6. Your early business career
Jul 31st 2003
Your proudest business achievement in the 1970s was Milano 2, a very large development of offices and flats at Segrate on the outskirts of Milan. You had just started construction of Milano 2 in 1970, leading your small and dedicated team. By the end of the decade, the development was complete.
Yet you were nowhere to be seen in the company filings of the main developer, a limited partnership called Edilnord Centro Residenziale di Lidia Borsani (Edilnord). Successive managing partners of Edilnord were your cousin (Lidia Borsani), her mother (your aunt), and an Edilnord employee. Umberto Previti, the father of your friend, Cesare Previti, at the time a little-known lawyer in Rome, became Edilnord’s liquidator in January 1978 when it went into voluntary liquidation.
Nor were you to be seen in company filings for Societa Generale Attrezzature di Walter Donati (SOGEAT), the firm that developed the commercial part of Milano 2. SOGEAT was also a limited partnership. Its managing partner was Walter Donati, a Milanese accountant who became a director of many companies connected to Fininvest.
Yet jointly with Luigi Berlusconi, your father, you guaranteed facilities from Banca Popolare di Novara (BPN), an Italian bank, to Edilnord of at least 6.9 billion lire in 1973-77. You also jointly guaranteed facilities to SOGEAT from BPN of at least 4.7 billion lire in 1976-77. And, in 1978, you personally guaranteed facilities of 3 billion lire to SOGEAT.
Swiss registered companies with nominee directors controlled both SOGEAT and Edilnord, and the Swiss companies’ shares were in bearer form. An internal document from one of your lenders, dated December 1976, shows that the bank believed you to be their beneficial owner. This was hardly surprising. Otherwise the bank would have been light on security for its loan.
Strict exchange-control laws were in force in Italy in the 1970s—prison sentences for violations were severe. The Swiss companies behind Edilnord and SOGEAT were punctilious in applying to the Bank of Italy for permission to bring into Italy a total of 4 billion lire in 1968-75 to increase the companies’ share capital. The Bank of Italy agreed on condition that any post-tax profits made by Edilnord or SOGEAT would be remitted to the Swiss parent companies.
The Swiss company behind Edilnord, your brother, Paolo, and you all had bank accounts at Banca Rasini, a little-known bank with only one branch (in Milan), where your father, by then retired, had worked for most of his life.
Today, the holding company at the apex of your family’s business empire is Fininvest. A corporate forebear of Fininvest is a company called Finanziaria di Investimento Fininvest Srl (Fininvest Srl), which was incorporated in Rome in March 1975. Mr G Foscale, your cousin, was its sole director. In 1975, both Umberto Previti and his son, Cesare, were appointed to Fininvest Srl’s board of statutory auditors.
Mr G Foscale mandated two trust companies to be the registered holder of the shares: SAF and Servizio Italia, both owned by Banca Nazionale del Lavoro (BNL), then a state-controlled bank. The person who mandates a trust company is either the beneficial owner, or someone ultimately acting on behalf of the beneficial owner. Through use of a trust company, which shows up to the public as the registered shareholder, a beneficial owner remains anonymous. Use of them was common in the 1970s in Italy.
Before anti-money-laundering rules in 1991, a beneficial owner of shares registered to a trust company could sell shares and receive payment directly from the buyer under so-called “franco valuta” transactions (ie, the money would bypass the trust company). The trust company would merely execute a share transfer when instructed by the beneficial owner, and not handle the money. With a franco valuta transaction, the trust company would have only a beneficial owner’s word that he had sold his shares.
In May 1975, Fininvest Srl’s shareholder(s) agreed to inject 2 billion lire by way of share capital. Fininvest Srl bought 80% of Italcantieri in July 1975 and the rest in November 1976. Construction work at Milano 2 was sub-contracted to this Milanese firm, set up in 1973 by two Swiss registered companies which had nominee directors and bearer shares. The sole director of Italcantieri from 1973 until July 1975 had been Luigi Foscale, Giancarlo Foscale’s father and your uncle. You joined Italcantieri’s board in July 1975, immediately after Fininvest Srl bought it.
Bank of Italy inspectors carried out a check in 1979 at Cassa di Risparmio delle Provincie Lombarde (Cariplo). They found evidence that suggested that Edilnord, Italcantieri and SOGEAT might belong to you.
