Centripetal and Centrifugal Corruption in Post-Democratic Italy

Centripetal and Centrifugal Corruption in Post-democratic Italy

Donatella della Porta, Salvatore Sberna, and Alberto Vannucci

One enduring feature found in the latest examples of corruption in Italy, compared to those that emerged during the “clean hands” investigations of the 1990s (also known as Tangentopoli), is the evidence of an “institutionalized” practice of corruption. Decisions, attitudes, negotiations, expectations, and language are based on pre-established scripts, following rules that are well-known to the people involved and informally codified, underpinning models of behavior that have become familiar as a result of their habitual and frequent use. Unwritten rules coordinate the behaviors of those who aspire to corrupt and to be corrupted: they facilitate identification and demonstrate the reliability of possible partners; they differentiate the roles that are played; they increase the expected profits; they soften any possible psy- chological unease with crime; they marginalize or punish those who show opposition or express disagreement; they socialize those who are coming into contact for the first time with the “laws” of corruption.1 The obligation to pay “kickbacks” has re-emerged in many of the scandals that have come to light in 2014. Like other entrepreneurs in the 1980s and 1990s, Enrico Maltauro, who was involved in the Expo 2015 investigation, declared to the Milanese magistrates: “The system of large works is rotten and corrupt. If you want to get into it, you have

Italian Politics: The Year of the Bulldozer 30 (2015): 198–217 © Berghahn Books doi:10.3167/ip.2015.300112 Centripetal and Centrifugal Corruption in Post-democratic Italy 199 to pay. I fell into line because if you don’t, you will not get work. I did it for the company, to move forward and to safeguard the jobs … In Italy, you have no choice: either you come to terms with this and pay the kickbacks, or someone else will do it instead of you. The first past the post wins. And gets the work.”2 Some of the scandals that unfolded in 2014 have allowed us to see the hidden dynamics that still govern the underground world of corrupt exchanges in Italy. According to the non-governmental organization Transparency International, in 2014 Italy was still among the countries with the highest perceived level of corruption in Europe, along with Bulgaria, Greece, and Romania. The scandals that followed one another in 2014 involved the various levels of government, from local to national. A large number of investigations looked into misuses of funds to reimburse councilors and regional council groups in almost every region in Italy (i.e., 18 regions out of 20), including, in two cases, regional presidents who were still in office at the time of the investigations.3 There were also numerous cases of corruption at the local level. The most notorious, as we shall see in the sections that follow, are those of MOSE in Venice and Expo 2015 in Milan. Among those who were elected to the Italian Parliament, there was no shortage of cases of requests for authorization to proceed or to use wiretapping for offenses such as corruption, embezzlement, or defrauding the state.4 In the following section, we shall provide a theoretical framework to enable us to see the evolution of corrupt exchanges in Italy. Then, in the next two sections, we will analyze the scandal around MOSE and the investigations into the corruptive activities involved with Expo 2015, which will help us to identify the various configurations of corruption in the country. Finally, in the conclusion we examine in greater depth the policies and initiatives to combat corruption that have been enacted by national governments in recent years.

Post-democracy and Corruption: A Theoretical Framework

Although corruption has remained systemic, it would be wrong to think that nothing has changed in the way it is organized and prac- ticed, that is to say, in the wide network of actors involved in it and in the resources exchanged.5 While corruption in the first of the Tan- gentopoli scandals of 1992 was often organized around the hidden structures of the political parties, then managed by party cashiers and “business politicians,” the corruption that has emerged from 200 Donatella della Porta, Salvatore Sberna, and Alberto Vannucci

