Gadhafi, Arafat Reportedly Supplied Suitcases of Cash to Papandreou

Greek Prime Minister Andreas Papandreou accepted secret contributions from Libyan leader Moammar Gadhafi and Palestine Liberation Organization chief Yasir Arafat for his 1981 election campaign, a former ally of Papandreou has charged.

If true, the payoffs would underscore the links between the Greek government and Palestinian terrorists and help explain the government’s refusal to honor Italy’s request for the extradition of convicted terrorist Abdel Osama al-Zomar.

Zomar is the principal suspect in the Oct. 9, 1982, machine gun and grenade attack on the main synagogue in Rome, which killed a 2-year-old and wounded 40 others.

At the time of Zomar’s release to be allowed to fly to Libya, the Greek minister of justice, Vassillis Rotis, said he could not honor Italy’s request — upheld by the Greek Supreme Court — because he considered Zomar’s acts “all in the domain of the struggle to regain a homeland.”

In an interview with the Los Angeles Times this week, fugitive Greek banker George Koskotas said, “In 1981, Papandreou got money from Gadhafi and Arafat to be elected. This I know from a very close friend of Papandreou, Ionnis Mantzouranis. He told me about suitcases of money that he took from Arafat and Gadhafi.”

During a five-hour interview, Koskotas also said that he smuggled 90 million drachmas ($600,000) directly to the prime minister, hidden in a box of Pampers diapers.

Koskotas, who has been charged by the Athens government with embezzling $213 million from his own bank, was interviewed by the Times at the county jail in Salem, Mass.

He is being held on U.S. income tax evasion charges from 1979, before the 34-year old Greek-American entrepreneur returned to settle in Athens.

Koskotas is fighting extradition to Greece but fears he may be exchanged against his will if Greece agrees to extradite Palestinian terrorist Mohammed Rashid to the United States.