Thursday, March 22, 2012

Corruption – Italian style - 2012

Walking home after dinner with friends, we noticed that someone else was still partying. The lights were on on top floor of one of the houses in piazza Farnese and many guests were admiring the square below and the stunning view of Michaelangelo’s cornice on Palazzo Farnese, the rest of its façade, the fountains and St. Brigid’s opposite.

The scene was an ironic and bitter reminder of the state of Italy.

The party taking place in a beautiful flat overlooking one of the most beautiful squares in the world was hosted by a convicted felon who had just served a six year sentence for corruption in that very flat.

The sentence-beginner “only in Italy…” is over used, but surely only in Italy, could there be such a blatant manifestation of the inequity of the administration of justice and politics; at least in the democratic world which purports to respect the rule of law.

The convict in question is Cesare Previti, a pit-bull lawyer, now 77, who has looked after Silvio Berlusconi’s interests for 40 years. In one case, he was accused of bribing a judge in order to fix an arbitration judgement for Berlusconi. He was convicted in the court of first instance and on appeal but the Supreme Court ordered a retrial. The statute of limitations, not for the first time, prevented the case from coming to verdict. In the midst of the serious charges, a minor point was not even noted by the court or commentators – the prosecution alleged that the bribe had been paid from Berlusconi’s account to Previti’s Swiss account to the judge’s. Previti defended himself by saying that the $434,000 was a fee paid to a foreign account to avoid paying taxes. At the time Previti was Minister of Defence. No one seemed to consider anything untoward that a Minister of the Republic admitted in court that he had evaded taxes on a hefty sum.

In 2006, he was actually convicted of bribery in the IMI-SIR Mondadori case for having persuaded a court in an arbitration case to award companies to Berlusconi rather than his rival Carlo De Benedetti. This is one of the few cases which went to the third level of judgement without being stopped by the statute of limitations. A law was immediately passed preventing anyone over 70 from serving time – hence Previti’s “prison” in piazza Farnese.

On Sunday, President Napolitano held a ceremony to close the celebrations of Italy’s 150 years. His speech was mostly about history but he concluded with an endorsement of Mario Monti’s government today and a near explicit exhortation to deal with illegality and corruption. The government, he said should “guarantee transparent behaviour in morality and a higher quality of governmental and institutional representation”. For a non-political head of state, that is strong stuff and most of the commentators focussed on the admonition.

The message was clear. There are half a dozen high profile corruption cases coming to the boil which will make for an interesting election campaign next year as most of the parties will try and paint everyone grey and only their most serious opposition as actually criminal.

On the centre-left there is Luigi Lusi who was accused of having removed €13m from the Margherita party when he was treasurer. He was a Democratic Party (PD) senator until February when he was expelled. At the moment, he has admitted to having taken the money and would like to plea bargain. In the meantime, it is not clear whether he embezzled €13, €18 or €21m. The leader of the party, Francesco Rutelli says that he was completely unaware of the theft and feels that he is the victim. To make the episode surreal, the party no longer exists and the funds that Lusi is accused of having stolen are a reimbursement of public funds… to a non-existent party. Lusi, by the way, lives 200 yards from Previti. Together, they rather lower the tone of the neighbourhood.

In Lombardy, the PD has been shaken by accusations that the city of Sesto San Giovanni ran what was in practice a racket, fleecing businesses in an urban renewal scheme. It was so well-known and practiced that it was called “Il sistema Sesto” and was run by a senior PD figure, sometime mayor of Sesto, Filippo Penati.

On the centre right in Lombardy, the situation is if anything, worse. More than 10% of the regional assembly is under investigation for taking bribes. Some were arrested in January. Most of the accused are from the centre right, People of Freedom (PdL) but the Northern League assemblyman Davide Boni is also accused of taking kickbacks.

There are dozens of other episodes; from Bari in the south to Genoa in the north with allegations that the kickbacks are not just in used notes as they used to be 20 years ago. Today, they are often payments to foundations or for “consultations fees” which are much more difficult to secure convictions on. Whatever the judicial outcomes over the next few years, there is a perception and resignation that once again, corruption is rampant, if it ever was under control.

Eurobarometer reckons that 87% of Italians think corruption is a problem compared to the hardly encouraging European average of 74% with 12% of those surveyed saying that they were asked to pay a bribe in the last year (compared to the average 8%).

Transparency international puts Italy at 69th place with the same score as Ghana and Macedonia. Their corruption barometer has two thirds of Italians thinking that corruption has increased over the last year.

At the same time, though, parts of the coalition supporting the Monti government has growled at the idea of tackling corruption. The PdL secretary Alfano said explicitly that Monti was overstepping his mark and there are plenty of other ways in which the government is kept in check. After the employers and the unions, Monti will have a much more difficult task reforming the politicians. As the economist Michele Salvati said recently, legality is certainly a good prerequisite for growth . In Greece, too, there is concern.

But don’t hold your breath in either country – it will take more than Napolitano’s polite exhortation and I am sure we’ll see a lot more parties at Previti’s and Lusi’s in my part of town.

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