The testimony of G. Auditor in the Research for Naturalizations is published
'Misleading the Minister and the Parliament', said the Auditor General in his deposition in the National Committee for Naturalizations
The Auditor General Odysseas Michailidis spoke about the possible deception of the Minister and the Parliament in relation to exceptional naturalizations that were granted (here are the minutes:when it is tabled before the Commission of Inquiry), provided by KYPE.
Answering questions from the President and the members of the Investigative Committee, Mr. Michailidis defended the decision of the Audit Office to continue the audit for naturalizations despite the appointment of the Investigator and the opinion of the Attorney General, as well as the correctness of the conclusions of the reports. At the same time, he assured that the content of his reports is purely technocratic and does not contain comments or remarks with political elements.
Mr. Michailidis, who presented all his findings to the Commission of Inquiry, also reiterated in his lengthy testimony various elements included in his reports and especially in his latest report on a series of exceptional naturalizations concerning 18 people associated with the investment of the casino-resort in Cyprus and another 64 people connected with another large investment made by a foreign company in Nicosia.
The powers of the Audit are not set aside by the appointment of an investigative committee
Responding to a question about the fact that the Audit Office chose to continue its investigation despite the fact that an Investigative Committee was appointed, he said that "because the opinion of our Office is that the powers of the Audit Office are not annulled, suspended, weakened, not set aside, not influenced in any way by the appointment of a research committee, yours, whose work I emphasize and you, we respect and that is why I speak to you, to help you as much as we can to do your job as well as you want ».
Referring to the case of the naturalizations related to the casino-resort, Mr. Michailidis said that "it was also a public contract and the reason we published our report, is because in a similar way the obligation of our service to publish reports, the obligation which arises from the duties of our service, which clearly stipulate that the reports of the Audit Office are made public, unless this is prohibited by law and there is no legislation that says if you have a committee, the findings of the Audit Office are not made public ".
"We considered it our duty to make our findings public and I do not consider that the disclosure, therefore the completion of the report, I do not consider that the disclosure, once the submission to you is complete, which would be anyway, is influenced by "the fact that it has been made public," he said.
Asked about the opinion of the Attorney General, he expressed the position that "this issue concerns the constitutional powers of the Audit Office". We do not believe, he said, "that these powers can be limited by expressing opinions, by submitting opinions by the Attorney General, but only by a decision of the Supreme Court, so whoever believes, whether it is the Government or the Attorney General , that our powers to publish reports are limited, suspended, suspended, frozen or anything else because an inquiry committee has been appointed, we consider that because we do not agree with this view and do not have the legal basis for such an opinion, we consider that it could be resolved only by the Supreme Court ".
Asked to express his opinion on the fact that double work can be done but also to cause confusion in the outside world, the Auditor General replied that "in this logic, which is based, in the sense of good management of our resources, when he was appointed the committee chaired by Kalogirou, we had said that ok, let's wait for this committee to complete ".
However, this, Mr. Michailidis noted, "can not lead to self-withdrawal of the Audit Office, especially, I remind you that I could reverse this and say well, the Government, when the Audit Office announced the audit on August 28, why did not Dimitra Kalogirou think with this logic and say that after the Audit Service will do an audit, why should I make a research committee "?
We said, he continued, "the right of the Government to set up a research committee, it put it, we believe that with a consultation and especially because we publish what we control, we have said publicly what we control, we can avoid double work and you could, so I submit to you , to use it as your own material, to facilitate the work done by the Audit Office ".
According to him, "it is now a matter of safeguarding independence and we can not enter into the logic that from now on the Government appoints an investigation committee, especially after the start of control by the Audit Office, that the Audit Office will freeze its own investigations." "And to say about the casino, as it turned out exactly the casino files were to a large extent those who were in the 15 that we had asked for and did not give us," he added.
Possible deception of the Minister and the Parliament
Mr. Michailidis referred to the reasoning given in the decision of the Council of Ministers for the exceptional granting of naturalization to the 18 people who were associated with the casino-resort company.
He stated that it is my view that this does not mean that when the Ministry of Finance, for example, assures, as it did in 2019, in this decision that, "literally I read you" the Ministry of Finance assures that the applicant investors meet the economic criteria set by the aforementioned in paragraph 2 of the Council of Ministers "to mean that these economic criteria are zero".
When someone reads this thing, he said, "he understands that they are met and refers to a specific paragraph of the decision of the Council of Ministers of 2016, which is paragraph 2, the one I started telling you earlier."
"I think it is very clear to me that the Council of Ministers, at the time of taking the decision to naturalize the 18, considered that the criteria set by the 2016 decision were met," he noted.
