Bancopoli

Bancopoli was the name given by the Italian press to the finance and banking scandals that played out in the public eye in Italy between July 2005 and January 2006. The main story was that the Italian Banca Popolare Italiana (BPI), in competing with Dutch ABN AMRO for control of Banca Antoniana Popolare Veneta (known as Antonveneta), was given an unfair advantage by Banca d'Italia Governor Antonio Fazio (Banca d'Italia is Italy's central bank). Fazio was forced to resign, and BPI Managing Director Gianpiero Fiorani was accused of using several illegal tactics and was arrested on a number of charges in connection with the attempted takeover. In addition to this, Giovanni Consorte, head of the Italian insurance company Unipol was also forced to resign, implicated in wrongdoing in connection with the Antonveneta scheme as well as another attempted takeover, this one of the Italian Banca Nazionale del Lavoro (BNL). In the end, ABN AMRO won control of Antonveneta and the French BNP Paribas won control of BNL.

Italian and Foreign Interest in Antonveneta and BNL

Antonveneta

In summer 2004, the Dutch bank ABN Amro asked the Bank of Italy for authorization to increase its share in the Italian bank Antonveneta from 12.6% to 20%, making it the largest shareholder. On February 14, 2005 the Italian BPI (then Banca Popolare di Lodi) got permission from the Bank of Italy to raise its holdings in Antonveneta to 15%.

On March 30, 2005, ABN Amro launched a bid for Antonveneta. On April 29, BPL proposed a merger with Antonveneta.

BNL

On March 29, 2005, the Spanish bank BBVA, already a 15% shareholder in the Italian bank BNL, launched a bid to become the majority shareholder in BNL. Then on July 19 the Italian insurance company Unipol launched an takeover bid for BNL.

Thus two Italian companies (BPL and Unipol) were competing with two foreign banks (ABN Amro and BBVA) for ownership of Italian banks.

candal

The scandal became public on July 25, 2005 with the public prosecutor's office in Milan ordering judicial seizure of any Antonveneta bank shares owned by BPL (who had by then changed their name to Banca Popolare Italiana) after the investigations began on May 2. This case was investigated by public prosecutors Eugenio Fusco and Giulia Perrotta.

Friendly relations between BPL Managing Director Gianpiero Fiorani and Banca d'Italia Governor Antonio Fazio ensured quick authorization of BPL's requests, while those of ABN Amro were stalled. According to the Italian markets regulator Consob (an acronym for "Commissione Nazionale per le Società e la Borsa"), BPL had been mopping up Antonveneta stocks since November 2004 thanks to a secret shareholder agreement, while declaring on January 17, 2005 only a little over 2% ownership.

On February 14, 2005, BPL took control of Antonveneta, controlling 52% in aggregate, part directly through BPL (15%), and the rest through other companies, including Fingruppo, Gp Finanziaria, Unipol and Magiste. The operation was financed, according to several statements by Fiorani made under questioning in December 2005, by amassing money through illegal bank charges and by taking it from accounts of dead people.

Preliminary Investigation

On May 2, 2005 the prosecutor in Milan started a file against unknown persons for the inflation of Antonveneta. The allegation was of stock manipulation, that is, an attempt to influence the price of Antonveneta stock through spreading false information. Fifteen days later the first group of names being investigated were released: among the 23 people named were Fiorani as well as Emilio Gnutti, key shareholders of Fingruppo, Gp Finanziaria, and Hopa, in which then Italian Prime Minister had a stake through Mediaset [ [http://www.key4biz.it/Profili_societari/2006/11/Mediaset.html Mediaset ] ] and Fininvest [ [http://www.key4biz.it/Profili_societari/2006/10/Fininvest.html Fininvest ] ] , already co-authors of the sensational inflation of Telecom Italia, together with Olivetti of Roberto Colaninno, Vice President of Monte dei Paschi di Siena, already convicted for insider trading. As a result of the investigations, on June 8 the tribunal of Padua decided to suspend the Antonveneta Board of Directors.

Meanwhile the prosecutor in Rome decided to open a file on developments in the banking sector, and Fiorani was added to the list of names being investigated on July 12. Right away it was clear that this was a scandal of major proportions. Three days later (July 15), Francesco Frasca, head of the Banca d'Italia's inspectorate, completed the list of persons under investigation at Rome, where prosecutors Perla Lori and Achille Toro were working.

Adding to the furor was the publication in the media of transcriptions of intercepted telephone calls among those at the centre of the scandal. In particular, the call in which Fazio gave Fiorani Banca d'Italia's permission for the transactions was considered astonishing in view of the familiarity between the two banks and brought the scandal fully into public consciousness.

