PICK-A-PECK-OF-PECCADILLOS: A RAFT OF SCANDALS

C O N F I D E N T I A L NICOSIA 000511

SIPDIS

SIPDIS

E.O. 12958: DECL: 04/04/2021
TAGS: PREL PGOV CY
SUBJECT: PICK-A-PECK-OF-PECCADILLOS: A RAFT OF SCANDALS
BESETS THE MFA


Classified By: Ambassador Ronald L. Schlicher; Reason 1.4
(b) and (d)


1. (C) Summary: The Cypriot MFA is an unhappy and
dysfunctional place. A recent raft of scandals -- nearly all
related to sex or money -- has both embarrassed the ministry
and undercut its effectiveness. The scandals are beginning
to overlap. The MFA may well choose to pardon an embezzler
at the embassy in Stockholm who also happens to be a key
witness in the sexual harassment investigation against the
Ambassador. Systemic problems at the MFA have been magnified
by an increasingly vicious and competitive culture in which
ratting out one's colleague is often the swiftest and surest
ticket to personal advancement. Much of the blame for this
can be laid at the doorstep of the MFA's Permanent Secretary,
Sotos Zakheous, who has used the various scandals percolating
in the ministry to undercut potential rivals. Our contacts
describe a personnel system that rewards and punishes
diplomats in direct proportion to their perceived personal
loyalty to Zakheous. Even senior officials are clearly
afraid to cross the Permanent Secretary, who has allies in
the Palace as well as in the largest political party, AKEL.
The bilious atmosphere at the MFA complicates our own efforts
to urge the GOC to look beyond the parochial Cyprus issue and
engage more broadly with global affairs. End Summary.


Pride of Lions, Murder of Crows, Raft of Scandals
-------------- --------------


2. (C) A seemingly endless stream of scandal and gossip
emanating from Cyprus Embassies over the last year has
embarrassed the MFA and left the Cypriot public with the
impression that its diplomatic corps is chock-a-block with
expense account cheats and sexual predators. Most recently,
the MFA was forced to announce that it had asked the
government to begin a criminal investigation into the alleged
embezzlement of some 200,000 Cyprus pounds ($400,000) from
the Embassy in Stockholm. According to press accounts, the
suspect -- a Cypriot administrator -- had been forging
documents and signatures (including the Ambassador's) for at
least three years and transferring the funds to his personal
bank account to support an expensive gambling habit. MFA
officials reportedly offered a deal to the employee -- return
the money and no charges would be filed -- because the
suspect was also the key witness in an ongoing investigation
against Cyprus' former Ambassador to Sweden, Costas
Papademas. Last June, three female employees of the Embassy,
two local staff and one Cypriot diplomat, accused Papademas
of sexual harassment. Following an investigation, the Cyprus
police filed a total of 26 charges against the Ambassador.
After his arrest, Papademas was released on bail, but his
passport was confiscated and his name was added to the
stop-list at the airport. His trial should begin sometime in
May or June.


3. (SBU) One day after the March 30 announcement of the
embezzlement investigation in Stockholm, the Cypriot papers
reported that the MFA was also investigating the
disappearance of a dinosaur fossil from the Embassy in
Brussels. The fossil had been donated to the Embassy by a
former Greek mayor some five years ago. At a recent Embassy
reception, however, the donor noticed that his fossil was not
on display and he asked for an explanation. It turns out
that the fossil had never been registered as Embassy
property. Investigators suspect that a diplomat who was
working at the mission at that time took the fossil himself
and gave it to a relative in New York who was active in the
trade of antiquities and other archeological artifacts. It
is believed that the fossil in question is now in the hands
of a nameless private collector.


4. (C) This is just the tip of the proverbial iceberg. The
Cypriot MFA is a fundamentally unhappy and dysfunctional
place. Had Leo Tolstoy been a diplomat, he would have been
the first to observe that all unhappy embassies are unhappy
in their own way. Even so, two clear themes emerge
(unsurprisingly) from the list of recent scandals: sex and
money. The sex is mostly tawdry or coercive and the money
(Stockholm aside) is mostly chump change. We are aware of no
scandals stemming from disagreement over policy issues. With
apologies to Matt Drudge, Al Kamen and Liz Smith, some of the
highlights include:

-- In 2004, the Cypriot Ambassador to Moscow, Andreas
Georghiades, was recalled pending an investigation into
alleged irregularities related to hotel room charges.
Investigators concluded that Georghiades had charged the
government at the hotel's maximum rate when his own bills had
been reduced nearly 60% by the hotel management. Total gain
for Georghiades: $2,376. The Ambassador has since retired.
(Note: Georghiades' predecessor, Charalambos Ioannides, was
also recalled in 2002 in relation to alleged irregularities
in his expense accounts. Ioannides is currently serving as
director of the MFA's Middle East and North Africa
Department).

