Diana Salazar, the prosecutor spearheading Ecuador’s fight against ‘narcopolitics’

Attorney General Diana Salazar is the leading figure in Ecuador’s fight against “narcopolitics”. As the country’s top prosecutor, her revelations have already led to the arrest of several high-level officials, including judges and other prosecutors accused of involvement in organised crime linked to drug trafficking. 

Ecuador is waging a war against the rise of “narcopolitics” and the powerful drug gangs who have infiltrated the country’s political system. Leading the fight is Attorney General Diana Salazar, who has launched what she described as the country’s “largest operation against corruption and drug trafficking in history”. 

Nicknamed the “Ecuadorian Loretta Lynch” after the US attorney general who served under Barack Obama, Salazar launched “Caso Metastasis” – a vast investigation into collusion between drug traffickers and government officials – following the October 2022 death in prison of powerful drug lord Leandro Norero.

More than 900 people took part in the investigation, which resulted in more than 75 raids and 30 arrests in mid-December. 

Ecuador has descended into chaos in recent weeks, with drug gangs going on a violent rampage. Hundreds of prison staff were taken hostage, a TV station was attacked live on air and explosions were reported in several cities. The latest violence erupted soon after the escape from prison of notorious crime boss Jose Adolfo Macias, known as “Fito”, the leader of Los Choneros, the country’s biggest gang. Ecuador’s President Daniel Noboa said earlier this month that the country was in a “state of war” against the drug cartels behind the violence.

Most recently, a prosecutor investigating the brief siege of the TV station was shot dead on Wednesday in the port city of Guayaquil. 

In a statement on X following the murder, Salazar vowed to continue Ecuador’s fight against drug gangs, saying “organised crime groups, criminals, terrorists will not stop our commitment to Ecuadoran society”. 

Ecuador’s first Black, female attorney general 

A well-known figure on Ecuador’s anti-corruption scene, Salazar, 42, is the country’s first Black woman to hold the position of attorney general.  

She comes from the northern Andean city of Ibarra, where local media says she grew up in a modest family, raised by a single mother of four. 

Salazar moved to Quito when she was 16 for high school. At the age of 20, while still a law student at the Central University of Ecuador, Salazar began working as an assistant prosecutor in the Pichincha provincial prosecutor’s office. By 2011 she had become the public prosecutor for the southern part of the province. 

Salazar, who later started handling cases involving organised crime and corruption, came to prominence when she led the investigation into the “Fifa Gate” affair in 2015, resulting in a 10-year prison sentence for Ecuador’s former football chief Luis Chiriboga for money laundering.   

Salazar also helped prosecute Ecuador’s former vice president Jorge Glas, who was implicated in a corruption case against Brazilian construction company Odebrecht. 

Led by Salazar, the investigation revealed that Glas, who was sentenced to six years in prison in 2017, received $13.5 million in bribes from Odebrecht. 

“The Odebrecht affair was a real test for Diana Salazar,” said Sunniva Labarthe, a doctor in political sociology at the School for Advanced Studies in the Social Sciences (EHESS) in Paris. “A lot of people thought she would be quickly removed from office as a consequence, but she’s managed to hold her ground … It shows that she is a credible and stable figure.” 

Salazar was elected attorney general for the first time in 2019. “In Ecuador, the attorney general position – known as ‘the fiscal’ – has become extremely important and scrutinised since the ministry of justice was abolished in 2018,” Labarthe said.  

Salazar even went after former president Rafael Correa (2007-2017) who in 2020 was sentenced to eight years in absentia for corruption and who later fled to Belgium

In 2021 Salazar was given an Anti-Corruption Champions Award by the US State Department, which said her “courageous actions in tackling these cases have made immense contributions to transparency and the rule of law in Ecuador”. 

Operation Metastasis

In a video message addressed to the public in December 2023, Salazar said that her office had uncovered a “criminal structure” that involves judges, prosecutors, prison officials and police officers, following the investigation into Norero’s death.

Salazar’s team scoured chats and call logs from Norero’s cellphone and found links to high-ranking state officials who handed out favours in exchange for money, gold, prostitutes, apartments and other luxuries.  