In October 1979, the Bank of Italy asked the Guardia di Finanza to investigate. The Guardia di Finanza found that Edilnord had made profits of 2.44 billion lire in 1974-78 that should have been remitted to the Swiss shareholder (ie, your alter ego), as agreed with the Bank of Italy. And SOGEAT had made 3.3 billion lire in 1974-78 that had not been remitted to Switzerland. The total infraction amounted to 5.74 billion lire.
As result, a posse of Guardia di Finanza officers came to another of your companies on November 13th 1979. Mr Berruti, then a captain in the Guardia di Finanza, led the team. The previous day you had told Mr Berruti that you were merely an external consultant to Edilnord and SOGEAT. Mr Berruti resigned from the Guardia di Finanza that month. Despite the strong evidence of exchange-control violations (ie, your personal guarantees at BPN and another bank, and failure to repatriate post-tax profits), no legal action was taken against you.
You, as chairman, and your brother, Paolo, joined Fininvest Srl’s board in November 1975.
Another direct corporate forebear of Fininvest is Fininvest Roma Srl (Fininvest Roma), incorporated in Rome in June 1978. It was a shell company with paid-up share capital of 20 million lire. Umberto Previti was its sole director until June 1979.
On January 29th 1979, Fininvest Roma and Fininvest Srl voted to merge, but based on their respective balance sheets at December 27th 1978.
For 18 months prior to the merger you had been trying to increase the share capital of Fininvest Srl from its paid-up level (2 billion lire). This was a meagre capital base for a man of your ambition, so you needed more share capital. At that time, ministerial approval was needed for a share capital increase beyond 2 billion lire. By mid-1977, Fininvest Srl had not obtained this. The authorities typically requested information such as details of a company’s beneficial owners.
You found a solution. As chairman of Fininvest Srl, you proposed that shareholders make interest-free loans on account of the approved share capital increase. As the approved increase was 18 billion lire, that meant up to 18 billion lire of shareholder loans could be received. Your proposal was approved on December 2nd 1977.
Unofficial records at SAF (one of the BNL trust companies) show that between February 1977 and August 1978, Fininvest Srl received interest-free shareholder-loans of 16.94 billion lire on account of the capital increase. These came in 25 tranches, sometimes on successive days. The obvious inference is that the money was received in cash or cash equivalent, such as bank cheques. SAF got the information from Giovanni Dal Santo, an “interlocutor” and director of several Fininvest-related companies. Mr Dell’Utri’s technical consultant confirmed the accuracy of the list, but added that some of the funds may have come by ordinary current-account cheque.
In November 1978 Fininvest Srl decided to repay its shareholder loans of 16.94 billion lire and a 500m-lire convertible bond that had been issued in November 1976. What happened next is complicated—it is best understood by looking at steps 2-4 in table 1.
Your cousin, Mr G Foscale, told the BNL trust companies of the proposed redemption of shareholder-loans. The trust companies would be initial beneficiaries of three uncrossed bank cheques for a total of 16.94 billion lire, to be drawn on Fininvest Srl’s account with Banca Popolare di Abbiategrasso (BPA). He asked SAF to endorse the cheques in Mr L Foscale’s favour (ie, his father’s favour).
At the end of November, Mr Dal Santo, acting as interlocutor, picked up the three endorsed cheques from the trust companies. Mr Dal Santo gave the three cheques to Mr L Foscale, who was acting on your behalf. A negotiable cheque (ie, no named beneficiary) was also obtained for 500m lire. So there were four cheques in total.
On December 7th 1978 Mr L Foscale cashed the negotiable cheque and one of the three bank cheques. This came to 1.01 billion lire. So he had 1.01 billion lire in cash and 16.43 billion lire in cash equivalent (ie, the two remaining bank cheques)—17.44 billion lire in total. Thus 17.44 billion lire had left Fininvest Srl’s coffers.
That day, there was receipt from an unknown source of 17.5 billion lire into Fininvest Srl’s bank account at BPA. And on the same day, Fininvest Roma paid 17.5 billion lire to another party, whom the investigators were unable to identify from banking records, at the same BPA branch (see steps 1 and 8 of table 1). Since the Palermo investigators’ inspection of BPA’s records precluded the introduction of funds by a third party, the money must have gone round in a circle. (The investigators deduced this because the total movements shown in BPA’s daybook for December 7th 1978 were 78 billion lire. The four bank account movements of around 17.5 billion lire accounted for 70 of the 78 billion lire. If a third party had introduced funds, there would have been movements of at least 95.5 billion lire (ie, 78 plus 17.5)).
