'New Bribesville' hits Italy Inc before election

Feb 15 2013, 21:39 IST
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SummaryCorruption probes at three major companies have hurt corporate Italy's image with investors and revived memories, just a week before an election, of the scandals that devastated Italian politics in the 1990s.

Corruption probes at three major companies have hurt corporate Italy's image with investors and revived memories, just a week before an election, of the scandals that devastated Italian politics in the 1990s.

Defence firm Finmeccanica, oil group Eni and Monte dei Paschi di Siena, the world's oldest bank and Italy's third largest, all face judicial probes into crimes ranging from bribing foreign officials to accounting fraud.

"We're facing something very like Tangentopoli," outgoing Prime Minister Mario Monti said on Friday, referring to the "Bribesville" scandals 20 years ago. A technocrat appointed in a crisis in 2011, Monti is now campaigning on a centrist ticket.

The separate investigations have been going on for months, but prosecutors have taken high-profile steps lately, starting with the discovery of big losses on financial derivatives trades at Monte dei Paschi, a bank close to the centre-left Democratic Party (PD) which leads in opinion polls for the Feb. 24-25 vote.

That was followed by Eni chief executive Paolo Scaroni being formally placed under investigation last week over an allegation that Eni's oilfield engineering subsidiary Saipem paid bribes to win a contract in Algeria.

This week started with the arrest of Giuseppe Orsi, head of partially state-owned Finmeccanica - which employs more Italians than any other firm bar Fiat - over alleged bribes the company paid to win an Indian helicopter order.

On Thursday, four executives at other firms were detained in four other probes - ranging from embezzlement in the building of a soccer stadium to market rigging. Among these was the former head of Monte dei Paschi's finance department.

"Bribesville is Back," read a banner headline in the daily La Repubblica on Friday, drawing parallels with the high-level cases of political corruption that brought Italy's Cold War-era party system crashing down two decades ago.

"A week before the vote, citizens are heading for the ballot box through the rubble of a new Tangentopoli," it said in a front-page editorial under the headline "Sins of the Elite."

Weary of corruption, Italians might welcome a crackdown but with an election looming, many have been quick to spot the party connections of some of the major companies involved and to suspect political motives, despite denials from the judiciary.

"Finmeccanica has been under the spotlight for a good 18 months and suddenly there is an arrest," said Luca Caprai, founder of Cruciani, a maker of fashionable macrame bracelets.

"If this is the beginning of a clean-up, it will be

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