The Scandal Explodes

On July 25, the heads of the Milan inquiry, Fusco and Perrotti, arranged the seizure of Antonveneta stocks held by BPI and its allies, among others Emilio Gnutti, Stefano Ricucci, owner of Magiste who was implicated in the murky inflation of RCS, the Lonatis and Danilo Coppola. The seizure decree also mentioned several wiretaps whichthe implicated Fazio and Fiorani. For the prosecutors, it was proof that the inflation was illegally planned. On August 2 the judge for the preliminary investigation Clementina Forleo validated the seizure of stocks and further served notice of measures against Fiorani and BPI financial director Gianfranco Boni.

On September 16 Fiorani resigned from the Board of BPI. The decision came after a new allegations against his office. Besides stock manipulation, insider trading and impeding the activities of the Consob inspectorate, Fiorani was obliged to respond to charges of making false declarations to a public office and making false assessments and prospects. In effect it was alleged that Fiorani personally enriched himself by the financing of his own bank.

The enquiry widens

Meanwhile the scandal was being discussed in the political arena, with Fazio being singled out as the principal figure, and there were repeated calls for his resignation. After some wrestling, on September 22 finance minister Domenico Siniscalco resigned in protest against the government's failure to oust Fazio. [ cite web|url=http://search.ft.com/ftArticle?startDate=29/08/2005&dsz=1&dse=true&queryText=domenico%20siniscalco&endDate=02/10/2005&activeTab=ftNews&resultsToReturn=10&aje=false&id=050922002161&ct=0 |title=Lex live: Italy |accessdate=2007-12-29 |date=2005-09-22 |publisher=Financial Times ]

On September 29 the news filtered down that the head of Banca d'Italia was being investigated since early August by the prosecutor in Rome for abuse of office in relation to the Antonveneta inquiry. Summoned by the magistrates, Fazio was to be questioned October 10.

On December 6 the entire Board of Directors, the executive committee and the executive committee and auditors of BPI came under investigation for stock manipulation on behalf of the bank. This was a new thread of an inquiry that had rocked the economic world to its depts.

On December 7 Giovanni Consorte, head of the insurance company Unipol, was added to the list of those being investigated, for having participated in the mop-up of Antonveneta shares on behalf of Fiorani.

Gianpiero Fiorani arrested, Fazio and Consorte resign

On December 13 another major charge was made against Fiorani: association with criminal intent. The inquiry was now working on three fronts: association with criminal intent, stock manipulation and embezzlement, insofar as Fiorani would have subtracted money from current accounts of the clients of his own bank. On this point, judge Forleo, at the request of the prosecutor, issued an order to take Fiorani into custody.

The same day Vito Bonsignore came under investigation for stock manipulation, a Member of European Parliament from the UDC party and an entrepreneur, owner of Gefip, a company that participated in the stock inflation orchestrated by Fiorani. Bonsignore was the only politician who was clearly implicated in the scandal.

On December 15 Giovanni Consorte, Unipol's chairman and chief executive, came under investigation by the prosecutor of Rome for stock manupulation, market manipulation and impeding an inspecting authority, in relation to an inquiry into the inflation of BNL, in which Consob ascertained the existence of a pact between Unipol and Deutsche Bank.

Fiorani, questioned on December 17, made several admissions to accumulating a treasury of 70 million euros at the expense of his own clients.

The Governor of Banca d'Italia, by now implicated in the inquiry and under a great deal of pressure from Italian parliament, resigned his commission on December 19, a resignation that was accepted by the high council of the central bank the next day.

On December 28 Consorte was forced to relinquish control of Unipol as the list of allegations in the inquiry got longer. According to the magistrates, Unipol would have aided Fiorani in the illegal inflation of Antonveneta and, probably, would have received benefits from the intricate web of relationships already woven with the other so-called "furbetti del quartierino" for acquiring BNL.

The resignation by judge Achille Toro and the victory of ABN Amro bank

On Tuesday January 3, 2006, the prosecutor of Perugia added the name of Achille Toro, special prosecutor of Rome, to the list of people being investigated, on the hypothesis that he was abetting the violation of official secrets. Notwithstanding the attestation of good faith received from his office, Toro decided to resign, declaring his innocence, from the investigations of the takeovers of BNL and Antonveneta and their stock activities. The official secret that Toro was said to have revealed would have concerned those under an investigation in progress.

