Money and politics, Italian style

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There are many differences between American and European politics. But there is one thing they have in common. Both are often challenged by their reliance on corporate money.

Of late, the Enron affair has served as an increasingly painful reminder to Americans of the role money plays in politics. During the same period, a crowd of 40,000 Italians gathered recently in Milan to remember the 10th anniversary of Tangentopoli (Bribesville) - an astonishing revelation of corruption in Italian politics. Tangentopoli is the key to understanding the type of system which later brought shame on such European politicians as François Mitterand, Helmut Kohl, and Jacques Chirac.

Traditionally, Italy has one of the largest shares of state-owned or controlled companies of all West European countries. Their top managers are almost exclusively political appointees who, once getting a lucrative job, were expected to help fill up their party's treasuries. "If you want to count in politics, you have to bring money to your party," wrote Socialist parliament member Andrea Moroni, defending his public role in a 1992 farewell letter before committing suicide.

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In early 1992, a team of Italian investigators uncovered a simple mechanism that was pumping money into politics: Everyone who got a contract with a state company had to pay a kickback to its managers. The money (in most cases) was dutifully consigned to the political parties. Contractors included the extra expense in their overhead, passing the bill on to the taxpayers.

The US system seems more transparent, allowing corporate "political action committees" to finance politics on a transparent legal basis. But the result is similar: The corporations expect politicians to pay back the favor.

In Italy, he "mother of all bribes" was nearly $80 million paid in the late 1990s by the private energy firm Montedison in an attempt to merge with state-owned Enichem. To make the political environment friendly for the creation of the new energy giant, Enimont, each party got its chunk - some bigger, some smaller. Taxpayers suffered again: State managers overestimated privately owned Montedison by up to $400 million, undervaluing the state's share in the newborn Enimont.

Discovery of the Enimont maxibribe was followed by two executive suicides in three days, complicating the investigation. It was clear that many highly respected people did not realize the moral, not to mention criminal, consequences of their actions.

"Everybody knew, everybody was silent. Who will cast the first stone?" asked Bettino Craxi, the leader of the Italian Socialist Party in July 1992. The symbol of Italian corruption, Mr. Craxi had a simple message: In blaming the entire system no one should feel guilty. (He was soon forced to depart for his extravagant Tunisian exile, where he later died.) Will a similar approach be taken by Wall Street in the Enron scandal?

At the end of 1993, Milan media tycoon Silvio Berlusconi announced his decision to enter politics. It took only three months for the richest Italian and his new political movement, Forza Italia, to win the election in March 1994. He got the support of the public, promising to change the political culture. But it never happened.

Some analysts later said that his entry into politics was Mr. Berlusconi's ultimate attempt to avoid investigation. It was no secret that Craxi was behind his enormous success.

Berlusconi was formally notified that he was under investigation for alleged bribery during the UN-sponsored conference on organized crime in Naples on Nov. 21, 1994, over which he presided as Italian prime minister.

The subsequent fall of Berlusconi's coalition opened the second act of Tangentopoli. Investigators slowly approached the final number of 25,000 inquiries on political corruption involving 5,000 people. One hundred members of the national parliament were indicted.

The number of court cases grew, but the number of final verdicts was very low. What followed was exactly what many analysts now are predicting in the Enron case: The complexity of the investigation developed into something so monstrous that it was too difficult for the average citizen to keep up with the facts. Public support lost its momentum. In early 1998, all investigations practically stopped.

As the leader of the opposition, Berlusconi started an open war with the Italian justice system, accusing the investigators of a communist plot, calling judges a "cancer of democracy" that had to be removed. Somebody in Rome had already compared his relationship with the law to the White House's problems with the General Accounting Office. With one substantial difference: Berlusconi had at his disposition his own TV network - the largest one in Italy - which he never hesitated to use.

Rep. Martin Meehan (D) of Massachusetts, a sponsor of campaign-finance overhaul, recently said, "Enron is the last straw that will produce a fair vote on campaign finance reform." In the early 1990s, many Italians thought the same about Tangentopoli, as shocking facts popped out of political closets daily.

But now, 10 years later, public opinion in Rome and Milan is much less unanimous on the theme of Tangentopoli. With Silvio Berlusconi back in office, there are many who would like to see the former investigators face justice themselves.

Yes, there is a common impression in Italy that the systematic corruption that led the country into Tangentopoli is greatly diminished. But none of the Italian political parties did anything to change the rules of the game. Will America learn the lessons Italians missed?

• Juraj Kittler is a journalist from Slovakia who worked as a political correspondent in Rome from 1992 to 1997.

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