The operation revealed the extent of the corruption and infiltration of drug trafficking into the highest levels of government in Ecuador. 

“Salazar deserves credit for having carried out her operation in the utmost secrecy, so as to prevent the drug traffickers from being informed of the arrests,” said Emmanuelle Sinardet, professor of Latin American civilisations at Paris Nanterre University.  

“Managing to keep an investigation confidential is no mean feat in a country where corruption and the influence of drug trafficking are deeply rooted in state institutions,” she said. 

Regularly receiving death threats, Salazar has since largely kept out of the public eye, only appearing on occasion in a bullet-proof vest or surrounded by security.  

Ecuador’s top prosecutor, however, remains undaunted.  

“Now come and kill me,” she taunted her enemies at a recent hearing requesting prison terms for eight suspects. 

“Salazar’s courage, knowing full well that she is risking her life to fight corruption, makes her popular and appreciated by Ecuadoreans,” according to Sinardet. 

While Salazar has been criticised for her ambition and her alleged connections to powerful interests, “in the face of the threats to her and her family, the public sees her as a figure of integrity and dedication to the common good”, Sinardet says. “She is seen as the judicial arm of the state’s fight to restore authority and order to the streets.”  

Labarthe said the threats against those battling drugs and corruption are real, and widespread.

“We must not forget that all the other people involved in the fight against corruption – including lawyers, judges, investigators and journalists – are also under threat,” Labarthe said, adding: “We can only hope that Diana Salazar stays alive.” 

This article was translated from the original in French.

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Is cryptocurrency helping Hamas fund terrorism?

The US and Israel have stepped up their efforts to limit cryptocurrency transfers to Hamas since the group’s brutal October 7 attacks on Israel. Bitcoin, Dogecoin and Ethereum are increasingly blamed as conduits of funding for Islamist groups, but to what extent is this justified?

In the wake of Hamas’s attacks on Israeli territory on October 7 that were unprecedented in scale, the role of digital currencies like Bitcoin and Dogecoin and crypto exchange platforms in financing the radical Islamist movement are increasingly under scrutiny.

On October 19, the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) proposed new regulations identifying “Convertible Virtual Currency Mixing (CVC mixing) as a class of transactions of primary money laundering concern … to combat its use by malicious actors including Hamas [and] Palestinian Islamic Jihad”.

These online services, known more casually as “mixers” or “tumblers”, mix cryptocurrency of illicit origin with other cryptocurrency funds. As such, “the risk of employing crypto mixers to launder money or conceal earnings is pretty considerable”, acknowledges crypto industry news site Cointelegraph.

Appeals for Bitcoin via Facebook, Instagram and Telegram

In the wake of the October 7 assault, the Israeli defence ministry claimed it had seized virtual wallets linked to Hamas that had received $41 million (€39 million) between 2019 and 2023. The Palestinian Islamic Jihad group, for its part, has raised $94 million (€89 million) in cryptocurrency in recent years, according to Elliptic, a British firm that analyses virtual currency transactions.

And that’s not all. Washington also decided on October 18 to sanction “Buy Cash”, a Gaza-based company accused of “facilitating” cryptocurrency transfers to Hamas and Palestinian Islamic Jihad.

“Hamas’s use of crypto first came to light in January 2019,” writes David Carlisle, co-founder of Elliptic, in a blog post published on October 11. The al-Qassam Brigades, Hamas’s armed wing, was caught red-handed while organising a call for Bitcoin donations via Facebook and Instagram

At first, these “funding 2.0” initiatives only raised a few thousand dollars, but Hamas has increasingly used social networks as funding channels ever since. And the Palestinian group formally listed as a terrorist organisation by the EU and the US is not alone in its actions. “Using crypto in conjunction with social media platforms – Facebook, Instagram, and I’ve seen Telegram mentioned recently – has become quite popular,” says Nicholas Ryder, a professor of law and specialist in terrorist financing networks at Cardiff University.

The recent attention paid to funds transferred to Hamas in Bitcoin and other cryptocurrencies may give the impression that without this windfall, the Islamist movement would be bankrupt or would, at least, have had a much harder time financing its attacks on Israel.

