Court Acquits Papandreou of All Charges in Scandal

A special 13-judge criminal court in Athens early today acquitted former Greek Prime Minister Andreas Papandreou of all charges against him in a $200-million financial scandal that was instrumental in driving his Socialist government from office in 1989.

In dramatic conclusion to the most spectacular corruption trial in recent Greek history, the court found Papandreou innocent of masterminding an embezzlement at the privately owned Bank of Crete through the misuse of government funds. It also acquitted him on separate charges of accepting bribes and of arranging to have the debts of a friend paid by the government.

After a 10-month trial in which 109 witnesses generated only circumstantial evidence, the verdict is bound to exacerbate already stark political divisions in Greece. As ever, bitterly and almost evenly divided between left and right, Greece is also wrestling unhappily with a deep-seated economic crisis that has made it the sick man of Europe.

The narrow decision by the panel of Supreme Court and Appeals Court judges will be a bitter pill for conservative Prime Minister Constantine Mitsotakis, who personally spearheaded the campaign to indict Papandreou after eight years of assertive Socialist rule.

Papandreou, 72, who labeled the trial against him and three of his former ministers a political vendetta, is demanding new elections. Opinion polls before the verdict showed him leading Mitsotakis.

By a vote of 7-6, the court found Papandreou innocent of ordering government officials to deposit money at the bank owned by overnight tycoon George Koskotas, who is himself awaiting trial.

“From no evidence did it arise that the defendant knew that Koskotas was embezzling funds from the Bank of Crete,” the court ruled. Neither, the judges found, did the government prove its accusation that Papandreou accepted bribes from Koskotas with money stolen from the bank.

When the trial ended, most court observers felt that the government had failed to produce direct evidence linking Papandreou to what became the biggest scandal in Greek history. Koskotas, the government’s star witness, claimed that he had paid bribes to Papandreou but failed to deliver what he had promised.

Papandreou--a former UC Berkeley economics professor and an acerbic Socialist, scornfully refused to attend the trial. He was not present for the verdict.

He was indicted by a short-lived conservative-Communist alliance that ruled until Mitsotakis won his slender majority.