Koskotas scandal
[1] Koskotas' alleged that the missing over $200 million from his bank was embezzled with the support of several government ministers; the amount was significant for the relatively small Greek economy, approximately $50 billion in the mid-1980s.
At the same period, the Greek economy, having outperformed in the previous two decades, was slowing down due to the oil crisis of the 1970s and the additional competition with the entry into the European Market.
[15] The elevation of Papandreou was hailed as a milestone because PASOK was the first non-communist political party and a step in renormalizing the social trauma caused by the Greek civil war (1946-1949).
The cohabitation of the two men in the 1981–1985 period was successful since Papandreou governed in a more pragmatic approach compared to his radical polarizing rhetoric by reversing many of his campaign promises.
[3] Soon, a judicial inquiry found that Koskotas embezzled large sums from the bank's clients and illegally used this money to form a mass media empire to support PASOK exclusively.
To avoid justice, he left Greece for the United States (with an intermediary stop at Brazil) on 5 November 1988 despite being under strict surveillance by Greek security forces.
[7] Resignations followed (Stathis Yiotas, Deputy Defence Minister, and Theodore Karatzas, Finance Under Secretary) upon the revelations during the inquiry that the members of Papandreou's government were profiteering by illegal arms sales to both sides in the Iran–Iraq War and the apartheid state of South Africa.
[5][6][7] It also revealed that for the "purchase of the century" (40 American F-16 and 40 French Mirage 2000 aircraft[20]), the Greek state overpaid by as much as 20% above the true cost due to illegal commissions to PASOK members.
[23] Koskotas alleged that Papandreou and other PASOK high functionaries had ordered state corporations to deposit funds (over US$200 million[i]) with the Bank of Crete, which went missing in the form of bribes and acquisition of mass media companies.
On this day (26 September 1989) and hours before deliberations began, Pavlos Bakoyannis, a prominent conservative member of parliament and the architect of collaboration between the left and right wings for Papandreou's indictment, was shot by 17 November terrorist group outside his office in Athens.
[34] Instead, New Democracy (right wing) collaborated with the Synaspismos (radical left), led by Charilaos Florakis, to form a government under Tzannis Tzannetakis; while on the opposite ideological sides (as well in the Greek Civil War), both sought a "catharsis," i.e., investigation and trial of PASOK's corruption was completed.
[1][9][10] The decision carried additional responsibility because if no charges were brought against Papandreou under the current collaboration between New Democracy and Synaspismos, no future government could do so based on the Greek constitution.
[11][1][12] During the trial, the deputy of the Prime Minister, Agamemnon Koutsogeorgas, who was also accused and a close friend of Papandreou, had a stroke on live television during his sentencing and died a few days afterward.