Secondary means

“There is a degree of hyperbole about this topic. It’s relatively new, has cachet and is unknown by many people, so of course it attracts attention. You cannot ignore it, but if you think about the pros and cons of [using it for] raising or moving funds, crypto is not the best,” says Tom Keatinge, director of the Centre for Financial Crime Research and Security Studies at the Royal United Service Institute, one of the UK’s leading think tanks on security issues.

For example, Hamas, which Forbes magazine ranked in 2014 as “one of the richest terrorist groups in the world”, has an estimated annual budget of nearly $1 billion. Most of the money comes from “expatriates or private donors in the Gulf region”, points out German news channel Deutsche Welle.

In this respect, the $41 million in cryptocurrencies seized by the Israeli authorities may seem like a drop in the bucket for Hamas. What’s more, these amounts should be taken with a grain of salt: it can be very difficult to separate funds intended to finance terrorist activities from others in a virtual wallet, Chainalysis, an American blockchain analysis company, notes in a blog post.

“[It’s] impossible to quantify how much money is transferred via crypto, but it has become a more and more prominent funding method,” says Ryder.

The rise of Bitcoin, Ethereum and Dogecoin in the world of terrorism can be explained first and foremost by the simplicity of making a transaction, notes Keatinge: “It’s easy, and I can make a donation from my couch at home.” It’s also much quicker than having to open a bank account and find intermediaries willing to transfer the fund. “You just need a smartphone and/or a laptop,” adds Ryder.

International authorities are also putting more effort into countering traditional terrorist financing channels, so these groups are trying to compensate with new ways of raising money. “The more we put pressure on traditional ways of financing, the more they’ll find alternative ways like crypto. And we are becoming better at fighting against the traditional means of financing. It’s like a balloon: when you squeeze one part, the other gets bigger,” says Keatinge.

Not so anonymous

Hamas, al Qaeda and Hezbollah don’t hesitate to combine the best of both worlds, either. For example, there can now be a cryptocurrency dimension to the use of fake NGOs, a classic means of funding for terrorist groups. “They can cut the top 10 to 15 percent and convert it into crypto, and then transfer it in order to make it more difficult to trace,” explains Ryder.

However, these movements’ interest in such new funding methods is not as strong as current media noise might suggest, because they are not ultimately as anonymous as we’ve been led to believe. “It may seem as though crypto is some kind of secret way to channel funds, but it has vulnerability. As soon as you start blockchain transactions, they are traceable. They’re not as secretive as many people think,” says Keatinge.

Indeed, all Bitcoin transactions pass through the blockchain, which is the digital equivalent of a ledger that is accessible to all. Admittedly, the names of those transferring or receiving the funds do not appear, but it is possible to track every movement of funds, and companies such as Chainalysis and Elliptic have become masters in the art of tracing their origin.

Of course, there are ways of making these transactions more anonymous, but they come at the expense of ease and speed – the main advantages of the use of cryptocurrencies for terrorists and other criminals. In the end, it’s still easier and more anonymous to hand-deliver suitcases full of cash.

This article is a translation of the original in French

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BRICS hypocrisy on offshore reform

Andrea Binder is a Freigeist fellow and research group leader at the Otto Suhr Institute of Political Science at Freie Universität Berlin and the author of “Offshore Finance and State Power.” Ricardo Soares de Oliveira is professor of the International Politics of Africa at Oxford University and is currently writing a monograph titled “Africa Offshore.”

Of all the challenges in global governance discussed at the latest BRICS summit in Johannesburg, the role of offshore financial centers should have loomed large. Instead, the issue barely got a noncommittal half paragraph on page eight of the summit’s 26-page declaration.

In an example of breathtaking hypocrisy, BRICS countries rail against the global financial architecture but offer no collective action on offshore banking, and they also continue to be among its major users themselves.

Data leaks such as the Pandora Papers and Panama Papers have shown just how vast amounts of cash end up in jurisdictions that cater to wealthy nonresidents by offering secrecy, asset protection and tax exemption. And according to economist Gabriel Zucman $7.8 trillion — or about 8 percent of global wealth (and 40 percent of corporate profits) — are currently hidden in such tax havens.

