Greek parliament to probe 2007 bond issue scandal

* Probe of 280 mln euro govt bond issue backed by JP Morgan

* Inquiry part of crackdown on graft hitting state coffers

ATHENS, June 23 (BestGrowthStock) – Greek lawmakers have decided to
investigate a bond scandal that helped topple the country’s
previous conservative administration as part of a campaign to
clean up politics soiled by decades of corruption.

Widespread corruption is seen to have contributed to a debt
crisis gripping Greece. Hard-pressed by a new government
austerity programme of tax increases and spending cuts to reduce
debt, Greeks are demanding retribution for graft.

A parliamentary investigative committee will present its
findings on October 4, according to records of a debate
published on the parliament’s website after political parties
unanimously agreed to the move late on Tuesday.

The probe will focus on a 280 million euro ($375.7 million)
structured government bond issued in February 2007, underwritten
by JP Morgan (JPM.N: ), that passed through several brokers before
ending up with state-run pension funds at inflated prices.

Following published reports about the situation, the pension
funds reached a deal with JP Morgan to have the transaction
reversed and the investment bank bought back the bonds.

Several such structured notes, underwritten by other banks,
had been sold to Greek pension funds.

“Setting up this committee is an act of responsibility, of
transparency, and democracy. If we didn’t do it, we would bring
the political system in disrepute,” said Christos Papoutsis,
leader of the ruling Socialist Party’s parliamentary group.

Two other investigative committees are looking into a
suspicious land swap deal with a Greek Orthodox monastery and
into whether German engineering giant Siemens (SIEGn.DE: ) may
have bribed and misled government officials to win deals,
including the security contract for the 2004 Olympics.

There are parliamentary and judical investigations going on
regarding Siemens, and a Greek prosecutor has filed charges in
that case. Siemens says it is fully cooperating with Greek
justice authorities and has not commented further.

Siemens ended one of the biggest corporate corruption
investigations in history when it agreed in 2008 to pay about 1
billion euros in fines and penalties as a result of U.S. and
German investigations into bribes paid to obtain contracts.

Prime Minister George Papandreou has said that parliament
will also investigate how Greek finances deteriorated to the
verge of bankruptcy, leading to a 110-billion-euro bailout by
the European Union and the International Monetary Fund.

Investigative committees are the first part in a long
parliamentary process that can ultimately lead to the trial of
sitting or past government ministers by a special court.

However, Greece’s very restrictive statute of limitations
for government ministers makes it hard to prosecute politicians
for crimes committed before September 2007.

Stock Market Investing

(Reporting by Harry Papachristou; Editing by Ingrid Melander
and Mark Heinrich)

Greek parliament to probe 2007 bond issue scandal