Koskotas scandal

Koskotas scandal (Greek: Σκάνδαλο Κοσκωτά) was a corruption and financial scandal in 1989 Greece centered on George Koskotas, owner of the Bank of Crete and media magnate, implicating the highest-ranking members of the Greek government, including Prime Minister Andreas Papandreou.^[1]

Koskotas' alleged that 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. In return, Koskotas supported Papandreou's political party (PASOK) through his magazines and newspapers, some of which were bought with embezzled money.^[2][3] The revelation caused considerable political turmoil, with six ministers resigning in protest.^[4] A judicial inquiry revealed additional scandals,^[5][6][7] further deepening the public disillusionment with the populist government of Papandreou.

Papandreou lost the June 1989 Greek parliamentary election, owing much to the Koskotas scandal.^[8] This led to a collaboration between conservative New Democracy and radical-left Synaspismos political parties to form a government and decide on the indictment of Papandreou and his ministers. This collaboration was novel for Greek society since they were on opposite sides in the Greek civil war, and it was marked as a healing process.^[1][9][10] The trial occurred two years later and lasted nine months with live broadcast dominating the news cycles and public discourse. Koskotas and Papandreou's ministers were found guilty; one of the ministers had a heart attack on live TV and died a few days later. Papandreou was acquitted by one vote.^[11][1][12] The trial is considered one of the most significant trials of modern Greece.^[13]

The scandal marked a turning point in Papandreou's populist government, which has controlled the state apparatus since 1981. The year 1989, in which the scandals were revealed out of the Koskotas scandal, is called "dirty 89".^[14]