What’s interesting is that a considerable share of this originates from BRICS and other developing countries. The U.N. Conference on Trade and Development, for instance, estimates that $88.6 billion leave Africa every year in the form of illicit capital flight, much of it ending up offshore.

The fact that this offshore world is underpinned by the interests of the rich world and also a majorly exacerbates global inequality should fire up BRICS countries.

And certainly, they are quite vocal in denouncing the role of offshore finance: In the 2020 Moscow Summit declaration, for instance, BRICS member countries reiterated their “commitment to combating illicit financial flows, money laundering and financing of terrorism and to closely cooperating within the Financial Action Task Force (FATF) and the FATF-style regional bodies […], as well as other multilateral, regional and bilateral fora.” They have also rightly called out the West for setting up these mechanisms decades ago.

In practice, however, whatever global multilateral action is currently being taken is at the level of the G7 and the Organisation for Economic Co-operation and Development — even if these ambivalent reforms are often protective of the West’s offshore interests. BRICS countries, meanwhile, do almost nothing, despite being the largest global source of capital flight, according to a 2014 report by Global Financial Integrity.

And this lack of multilateral action perfectly aligns with the way individual BRICS countries have engaged with the offshore world thus far.

Brazil currently stands as the world’s second largest borrower from offshore financial markets. India long accepted a double-taxation agreement with Mauritius, which enabled significant foreign direct investment and tax avoidance by the wealthy until 2016. The country also created of an offshore financial center in Gujarat. Meanwhile, Russia’s hydrocarbons are traded through opaque offshore jurisdictions, and its elites have notoriously thrived in such systems. Then, there’s perhaps the most significant — and counterintuitive — stakeholder in the offshore world, which is China. Its state-owned enterprises are major users of jurisdictions like the British Virgin Islands, where they register secretive subsidiaries.

In short, BRICS countries are just as implicated in the offshore world as the Western economies they lambast. The reality is that their governments and political elites both benefit from and need the offshore financial world — and there are four reasons for this:

First, these countries engage in institutional arbitrage by accessing more efficient institutions — and, sometimes, institutions that don’t exist domestically, like credible contracts or a non-political judiciary — offshore.

They also seek access to cheaper and less constrained financing in offshore money markets, where they get access to the U.S. dollar and international investors that are unavailable onshore.

Heavily hit by sanctions — as in the case of Russia since 2022 — the offshore world is also a lifeline for BRICS countries, allowing for the circumvention of punitive measures.

And finally, BRICS elites frequently use such facilities for their own personal purposes, including hiding illicit money and assets.

Thus, closing these discretionary offshore avenues may well have implications for their personal survival — or the survival of their regimes.

This is why multilateral action from BRICS members remains rhetorical at best. And unilaterally, they either do nothing, or selectively implement anti-offshore measures as political tools of regime consolidation and to punish rivals. While continuing to criticize the West, they also voice few qualms regarding the thriving offshore roles of Hong Kong, the United Arab Emirates or Singapore.

The latest summit declaration’s vague language of “international cooperation” and “mutual legal assistance” simply highlighted all this once more, and it even eschewed the previous declaration’s references to the FATF or anything smacking of coordination with the West.

And while de-dollarization was again bandied about, BRICS countries remain keen on access to offshore dollars. Moreover, several of the bloc’s newly admitted states have deeply problematic records when it comes to money laundering and illicit financial flows. This is especially true of the UAE — an aggressively growing offshore financial center with dense layers of secrecy, and which the FATF placed on its “grey list” due to “strategic deficiencies” in its efforts to counter money laundering.

Given all this, what are the chances of BRICS-initiated reform in this area? Realistically, the only reason they would take action is because they care about their own regime stability. Though offshore mechanisms may seem like useful short-term levers, their long-term impact is likely to have troubling consequences for their economies. In time, offshore finance supercharges inequality and begets financial instability, which can lead to the toppling of regimes. Brazil experienced this first-hand in the 1982 financial crisis, which had a significant offshore component.

