Shady Friends

[~Snaps~]

Part I of II

Italian Prime Minister Silvio Berlusconi managed to escape corruption charges this time. But that doesn't make him clean. His connections with shady characters -- and with the Mafia -- go way back. Many are now in jail and the evidence against Berlusconi himself is slowly piling up.

Silvio Berlusconi's reaction showed his sense of relief, but also his defiance over the string of legal cases that have haunted his term as Italy's prime minister. "I told you so. I knew it all along!" he boasted. "I was right to be calm because I was fully aware of having never committed a crime." Berlusconi's good news came Friday evening from the Palace of Justice in Milan. After a four-year trial, the court cleared the billionaire businessman of charges that he bribed judges in the 1980s and early 1990s while building up his gargantuan and influential media empire.

For eight years, State Prosecutor Ilda Boccassini had been trying to put Berlusconi behind bars. But once again, just as in earlier cases, Berlusconi dodged a bullet. The court acquitted him on a number of charges brought in connection with the privatization of a state-owned company bought by Berlusconi. On the last charge, that of bribery in the early 1990s, he was saved by the statute of limitations -- too much time had gone by for a judgment. Despite the apparent victory, Berlusconi's lawyers are appealing -- their client's record needs to be absolutely flawless, and a statute of limitations judgment just isn't good enough, they argue.

For Berlusconi's attorneys, who have been leading Berlusconi's defense against Italian justice for years, Friday marked another in a long series of victories. And they are victories for which they are well paid -- Berlusconi's expenditures for his legal defense now add up to the hard-to-fathom total of €250 million. But for Berlusconi, it has turned out to be money well invested -- he has so far managed to keep ahead of his legal trouble and his record, with the help of an appeals court which overturned a late 1990s bribery and false accounting conviction, remains clean.

But the cases have sullied Italy's reputation abroad -- and it wasn't the best to start with. And Berlusconi now has a number of political problems to look forward to. His coalition is barely managing to keep its head above water despite a broad majority in parliament, and Berlusconi is only able to keep his four-party coalition in line by using constant threats of resignation -- a strategy he used most recently in connection with his controversial plan to drastically cut taxes. The country's healthcare and education systems are sinking into chaos and the Italy's economic prognosis looks far from rosy. Berlusconi is also suffering in public opinion polls and the recent court verdict, especially the decision on the statute of limitations, is unlikely to help him out of those problems.

Plagued by questions of corruption

Potentially even more damaging for Berlusconi, is that, despite his most recent legal triumph, questions about his conduct as a budding businessman in the 1970s and continuing through to his establishment as a powerful media mogul in the 1990s, aren't likely to go away anytime soon. From close Mafia contacts to massive judicial payoffs to a political career born out of negotiations with the Mob, Berlusconi's past remains a favorite target for his enemies -- and for prosecutors.

The most recent trial was ignited by society doyenne Stefania Ariosto, once a close friend of Berlusconi's lawyer and other associates of the prime minister. In 1995, she told prosecutors -- under her witness protection codename "Witness Omega" -- that Berlusconi and his associates had bribed a number of judges. They were, she said, trying to make sure that the correct verdict was handed down in cases involving the privatization of lucrative state enterprises.

Ariosto's information triggered a tenacious investigation that led investigators through the tangle of secret paths taken by the huge sums of money transferred from hidden Berlusconi accounts into the accounts of politicians, business partners and lawyers. In the process of their investigations, they stumbled across $434,404.87 that in March 1991 found its way, by way of an account held by a Berlusconi-owned company, into the pockets of the Roman judge Renato Squillante. The judge has since been sentenced to eight years in prison.

Berlusconi, not surprisingly, played innocent. Squillante, he claimed, had never been part of any trial against him or against any of his companies. He also claimed that he didn't even know judge Squillante personally until the beginning of the 1990s.

Wrong on both counts, say prosecutors. As early as 1984, the judge ruled in favor of Berlusconi's investment company Fininvest in one case. And a personal connection could also be proved: the police are in possession of recordings of telephone conversations between the two.

Despite his continued denials, Berlusconi got nervous. It was the threat of these bribery accusations that led him to design a custom-tailored law that, when passed in 2003, was to save him from all pending corruption and bribery charges. The holders of the five highest political positions in the country including, naturally, the prime minister, so went the law, should be immune to all legal action. Earlier this year, however, Italy's high court struck down the legislation which led, in the end, to Friday's verdict.