The Council of Ministers, said, among others, Mr. Michailidis, "had before him a proposal, which stated that I am naturalizing on the basis of the 2016 decision, the Ministry of Finance assures that the criteria of paragraph 2 of 2016 are met and this proposal was sent to the House of Representatives and I remind you that paragraph 3 of article 111A explicitly stipulates that naturalization takes place after being informed by the House of Representatives ".
Therefore, he said, "I believe that this information should be based on true information and not information that does not correspond to reality."
In a comment that according to the Ministry of Finance, the case of the casino was considered to be an exceptional case of public interest because it would contribute more than € 9 million to the funds in the form of taxation, salaries over € 42 million and to Cypriot companies over € 38 million and if his opinion is that naturalization was not done for this reason, the Auditor General replied that "it does not matter what my opinion is, here it is not a matter of opinion".
The issue is, he said, "if the Council of Ministers believed that either the Ministry of Finance, the Ministry of Interior that would make the proposal, that the conditions of paragraph 1 of Article 111A were met, should have written in its proposal" exercising my powers, of paragraph 1, of article 111A, I believe "as previously said" these and these persons "which to name them, who named them, to say what services they have provided in Cyprus".
So I guess, he added, "one would expect a middle-minded person to see the word 'casino' at least once in the sentence. When I see a proposal in the Council of Ministers, which starts and says, first it says "according to paragraph 2", it does not say according to paragraph 1. "
To another question regarding the fact that he has not studied all the data, Mr. Michailidis answered that "what I believe is that the ones, which you correctly point out that there are other data, which we did not have in our possession, are the ones should be used to document who is responsible for this abusive and in our opinion illegal decision of the Council of Ministers, who contributed to this decision ".
"We can not express an opinion, we can not know who was the one who had a role in making this decision," he said, asking the questions: "Were they the Ministers of the Ministry of Interior? Were they the heads of the Ministry of Interior? Were they the officials of the Ministry of Finance? Was he the Minister of Finance? Was he the General Director of the Ministry of Finance "?
These, he said, "we can not know, but the essence is that a proposal to the Council of Ministers that was communicated to Parliament, whose correct and true information is a requirement of the law, went to Parliament stating that I naturalize on the basis of paragraph 2 these the persons who meet the criteria of 2016 and I come in 2020 to claim that I naturalized them with paragraph 1… ".
This thing, he added, "is not an excuse for me today, that the process was right."
To another question he answered that "the mistake is that these people were naturalized".
I consider, he stated, “that the conditions of paragraph 1 were not observed either. My view is that when I have a special section on investment, I can not go to a section on persons, as we have read before, to open it for a minute, "very exceptional cases of providing the highest level of services to the Republic". Therefore, the Auditor General noted, "I believe that even if they used paragraph 1, it would be abusive."
"I do not think these people should be naturalized. "I emphasize that these were people related to a company that has contracted with the Republic, is a contractor of the Republic, I consider it unacceptable for persons who have contracted with the Republic to receive any such treatment, since we are talking about a public contract", he noted.
I also consider it unacceptable, continued Mr. Michailidis, "that there is a claim that these persons were naturalized for the purpose of assisting the investment, which was concluded two years ago and at the moment when the competent supervisor informs us that he had no idea about this intention for naturalization, but how can I not inform the competent authority about this naturalization "?
Asked about his observation that it was not a matter of public interest but of other interests, the Auditor General said that "when we say public interest one must explain why a company, which was contracted with the state and has specific contractual obligations, better serves the public interest if I grant its executives 18 passports ".
In a comment on a specific provision of the Law on the Population Archive Law for exceptional granting of naturalization to persons who offer the highest level of services to the public interest and in his opinion the public interest should be specialized in the Ministerial decision, Mr. Michailidis answered precisely , adding that "in my opinion, when the legislator for a specific purpose has a special paragraph, which is paragraph 2, which concerns investments in Cyprus, I do not consider that investors can be mass-naturalized under paragraph 1".
Now, he said, "if there was a person who was also an investor and at the same time really provided such a high level of services in Cyprus or was an ambassador of Cyprus abroad, I do not mean an ambassador of the diplomatic service, I mean he was a person who provided such high services for Cyprus abroad, for example something like that to say that we could perhaps naturalize it under paragraph 2, but here we are talking about very exceptional cases ".
To mass naturalize 18 people, many of whom seem to have nothing to do with the company that even exists in Cyprus, I mean that operates in Cyprus, first the mass can not fall under the definition of "very exceptional cases" and I also have "He said that, from the moment it is a public contract, this in itself, in my opinion, makes it problematic to characterize that they provide a very high level of services", he said. They are services, he added, "under a public contract."
