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The Alternate Minister of Interior and Administrative Reconstruction, Giorgos Katrougalos, is going through a tough ordeal. A To Vima publication has alleged that Katrougalos has signed private contracts with hundreds of civil servants, who were made redundant, and took 12% from their compensation – which might amount to 3 years’ wages – as commission for reappointing them.

The law provides 25% of the salary as compensation for every civil servant who is laid off and then reappointed, for the whole period of redundancy. To Vima claims that Katrougalos has made such contracts with at least 300 laid off government employees. The contracts have a clause whereby 12% of this compensation, when received, goes to Mr Katrougalos as attorney fees.

The article says that these private contracts were signed after Katrougalos became alternate minister in charge of administrative reform, hence of employees who were made redundant or are in a standby mode.

Contracts lodged with tax and attorney offices on 26th and 27th January, 2015

On these two dates, scores of private contracts were submitted to tax offices and the Bar by public sector employees who were either laid off or put in a standby mode. This was done to officially certify the contracts, whereby Giorgos Katrougalos and his law firm were hired to protect the interests of these employees.

What do the contracts provide?

Through such a contract, a public sector employee authorises the law firm to make a claim against the state: if satisfied, the employee will receive the margin between his/her former public sector remuneration and his/her income after the employee was laid off. The latter will cover the cost of litigation. An upfront amount of €200 is also paid.

Katrougalos’ interest: fully warranted

Ever since Mr Katrougalos was appointed to his government job, he was automatically debarred as a lawyer. On 27th of February he shut down his law firm. But, claims To Vima, he took the pains to warrant his rights as soon as he quits the government and goes back to his law practice. The last clause of the private contracts provides that if the Ap. Papaconstantinou - G. Katrougalos - N. Hlepas & Associates Law Firm and Partners shuts down, the powers stemming from those contracts will transfer to G. Katrougalos.

Katrougalos: this is slander, provocations and false claims

At the press conference launched specifically as a response to the allegations, Katrougalos qualified them as slanderous and provocative. "Had I signed the contracts, I should have left the country and committed suicide rather than just hand in my resignation." Katrougalos also said he would demand €10,000 as compensation from To Vima.

As far as the contract of January 27^th (published by the paper) is concerned, Katrougalos says it does not refer to a reappointment, but arranges a small fee margin instead. Plus, it was signed by his associate rather than by he himself.

Asked how come he signed a contract implying a claim against the state at a time when he already held a position in the new government, Katrougalos replied it was a minor case, which had been dealt with by his associate before Katrougalos himself had even realised he would be a government minister. But even if he had known, Katrougalos said, he would have authorised the contracts.

The government stands behind Katrougalos

Prime Minister Tsipras has already spoken with Katrougalos and asked him for explanations. Reportedly, the alternate minister pledged To Vima’s claims were fake. According to government sources, his explanations were deemed sufficient and his resignation was no longer considered. In a statement, the government expressed its support for Katrougalos and urged the opposition parties to withdraw their declarations against him.

PASOK and Kyriakos Mitsotakis demand Katrougalos’ resignation

Meanwhile, PASOK urged Tsipras to sack Katrougalos. So did the former minister of administrative reform, Kyriakos Mitsotakis. The latter argued that if Katrougalos failed to provide clear explanations, Prime Minister Tsipras would be obliged to dismiss him.

New Democracy: Now everyone knows what the implications are of the radical left running the country for the first time

The press secretary of New Democracy, Costas Karagounis, said:

If this is all true, Katrougalos must resign. At the end of the day, ‘hope’ has proven to be a business transaction with a 12% price tag. Although underwritten by the taxpayer, the minister is the one who will cash in on it. Instead of appointing young and capable people, we will reappoint our own guys with compensations. Now everybody knows what the implications are of the radical left running the country for the first time.

Potami: the ‘Katrougalos’ case is a big issue

Potami qualified the case as a big problem necessitating explanations by the minister, and the Premier taking adequate measures.