As 17.5 billion lire had gone in and 17.44 billion lire had gone out of Fininvest Srl’s bank account at BPA, the shareholder-loans and the convertible bond together totalling 17.44 billion lire could not have been repaid. So Fininvest Srl still had 17.44 billion lire outstanding, even after this bank-cheque shuffling (steps 2 to 4).
In other words, the 17.44 billion lire needed to disappear from its balance sheet. The merger, effected by Mr U Previti and based on balance sheets drawn up as at December 27th 1978, was the answer.
Mr U Previti said there would be an interest-bearing receivable, due from Fininvest Srl, of 17.69 billion lire in Fininvest Roma’s balance sheet at December 27th 1978 (ie, the payment made by Fininvest Roma at step 8 of table 1 must have been included in that balance). When Mr Previti merged the two companies, he literally merged the two companies’ balance sheets. The receivable of 17.69 billion lire in Fininvest Roma’s balance sheet simply netted off against the liabilities of 17.44 billion in Fininvest Srl’s balance sheets. Two of the equal and opposite accounting balances that had in effect arisen from the circular flow of funds had been eliminated.
These operations were part of an even wider transaction involving 19 companies called Holding Italiana 1 (and so on sequentially to 19). Steps 6 to 7 in table 1 show how these companies were involved in the circular flow of funds.
The Holding Italiana companies have become synonymous with your family’s wealth as the owners of Fininvest, yet you are absent from these companies’ filings until 1990, and even then you do not appear in all of them.
Acting on your own behalf and/or on behalf of someone else, by December 4th 1978 you had bought 10% of 23 holding companies and had given a mandate to Par.Ma.Fid, a little-known trust company, to act as the registered shareholder. By December 5th 1978 you had bought the remaining 90% and had mandated SAF.
As at December 5th 1978, the holding companies had combined share capital of 420m lire. As there were 23 holding companies, their combined share capital could reach 46 billion lire without any ministerial approval (ie, 2 billion lire apiece).
You appointed Mr L Foscale, your uncle, as the companies’ sole director and mandated signatory for their bank accounts with BPA. Mr Dal Santo was appointed to their boards of statutory auditors.
You seemed to know the share issue was going to happen. By December 7th 1978 you had written to SAF to state that a total of 17.98 billion lire would be paid in as share capital to 19 of the holding companies “presso le casse sociali” (at the companies’ treasuries).
On December 7th 1978, the 19 holding companies received a total of 17.98 billion lire into their accounts at BPA. The source of nearly all the cash must have been the 17.44 billion lire (€46.8m in today’s money) in Mr L Foscale’s possession that day.
The 17.98 billion lire inflow was accounted for as share capital in the books of the 19 holding companies. These companies injected this amount as share capital into Fininvest Roma, thereby becoming the collective owners of Fininvest Roma. This transaction brought Fininvest Roma’s share capital to exactly 18 billion lire, all paid up.
In effect, a convertible bond of 500m lire and 16.94 billion lire in shareholder loans―received by Fininvest Srl, according to Mr Dal Santo’s information, in 25 tranches from February 1977 to August 1978―were recycled in December 1978 as fresh share capital for the 19 holding companies. The money had appeared all at once, as well.
However, the only new funds were 540m lire sitting in Fininvest Roma’s and Fininvest Srl’s bank accounts (see table 1).
As at December 26th 1978, Fininvest Roma had paid-up capital of 18 billion lire, all held by the 19 holding companies. The merger with Fininvest Srl had not yet happened. Fininvest Srl had paid-up share capital of 2 billion lire at that date. As part of the merger, its shareholder(s) must have exchanged his/their Fininvest Srl shares, which had been mandated to SAF, for 10% of the shares in the holding companies. This may explain why you mandated 10% of the holding companies’ shares to Par.Ma.Fid.
It is reasonable to surmise that the provider(s) of the shareholder-loans to Fininvest Srl between February 1977 and August 1978 owned the other 90% of the holding companies.
In 1979, 45.4 billion lire (about €104m in today’s money) flowed into the holding companies (see table 2). Nearly all of it involved money that had been sent round in a circle through companies under your control. The largest transaction of 27.68 billion lire is explained in the section below on Anna Maria Casati Stampa di Soncino’s legacy.
