Conflicting interests

Silvio Berlusconi is Italy's richest man, with a manifesto little short of revolutionary, but his opponents see him as a threat to democracy. Domenico Pacitti reports from Rome

SILVIO BERLUSCONI, Italy’s media magnate leader of the centre-right Freedom House alliance, staged a political comeback in May’s Italian general election that seemed scandalous to many outsiders. His entrepreneurial talents and powers of persuasion, added to a clear and precise political manifesto, appear to have convinced many Italians that he is the right man to run the country efficiently and intelligently. But Mr Berlusconi’s critics say that his conflicting political and business interests and a string of damning criminal accusations render him legally and morally unfit for the job.

Mr Berlusconi’s rise to success began when he entered the construction business as a law graduate at the age of 25. Within eight years he had built an entire suburb of 10,000 luxury homes in Milan and supplied them with cable television. Two similar suburbs soon followed. Between 1980 and 1984 he founded three national TV stations. Two years later he purchased A.C. Milan soccer club, which went on to win five league championships and two European cups. In 1989 he became Italy’s chief editor of books and periodicals.

By January 1994 he had formally resigned from his companies and founded his own political party, Forza Italia, in a last-ditch attempt to save his empire from what he took to be a leftwing attempt to destroy his life’s work. Two months later he was elected premier of a centre-right coalition but was forced to resign less than eight months later when his rightwing ally, Umberto Bossi’s Northern League, withdrew its confidence over Mr Berlusconi’s refusal to adopt federalisation as a policy.  

Mr Berlusconi, who allegedly owns 64 offshore companies and is said to be worth 10,000 million GBP, recently explained to a press conference: "The first act of my government was to draw up a draft of legislation to regulate conflicts of interests. The Left voted in favour and then shelved the matter for five years and refused to talk about it despite my continual insistence. And this so that they could raise the issue at election time, which is exactly what they have done."

The problem was that the bill which he managed to get through parliament was felt by the Left to be too weak. In February the Italian Senate began to approve a stronger version. It vetoed purely formal reshuffles and the use of offshore companies. It also introduced stiff penalties. Berlusconi then blocked the bill by proposing 1,200 amendments and requesting that 34 of his senators be heard, which the government viewed as a declaration of war.

Perhaps indicatively, little attention has been given to the fact that an existing law which dates back to the 1950s already provides for the exclusion of candidates with conflicting interests from government positions. This and the lack of insistence on Mr Berlusconi’s own exclusion from the elections, especially by former socialist premier Massimo D’Alema, one of Mr Berlusconi’s fiercest adversaries, has been intepreted by some to indicate a private agreement between Right and Left.

Mr Berlusconi has over the past ten years also gained the perplexing distinction of being Europe’s most investigated politician. He has received three prison sentences totalling six years and five months for corruption, illegal financing and false accounts, none of which he has actually had to serve as the offences were deemed to have lapsed in accordance with statutory time limitations.

In 1990 he was found guilty of perjury for denying his membership of the secret P2 Masonic lodge, an anti-Communist organisation which used Italy’s security services for political ends. Its members included prominent figures from industry and banking, magistrates, ministers and over 40 MPs. His conviction was one of many subsequently annulled by a general amnesty that was felt to be needed to save the country further embarrassment.

Seven more cases are currently proceeding against Mr Berlusconi. They concern his alleged involvement in the Mafia car bombings of anti-Mafia judges, conspiracy to pervert the course of justice, undeclared cash – 330 million GBP in overseas companies and 2 million GBP for the purchase of a soccer player – and a 33 million GBP fiscal fraud which also involves the breach of a Spanish law against unfair monopoly.

Any one of Mr Berlusconi’s fourteen criminal cases would no doubt have put a sharp end to his political career in any self-respecting modern democracy. Not so in the peculiarly anomalous case of Italy where the laws of normality do not apply and where everything is possible. Predictably, he feels that he is being pursued for political purposes and that he has fallen victim to illiberal laws which need radical revision.

In partial support of Mr Berlusconi’s thesis, Italian law courts tend notoriously to lack a rigorous ethic of truth and justice, often privileging fudging and unnecessary compromise over clarity and simplicity, a collateral effect of the Roman Catholic doctrine of indulgence. Moreover, it is both alarmingly easy and fairly common practice in Italy to launch bogus cases for personal gain or vendetta. Nonetheless, at this stage the moral balance appears decidedly tilted against Mr Berlusconi, whose position remains at best disconcerting.

