Held to account - FT.com Free man: Costas Vaxevanis at an Athens court, where a judge ruled that he had acted in the public interest when his magazine published the names of Greeks holding Swiss bank accounts Cheers broke out in the packed Athens courtroom as the verdict was delivered: Costas Vaxevanis, the investigative journalist, had been acquitted. Outside, however, some of Greece's richest and most powerful figures braced for the verdict's repercussions. The judge found that Mr Vaxevanis had acted in the public interest when he published the "Lagarde list" - a document containing the names of 2,000 Greeks with Swiss bank accounts - in Hot Doc, the magazine he edits. IN Analysis The case has captivated austerity-wracked Greece, where the unemployment rate has reached 24 per cent and basic services, including discounted prescriptions and family benefits, are being slashed. For many Greeks, the rampant tax evasion highlighted by Mr Vaxevanis is confirmation that the wealthiest have shirked their responsibilities to the country by sending their savings abroad. Looking every bit the crusading journalist in his jeans, safari jacket and dark scarf, Mr Vaxevanis argued that the case against him was politically motivated. "Three governments made a mockery of this list in order to protect big tax evaders - their friends and financial backers," he said after the hearing on Thursday. His two high-profile lawyers, a former leftwing political party leader and the president of the British-Hellenic chamber of commerce, noted that none of those named had brought a defamation suit against Hot Doc. Several account holders came out in the editor's favour, declaring they did not feel their privacy had been violated by his publication. Still, the lawyers said they had not known what to expect in court. If found guilty, Mr Vaxevanis would have faced up to five years in prison. Even though the outcome assuaged doubts about Greece's commitment to freedom of expression, the case attracted a burst of unwelcome international publicity for premier Antonis Samaras and his fractious three-party coalition as they prepare for a critical parliamentary vote next week. Lawmakers have to approve a new €13.8bn austerity package agreed with the EU and International Monetary Fund if Athens is to receive a €31.2bn funding lifeline by December. The IMF has been particularly vocal about the failure of successive governments to crack down on tax evasion. According to a recent US study, about €30bn of revenues - the equivalent of 15 per cent of Greek national output - escapes the tax net every year. "If they'd collected the taxes, there would never have been a crisis in the first place," a former fund official said. As the country heads into a sixth year of recession, impoverished Greeks are becoming ever more resentful of the ability of the elite to escape paying their dues. Hot Doc's list, published in a special issue on October 27, sold about 100,000 copies - four times more than the normal print run. "It was the first time that the names of Greek account holders abroad had been published, so there was tremendous interest in finding out who they really were - the top tier of Greek business and society," Mr Vaxevanis told the Financial Times. A former war correspondent, he made his name as chief reporter and producer of Pandora's Box, an investigative programme. He launched Hot Doc in April because, he said, he was fed up with constraints imposed by bosses worried his reporting would anger influential politicians and their business cronies: "It was frustrating to be told to stop halfway through a project because the programme wouldn't be aired . . . so I decided to go independent," he says. Hot Doc has exposed several financial scandals during the Greek crisis. It reported on the hundreds of millions of euros in kickbacks on weapons contracts allegedly taken by Akis Tsochatzopoulos, a former defence minister now in jail awaiting trial on corruption charges, which he denies. Another piece detailed the central bank's alleged involvement in facilitating the shorting of Greek debt by local speculators at the start of the crisis. HotDoc has also covered the machinations of private Greek banks accused by George Papandreou, the former premier, of issuing thalassodaneia - unsecured loans - to favoured clients. This muckraking led Mr Vaxevanis to his biggest scoop. An anonymous reader impressed by Hot Doc's revelations sent Mr Vaxevanis a memory stick containing the names of the Greek account holders at the Geneva branch of HSBC. "A highly placed person confirmed its authenticity but we were already convinced it was the real thing from the reaction of about 200 people on the list whom we called directly," he says. Some gave legitimate explanations for keeping money abroad, others begged us not to reveal their names in print. The names were extracted from a list of 20,000 foreign account holders obtained by French authorities in 2009 after being stolen by Hervé Falciani, an IT specialist at HSBC. French, Spanish, Italian and German citizens named were swiftly contacted by their respective tax departments. But it was almost a year before the Greek finance ministry took an interest. George Papaconstantinou, the former finance minister, requested the list from Christine Lagarde, then France's finance minister. The two heads of the financial police who served under Mr Papaconstantinou say they had not been instructed to carry out a full investigation. Evangelos Venizelos, his successor, dropped the matter. The disc containing the Lagarde list has since disappeared. Now, both men face the prospect of investigation by a parliamentary committee and, possibly, criminal charges of negligence. Greek governments have tended to avoid crackdowns on tax evasion, relying instead on tax amnesties and high value added taxes on petrol and cigarettes. A culture of weak compliance is endemic, say European advisers. It does not help that Greek shipowners, who are not required to pay income tax on their earnings from operating international shipping businesses, flaunt their wealth, they add. Many Greek professionals could afford a shipowner lifestyle in the boom years of the early 2000s, according to an official at SDOE, the financial police. He says doctors and lawyers used their Swiss bank accounts to set up offshore companies "to buy big motor yachts and houses in London while declaring the same income as a middle-ranking civil servant." A Swiss bank account, while illegal, provided members of the establishment with a sense of security during decades of political instability and tight foreign exchange controls, lifted only in the mid-1990s. Many more such accounts were set up legally in the run-up to Greece's eurozone entry in 2000. The practice continued unabated while the economy enjoyed strong growth, aided by governments that turned a blind eye. Some Greeks say tax evasion is justified because a corrupt, inefficient state fails to provide adequate education, healthcare and other services, forcing its citizens to turn to the private sector. "The treatment you receive in the public health service is an insult, even allowing for the problems caused by the crisis," says Anatasia Haritakis, an office manager. You feel your taxes were just poured down a black hole. Professor Emilios Avgouleas, who holds the chair of international banking law and finance at Edinburgh university, says evasion is part of a wider issue. Unless the Greek government addresses the systematic failure of governance - including tax fraud and the other criminal practices relating to the funding of political parties - Greece is not going to return to the path of growth. Yannis Stournaras, the technocrat finance minister, says the key to the problem is better tax administration. "We have failed miserably on tackling tax evasion," he says. But as soon as the new [bailout] measures are approved by parliament, it will become my priority. He plans to appoint a non-political boss to the finance ministry tax department on a contract that would outlast the electoral cycle. Scores of regional tax offices are to be closed, and those that remain will be managed by professional accountants. Negotiations are under way with Swiss authorities to reveal the names of thousands more bank accounts held by Greeks in private banks. The Lagarde list will be fully investigated as soon as a new copy arrives from Paris, he said. Two other lists provided by the central bank are already being investigated. One involves 400 purchases of high-end London properties by Greeks; the other three years" worth of transfers abroad by 54,000 Greeks totalling €22bn. About 15,000 people will receive a tax office summons this month asking why their declared incomes were significantly lower than the amounts they sent abroad. Yet political will is also required for a crackdown to be effective, says Tasos Telloglou, an investigative journalist. Funds from tax evasion by big Greek businesses are used to finance political parties. In return, companies are awarded state contracts at overpriced rates. "It's clear that there's an issue of social justice now because of the crisis," Mr Telloglou says. The question is whether the political class has the will to break with past practice and go after the tax evaders.