Of course, Russia’s dependence on offshore financial facilities to circumvent sanctions means it can be written off as reformer. But one would hope that some of the others might belatedly come to see an enlightened self-interest in going beyond their rhetoric.

For now, however, even this seems highly unlikely as, in the immediate future, the availability of offshore services continues to come in handy, while their negative impact on domestic inequality remain largely hidden from public view.

Besides, fighting domestic inequality isn’t really a major concern for many of these governments anyway.

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How Sh72bn hard cash inflow put Kenya on dirty money watch


How Sh72bn hard cash inflow put Kenya on dirty money watch

Currency in dollars that was nabbed at JKIA on October 7, 2022. PHOTO | POOL

Massive movement of hard cash into Kenya, mostly in US dollars, prompted a regional anti-money laundering watchdog to issue a damning verdict on the country’s preparedness in the fight against dirty cash.

The Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), which monitors how the region is implementing global measures against dirty cash, notes that Kenya received a suspect Sh72.2 billion in cash in the four years to 2021 that was not sufficiently explained.

The agency has in its report now asked the Kenyan government to strengthen its strategy in the fight against money laundering and terrorism financing or risk being grey-listed, a decision that would hurt the standing of Nairobi as the financial centre of the region.

Read: Banks to access secret State database in dirty cash fight

The report says its analysis of the cross-border currency movement revealed that between 2017 and 2021, a total of $1.85 billion (Sh262 billion), €6.97 million (Sh1 billion), £7.80 million (Sh1.4 billion) and Sh482.84 million had left Kenya in cash.

In the same period, Kenya received $455.35 million (Sh64.4 billion), €34.34 million (Sh5.3 billion), £11.69 million (Sh2.1 billion) and Sh482.84 million. This adds up to about Sh72.2 billion using the current exchange rates.

The main port of entry for this cash was Jomo Kenyatta International Airport (JKIA). Kenya attributed the huge cross-border physical movement of cash to the robustness of its financial system as many financial institutions across the region channel their financial needs through it.

Kenya is a gateway into the region and also a financial hub with its commercial banks having operations in a number of the neighboring countries.

For example, Kenyan banks engage cash in-transit courier companies to move physical cash to their foreign branches.

“Also, several international humanitarian agencies, NGOs, agencies and embassies based in Kenya move physical currency within the region. Cash is preferred to electronic transfer to address liquidity challenges in those jurisdictions,” said ESAAMLG in the mutual evaluation report for Kenya.

The assessment team noted that while the reasons given may be legitimate for the outflow, they could not explain the dollar inflows.

“While this may be a legitimate purpose of the USD outflow, the same reason cannot apply in relation to USD inflow and movement of Kenyan shillings in both directions,” the report said.

The assessment team, which came to Kenya between January 31 to February 11, 2022, for an onsite visit, was concerned that the Financial Reporting Centre (FRC) was not sufficiently analysing the cash transaction reports to develop patterns or linkages to any possible offences leading to money laundering or terrorism financing.

“In view of this, the AT (assessment team) is of the view that the FRC should still analyse the data for strategic purposes to confirm the validity of the source and destination as well as the purpose of the funds,” the report noted.

Kenya is far ahead of its regional peers in the East African Community—Tanzania, Uganda, South Sudan and Tanzania— which are all on the grey list, meaning they are under increased monitoring when it comes to risks of money laundering and terrorism financing. But experts note that the gaps exposed by the report could hurt its efforts.

“I think we have a robust system of monitoring because banks have to report. But nothing is foolproof, there is a need for enhancement,” said Bernard Kiragu, the managing partner at corporate governance consultancy firm Scribe Services.

According to Mr Kiragu, although most of the money comes into the country in cash, they ultimately end up in banks, where cash transactions of amounts of $10,000 and above are vetted for anti-money laundering and combating the financing of terrorism (AML/CFC).

“Cash transactions are very rare. I don’t expect someone would do really much in cash. By and large, the money still ends up in banks. So we are not that bad,” added Mr Kiragu, noting that there is a need for enhanced training of bank staff.

This comes at a time Kenya is making changes to the law to increase the reporting threshold by 50 percent to $15,000.