The holding companies put 32 billion lire in 1979 into Fininvest Roma by way of share capital, thereby apparently increasing its paid-up capital to 52 billion lire by December 31st 1979. But this money went straight out of Fininvest Roma, too, in effect whence it came. Therefore 32 billion lire of Fininvest Roma’s paid-up share capital of 52 billion lire were phoney.
In 1980, 20.05 billion lire was put into the holding companies in cash or equivalent, including 19.2 billion in late December 1980 (see table 2). This money was for Fininvest.
On December 22nd 1980, you wrote to the trust companies to say that 19.2 billion lire would be paid in as interest-free shareholder loans, with 90% going via SAF and 10% via Par.Ma.Fid. According to the holding companies’ books, the funds came in four tranches of 4.8 billion lire in the last week of December.
Yet the investigators from Palermo found trace of only one transaction in banking records at Banca Rasini, the little-known bank with one branch, which was another banker to the holding companies. They found that 4.3 billion lire (ie, SAF’s 90% share of 4.8 billion lire) had been recorded in a transit account at Banca Rasini and so had the payment for the same amount to Fininvest. The receipt was in cash (or equivalent), and so was the payment. The receipt must have been in cash. If you had funded 4.3 billion lire from your personal account at Banca Rasini, there would have been a withdrawal from your account that day for that amount. There was not.
The transaction had been recorded in a transit account. In those days, some banks used transit accounts to record very short-life transactions (ie, one week maximum to maturity). Recording a transaction in a transit account indicated that it was for a customer who was not a client of the bank. There was therefore a serious anomaly – for you were a Banca Rasini customer.
Banca Rasini acted as a bank to you, your brother, Mr Dell’Utri and his brother, your Swiss alter egos (the ones behind Edilnord and Italcantieri), and also Par.Ma.Fid. It was also very close to the Holding Italiana companies.
Armando Minna, a Milanese accountant, and his wife had founded Holding Italiana 1-23 in June 1978. Mr Minna, who was a member of the board of statutory auditors of Banca Rasini, set up bank accounts for the holding companies with Banca Rasini. You bought the 23 holding companies’ shares in December 1978 in franco valuta transactions with Mr and Mrs Minna. Mr Minna was appointed a member of the board of statutory auditors of the holding companies.
In the bank’s internal records, each Holding Italiana company was categorised as “hairdresser and beauty parlour”. Bank of Italy inspectors use this categorisation as one of the criteria for determining which bank accounts to inspect. The categorisation could have been a mistake, but there is no doubt that 23 “hairdressers” would have been far less susceptible to inspection than 23 financial holding companies.
At the time, Giuseppe Azzaretto, a Sicilian, appointed in 1973, was Banca Rasini’s managing director. Mr Azzaretto was one of the banks’ largest shareholders with 29.3%. Three Liechtenstein-registered companies held a further 32.7%, represented by Herbert Batliner, who runs one Liechtenstein’s leading trust companies.
Doubtless Mr Batliner represents many people who have valid reasons for privacy. Some clients did not. A court case in America in 1971 resulted in the conviction of two American citizens for evading taxes in the 1960s. They had done so through a Liechtenstein-registered front company that Mr Batliner had run on their behalf. Another court case from America (in 1998) revealed that Mr Batliner’s firm had acted for the common-law wife of a Latin American drug-trader. In 1989 the drug-trader had transferred $8m into a Swiss bank account. The account was held in the name of a Liechtenstein-registered company, represented by Mr Batliner who had been mandated by the common-law wife. The court case arose because the US government wanted to sequester the money, the alleged proceeds of narcotics trading and money laundering.
By November 1979, you had been living in a 17th century mansion, called Villa San Martino, for over five years. This beautiful house is in the town of Arcore, just north-east of Milan. You were not the legal owner; Anna Maria Casati Stampa di Soncino was. In September 1970, aged 19, Ms Casati Stampa became heiress to the family’s large fortune in tragic circumstances after Count Camillo Casati Stampa di Soncino, her father, shot her step-mother, her step-mother’s lover and then turned the gun on himself on August 30th 1970 in Rome.
