2. Your spontaneous declarations (May 5th 2003)
Jul 31st 2003
From The Economist print edition
It is a defendant’s right in a criminal trial in Italy to make “spontaneous declarations”. Not made under oath, they can be made at any stage of a trial. In essence, they are an opportunity for a defendant to make a plea in mitigation. A defendant is not supposed to use them to make allegations not directly related to his case.
Your words below are from a translation of your spontaneous declarations on May 5th in the SME trial. We have edited your speech, but fairly, we believe. The transcript is available in both Italian and English. What follows are words you spoke, except where indicated by the use of square brackets. For the sake of clarity, we have juxtaposed your opening and closing remarks, and have moved the context of two of your remarks, as indicated by use of italics. We note where we omit sizeable passages of your speech by use of the symbol (.).
“…I have decided to change my attitude to this case. My earlier attitude was…[no] involvement on my part, because I was convinced…that my lawyers were perfectly capable of putting forward all the arguments [to] fully demonstrate how ludicrous the charge is…Some three weeks ago my lawyers…told me…that the court had rejected [their] application to call some witnesses who…are…indispensable…
…for the first time at last night’s meeting with lawyers Ghedini and Pecorella – it may sound incredible, but the accusations seemed so illogical, so ludicrous, that I had never read the charges filed against me. I discovered… that the evidence against me was uncertain and fragmentary, and as I was well aware of my situation, I placed no importance on these proceedings. However, last night I discovered that it was actually alleged that I, or other partners, or jointly with other partners, had contacted one of the judges involved in these lawsuits filed by Buitoni, which Buitoni always lost, to the advantage of IRI. [From page 18-19 of the transcript].
I think the court needs to hear sworn evidence of the facts I have recounted today, and I believe that at this point, in view of the amount of public interest focusing on this trial, I need to be present when the witnesses are heard to exercise my right, the right of every citizen, to cross-examination. I believe that this can be arranged, despite…my heavy schedule…I am not only prime minister…but also, since May 1st, a member of the European troika that governs the Council of Europe; consequently, from now until the end of this year I will have to make 76 trips abroad…There will be my engagements as prime minister…
This does not mean that I won’t be able to find some free…mornings…This will allow the prime minister and citizen Berlusconi to be present…and exercise the right…to cross-examine the witnesses whom I would urge the president of the judges to call…The judgment will…relate to the integrity and morality of the prime minister…my conduct was scrupulously honest, and I hope that what I have said will be borne out in this trial, because the person before the court today is not only the defendant Berlusconi, but also citizen Berlusconi, to whom the majority of the country has entrusted the responsibility and honour of governing the country. Thank you.”
“I only wish to talk about facts, without giving opinions, or passing judgment…On 1st May 1985, while I was in Madrid…I [learned] that IRI had sold SME to Carlo De Benedetti’s Buitoni…In particular there was a very heated phone call from the late Pietro Barilla, who told me that…a fortnight earlier…, [he] was told that IRI did not intend to sell off [SME]…And he asked me, he begged me, in view of my friendship with the then prime minister, Bettino Craxi, to try and arrange an appointment…for him.
When I got back to Milan I spoke to the prime minister, who…gave the impression that he wasn’t particularly interested in it…
A few days later the prime minister rang and asked me to meet him…in his offices in Piazza del Duomo, Milan, where I found a totally different person…He used very strong, sometimes colourful language, and began to recount what he had learned of the affair, not only from…Undersecretary Amato, but also from…members of the IRI board who belonged to his political party.
He began by describing as incredible, horrifying and scandalous the way in which the negotiations had been conducted, as he put it, and I remember his words well, ‘behind closed doors’, rather than on the open market…He said it was scandalous that…board members of IRI had not been informed of these negotiations, or even the intention to sell SME; he said it was scandalous that IRI had rebuffed leading figures in the Italian food industry, and he named Buitoni, who had also been mentioned by Pietro Barilla when he phoned me in Spain.
If I may go back in time…Bruno Buitoni…said that he was even willing to sell Buitoni…to IRI…He also told Barilla…that De Benedetti had decided to buy [Buitoni], because he had convinced him that he was now sure the purchase would go ahead…and...he quoted the exact expression; I think he said that he had SME ‘in his pocket’. This was also reported to the prime minister, who described this behaviour as unacceptable. He also told me what…minister Altissimo…told him about an offer by the American multinational Heinz, which had asked to buy SME…[Mr Prodi] turned down the offer. On that occasion [Mr Prodi] said that the food holdings owned by SME were considered strategic to [Italy], and therefore unsaleable. [Mr Prodi] also estimated…the value of SME at 1,300-1,500 billion [lire], saying that SME was the casket, the safe in which the main historic Italian brands were kept…
He said Altissimo had told him about this discussion with [Mr Prodi]. He also said that the then chairman of the budget commission…had contacted Romano Prodi at the beginning of the year and received an identical negative answer about SME’s intentions…[Craxi] consequently felt that this sort of behaviour was totally unacceptable, and that the sale, which he viewed as stripping of government assets in return for a gift, for undue enrichment of a private individual, could not take place in that way. He described in even stronger terms the agreed price…497 billion [lire]…
… “It’s impossible for a deal of this kind to be concluded in just two sessions at Mediobanca”, he said he’d been informed that some IRI executives… were so offended that they walked out… leaving only [Mr Prodi], who then clinched the deal with De Benedetti.” [from page 14 of the transcript].
