Several arrests this past week have drawn renewed attention to anti-corruption efforts in Italy.
On Tuesday, Giuseppe Orsi, CEO of Finmeccanica, was arrested in Milan relating to charges that he used intermediaries to bribe a former chief of the Indian Air Force with regards to the sale of 12 AW101 helicopters to India in 2010. Finmeccanica SpA is approximately 30% owned by the Italian government and focuses primarily on the aeronautics and defense industry. Shares in Finmeccanica reportedly fell 14 percent on news of the CEO’s arrest. Mr. Orsi, who’d been under investigation since April 2012, has since resigned from his post. Authorities are reportedly still looking for two residents of Switzerland who may have acted as intermediaries in the alleged bribes.
A few days earlier, Milan officials also announced that they were opening an investigation into Eni SpA Chief Executive Officer Paolo Scaroni regarding alleged improper payments by Eni in Algeria. The oil and gas company has been under investigation since 2010 regarding a reported €197 million in bribes related to Eni’s GK3 gas pipeline contract in Algeria. The recent news that prosecutors have targeted Mr. Scaroni may indicate that authorities are prepared to make an arrest in that case as well.
Italy has a storied history of struggling with corruption. The country ranks 72 out of 176 in Transparency International’s 2012 Corruption Perception Index. In comparison, its neighbors France , Switzerland, Austria and Croatia rank 22, 6, 25 and 62 respectively. And a 2011 Phase 3 Report written by the OECD Working Group on Bribery remarked that the level of sanctions in Italy against bribery “may not always be fully effective, proportionate and dissuasive.” This past November, however, Italy adopted a new anti-corruption law (Law No 190 of 6 November 2012) which focuses on increasing anti-corruption efforts in the public sector. The law was passed by the government of Prime Minister Mario Monti, who has made fighting corruption and organized crime in Italy a main focus of his administration.
You can read more about the investigations into Finmeccanica and Eni SpA in the TRACE Compendium.