As Ms Casati Stampa was under 21, the court appointed Giorgio Bergamasco, a senator and friend of the late count, as Ms Casati Stampa’s legal guardian. Cesare Previti, based in Rome and who had acted for Ms Casati Stampa’s step-mother, won Ms Casati Stampa’s confidence and became her lawyer. His role was to dispose of the estate, whereas Mr Bergamasco’s was to sign all the necessary legal paperwork in Ms Casati Stampa’s name. So Mr Bergamasco had legal control of her assets, while Mr Previti had practical control.
Traumatised, Ms Casati Stampa left Italy in 1970, briefly returned in 1972 and has lived abroad since. When she became 21 she gave Mr Bergamasco power of attorney over her affairs. Ms Casati Stampa declines to comment.
The Casati Stampa estate, mainly in Lombardy, included large tracts of land. As well as Villa San Martino and its parkland, the family owned about 250 hectares of land at Cusago. With effect from November 11th 1979, a company called Immobiliare Coriasco Spa (Coriasco) bought Ms Casati Stampa’s land at Cusago.
Mandated by Mr L Foscale, SAF were the registered holders of Coriasco’s shares, so Coriasco’s beneficial owners were anonymous. However, in Fininvest Srl’s 1976 accounts Coriasco was included as a wholly owned subsidiary. Coriasco’s only director was Giuseppe Scabini, who later became Fininvest’s treasurer.
Coriasco did not pay money for Ms Casati Stampa’s land. Instead, 800,000 shares, valued at 1.7 billion lire, in a company called Cantieri Riuniti Milanesi (CRM), a small property company, one of whose directors was Mr Dell’Utri, were given to Ms Casati Stampa. These shares represented a 40% stake in CRM. Around the same time 400,000 CRM shares were given to a trust company called Unione Fiduciaria, a subsidiary of an Italian bank. It is not known who the beneficial owner of these shares was.
Ms Casati Stampa was unhappy that she had been given shares in a company she knew nothing about in exchange for her land. She wanted the shares to be turned into cash. What followed next is best understood by referring to table 3.
The essence of what happened is that you arranged for a shell company of yours, Palina, fronted by a 75-year old stroke victim, to buy the 800,000 CRM shares from Ms Casati Stampa, and the 400,000 CRM shares from Unione Fiduciaria. Palina paid 1.7 billion lire to Ms Casati Stampa and 860m lire to Unione Fiduciaria. The investigators from Palermo did not find out where this money came from, as there was no trace of it at BPA. However, they found a bill from Unione Fiduciaria and a stamped share-transfer form signed by Mr Bergamasco, which strongly suggest that 2.56 billion lire was paid.
On December 19th 1979, Palina sold the 1.2 million CRM shares to Milano 3 Srl, another shell company. Milano 3 Srl paid Palina 27.68 billion lire (ie, more than ten times as much as Palina had paid weeks earlier). Palina was a cut-out company; it was incorporated in October 1979 and placed in liquidation in May 1980. There was nothing in its accounting records about the CRM share deals, or the sale of the CRM shares to Milano 3 Srl.
The transaction was a sham because Milano 3 Srl indirectly got the money to pay Palina from Palina. As table 3 shows, on December 19th 1979, Palina sent 27.68 billion lire to the trust companies, which then transferred this sum to holding companies’ bank accounts at BPA. From there, the funds went through Fininvest Roma’s BPA account, and then, through Milano 3 Srl’s account to an unknown beneficiary.
Since the Palermo investigators’ examination of BPA’s records precluded the introduction of funds by a third party, the funds must have gone round in a circle. This is because on the same day there was a receipt of 27.68 billion lire in Palina’s current account (ie, from Milano 3 Srl).
You seemed to have known what was going on. You had written to the trust companies on December 13th 1979 to advise them that a forthcoming payment of 25.68 billion lire was to be treated as shareholder loans to certain of the Holding Italiana companies. In the event you paid 27.68 billion lire. (Holding Italiana 18-19, not mentioned in your letter, received 2 billion lire.)
Milano 3 Srl was incorporated in November 1979, as a subsidiary of Fininvest Roma. Mr Dal Santo was its only director. The anti-Mafia investigator and the Palermo magistrates' technical consultant did not gain access to Milano 3 Srl’s books and records. However, Milano 3 Srl must have been the source of the 27.68 billion lire received by Palina on December 19th. It must also have recorded the 27.68 billion lire as an investment in CRM in its books. This investment was “funded” by the 27.68 billion lire that it had received from Fininvest Roma the same day.
