OO RUEHIK RUEHPOD RUEHYG
DE RUEHTH #0153 0321646
ZNR UUUUU ZZH
O 011646Z FEB 08 ZDK
FM AMEMBASSY ATHENS
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1136
INFO RUEHZG/NATO EU COLLECTIVE PRIORITY
RUEHSQ/AMEMBASSY SKOPJE PRIORITY 1145
RUEHPS/USOFFICE PRISTINA PRIORITY 0348 UNCLAS ATHENS 000153
E.O. 12958: N/A
SUBJECT: RULING PARTY MAJORITY RAZOR THIN FOLLOWING MP
RESIGNATION OVER SCANDAL
REF: A. ATHENS 23
B. ATHENS 64
1. (SBU) On January 31, the ruling New Democracy party's
already-thin majority was shaved further (152 to 151 seats of
300) when ND MP Kostas Koukodimos announced he was leaving
the party following allegations of corruption in connection
with the parties to the overheated Zachopoulos scandal (refs
a, b). In a letter to the speaker of the Parliament,
Koukodimos said he would continue to support ND's line as an
independent, but his resignation removes any margin of error
from PM Karamanlis's calculations in maintaining party
discipline in Parliament, including on tough economic and
education reform issues, as well as on the very sensitive
Macedonia name issue.
2. (SBU) Koukodimos came under the spotlight when one of
Greece's best-known sensationalist reporters alleged that
Koukodimos had interceded with him to quash newspaper stories
damaging the reputation of Spyros Kladas, chief of the GOG's
Special Investigation Squad (SOE) focusing on fraud and
financial crimes, including those connected with the
Zachopoulos affair. Kladas had worked at the Culture
ministry when Zachopoulos was SecGen there. Media reports
claim that Kladas had promised to find a permanent government
job for Zachopoulos's mistress (which he denies) and that he
was privy to Zachopoulos's actions at the ministry.
3. (SBU) The Zachopoulos affair has been front-page news
since it first broke just before Christmas, but thus far the
allegations and investigations by magistrates have focused on
secondary cover-up, blackmail, and pay-off allegations. The
GOG is only now beginning in earnest its investigation of
Zachopoulos's tenure at the Culture Ministry and whether he
used his position to, amongst other things, allow illicit
building on, or reconstruction or, historical properties in
exchange for bribes -- allegations which many Greeks assume
to be true but for which no evidence has yet publicly
4. (SBU) Koukodimos apparently submitted his resignation from
the party in order to save ND further embarrassment and said
that he intends to continue to vote with the government.
Nevertheless, with Koukodimos's departure, the ND majority is
precarious. There are rumors that another ND MP may soon be
revealed in a situation similar to Koukodimos's, which could
have serious repercussions on the government's position.
Slipping to 150 of 300 seats would bring the fall of the
government and a possible new round of elections.
5. (SBU) COMMENT: The Zachopoulos affair is Byzantine
politics at its most complicated, and many Greeks are wary of
missing even a day's reporting out of fear of losing track of
the many strands. We continue to watch the affair closely,
but have yet to see hard evidence of wrong-doing at the heart
of the matter. But the Karamanlis government nevertheless is
starting to feel the bad effects in terms of an even more
fragile Parliamentary majority and in popularity polls -- and
all at a time when the GOG faces tough domestic and
international issues. END COMMENT.
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