministry thought that the investment scheme should be interconnected with the money laundering law.
'The position that I took before leaving the Ministry of Finance is similar to your convictions. Unfortunately, the plan used to support the economy has been used by some people for their own benefit. Outrageous cases of violations that were made public, for example, with a Malaysian, are direct evidence of this. I cannot understand how the application for this case was approved. As a member of the Council of Ministers, I bear a certain share of responsibility, therefore, when we were informed about the weaknesses of the program, I voted to close it,' Georgiades said.
It is worth noting that due to the coronavirus pandemic, gold passports cases hearings have so far been closed to the media.
By now several officials have already given testimony, mostly via videoconference.
They are: Interior Minister Nicos Nouris, Finance Minister Constantinos Petrides, Auditor General Odysseas Michaelides, former Interior Ministers Socrates Chasikos, Eleni Mavrou and Neoklis Sylikiotis, as well as the current Cabinet Secretary and former secretaries.
'Now that a suitable location has been found: Jean Monnet's auditorium in the former Filoxenia hotel as the media will be allowed inside, but with a limited number of people,' - said one of the Commissioners.
By the way, a maximum of 15 representatives of the press will be able to attend the hearings.
The Committee's hearings are expected to take place twice a week, on Tuesdays and Thursdays. So, next Thursday, at 10 o'clock in the morning, the former Minister of Finance Michael Sarris will testify in the Investigative Committee, and at 12 o'clock - the former Minister of Finance Charilaos Stavrakes. Later, the President of the Republic of Cyprus Nicos Anastasiades and the head of the Cyprus Orthodox Church Chrysostomos II will take part in the hearings of the special commission.
It is preliminary known that the final report of the Special Commission will be submitted to the Prosecutor General before the parliamentary elections scheduled for May 2021.
Chronicles of the Cyprus Passport Saga:
- Part 1 (link)
- Part 2 (link)
- Part 3 (link)
- Part 4 (link)
- Part 5 (link)
- Part 6 (link)
- Part 7 (link)
- Part 8 (link)
- Part 9 (link)
- Part 10 (link)
- Part 11 (link)
- Part 12 (link)
- Part 13 (link)
- Part 14 (link)
- Part 15 (link)
- Part 16 (link)
- Part 17 (link)
- Part 18 (link)