CRM merged (literally) into Milano 3 Srl in July 1980. Milano 3 Srl, the surviving company, renamed itself Cantieri Riuniti Milanesi. It was the same manoeuvre once again—elimination of two equal and opposite accounting balances that had arisen from the circular flow of funds. When the two balance sheets were merged, the balances in Milano 3 Srl’s books relating to the Palina transaction disappeared. Its investment in CRM shares would simply have been netted off against the related financing received.
It needed to be. Fininvest could not possibly have spent 27.68 billion lire on buying the 1.2 million CRM shares that you already owned (through Palina) since precisely the same amount of money had gone in and out of Palina’s bank account on December 19th 1979. And CRM’s shares had little value since CRM did not even own the land at Cusago— Coriasco did.
Mr Dell’Utri’s technical consultant told the Palermo court that, if this transaction had taken place after anti-money laundering rules were introduced in 1991, “it would have had to have been reported” because of the amount of money involved.
Routing the funding for the Palina transaction through Fininvest Roma had the effect of puffing up this company’s assets and liabilities by 27.68 billion lire. As a part of the operation, Fininvest Roma’s share capital increased by 15 billion lire, treated as fully paid up. This share capital was phoney, as were the rest of the accounting entries relating to this operation. In other words, manufactured bank-account movements, made possible by Palina, which completed the circle, lent spurious credence to hollow accounting entries.
Coriasco (the company that acquired the Cusago land) also made a share issue in 1979 that was not what it seemed.
As noted above, in 1976, Fininvest Srl had owned 100% of Coriasco’s 200,000 shares of 1,000 lire each (ie, Coriasco had paid-up share capital of 200m lire in total), but SAF was Coriasco’s registered shareholder under a mandate from Mr L Foscale.
According to official SAF records, in mid-March 1979, Mr L Foscale had written to SAF to say that on March 22nd 1979 there would be a 2 billion lire increase in the share capital of Coriasco (ie, 2m shares would be issued).
He said the transaction would be franco valuta (ie, the money would bypass the trust companies). Instead, according to unofficial records at SAF, on March 20th 1979, Mr Dal Santo phoned to say he would give them the mandate to underwrite a 2 billion lire share capital increase. Again, according to SAF’s unofficial records, on March 21st 1979, Mr Dal Santo brought the mandate for SAF to sign, and made available 2 billion in cash. SAF paid that money to Cariplo and Banca Popolare di Novara and obtained two uncrossed bank cheques for a total of 2 billion lire.
SAF endorsed these cheques to Coriasco, which therefore looked as though it had received a 2 billion lire share capital increase paid by two bank cheques. It had not—the money for the shares was really in cash. In other words, Mr Dal Santo had laundered 2 billion lire through SAF with help from the trust company itself.
To any inspector of the official paperwork for the share issue (ie, Mr Foscale’s letter), it would have looked as though the money had bypassed the trust company. This is because there would have been no immediate reason to suppose that the deal had not been done as set out in Mr Foscale’s letter.
According to Fininvest’s accounts for 1979, its stake in Coriasco was by then only 9.09% (ie, the 200,000 shares it held in December 1976). It was not therefore clear who had provided the 2 billion lire in cash in March 1979. Mr Dell’Utri’s technical consultant told the Palermo court that Coriasco was “absolutely marginal and irrelevant”.
After getting planning permission, another company called Cantieri Riuniti Milanesi (ie, not the same company as involved in the Palina operation) later carried out a large development on land that Coriasco had acquired in 1979.
In 1980 Immobiliare Idra, a company fronted by Mr Dal Santo, became the legal owner of Villa San Martino (and its parkland, collection of books, pictures and so on) when it paid Ms Casati Stampa 500m lire (about €960,000 in today’s money). At some point Immobiliare Idra must have belonged to Fininvest because Fininvest later sold this company to you.
A number of influential figures in your early career—Mr C Previti, Mr G Foscale, Mr Scabini, Mr Dell’Utri, and Mr Berruti—later rose to positions of prominence with you. Like you, they were all charged in the 1990s with criminal offences. Far more enigmatic is Mr Dal Santo.