Kenya avoided being grey-listed like Uganda and South Africa. However, it was asked to expedite the listing of lawyers and notaries as reporting agencies.

“Kenya has not demonstrated that competent authorities conducting investigations of money laundering, associated predicate offences and terrorist financing are able to ask for all relevant information held by the Financial Intelligence Unit (FIU),” noted the evaluation report.

The FRC is expected to receive a cross-border currency declaration report from the Kenya Revenue Authority (KRA) for currency coming in and out of the country that is more than $10,000.

The details in the report include the traveller, the means of transport, the destination and amounts in various currencies.

Customs officials have intercepted individuals, both nationals and foreigners, with huge sums of unexplained cash that the government fears are illicit.

The law requires cash of $10,000 (Sh1.42 million) and above to be declared in what is aimed at fighting money laundering.

In October last year, customs officials arrested six women who had concealed $857,300 (Sh122 million) in luggage containing shoes and clothes at the Customs Area at the JKIA.

“As usual, the bags were scanned to establish what they contained,” said the KRA in a statement.

Read: Kenyans abroad avoiding banks on sending money home

In February last year, a Kenyan man travelling from Burundi was arrested at the same airport with $2 million (Sh284.6 million) in foreign currency, which he did not declare as required by law.

In November 2021, the KRA and Posta officials said they had recovered $28,000 (Sh3.1 million) concealed in a jacket shipped into the country as a parcel from South Carolina State, USA.

Posta staff working jointly with the KRA customs officials based at City Square Post Office, Nairobi recovered the money in a suitcase containing clothes and books sent to a Nigerian national.

In December 2020, a Nigerian national Mauzu Bala, was arrested by the Assets Recovery Agency (ARA) with over Sh100 million — in 880,000 US dollars, 60,000 euros and 63,000 Nigerian naira — stacked in his handbag.

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Eva Kaili is back with a new story: There’s a conspiracy

ATHENS — Eva Kaili is spinning up a new, eyebrow-raising narrative: Authorities might have targeted her because she knew too much about government spying.

After months of silence during her detention and house arrest, the most high-profile suspect in the cash-for-influence Qatargate scandal was suddenly everywhere over the weekend. 

Across a trio of interviews in the European media, the Greek European Parliament member was keen to proclaim her innocence, saying she never took any of the alleged bribes that authorities say countries such as Qatar and Morocco used to sway the Brussels machinery. 

But she also had a story to tell even darker than Qatargate, one involving insinuations of nefarious government spying and suggestions that maybe, just maybe, her jailing was politically motivated. Her work investigating the illegal use of Pegasus spyware in Europe, she argued, put her in the crosshairs of Europe’s own governments. 

“From the court file, my lawyers have discovered that the Belgian secret services have allegedly been monitoring the activities of members of the Pegasus special committee,” she told the Italian newspaper Corriere Della Sera.

“The fact that elected members of Parliament are being spied on by the secret services should raise more concerns about the health of our European democracy,” she added. “I think this is the ‘real scandal.’”

As Kaili reemerges and starts pointing the finger back at the government, the Belgian prosecutor’s office has decided to remain mum. A spokesperson on Monday said the prosecutor’s office was “not going to respond” to Kaili’s allegations. 

“This would violate the confidentiality of the investigation and the presumption of innocence,” the spokesperson added. “The evidence will be presented in court in due course.”

But her PR blitz is nonetheless a likely preview of Qatargate’s next chapter: The battle to win the public narrative.

A European media tour

In addition to her interview with the Italian press, Kaili also appeared in the Spanish and French press, where she expanded on her spying theory. 

In a video interview with the Spanish newspaper El Mundo, Kaili said her legal team has evidence the entire PEGA committee was being watched illegally, arguing she does not know how the police intercepted certain conversations between her and other politicians. 

“I was not spied on with Pegasus, but for Pegasus,” she said. “We believe Morocco, Spain, France and Belgium spied on the European Parliament’s committee,” she told El Mundo.

Kaili’s assertions have not been backed up by public evidence. But she didn’t equivocate as she pointed the finger.

