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The Odysseus Paradox

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In less than two weeks, the Supreme Court of Cyprus will decide the fate of the Auditor General following charges filed against him by the government for improper behaviour.

Odysseas Michaelides has been a controversial figure within the otherwise tame civil service. He has a habit of publicly firing allegations against everyone and anyone, as long as this will generate favourable comments for himself.

His methods often involved leaking information to the press on how his agency would investigate a certain case, while quite often such investigations have proven to be nothing more than noisy fireworks.

As both judge and jury, he is not too fond of a fair dialogue and often prevents the accused party of a voice, or right of reply.

One of such-high profile cases was back in 2015, involving the Emergency Liquidity Assistance provided by the Central Bank of Cyprus to Laiki Popular Bank in the aftermath of the 2012-2013 banking collapse and painful bail-out imposed on Cypriot consumers.

Although the populist investigation had no merit, as it did not involve public funds and it was part of the ECB’s policies, where the Auditor General of Cyprus had no jurisdiction whatsoever, Michaelides still went ahead.

In emails he sent to people targeted in his investigation, he also threatened to send his findings to the then Attorney General, Costas Clerides, to consider criminal action. During that time, everything was leaked to the press, but eventually his investigation reached a dead end and nothing materialised.

Dozens of such investigations were undertaken by Odysseas Michaelides that followed with much fanfare in the press, only to prove a waste of time and a waste of millions of public funds, without any accountability to how this money is spent.

End the theatrics

Now, the government wants to put an end to these theatrics and appoint a five-person board to the agency to ensure good governance of the Audit Office. As part of the current administration’s reform package, the new oversight body would include the sitting Auditor General and the Deputy Auditor General, as well as three others directly appointed by the government.

Michaelides vehemently opposes this proposal and has embarked on a crusade to convince public opinion otherwise. While he demands that everyone else in public office is held accountable when it comes to the use (or misuse) of public funds, he wants no accountability whatsoever of his office.

A paradox, one might say, but it comes as no surprise.

His office has scored a mixed bag of successes, with as many more failures during his time in office.

Perhaps the most spectacular faux pas involved the Investment for Citizenship Programme, also known as the ‘golden passports scandal’.

More than 5,500 passports have been issued illegally to foreigners, many of whom dubious characters, with hundreds of millions lost in state revenue, as apart from meagre fees and other government charges, nearly nine tenths ended up in private pockets of consultants, lawyers and accountants, mainly friends of the previous administration.

Elephant in the room

And yet, the Auditor General failed to spot the elephant in the room.

In a recent independent investigation undertaken by a former supreme court judge and two other high profile public employees, his office was caught out for its failure to investigate the matter properly, and issue timely warnings highlighting the weaknesses of the legal framework surrounding the Citizenship Programme.

As a result, the government of Cyprus lost hundreds of millions in revenue and continues to suffer an international embarrassment.

Michaelides could have prevented all that, but he failed. Now, he wants to remain the exception and carry on his services unchecked, and without any public accountability, unlike every other independent service such as the Central Bank of Cyprus or the Securities and Exchange Commission that have a board of directors appointed by the government to ensure just that.

But his inability to see the benefit of good governance within his agency is just another testament of his ineptitude, or to use the Attorney General’s allegations, incompetence, thus making him liable to sacking.

The government must press ahead and implement the rules, in consultation with parliament, to ensure good governance, transparency and accountability of the entire Audit Office, as well as to safeguard the department’s good name and mission.

After all, it is time to end more waste of public money and further international embarrassment.

 

Michael Olympios is a regular columnist and Editorial Consultant for the Financial Mirror