Research into transparency gaps in party donations traces back to Pegeia resort
Cyprus is fourth among EU states when it comes to private donations per capita to political parties. And more than half of these private donations come from companies.
Data analysis by CIReN — in collaboration with Follow the Money’s cross-border project Transparency Gap: The Funding of Political Parties in the EU, which involved 25 other outlets and 50 journalists, who conducted an in-depth analysis of where parties in the EU get their money — found that 374 companies were behind more than 50 percent of private donations publicly reported in Cyprus between 2019 and 2022. These donations added up to €4.3 million, out of a total €8.5 million in private financing overall. Another €19.6 million in state subsidies went to political parties, the second highest per capita, just behind Belgium.
While local media in Cyprus have published the names of the largest donors, CIReN decided to look into firms that have little public activity but make significant contributions to political parties.
This included companies linked to Cap St Georges, a Pegeia resort that made headlines in December 2023, as part of the Cyprus Confidential collaboration led by the International Consortium of Investigative Journalists (ICIJ) and Paper Trail Media.
As part of the Cyprus Confidential investigation journalists reviewed 3.6 million leaked files from six Cypriot financial service providers. [ICIJ]
The OCCRP investigation found that the sprawling development was partly financed by Dmitry Klyuev, the sanctioned “mastermind” behind the Russian tax fraud known as the Magnitsky Affair.
According to that investigation, the companies behind Cap St Georges, including the resort’s current owner Korantina Homes, donated at least €170,000 between 2016 to 2022 to every party in parliament aside from the development’s harshest critics, the Green Party, which had repeatedly raised concerns about the construction’s impact on the environmentally sensitive area.
CIReN identified among the donors four more companies linked to Korantina Homes owner Georgios Ioannou: Amadiaso Limited, Asterionas Limited, Lomendox Limited and Nikki Beach Club Limited. They appear to have donated a further €87,000 between 2018 and 2022, to parties spanning Cyprus’s political spectrum.
The gifts ranged from €2,000 to €20,000, with the peak of donations in 2020, when the Cap St Georges resort was scheduled to be completed. In 2020, the total donated by companies linked to Ioannou was €115,000 (DIKO: €70,000; AKEL: €20,000; DISY: €15,000 euro; and ELAM: €10,000).
Ioannou told CIReN that these donations were “made in complete transparency,” and were “a common practice, internationally accepted and applied both in Europe and the US.”
Another company – A.N. Ioannou Construction Ltd., a major subcontractor working on the construction and development of the Cap St Georges project – also made a donation of €35,000 to the then-ruling party the Democratic Rally (DISY) in 2020. According to their website, the company was also the contractor for several public sector projects in Paphos, including the Paphos TEPAK Technological University branch, Paphos District Court, Ivi Maliotou Park and the Paphos Community Care Center.
This brings the total of donations between 2016 and 2022 by companies linked to the Cap St Georges project and its developers to €292,000.
The only party in parliament not to benefit from the companies’ generosity is the Green Party, which protested the development, alleging threats to the nesting environments of the endangered Mediterranean monk seal.
A 2019 “warning letter” from the European Commission to the Cypriot government had accused Cyprus of failing to carry out an appropriate assessment of several projects that risked damaging sensitive environments — including Cap St Georges.
A representative of the Ministry of Agriculture, Rural Development and Environment told CIReN that an environmental impact assessment “concluded that no significant impacts to the Natura 2000 sites are expected from the project.”
In March, the European Commission followed up with a “reasoned opinion,” accusing Cyprus of failing to properly assess projects that may have a significant impact on Natura 2000 sites. This is the final step before the Commission can decide to refer the case to the EU Court of Justice. Cyprus had until May to respond.
Late last year, MP Alexandra Attalides registered the findings of the Cyprus Confidential investigation as a topic for discussion with the Parliament’s Committee on Institutions, specifically “the possibility of insufficient checks by the relevant authorities” responsible for the prevention and combating of money laundering.
Attalides had also called for an investigation of the political donations, and whether they influenced local decision makers.
She told CIReN that she had “spoken to the President of the Committee and had been reassured that the issue will be debated at one of the committee’s meetings after the June 9th elections.”
Meanwhile Pegeia Municipality held an event in February, under the auspices of the Agriculture Minister Maria Panagiotou, titled ‘Mediterranean Seal: An Emblematic Species of the Mediterranean – Past, Present and Future’. The event was held at Cap St Georges Hotel and Resort, and attended by Korantina CEO George Ioannou.
Ioannou (left) and Agriculture Minister Dr. Maria Panayiotou (third from left) at the Mediterranean Seal Event in February 2024. [Facebook – Cap St Georges]
And at the Cyprus Cup Final in May, contested between A.C. Omonoia and Pafos FC, President Nicos Christodoulides, whose campaign was supported by DIKO and EDEK, wore a Pafos FC shirt bearing the logo of Korantina Homes — the team’s main sponsor.
President Christodoulides wearing an FC Pafos shirt at the Cyprus Cup Final. [YouTube – AlphaNews]
AKEL told CIReN that “all the annual financial statements of the Party, without exception, as well as the contributions from natural and legal persons are published and posted on our website, as required by law.”
DIKO, DISY and ELAM did not respond to requests for comment.
The data analysis was conducted in collaboration with Follow the Money’s cross-border project Transparency Gap: The Funding of Political Parties in the EU. CIReN, together with 25 other outlets and 50 journalists, conducted an in-depth analysis of where parties in the EU get their money. In the runup to the European elections, the project scrutinized the incomes of almost 300 political parties, diving into 1,200 financial reports and more than 500,000 donations to uncover how political parties are financed, who funds them, and how transparent the accounts are.
In Cyprus, the project examined donations to parties currently represented in the European Parliament, as well as parties deemed to occupy the populist far-left and far-right. The parties examined by researchers included AKEL, DIKO, DISY, EDEK and ELAM.
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