Born in Sicily in 1920, by the 1970s, Mr Dal Santo was working in Milan as a book-keeper. He was the only director of a number of companies at crucial points in their existence: for instance, of Milano 3 Srl when it acquired CRM from Palina, and of Immobiliare Idra when it bought Villa San Martino. He was also the “interlocutor” between Mr L Foscale and the BNL trust companies. He was the person who supplied the information found in SAF’s unofficial records (ie, information that the 16.9 billion lire of shareholder loans to Fininvest Srl were received in 25 tranches between February 1977 and August 1978). He served on the board of statutory auditors of the Holding Italiana companies. You certainly knew him.
Mr Dal Santo laundered 2 billion lire (about €5.1m in today’s money) through SAF and Coriasco in March 1979. From the date of its acquisition by Fininvest Srl in 1976 until January 1978, ISTIFI’s only director was Mr Dal Santo. This firm, a finance company, was to become the financial lung of the group.
He was obviously an uomo di fiducia (trusted man).
Do you have any alternative explanations for the above transactions?
Who put 4 billion lire into Edilnord and SOGEAT by way of share capital in 1967-75?
Who put the 16.94 billion lire into Fininvest Srl as shareholder loans in 1977-78, and where did the money come from?
Why was this money injected in 25 tranches over a 20-month period?
On whose behalf was Mr Dal Santo an uomo di fiducia?
Do you think Ms Casata Stampa got a fair deal for Villa San Martino and her land at Cusago?
Who was the beneficial owner of the 400,000 CRM shares registered in the name of Unione Fiduciaria and who therefore received the 860m lire paid by Palina?
Who put 2 billion lire into Coriasco in March 1979 and where did the cash come from?
Why did you transact so many share deals franco valuta?
Why did you avail yourself of the right to silence when prosecutors wanted to question you at Palazzo Chigi on November 26th 2002 about these and other matters?
In October 1990 the appeals court in Venice found that you had perjured yourself while giving evidence in 1988 in an unsuccessful libel case that you had brought against Giovanni Ruggeri and Mario Guarino, both Italian journalists. They are the joint authors of “Inchiesta sul Signor TV”, a thoroughly researched book on your early business career, first published in 1987.
You were found guilty but your perjury was commuted by a general amnesty. Among other things, in the libel proceeding you said that you had joined the P2 lodge only shortly before it was uncovered in 1981 and that you had not paid your subscription. The court in Venice ruled that these statements were not true. You were initiated into the P2 lodge in early 1978 and paid your 100,000 lire subscription.
After Mr Berruti questioned you about Edilnord and SOGEAT in November 1979, Salvatore Gallo, a superior officer in the Guardia di Finanza in Rome, wrote the following month to the Ufficio Italiano dei Cambi. He recommended no further action be taken. Mr Gallo was initiated into the P2 lodge in July 1980.
BNL had more top managers who were members of P2 than any other Italian bank. At least six senior BNL executives had been initiated into the lodge, including Gianfranco Graziadei, chief executive of one the BNL trust companies.
During the 1970s your companies received generous support from Italian banks, including Monte dei Paschi di Siena whose general manager, Giovanni Cresti, was a member of P2. Later Monte dei Paschi di Siena’s statutory board of auditors concluded that: “ The risk profile towards [your group] was altogether exceptional. Inspectors who have looked at the loan book have made an accurate analysis of it that allows the conclusion that there was significant favouritism towards [your group].”
Why did you lie about the date on which you were initiated into the P2 lodge?
Did you use your membership of the P2 lodge to obtain things that you would not otherwise have done?
*We have compiled this sub-section from the reports on your companies by an anti-Mafia investigator and by the Palermo magistrates’ technical consultant from the Bank of Italy. An allegation from a pentito (supergrass) that 20 billion lire of Mafia money had been used to build up Fininvest’s television interests triggered their investigation. The two investigators spent 18 months combing records of companies at the top of the Fininvest corporate hierarchy in the period 1975—1985 (and companies connected to those, and so on), of trust companies connected to you, and of bank accounts belonging to you and the companies examined. They have both given evidence in relation to their findings in the trial of your close friend, Marcello Dell’Utri, who was charged in 1996 with aiding and abetting the Mafia.
Apart from a short spell in the late 1970s, Mr Dell’Utri, a Sicilian, worked with you from the mid-1960s to 1994. A member of the Italian parliament, he was a co-founder of Forza Italia, and acted as your campaign manager in the 1994 election.