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Monthly Archives: February 2013

Corruption’s kosher in Italy

February 18, 2013:
In early 70s I have this very distinct memory of being wrapped up in Mario Puzo’s novel The Godfather, and my mother leaning over and asking me, ‘How much longer is this?’.

A scene from that readable, almost Shakespearean-like masterpiece I am reminded of these days, is that of Nevada’s Senator Pat Geary turning sinister and corrupt. He insults Michael Corleone, the mafia don of Italian origin and tries to extort money from him saying: “I don’t like your kind of people. I don’t like to see you come out to this clean country with your oily hair, dressed up in those silk suits, passing yourselves off as decent Americans”.

Forty years on, The Godfather endures, its tentacles touching so many levels in our everyday lives.

BRAZEN BERLUSCONI

Last week, former Italian Prime Minister Silvio Berlusconi seems to have added ‘oil’ to that general perception by defending the need for bribery in winning contracts for Italy’s multinationals.

Indeed, paying bribes is a crime not only in Italy, but all of Europe and, it is against the law for European companies to use cash to grease the wheels of commerce overseas.

Most European nations, including Italy, are signatory to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, which makes foreign bribery a crime.

It is a key instrument for curbing the export of corruption globally, because these very countries are responsible for two-thirds of world exports and still more of foreign investment.

Everyone says some countries in of Europe have a debt crisis. But, does it now instead have a morality crisis? Take a look:

In the Transparency International index which measures perceived corruption in a country, Italy ranks 72th, between Brazil and Bulgaria, one of the worst scores among rich Western European nations.

In Italy, there also is evidence of an increase in the number of corrupt exchanges, which do not result in prosecution or, invite fines or punishment.

In the past ten years, the probability that transactions succeed because of graft, right under the eyes of the regulatory agencies, has grown. And since corruption is safer, there is a stronger urge to engage in it. This means corruption is spreading, instead of reducing, in Italy.

It also seems apparent that there is an growing disinterest in Italian media, in exposing corruption at national level.

In the past, there was a sense of shame — a fear of being prosecuted and publicly exposed – which acted as a deterrent for corrupt Italian officials and politicians. There was a fear of legal sanctions, since it implied a public judgment, made in the public sphere – with the possible outcome that reputations would be ruined. This is not the case anymore.

That implies that during the last decade, dishonesty and sleaze in Italy has become more widespread and less hazardous; that efforts to detect and punish it have lost momentum; that in a climate of mistrust and frustration, civic and media attention to it is almost missing.

ARMS DEALS IN EUROPE

But, corruption at high levels – especially colossal arms deals — is not restricted to Italy alone. Other European nations, including the United Kingdom, have their share.

Yet another recent scandal concerns the largest defence deal in Austria’s history: the purchase of 15 Eurofighter jets for some €1.5 billion. The sale has been dogged by corruption allegations for years.

It is estimated that around €110 million was transferred from EADS to the accounts of dubious companies.

Two months ago (December 2013) Joerg Schmitt and Gerald Traufetter wrote in Spiegel of Germany – “New Allegations Haunt EADS Fighter Jet Deal”:

“In the corruption scandal surrounding the sale of Eurofighter jets to Austria, more and more information suggests that European defence giant EADS may have played a role in bribery aimed at securing the lucrative contract. The affair has the potential to damage the company’s image and its bottom line”.

The bribe money was purportedly distributed via a complex web of shell companies based on the Isle of Man, a tax haven in the Irish Sea.

Investigations are underway and if doubts are confirmed, European industry will be shaken by yet another bribery scandal, with significant financial risks for the defence giant.

If and when we arrive at the end of the investigations into the Augusta Westland Chopper deal, all masquerades will be off to reveal how disconnected the elite are from reality, in the bizarre world of shady arms deals.

Keywords: Silvio Berlusconi, bribery in winning contracts, Italy’s multinationals, Transparency International, corruption and bribery, defence contracts