“The fact that security services surveilled elected members of Parliament should raise enormous concerns over the state of European democracy,” Kaili said. “This goes beyond the personal: We have to defend the European Parliament and the work of its members.”

Kaili was jailed in December as part of a deep corruption probe Belgian authorities were conducting into whether foreign countries were illegally influencing the European Parliament’s work. Her arrest came after the Belgian police recovered €150,000 in cash from her apartment — where she lived with her partner, Francesco Giorgi, who was also arrested — and a money-stuffed bag her father had.

The Greek politician flatly dismissed the charges across her interviews.

“No country has ever offered me money and I have never been bribed. Not even Russia, as has been alleged,” she told El Mundo. “My lawyers and I believe this was a police operation based on false evidence.”

According to her arrest warrant, Kaili was suspected of being “the primary organizer or co-organizer” of public corruption and money laundering.

“Eva Kaili told the journalist of ‘El Mundo’ not to publish her interview, until she gave them the final OK; unfortunately, the agreement was not honored,” her lawyer Michalis Dimitrakopoulos said on Monday.

Flying in on a Pegasus (committee)

The allegations — Kaili’s first major push to spin her arrest — prompted plenty of incredulity, including from those who worked with her on the Pegasus, or PEGA, committee. It especially befuddled those who recalled that Kaili had faced accusations of undermining the committee’s work. 

“I have absolutely no reason to believe the Belgian intelligence services spied on PEGA,” said Dutch MEP Sophie in ‘t Veld, who helped prepare the committee’s final report. “Everything we do is public anyway. And we have our phones checked regularly, it makes absolutely no sense.”

Kaili’s decision to invoke her PEGA Committee work is intriguing as it taps into a controversial period of her career. 

While the panel was deep into its work in 2022, Greece was weathering its own persistent espionage scandal, which erupted after the government acknowledged it had wiretapped the leader of Kaili’s own party, Pasok. 

Yet Kaili perplexed many when she started publicly arguing in response that surveillance was common and happens across Europe, echoing the talking points of the ruling conservative government instead of her own socialist party. She also encouraged the PEGA panel not to visit Greece as part of its investigation.

The arrest warrant for MEP Andrea Cozzolino also mentions the alleged influence ringleader, former Parliament member Pier Antonio Panzeri, discussed getting Kaili on the PEGA Committee to help advance Moroccan interests (Morocco has been accused of illegally using the spyware).

A war of words?

Kaili’s media tour raises questions about how the Qatargate probe will unfold in the coming months. 

Eventually, Kaili and the other suspects will likely face trial, where authorities will have a chance to present their evidence. But until then, the suspects will have a chance to shape and push their preferred narrative — depending on what limits the court places on their public statements.

In recent weeks, Kaili has moved from jail to house arrest to an increasingly unrestricted life, allowing her more chances to opine on the case. Her lawyers also claim she will soon be back at work at the Parliament, although she is banned from leaving Belgium for Parliament’s sessions in Strasbourg.

Pieter Haeck, Eddy Wax, Antoaneta Roussi and Barbara Moens contributed reporting.

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Not just Qatargate: Eva Kaili also faces probe into EU kickbacks scheme

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Qatargate aside, Eva Kaili is facing a world of pain for a different reason altogether. 

Documents seen by POLITICO reveal fresh details about a separate criminal investigation that the Greek EU lawmaker is facing regarding allegedly fraudulent payments involving four former assistants in the European Parliament from 2014 to 2020. 

The probe is looking at Kaili for three potential fraudulent activities: whether she misled Parliament about her assistants’ location and work activities; took a cut of their reimbursements for “fake” work trips she orchestrated; and also took kickbacks from part of their salaries, according to a letter from the European Public Prosecutor’s Office (EPPO) to Parliament President Roberta Metsola, seen by POLITICO. 

Another Greek EU lawmaker, Maria Spyraki, has also been part of the same probe. Investigators accuse her of misleading the institution about her assistants’ activities and of telling them to file expenses for fake work trips. However, the documents do not allege that Spyraki took kickbacks from salaries or false reimbursements.

In total, investigators say Kaili owes the European Parliament “around €100,000,” according to a person familiar with the case.