….Craxi added that a universal rule…had been disregarded, in other words that a majority premium should have been added to the valuation because the majority interest in the company was being sold.”
What was Craxi’s conclusion? He said, “This is a loss to the state, it’s unacceptable asset-stripping…there’s only one solution: for IRI to receive a much higher bid than the one contained in the contract with CIR [the holding company for Buitoni]. I know Barilla’s trying to get together a syndicate of industrialists”, he said, “…Darida…has…asked for…signature of the agreement to be postponed from 10th to 28th May. They agreed, so there’s a very short time to submit to IRI a bid higher [than] the price agreed with CIR”…
He said: “…So I’d like you to get involved personally alongside Barilla; I know there are other businessmen interested”. He mentioned…that Ferrero, as well as Barilla, as well as Buitoni, had come forward…“So…”, he said “…I know that an accountant, a Mr. Locatelli of Milan, is working on the matter…I’d like you to…get involved, perhaps by having Fininvest join the syndicate, so that a much higher bid than CIR’s can be submitted by that date, 28th May”.
I told him that…two senior executives of [IRI] (you said CIR, but we assume you meant IRI) had come to see me…when I asked [them] if IRI was planning to sell SME, they said it definitely wasn’t…I told this story to the prime minister, but although at the time I had no direct interest in buying SME or any of the companies belonging to it, [Mr Craxi] still asked me in a very, very friendly but insistent way to co-operate; he asked me to contact [Pietro] Barilla immediately and to see, hear this accountant and to put my practical approach to work…
I eventually did, and I must say that it was no great sacrifice for me because I had some unfinished business with Mr. De Benedetti; he had holdings in the La Repubblica-Espresso group which kept attacking me – not just every other day, but practically every single day…
So I immediately got in touch with Locatelli. …In full agreement with [Mr]Barilla, I instructed a Rome lawyer [Mr Scalera] to submit a higher bid to IRI (I remember that the increase was around 50 billion [lire], and I think the actual bid was 550 billion [lire]), on behalf of persons to be named at a later stage…This bid was submitted on 23rd May…
We set up a meeting at Ferrero’s head office in Turin or a nearby town; we all went there together and drafted a telex, which we sent to IRI the same evening. It was the last day, 28th May…I would say that this was the most important step in the process; I’d carried out the prime minister’s instructions, a procedure which would have led to completion of the contract had been halted, and…much higher bids…[had been received] than the price specified in the preliminary agreement with CIR. So the entire deal came to a standstill.
The contract signed by Prodi and CIR wasn’t completed, and other parties interested in the purchase came on the scene, including Mr Fimiani of a company whose name I don’t remember. He has phoned me in the last few days, and I would ask my lawyers to file the letter and documents which Mr Fimiani has sent me as exhibits in these proceedings. His bid was 620 billion lire, so it was higher than ours.
There had been strong criticisms from the entire left wing, and there was also (as I was told in my meeting with prime minister Craxi) a rumour, supported by what Craxi called very precise circumstantial evidence, that bribes had been paid to…a faction of [the majority] party…Amato told me in no uncertain terms…that proof of this fact existed. This was the only possible explanation for such a huge gift to a private individual, leading to such a serious loss to the state…
De Benedetti then filed a series of lawsuits against IRI, attempting to enforce the document signed by Prodi. I believe that CIR was well aware that Prodi acted ultra vires, in other words he had no power to sign that agreement; in fact, I believe that Prodi said as much to De Benedetti as there is no other explanation why CIR later failed to take proceedings against Prodi…
In any event De Benedetti filed a series of lawsuits…Without my involvement…. the case against IAR [Industrie Alimentari Riunite] was dismissed, either in the final judgment or during the proceedings. De Benedetti appealed, and once again IAR was considered to be a party to the proceedings, but its application was rejected. De Benedetti appealed to the court of cassation [the final appeals court]…
…there were 15 judges involved in these lawsuits, who kept saying no to Buitoni…. so it seems very strange that it could be thought that one of these judges influenced the entire decision, which seems to me to be an impeccable decision that cannot be criticised on legal or objective grounds.
I was only involved once, in 1988, when, as the lawsuits that claimed from IRI, which had benefited from IAR’s involvement in the proceedings, and was the only party which could have been benefited from it…it kept control of SME, retained ownership of it, and would not have been obliged to sell it to CIR…
This was established at first instance and by the high court at all levels of appeal; if anything, it was [Mr Prodi] whose position was protected against the possible claims… by CIR against him for contractual liability, thanks to the rulings of the court, which stated that [IRI’s] commitment was merely a preliminary commitment and not a final agreement.
I believe that is everything: I think these are definite facts.
How would you reconcile your spontaneous declarations on May 5th 2003 with our factual recital of the aborted sale in 1985 by IRI of SME to Buitoni?