The same day, following the acquisition of 25.9% of capital so far in hands of BPI, the Dutch ABN Amro definitively gained control of Antonveneta with 55.8% of capital, and prepared to launch a takeover bid by the end of the month on the same terms offered the previous July, terms that had been abandoned thanks to the opposition of BPI and its allies.

The victory by BNP Paribas

On January 10, 2006, Banca d'Italia blocked the takeover bid of Unipol on BNL. On February 3, 2006, BNP Paribas acquired the 48% of BNL that had belonged to Unipol and its associates, and launched a takeover bid on all of the stockholdings. The Banco de Bilbao later granted the shares in its possession.

The publishing by Berlusconi's newspaper "Il Giornale" and his testifying

On January 2, the publication in "Il Giornale", owned by Paolo Berlusconi, brother of Silvio Berlusconi, then Prime Minister of Italy, of part of the telephone wiretaps of calls between Consorte and the secretary of the DS party member Piero Fassino amplified the political scandal. The published wiretaps, going back to July 2005, turned out to be irrelevant to the judicial issues, and were not even transcribed by the magistrate; their publication had however a big effect in politics and the media, that was exploited by most of the politicians on the right in the campaign for the forthcoming April 9 elections.

On January 12, during an episode of Porta a Porta hosted by Bruno Vespa, Silvio Berlusconi revealed that he was aware of the facts regarding the implication of the DS on the question of Unipol. After repeated invitations of the exponents of l'Unione (a centre-left political party) to make a statement as soon as possible before the magistrates, the next day he presented himself to the prosecutor of Rome, where he spent 30 minutes in conversation with the magistrates. In the end, Berlusconi clarified that he had not spoken of the relevant facts and had told the magistrates that he was made aware by Tarak Ben Ammar of a an encounter between the heads of the insurance company Assicurazioni Generali and those of Unione, in which Generali were pressured to sell Unipol their own share of BNL, equivalent to 8.7%.

On January 18 the president of Generali, Antoine Bernheim, heard by the magistrates as a witness, categorically denied having been pressured on the sale by members of the left; only by Fazio. Ben Ammar confirmed having spoken of these meetings, but he also denied the allegation of Berlusconi: "Bernheim and me never told the president of the Council that political representatives of the left or right applied pressure."

On January 25 the Prosecutor of Rome requested the filing of the brief relative to Berlusconi's deposition, from the moment that the relevant criminal facts did not correspond, but grounds for opening a libel case did not exist. [ [http://www.corriere.it/Primo_Piano/Politica/2006/01_Gennaio/25/unipol.shtml Articolo sul Corriere della Sera su archiviazione fascicolo dichiarazioni di Silvio Berlusconi] ] [ [http://www.repubblica.it/2006/a/sezioni/politica/affaripol3/archidic/archidic.html Articolo su la Repubblica su archiviazione fascicolo dichiarazioni di Silvio Berlusconi] ]

No information yet on the source that allowed the journalist from il Giornale to access the wiretaps. After an inspection ordered by the Ministry of Justice, the diskette containing the original wiretaps was found still in its sealed envelope the previous August. During the parliamentary hearing of one section of major relevance to the Italian secret service, the members of DS called upon the service to abstain from any intervention that might influence the outcome of the electoral campaign.

Gianpiero Fiorani under interrogatory by the PM judge

Gianpiero Fiorani, former president of the BPI, admitted up front under questioning by the public prosecutor to making loans to certain centre-right politicians under favourable conditions in order to rescue Antonio Fazio, director of Banca d'Italia. Among the measures to obtain this goal was the rescue of Credieuronord, an allied bank on the brink of bankruptcy.

Subsequently it emerged during questioning that there had been a handover of cash money to centre-right politicians, including Roberto Calderoli of the Lega Nord and Aldo Brancher of Forza Italia. The investigation is awaiting documentary confirmation of these statements. [ [http://www.repubblica.it/2006/a/sezioni/economia/banche35/pagato/pagato.html Articolo su la Repubblica su interrogatorio di Gianpiero Fiorani] ] [ [http://www.repubblica.it/2006/a/sezioni/economia/banche35/fioraniaipm/fioraniaipm.html Articolo su la Repubblica su interrogatorio di Gianpiero Fiorani] ]

Notes

Bibliography

* "Inciucio". (Peter Gomez and Marco Travaglio, 2005, BUR Biblioteca Universale Rizzoli, ISBN 88-17-01020-0).

See also

* Tangentopoli and the connected enquiry "Mani pulite"
* Inciucio
* Italian political scandals