Yet while Berlusconi has survived this trial relatively intact, a new danger is rising from the company he chooses to keep -- from the circles of his friends and associates who helped Berlusconi along on his fairy-tale rise to the top. They, too, have become the targets of the Italian courts. And, because they aren't as well protected as Berlusconi himself, they have more to fear -- including the prospect of long prison terms. Unless, of course, they trade cooperation with prosecutors for shorter prison sentences. They could, in fact, turn out to be Berlusconi's Achilles heel.

With friends like these ...

A number of the members of Berlusconi's inner circle have been there from the beginning -- from his childhood. Romano Comincioli, for example, now a member of parliament in Berlusconi's Forza Italia party, was an early school mate of the premier and was also his front man in a number of real-estate deals. Police say he also keeps a lot of shady company. In the 1970s he was accused of having contacts to the Italian Mafia, and in the 1980s he apparently was friendly with Luigi Faldetta, Lorenzo di Gesu, Gaetano Sansone and Pippo Calo. These men represented the Who's Who of the Italian Mafia at the time.

Others were later additions to Berlusconi's circle -- like tax auditor Massimo Maria Berruti. He was sent by the state to inspect the books of Berlusconi's construction company Edilnord. Apparently the two got along famously and Berruti has since been convicted on two counts of giving businessman Berlusconi preferential treatment. A third prosecution is still in the works. He is also being investigated for potential Mafia contacts. He too is a Forza Italia parliamentarian.

One of his colleagues in parliament is another Berlusconi pal, Cesare Previti. For many years Previti served as lawyer and confidant to Berlusconi. His friendship paid off when he became Defense Minister is Berlusconi's first cabinet in 1994. Like so many other Berlusconi friends, Previti is also in legal hot water right now. The charge: bribing judges on behalf of his powerful buddy. But Previti may get lucky -- he's got friends in high places -- and parliament is currently trying to give fast-track treatment to a bill that would shorten the statue of limitations in his case. The Italian media -- or at least that part of the media not owned by Berlusconi -- is calling the law the "Save Previti Law."

The list of seedy characters goes on. Marcello Dell'Utri, for a long time Berlusconi's most important manager and a leading figure in the founding of Berlusconi's Forza Italia -- and who became Berlusconi's private secretary after the two studied law together -- was sentenced this weekend to nine years in prison. His crime? He is closely associated with the Mafia and, according to Federal Prosecutor Antonio Ingroia, acted as a sort of "ambassador for organized crime within Berlusconi's company Fininvest." It is only through his immunity as a Senator and as a member of the European Parliament that he had been able to dodge a number of warrants for his arrest thus far. Berlusconi reportedly reintroduced a bill over the weekend that would provide immunity for all members of parliament in response to the verdict.

[~Snaps~]

Part II of II

Much of the evidence in the Dell'Utri case ended up coming from former Mafiosi now carrying out prison sentences. These so-called "Pentini have said on a number of occasions that Dell'Utri is "one of us," and a recent telephone call tapped by the police seems to support their claims: Just before the last election, a local Mafia leader said to an associate, "We need to make sure that Dell'Utri is elected. Otherwise he'll have problems."

The story of a possible Berlusconi-Mafia link will likely not come to end with Dell'Utri's conviction. Highly placed Mafia members who are now in jail have provided testimony that could lead prosecutors directly to Berlusconi's door. For example, Berlusconi's rise to his current status as a billionaire, say Mafia sources, got started with money from the Mafia -- money he invested in one of his first construction companies. They further accuse Berlusconi of using his growing television and media empire not only to help former Prime Minister Bettino Craxi, who was involved in campaign finance corruption and fled to Tunisia to escape a prison sentence, but also to help the Mafia. And finally, say informants, the founding of Berlusconi's party Forza Italia was helped along by the Mafia and celebrated by the Dons as a sort of political lifeboat.

There is, of course, no incontrovertible proof that any of this is true -- the Mafia, after all, doesn't keep books and isn't in the habit of signing written contracts. It is also extremely hard to imagine that the rise of Italy's democratically elected head of government -- and one of Europe's richest men -- got his start with dirty money from the Mob.

Furthermore, testimony from former Mafia criminals is also not exactly dependable. After all, if they cooperate with prosecutors and police, they could very well end up with shorter stays in prison.

Berlusconi's mob contacts

And yet, there are other sources -- the product of years of fastidious police investigations -- that back up the testimony of the Pentiti. A recent court decision, for example, that saw the conviction of Mafia boss Salvatore ("Toto") Riina and 36 of his associates in the 1992 bombing that killed Judge Giovanni Falcone, his wife and three body guards, contains a chapter entitled, "Contacts Between Salvatore Riina and the Members of Parliament Dell'Utri and Berlusconi." The story it has to tell is riveting.

