VZCZCXRO7525
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 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS:      
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 
surfaced. 
 
 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. 
SPECKHARD