Scandals The Looting of Greece

For the first time, a fallen tycoon tells how he embezzled millions

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In jail, listening to the cassette, Koskotas heard the fright in the caller's voice. It was an echo of his own fears. Mantzouranis had an important message to pass on: Koutsogiorgas wants to be certain the prisoner knows what he is doing. "Menios says," the voice from Greece emphasized, "that George should not betray the only people who can help him now." Koskotas pondered silently and for a second felt a twinge of his old power. Then he dismissed the warning. He wanted to talk.

Throughout last week TIME sought comments and answers from government officials -- including Prime Minister Papandreou -- on the accusations in this story. When all refused to be interviewed, a list of questions was submitted to them. TIME did not disclose that it had interviewed Koskotas, but made clear that it was publishing a major story that contained serious and damaging allegations. Papandreou did address the affair in a Feb. 14 memorandum to investigators. He said he met Koskotas only three times, at the banker's initiative, between March 4, 1987, and June 30, 1988, during which the two discussed only Koskotas' business and, later, the accusations against him.

CHART: NOT AVAILABLE

CREDIT: TIME Chart by Joe Lertola

CAPTION: KOSKOTAS' TALE OF CORRUPTION. HE ALLEGES:

THE SCAM

THE PAYOFF

THE INFLUENCE

THE SCANDAL

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