At the beginning of the 1970s, one of the Mob's primary sources of income was ransom money from kidnappings and well-off Italians lived in constant fear of being nabbed. Berlusconi, off to a successful start in the construction business, knew he wasn't immune and likewise lived in fear. Indeed, an attempt to kidnap his son Pier Silvio came very close to succeeding. Out of fear, he moved his family to Spain and asked his college buddy Dell'Utri to come up to Milan from Palermo.

Dell'Utri agreed and brought a certain Vittorio Mangano -- later convicted as a member of the Mafia and as a drug trafficker -- along with him. Mangano quickly developed into a close advisor of Berlusconi's. One Mafia witness has testified in court that Mangano's move to Berlusconi's circle of advisors was personally blessed by top Don Stefano Bontade. The witness claims to have personally attended the all-important meeting between Bontade and Berlusconi.

The bonds became closer in January 1978, when Berlusconi became a member of the P2 secret society. The many politicians and businessmen in the club were likely seen by Berlusconi as a way to secure lucrative contracts for his companies. The head of P2, however, also opened club doors to others -- Stefano Bontade was a member as were a number of other characters from the organized crime underworld.

The Pentiti have also told police of being eyewitnesses to a number of other dubious meetings. The shady businessman Filippo Rapisarda, for example, claims to have seen Dell'Utri receive a bag full of money from the then mafia Don Bontade. The money, he says, was to be invested in television. The claims have never been proven.

This was also the time during which money -- some of it in cash -- flowed from unknown sources into the accounts of the 38 holding companies that were the financial basis of Berlusconi's concern Fininvest. While it has never been proven where the money came from, the Pentiti have said that most of it came from the Mafia.

How Berlusconi entered politics

At the same time, a brutal power struggle within the Sicilian mob was brewing. The "Corleonesi," or those from the town of Corleone, pushed aside the Palermo mob leadership headed up by Bontade and his friends. Toto Riina and his ice-cold second-in-command Bernardo Provenzano (nicknamed "The Tractor") took over. Riina, according to jailed Mafia members, immediately began personally intervening on behalf of the success of Berlusconi's construction and television interests.

Riina was, according to the testimony, not just interested in Berlusconi's business connections, but also his political ones. Riina and his gang needed new political friends badly at the time -- their political guardian angel, the Democrazia Cristiana Party, which had always sought to provide legal protection for Riina, was sinking under a campaign finance scandal.

Craxi's Socialist Party, on the other hand, wasn't a good choice either. They were also suffering under various scandals. The only choice left to the Mafia was to begin creating their own political movement -- a goal they began working towards in the late 1980s. That strategy, apparently, was only changed when Silvio Berlusconi entered politics.

Just like the Mafia in Sicily, the businessman Berlusconi was also having a rough go of it politically. State prosecutors were investigating his companies in Turin, Milan and in Rome -- and a new government could have meant the end for his fragile media empire. "To prevent the huge difficulties for the Berlusconi Group that a victory of the left would have meant," former Fininvest Manager Ezio Cartotto would say much later, "it was decided that the boss himself would have to go into politics."

From the summer of 1992 onward, Dell'Utri began preparing the project -- codenamed "Project Botticelli," and on April 4, 1993, in Berlusconi's villa near Milan, the decision was made. Above all, it was Bettino Craxi, by now the former prime minister forced to resign and the target of roughly 10 different investigations by state prosecutors, who tried to hurry the plan along. "Thanks to the weapon of television that you already have in your hand," he said to Berlusconi, "all that is needed is a brand name, a symbolic name," to win the elections.

Berlusconi held out as long as he could. "I am exhausted, you are giving me headaches," he told Cartotto. "They would destroy me if I go into politics," Berlusconi complained. "They would say I am with the Mafia."

The Mafia, on the other hand, celebrated when Berlusconi finally made the decision to enter into politics -- at least if you believe the accounts of the Pentiti.

In April 2002, Antona Giuffre, a close confidant of top Mafia Don Bernado Provenzano, was arrested and freely testified about the inexorable rise of Berlusconi's political career. With whom did the Mafia bosses negotiate regarding their political strategies, state prosecutors asked him. "Directly with Berlusconi," came the answer. "Directly?" "Yes, directly." What did the Mafia leadership expect out of these negotiations was the next question. Giuffre: "All of our problems were supposed to be solved within the next 10 years: our trials, the Pentiti, the seizure of our money, the improvement of prison conditions for Mafia members."

What, then, was the result of these negotiations, asked the prosecutors? The answer of the top Mafia boss: "We officially decided to climb aboard Forza Italia."