Tuesday, February 11, 2020

Andreas Georgiou - Was It 'Breach Of Duty‘?

The story of Andreas Georgiou has been told many times in the international media because it is such a good story, albeit a very sad one. Georgiou was Director of ELSTAT, Greece's national statistics agency, for 3 years from August 2010 - August 2015. He was commended by Eurostat for having been the first Greek head of statistics who provided what Eurostat considered 'correct figures'. That got Georgiou into trouble with certain quarters of Greek officialdom and he was sued for several alleged crimes, e. g. by-passing ELSTAT's board of directors when reporting statistics to Eurostat, falsifying statistics, slander of predecessors, etc. As far as I know, most cases are still pending final judgment (correction: on the charge of failing to obtain board approval before reporting statistics to Eurostat, the Supreme Court, in June 2018, upheld the previous judgment of a suspended 2-year sentence, i. e. final judgment).

The Greek judiciary's treatment of Georgiou has triggered an international uproar. It seemed so obvious that Georgiou was being persecuted for telling the truth while no one had problems with his predecessors' having told lies. The latter was well described by the Icelandic journalist Sigrún Davídsdóttir in her article "Lies, damned lies and Greek statistics".

Thomas Cool, an econometrician and teacher in mathematics in Scheveningen, Holland, has now brought a new perspective to my attention (Cool uses the name Colignatus in science to distinguish this from his other activities in commerce or politics. See his website).

Colignatus argues that at the heart of the issue is Georgiou's by-passing the supervisory board when reporting figures to Eurostat. To recall: for the year 2009, Greece had submitted a budget to Eurostat indicating a budget deficit of 3,4% of GDP. This was subsequently corrected to about 6% but it stayed at that level until Giorgos Papandreou assumed power in late 2009. The new Finance Minister, Giorgos Papakonstantinou, shocked the world by revealing that the true budget deficit would be roughly twice that level. Eventually, he submitted a provisional figure of 13,4% to Eurostat. All of this happened prior to Georgiou's assuming the job of Director at ELSTAT.

In November 2010, 3 months after assuming his job, Georgiou reported to Eurostat a budget deficit of 15,6% for 2009, i. e. slightly higher than the previously reported 13,4%. He did so without first seeking board approval. Some commentators considered this merely a 'procedural matter', emphasizing that the European Statistics Code of Practice states that the heads of national statistical agencies 'have the sole responsibility for deciding on statistical methods, standards and procedures, and on the content and timing of statistical releases'. I, too, would have considered it as such a procedural matter because the substance of the report was not at issue.

The Greek judiciary has taken a different view: Greek laws were in place and Greek laws were broken, thus, a serious 'breach of duty' had occurred. The courts handed Georgiou a suspended 2-year sentence. Georgiou's appeal is pending (correction: sentence was confirmed by Supreme Court in June 2018).

Colignatus provides convincing evidence that (a) the law under which ELSTAT had been founded earlier in 2010 clearly stated that board approval was required prior to any outside reporting of statistics and that (b) the Statistics Code of Practice in force at the time (and since 2005) did not assign sole authority to national directors of statistical agencies. Colignatus provides rather convincing circumstantial evidence that Georgiou and his counterparts at Eurostat were well aware of this and colluded in the attempt to circumvent such board approval. Viewed from that standpoint, it was a clear 'breach of duty‘.

Colignatus argues that the above 'breach of duty', for which Georgiou is solely responsible, was at the heart of the issue because it then triggered all the other follow-up complaints and law suits. Colignatus further argues that both Eurostat and Georgiou are well aware that a violation of the law ('breach of duty') has occurred which is why they emphasize in their defense that Georgiou has never falsified statistics. This primarily in order to deflect attention from the main issue, the 'breach of duty'.

I have had lengthy exchanges with Colignatus about his position. My initial reaction was that it is rather irrelevant whether or not Georgiou by-passed his board when reporting statistics to Eurostat. The critical issue was (or should have been) whether or not his statistics were correct. Eurostat, as the final authority on statistics in the EU, confirmed (and complimented!) the quality of Georgiou's statistics and that was really all that mattered.

Having pondered the issue at length, I have become somewhat sympathetic to Colignatus' arguments. In a State of Law, laws do matter and if laws are violated, there ought to be punishment. It seems clear that Georgiou violated laws when by-passing his board of directors. Under normal circumstances, his colleagues on the board and at the agency might have considered that as a minor procedural mistake which could easily have been cured by providing post-approval. That, of course, assumes 'normal circumstances'. Circumstances in Greece were not normal at the time; neither at ELSTAT.

Perhaps Georgiou accepted the job at ELSTAT with a bit of naivité. Perhaps he thought he would be welcome there and that he would receive support from his colleagues in their joint effort to provide Eurostat with top-quality statistics. Well, that would have required a very substantial amount of naivité!

A seasoned manager would have known that he was about to enter a wasps' nest where undermining and mobbing would be ever present, and he would have prepared for that. He would have known that he could not afford the slightest misstep because he would immediately be crucified for it. And he would have been extremely cautious about colluding with Eurostat behind the backs of his colleagues at ELSTAT, knowing that his enemies would only wait for such a 'breach of duty' to happen. Apparently, Georgiou was not such a seasoned manager.

P. S.
Colignatus has published a book "Forum Theory and A National Assembly of Science and Learning". The chapter on Greece begins on page 155.