-- In July 2005, the MFA confirmed press reports that the
Cypriot Ambassador to Iran, Stavros Loizides, was under
investigation for both sexual harassment and embezzlement.
According to MFA officials -- many of them displaying the
unmistakable signs of schadenfreude -- the owner of an
Iranian travel agency had accused Loizides of making
inappropriate advances on two of his customers and one of his
employees. FM Iacovou publicly defended Loizides,
characterizing his invitation to a young Iranian female visa
applicant to wait in his private quarters while her
application was reviewed as nothing more than "an act of
politeness." In addition to the sexual harassment
complaints, Loizides is also facing nine charges related to
expense account padding. The investigation is ongoing.

-- In February 2006, the newspaper Politis reported that a
Cypriot Ambassador serving in a Central European country
posted a half-naked picture of himself on several gay-themed
internet sites along with solicitations for sexual partners.
The paper had been tipped off by an anonymous e-mail signed
only "a group of Christians." An investigation by the MFA
reportedly concluded that the Ambassador had been set up by a
professional rival, but he was nevertheless recalled to
Nicosia on March 1.

What's Going on Here?
--------------


5. (C) Cypriot diplomats receive little in the way of
administrative support or guidance from the home office.
They are responsible for making their own travel plans,
renting their own houses, and managing their own and their
embassies' affairs with minimal oversight. The system is
rife with abuse, and conflicts between employees and the
central system typically wind up in the courts. Reflecting
the litigious nature of Greek Cypriot society, the diplomatic
corps is quick to pull the trigger on a lawsuit over
everything from hiring, to assignments, to voucher
processing. The current head of the MFA's Legal Affairs
Division, Michalis Stavrinos, has filed no fewer than three
separate law suits against his employer.


6. (C) The systemic problems in the MFA are magnified by an
increasingly vicious and competitive culture in which ratting
out your colleagues is one of the swiftest and surest tickets
to personal advancement. Perched at the center of the web of
intrigue and infighting like some malevolent spider is the
MFA's Permanent Secretary, Sotos Zakheous. One MFA official
told us that the Ministry was prepared to pardon the
embezzler from the Swedish affair because he was a key
witness in the investigation into Papademas, who was himself
a potential rival to Zakheous. The Permanent Secretary makes
all personnel decisions below the level of Ambassador (and
has significant input into those appointments as well). Our
working-level contacts tell us that Zakheous uses this power
as both a form of patronage to reward his loyalists and a
cudgel with which to beat his rivals.


7. (C) Even senior officials with their own established
networks and bases of support -- such as Political Director
Thalia Petrides or Cyprus Question Division Director Erato
Marcoullis -- seem scared to cross him. We have heard from
some in the MFA that the Foreign Minister handles his
Permanent Secretary as one would a poisonous snake, carefully
and infrequently. Moreover, Zakheous has also taken personal
responsibility for the stepped-up intake of new junior
diplomats. Like replicates like, and the incoming crop of
MFA officials seems both loyal to Zakheous and remarkably
similar to him in style.


8. (C) Zakheous is a self-promoter of the first order.
President Papadopoulos declared to the Ambassador in their
last meeting that he regularly receives reports of meetings
with foreign officials directly from the Permanent Secretary.
His reports are invariably fulsome in describing Zakheous'
interventions but typically neglect to mention what his
foreign interlocutor had to say. That said, the President
went on to describe Zakheous as the best Permanent Secretary
the MFA has ever had even if "some of the time -- OK much of
the time -- he is too aggressive." Although he seeks to
cultivate a personal relationship with the Presidential
Palace, Zakheous is widely-regarded as an AKEL loyalist. It
was AKEL that reportedly insisted the Ministry accept
Zakheous as junior diplomat. One of Zakheous' cohorts from
the Cypriot MFA's equivalent of A-100 told us that "from day
one, we knew to be careful of this guy. He was politically
connected and seemed to be without any kind of ethical
compass."

Comment
--------------


9. (C) The MFA is hardly unique in laboring under the dark
cloud of scandals. Similar charges have beset other
ministries. The allegations against the MFA are the
juiciest, however, and the air of "international intrigue"
adds an additional layer of salacious appeal. Part of the
problem at the MFA is that the culture is changing. From
what we understand, Cypriot diplomats have always shaded the
truth in their expense reports. It is only recently that
this practice has come to make problems for them. Older
diplomats, in particular, have found it hard to adapt to
changing mores and standards.


10. (C) Meanwhile, the overall bilious atmosphere at the MFA
complicates our own efforts to urge the GOC to look beyond
the parochial Cyprus issue and engage more broadly with
global affairs. The diplomats in the MFA are reluctant to
take risks of any kind for fear of crossing their martinet
PermSec. It is far easier for the mid-level officials who
make the wheels turn at the MFA to keep their heads down and
maneuver for that cushy posting in Geneva.

SCHLICHER