Vatopedi Monastery - Land Deal Controversy

Land Deal Controversy

In September 2008, the monastery was implicated in a real estate scandal. The monastery is being accused of trading low-value land for high-value state property in a deal with the New Democracy government of Prime Minister Kostas Karamanlis. The cost to the state is believed to have been at least €100 million.

The financial writer Michael Lewis reports that a Greek parliamentary commission estimated the value of government property received by the monastery at one billion euros. Seen as the "poster children for greed and corruption," Michael Lewis, in his book Boomerang, compares Father Arsenios and Father Ephraim, respectively, to the Enron executives Jeff Skilling and Ken Lay. Lewis details the building of a commercial real estate empire worth about $1 billion in efforts to restore Vatopedi to its former glory.

After the story became public in August 2008, the government cancelled the land deals and two ministers resigned, under huge pressure from the media and public. Additionally, Parliament voted unanimously to set up a commission to investigate the deal. However, after investigations, the estimations of the public agencies for the exchanged real estate objects were found to have been in order.

In December 2010 a Court of Appeals found guilty and imposed a ten-month imprisonment (with three years suspension) to ex-judge Maria Psaltis on charges of misconduct and violations of judicial secrecy. The same penalty was issued to Abbot Ephraim and monk Arsenios on instigation. As of December 2011, 3 years after the reveal of the alleged scandal, none of the two different investigating parliamentary commissions and various trials had found any of the persons involved guilty of illegal money transactions or real estate fraud. Then, in late December 2011, the Abbot Ephraim was arrested, and jailed pending trial, for alleged fraud and embezzlement.

On January 11, 2012, the Criminal Division of the Supreme Court accepted the proposal of the Deputy Prosecutor of the Supreme Court Law Mr. Tsangas: it set aside the decision under which Psaltis, Ephraim, and Arsenios had each been sentenced to 10-month imprisonment (with three years suspended). The Supreme Court considered that the contested decision of the Court of Appeals had no legal justification and presented logical gaps, inconsistencies, and shortcomings. Moreover, the Supreme Court ruling that any disclosure of the outcome of the conference only a court is no longer a criminal offense, which means that the three defendants will be treated under more favorable conditions when judged again by the court.