Greek official bribed 'more times than he can remember'
When Antonis Kantas, a deputy in the Defense Ministry here, spoke up against the purchase of expensive German-made tanks in 2001, a representative of the tank's manufacturer stopped by his office to leave a satchel on his sofa. It contained 600,000 euros ($814,000).
Other arms manufacturers eager to make deals came by, too, some guiding him through the ins and outs of international banking and then paying him off with deposits to his overseas accounts.
At the time, Mr. Kantas, a wiry former military officer, did not actually have the authority to decide much of anything on his own. But corruption was so rampant inside the Greek equivalent of the Pentagon that even a man of his relatively modest rank, he testified recently, was able to amass nearly $19 million in just five years on the job.
Greeks are hardened to stories of corruption. But even they have been transfixed by Mr. Kantas's confessions since he was arrested recently on a litany of charges including money laundering and behavior that was detrimental to the Greek state. Never before has an official opened such a wide window on the eye-popping system of payoffs at work inside a Greek government ministry. At various points, Mr. Kantas, who returned to testify again last week, told prosecutors he had taken so many bribes he could not possibly remember the details.
Mr. Kantas's admissions, prompted by his hope that if he tells all he will be eligible for leniency under a new law, has left many Greeks hoping that they are finally witnessing the beginning of the end of the unchecked graft that helped plunge Greece into its current crisis. In the past, few officials have been convicted of corruption related charges and those who were went to jail without saying a word. There was no benefit in doing otherwise.
But as details of his back-room deals emerge, Mr. Kantas is also fueling a broader outrage here, particularly toward Germany, which has berated Greece for the financial mess it finds itself in. Mr. Kantas's testimony, if accurate, illustrates how arms makers from Germany, France, Sweden and Russia passed out bribes liberally, often through Greek representatives, to sell the government weaponry that it could ill afford and that experts say was in many cases overpriced and subpar.
The 600,000 euros, for instance, bought Mr. Kantas's silence on the tanks, which were deemed of little value in any wars Greece might fight, according to Constantinos P. Fraggos, an expert on the Greek military who has written several books on the subject. Greece went ahead and bought 170 of the tanks for about $2.3 billion.
Adding to the absurdity of the purchase (almost all of it on credit), the ministry bought virtually no ammunition for them, Mr. Fraggos said. It also bought fighter planes without electronic guidance systems and paid more than $4 billion for troubled, noisy submarines that are not yet finished and sit today virtually abandoned in a shipyard outside Athens. At the height of the crisis, when it was unclear whether Greece would be thrown out of the euro zone and long before the submarines were finished, the Greek Parliament approved a final $407 million payment for the German submarines.
(Read more: Greece's third aid program may be on its way)
''First, you have to blame the rotten Greek system,'' Mr. Fraggos said. ''But the sellers bear a very big part. They were bribing officials and lending money to an almost bankrupt country so they could sell their products.''
The Defense Ministry is hardly the only ministry suspected of being a hotbed of corruption. But the Defense Ministry makes a particularly rich target for investigators because Greece went on a huge spending spree after 1996 when it got into a low-level skirmish with Turkey over the Imia islets in the Aegean Sea.
One former director general of the Defense Ministry, Evangelos Vasilakos, calculated that Greece spent as much as $68 billion on weaponry over the next 10 years, much of it borrowed money. To win these deals, which involved the approval of military and Defense Ministry officials, as well as Parliament, arms dealers probably spent more than $2.7 billion on bribes, according to Tasos Telloglou, an investigative reporter for the Greek daily newspaper Kathimerini, who has written extensively on the subject.
Mr. Kantas, he said, could not make deals, but had the power to disrupt deals because he was considered knowledgeable about weaponry. ''He was basically a toll station,'' Mr. Telloglou said.
Mr. Fraggos and other experts worry that the prosecution team behind Mr. Kantas's arrests is being starved of the resources it needs to deal with an ever-widening pool of information. The four prosecutors work in a windowless converted storage room with their desks jammed together. The unit's chief, Eleni Raikou, appointed last August, paid for the installation of new wall outlets and light switches herself.
But the team appears undeterred. In the wake of Mr. Kantas's first testimony in December, they have made several more arrests, including the representatives of several German arms manufacturers and a subcontractor in the German submarine deal, who recently provided prosecutors with details of the bank accounts he used to transfer about $95 million worth of ''useful'' payments.
More from The New York Times:
Protests over government and economy roil Bosnia
Leaked recordings lay bare EU and U.S. divisions in goals for Ukraine
Russia committed to second aid tranche to Ukraine: Minister
In an odd twist, Mr. Kantas, 72, was apparently tripped up by his own banker, according to his lawyer, Yannis Mantzouranis. Like many other Greeks, Mr. Mantzouranis said, Mr. Kantas would bring bundles of cash to his banker, who would fly to Switzerland to make the deposits when enough cash had accumulated to make the trip worthwhile.
At one point, however, Mr. Kantas's banker lent 500,000 euros, about $680,000, of Mr. Kantas's cash to representatives of the German telecommunications giant Siemens. Then, the banker allowed Siemens, which is under investigation for bribing officials over various contracts in Greece, to wire a deposit directly into Mr. Kantas's Swiss account with Dresdner Bank.
Investigators looking into Siemens found Mr. Kantas's name on a list of people the company had sent money to, his lawyer said. Mr. Kantas was forced to explain where the 500,000 euros in his account came from. At first, he told investigators it was from the sale of some paintings. But they raided the home of the supposed buyer and found evidence that the paintings had been in his possession since the 1980s.
In his various depositions since his arrest, Mr. Kantas, who was a deputy in the Defense Ministry's procurement department, has described a tangle of bank accounts and offshore companies used to store his bribes, one named Kourkoumpini, after a Greek sweet. When the so-called Lagarde list -- a roster of Greeks with Swiss bank accounts -- became news, Mr. Kantas quickly moved most of his money to Singapore.
At one point, he said, even he was astounded at the money offered. One dealer promised him ''3 million dollars or euros,'' to support the purchase of antitank missiles, a figure he could not believe. But the dealer came through, putting some of it into his Swiss accounts and giving him 700,000 euros in cash, which he hid in the basement till he could get to the bank.
Prosecutors say the 2010 leniency laws Mr. Kantas hopes to take advantage of are giving them new leverage. But, they said, a plea bargaining system would be even better.
In all, Mr. Kantas admitted to taking bribes over 12 contracts, six with German companies, and two each with French, Swedish and Russian arms dealers. Some companies Mr. Kantas named have been convicted in other cases of bribery in the past. But others maintain that they have done nothing wrong. The makers of the tanks Greece bought, Krauss-Maffei Wegmann, say they are looking into the matter.
When investigators tallied up all the bribes Mr. Kantas admitted taking, they found he had still not accounted for all the money in his accounts.
Asked about this, Mr. Kantas said he had 2 million euros in bribes from his time in the military. On top of that, he told investigators, he invested well. ''I will prove it to you when the statements from the banks come,'' he said.
Mr. Mantzouranis says that his client, who is in jail awaiting trial, has met the criteria for leniency.
Law enforcement officials believe Mr. Kantas knows more and may have more money stashed away. ''He gave us nothing that we did not know,'' one investigator said. ''He has to tell us about the rest.''