The details offer the first real insight into the inquiry since it became public in December, only days after Kaili was put in jail under suspicion that she was involved in an even bigger scandal, Qatargate — the alleged bribery ring that prosecutors say involved countries such as Qatar and Morocco paying off European Parliament members.

And with all Qatargate suspects now out of detention, and no new arrests since February, attention is now shifting to the fraud case. MEPs in the Parliament’s legal affairs committee will discuss Kaili’s case behind closed doors for the first time on Tuesday. 

Kaili, who was moved to house arrest earlier this month, is currently fighting the prosecutor’s request to strip her immunity — a privilege afforded to EU lawmakers. But the EU prosecutor’s office, which investigates criminal fraud linked to EU funds, has argued its probe is on solid ground.

“The current investigation pertains to strong suspicions of repeated fraud and/or other serious irregularities,” European Chief Prosecutor Laura Kövesi said in the letter seen by POLITICO, which was sent to Parliament in December and requested both Kaili and Spyraki be stripped of their immunity. 

EPPO declined to comment on the case for this article. Kaili, through an attorney, said she has promised to pay back any money owed and to comply with any recommendations. Spyraki told POLITICO that her case has nothing to do with Kaili, and she confirmed she has never been accused of taking kickbacks.

“I have no dispute on the budget based on my responsibility as supervisor,” she said. “I have already paid the relevant amount and I have already asked the services to reassess my case financially.”


The European prosecutor went public about the fraud inquiry on December 15, just days after Kaili had been arrested in Brussels in connection with Qatargate. 

The notice named both Kaili, who belonged to the center-left Socialists and Democrats grouping, and Spyraki, a former journalist and former spokesperson for the center-right Greek party New Democracy, which is affiliated with the large European People’s Party group in Brussels.

The announcement came the same day Kövesi sent her immunity-lifting request to Metsola. The documents also named four former staffers of Kaili and two former assistants to Spyraki as potentially participating in the different schemes. 

But officials publicly offered few specifics about the inquiry, only noting that it was unrelated to the Qatargate affair, which had also ensnared Kaili’s life partner Francesco Giorgi, as well as several other current and former EU lawmakers. 

Now the details are starting to emerge. 

According to the letter seen by POLITICO, the EPPO probe is examining both Kaili and Spyraki over irregularities regarding their assistants’ “physical presence at the place of employment” and “related European Parliament decisions on working time.”  

According to the same letter, another line of inquiry is “fake missions, submission of false supporting documents and undue reimbursement claims for missions expenses by the APAs on the request of Ms Kaili and Ms Spyraki.” APA is an acronym for accredited parliamentary assistant.

Eva Kaili poses for the “MEPs for #millennialvoices”campaign in 2016 | European Parliament

Kaili specifically is also under investigation for receiving “payback” from her assistants’ salaries and the falsified expenses.

The public prosecutor’s probe follows an investigation by the EU’s anti-fraud office, known as OLAF, which was completed on November 23 of last year. OLAF then transferred its case to EPPO, it said in a December statement.

OLAF said it would leave any follow-up to the public prosecutor’s office, declining to comment beyond its statement four months ago. 

Immunity fight

The EPPO case is also becoming entangled in the fight over whether to lift Kaili’s immunity.

Immunity is a special privilege MEPs enjoy that is intended to protect them from being arbitrarily prosecuted for what they say or do as EU lawmakers. It can be waived following a recommendation by the legal affairs committee and a vote by all MEPs.

Parliament is now starting that process for Kaili, having already kicked it off for Spyraki. MEPs will discuss Kaili’s immunity at the legal affairs committee gathering on Tuesday.

Investigators say Kaili owes the European Parliament “around €100,000” | European Parliament

Spyros Pappas, Kaili’s lawyer, argued that typically, such fraud cases are closed after OLAF finishes its probe — as it did with Kaili — with the lawmaker paying back whatever the office says is owed. He also questioned how officials could justify lifting immunity for actions that stretch back to 2014. 

“One cannot but question both the legality and the opportunity of the initiative taken by EPPO,” he said. “The answer can only be given by the General Court of Justice of the EU.”

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