Perhaps only an international investigation could succeed in establishing the truth. Should the accusations against Mr Berlusconi turn out to be well founded, he would surely be obliged to quit politics permanently. If, on the other hand, his discrimination claims turned out to be true, the implications both for his political opponents and for the Italian judiciary would be nothing short of devastating. Pending (unlikely) EU intervention, all three parties appear for the moment to have settled for the customary Italian compromise.

As regards Mr Berlusconi’s political manifesto, it sets out "five great missions to transform Italy": the reduction of bureaucracy through the development of a new, fully computerised state model with over 100 Internet services; the radical reform of state institutions, including the direct election of the head of state and a fifty per cent reduction in the number of MPs and senators (currently 952 with gross monthly salaries of 12,000 GBP plus an endless list of economic privileges) and ministers (currently 25 with 56 undersecretaries); the recodification and simplification of Italy’s estimated 200,000-plus laws; the large-scale construction of new roads and services throughout Italy; and the introduction of incentives to encourage investment in the country’s underdeveloped South.

Disappointingly, no specific mention is made of the Mafia, which operates on one fifth of the national territory and has an estimated annual turnover of 100,000 million GBP, equal to 15 per cent of the gross national product. Mafia holdings are currently estimated at 630,000 million GBP.

To the missions are added "five great strategies to improve the living standards of Italians": substantial tax reductions for all and more employment; the raising of minimum pensions to 330 GBP per month, improved health services and more incentives for voluntary work; pay rises for the police force, guarantees that prison sentences actually get served and strict controls on illegal immigration; the introduction of English, Internet and commerce as key subjects in schools; and more rigorous controls on food, water and air.

Stressing employment, Mr Berlusconi said: "These days a country’s wealth consists in the number of citizens employed and in the standard of work they carry out. In Italy, 54 per cent of young men and 64 per cent of young women are unemployed. In the US, over 6 in 10 work, in Europe over 5 in 10, but in Italy the figure is less than 4. The big problem is: why do we have 3 million potential workers who are sitting with their arms folded and who are not contributing to the production of wealth in Italy?"

"Thanks to my work, my talent and the sacrifices I have made, I have formed a group of companies which has given work to tens of thousands of mainly young people. Each working day of the year my group pays four billion lire (1.3 million GBP) in taxes. I have no gold ingots in the bank. My entire wealth consists in the companies I have created, the jobs of my employees who work in those companies, the taxes that get paid and a certain lifestyle for myself and my family which allows me to use my money to help others," he added.

Finally, a ten-point development plan for companies includes greater tax concessions for reinvestment capital, the abolition of capital transfer and donation taxes, the progressive reduction of income tax to an upper limit of 33 per cent over ten years, amnesties for the declaration of past tax irregularities and the abolition of 3,000 tax laws. He also intends to reform company law so as to render the administrator and not the owner personally responsible for false accounting.

Mr Berlusconi, who believes that each EU state should develop its own fiscal policy, appears unconcerned that his economic and budget policies risk breaching EU guidelines for the stability of the euro. Nor do his proposed tax cuts seem likely to be matched by reduced expenditure despite the fact that Italy has been under continuing pressure on account of its rising deficit. His position is that if the EU passed the centre-left government’s budget, it will have no trouble passing that of the centre-right.

The Swedes, who hold the EU presidency until June, are among those who say they will seek sanctions against a centre-right Italian government. But European Commission President Romano Prodi has already confirmed that he will take no action. Mr Berlusconi’s radical ally, Mr Bossi, who has been widely described as even worse than Jörg Haider, is being seen as the real problem, but Mr Berlusconi has reassured his critics that he has the matter well under control.

Mr Berlusconi insists that he will require ten years in office in order to see his plans through, which is rather a tall order given that Italian governments have since the last war been running at over one a year – more than Rwanda and Ecuador combined.

Meanwhile, just four weeks before the elections the leader of Italy’s radical party and former European commissioner Emma Bonino demanded that an international committee of experts including Nobel laureates supervise voting procedures on election day. Ms Bonino, whose demands won the backing of Fausto Bertinotti’s Communist Refoundation party, said: "We have been forced to resort to this initiative in the face of systematic violation of legality in Italy, the victims of which are the fundamental rights of citizens who must be allowed to form their opinions on the basis of clear facts."

16 April, 2001

Domenico Pacitti is World Parliamentarian Editor for Italy based in Rome.

Note: This article was published by JUST Response on August 20 2002. It first appeared in World Parliamentarian (Brussels), Volume 2, edition 3 for May/June 2001.