When asked why he considers that there was a deception of the Parliament, Mr. Michailidis answered that
"Deception means informing someone of something that is not true." In this sense, he added, "when the Parliament is informed that these persons are naturalized on the basis of the 2016 criteria and on the basis of, as it says, assurances, it literally assures that" the applicant investors comply with the financial criteria set by the aforementioned in paragraph 2 decision of the Minister ”which in paragraph 2 is the decision of the Minister 13.9.16 that we said before. "I think this is a deception."
In a comment of the Chairman of the Committee if what he says is that what was misleading was the note of the Minister of Interior to the Parliament, who said in Parliament that these specific people meet the criteria of the decision of the Council of Ministers of 2016, Mr. Michailidis answered that "one is this".
He also said, "at first sight it seems that the Council of Ministers was also misled".
According to him, "this needs further research to be done". In order to decide whether or not the Council of Ministers was misled, one must see the minutes of the specific session of the Council of Ministers, he said.
To an additional question on the issue of the deception or not of the Parliament and whether he considers that the Parliament should be informed about the data of the case according to the provision of the law, he answered that "I did not say if he will be informed about the data, I said that the "Parliament must be really informed, that's what I said." "When you inform a House and inform it with lies, that is certainly not something that is allowed by any law," he said.
The conclusions of the Audit Office are safe, technocratic, not political
Asked whether he is sure of his conclusions, he said, among other things, that "the Audit Office carried out an audit work, with access to secure data from the Tax Department, the Land Registry Department and the Population and Social Insurance Department and we believe that what we have end up is safe, as expected from our audit procedures ".
Asked if the conclusions of his latest report on naturalizations are purely professional or contain comments and remarks that have a political element, Odysseas Michailidis answered that "they have no political element in any case".
"Political element, when we talk about politics, politics is not related to naturalizations and control of such processes," he added.
"If we go looking to find, the first is that there has been a large number of naturalizations, without meeting the applicable criteria, and to see that even, you will find that in our basic conclusion not even the word 'possibly' has been included, because we are sure that there is a large number of naturalizations without meeting the applicable criteria and then we say in our view, the impression that is created is that some of the public officials did not take into account the current legal and regulatory framework and this impression is not political, it is technocratic, it is an audit finding, because we see exactly that in the case there was the first so-called naturalization by grace ", he noted
According to the Auditor General, "in our opinion, the case is not in line with the current legal and regulatory framework, so the possibility of abuse of power and the fact that these are two different cases, the first in` 14, the second in `19, shows that the fragility of the program is essentially a finding, a finding which is based on our findings in both the first report, which we issued on 31 January of the 20th, and the second for the five, as well as the present, which remained unchanged until its recent abolition ". He added that "the third is that there may even be corruption or other criminal offenses and that in fact all of this has finally led to the termination of the program and we demand accountability."
And it is important, Mr. President, he continued, "that the Audit Office obviously when it comes to conclusions, are its general conclusions and you will see in our reports that general conclusions are recorded, which is exactly what a report requires. And in no case do they have a political character ".
Asked if he considers that the Parliament did not have any responsibility, Mr. Michailidis clarified that "essentially the Audit Services control the governments".
"It wants a lot of attention for an Audit Office to express an opinion, which shows that it is trying to control the Parliament, first in terms of the legislative initiatives it undertakes, which is a highly political act of taking a legislative initiative and also wants a lot of attention for a "Audit Office to demonstrate responsibilities in Parliament, that it did not exercise parliamentary control, which is also a highly political process," he said.
In relation to the research carried out for the 64 naturalizations associated with a specific company, he stated, among other things, that companies "made contracts, purchase and sale contracts with all these naturalized, which were supposedly for sale of apartments in places, locations that now have either fields , either parking, or unbuilt for some years and in only one case an apartment building ".
You will see, he said, that "the 7 acquired the real property titles after the naturalization, we found 27 cases that have not been transferred and may concern fictitious acts". He referred to examples of properties where there is parking and unfinished buildings and cases in which no property has been located.
He referred to a case in which one of the buyers and naturalized died in 2017, 2-3 years after he allegedly bought this property and allegedly paid the full amount when buying this property.
But when that man died, he said, he took on a managing lawyer, who was also a lawyer "who managed the property as if it were a piece of rubbish, as if it had no value". So, he said, "either this administrator acted by violating the rights of the heirs of this person, or he knew that in both cases he may be responsible and we will inform the Pancyprian Bar Association, or he acted knowing that this contract was fictitious and it had no value. "
Mr. Michailidis also spoke about possible false statements in entries made in the press in relation to intentional naturalizations. "So there may be false statements, because someone wrote that he is supposedly a resident of a house, which is non-existent and this whole network of issues creates the impression that it was something that is very fragile and may be serious criminal We record these crimes and believe that with everything we have identified, the image is reasonably created in us and we use it to conclude that this is a fragile situation ".