recent investigations has adapted to the reduced capacity of parties to run the corrupt machinery. In fact, it has played a part in weakening not only the capacity of parties to create and represent identity in society, but also the efficiency of their management of public decisions.6 The parties are more and more internally fragmented and lacking in external legitimacy, and the party actors have in fact become rather weak partners in hidden exchanges. They continue to be an essential part of them, but often leave the governance of the exchanges to others. This loss of capacity in terms of controlling (even) corruption is magnified in Italy by the explosive effect of the 1992 scandals and by the institutions’ inability to face up to it. In any event, it can be seen as part of a general tendency resulting from the neo-liberal model of relations between state and market. In fact, while the free market had been extolled as the solution to corruption, its policies of liberalization, deregulation, and privatization have often produced opportunities for corruption.7 Neo-liberalism had promised the separation of state and market, but more recent studies by sociologists8 and economists9 have shown how political institutions can be “captured” by large firms in a context where the collusion between democracy and market is greater. Post-democracy, which provides the political front for neo-liberalism,10 is thus a minimalist version of liberal democracy: on the one hand, it would like to limit the participation of citizens in politics; on the other, it would allow the market and its firms considerable power to influence governments and public decision-makers. As in an elitist model, the competencies of the state over the market are reduced, with political power being handed over to the economic interests of the few.11 Commenting on the ensuing moral crisis, economist Joseph Stiglitz observes: “A political system that amplifies the voice of the wealthy provides ample opportunities for laws and regulations—and the administration of them—to be designed in ways that not only fail to protect the ordinary citizens against the wealthy but also further enrich the wealthy at the expense of the rest of society.”12 Neo-liberalism introduces the moral imperative of competition, bearing with it an “ethos of competitive- ness at the centre of social life.”13 As happened in the first wave of liberalism, there was a spreading of amoral conceptions and practices of capitalism. As soon as these neo-liberal ideas took over, a form of “amorality also began to pervade society,” causing “grave anomalies” to emerge, “both on the free market front and in terms of the integrity of public institutions.”14 Rather than leading to greater competition, neo-liberalism has led to a greater concentration of capital, thereby causing a significant Centripetal and Centrifugal Corruption in Post-democratic Italy 201 distortion in the market mechanisms to the point where new forms of corrupt exchanges have become more widespread. This new expan- sion of corruption is in part the result of two factors. The first is the reduced allegiance of voters to their traditional political parties, which has brought about an increase in the costs of running election campaigns through visible and hidden forms of financing. The second is the product of a new reality: “Large firms are not just too big to fail, but also too big to jail … Already in the 1990s … fraud and corruption had reached all-time highs in the US … [b]ut what came after 2008 beat everything: ratings agencies being paid by the producers of toxic securities … offshore shadow banking, money laundering, assistance in large-scale tax evasion … [and] the leading banks worldwide fraud- ulently fixing interest rates and the gold price, etc.”15 As we shall see in the sections that follow, the new networks of systemic corruption have shown a capacity to adapt to the changed conditions in post-democracy—in particular, its Italian version. With a reduction in the centralizing capacity of parties, corrupt exchanges have found new forms of centripetal coordination or have developed centrifugal tendencies.16

The MOSE Affair and the Equilibria of Centripetal Corruption

The scandal affecting MOSE (Modulo Sperimentale Elettromeccanico, or Experimental Electromechanical Module)17 came to light in two successive waves. A first series of arrests took place during the course of 2013 following a judicial inquiry that had begun two years earlier into accounting irregularities discovered during a tax audit by a small firm in Veneto and that involved senior figures in the Mantovani construction company and other entrepreneurs. In June 2014, the investigations moved forward, aided by the collaboration of some of those who were under investigation. This brought a real boost to the inquiry, which spread to cover the whole “MOSE system” and the leading political figures in the region. Thirty-five people were arrested and more than 100, including entrepreneurs, managers, officials, and politicians, were under investigation for tax fraud, corruption, misuse of public funds, and illicit financing. Among them were the ex-governor of the Veneto region, the then-mayor of Venice, and a regional councilor. As the magistrates revealed: “[W]hat emerged was a widespread and complex system of corruption in which the links between the corruptors and the corrupted were so deep that it was not always easy to identify the single act that contravened the regulations 202 Donatella della Porta, Salvatore Sberna, and Alberto Vannucci

concerning the event targeted by the corrupt activity, as often no payment was necessary for a single act … The officials and the politicians have long been ‘on the payroll’ … In fact, the favors sought by those under investigation are not always exactly quantifiable a priori, and at times payback is spread out over time.”18 The network of systemic corruption seems to have taken root after the agreement reached in 1984, when the Consorzio Venezia Nuova (CVN) was legally established as the sole managing authority—and therefore the monopoly holder—for the completion of all the works considered necessary to safeguard the Venice lagoon. The network had emerged almost unscathed from the “clean hands” investigations of the 1990s, thanks to the effectively built web of relations of hidden exchanges among the protagonists. The Consortium began as a con- glomerate of the main public companies (which gradually withdrew from it as years went by), private firms, and building cooperatives. It was set up in such a way as to ensure that there would be a biparti- san political balance and an equilibrium between important national players and small to medium-sized businesses from the Veneto region. Thanks to this model of “legalized corruption,” in which “the laws themselves were corrupted, that is, they were written and approved for the benefit of private actors against the interests of the state or gave some private actors an advantage over others,”19 the CVN itself took steps to design, test, and complete the “momentous work” of MOSE, which was presented to the public as the definitive solution to the problem of saving Venice and its lagoon from the high waters. As a result of this model of the privatization of public decisions, a private operator established by law was awarded a 30-year monopoly over activities of public interest within the formal political framework of a so-called grand committee (consisting of representatives from the government, the region, and the municipalities concerned). The CVN was officially under the technical supervision of a so-called Magistra- tura alle Acque (Magistracy of the Waters), whose leaders turned out to have been, for at least the previous 10 years, on the payroll of the companies that they were supposed to be supervising. Although it was a private operator, the CVN proved to be adept at raking in a huge amount of public resources over time, thanks to its wide-reaching lobbying activity at local, regional, and national levels, along with well-established channels of political financing in illicit forms, yet it was also able to build up consensus over the ter- ritory. Through the exercising of generous powers of discretion, the senior figures in the Consortium, who had been chosen by private shareholders, offered to provide services to local public bodies that would cover the planning of the works, including the supervision of Centripetal and Centrifugal Corruption in Post-democratic Italy 203 the design phase, obtaining planning permission, awarding contracts for the works, and supervising them from a technical and financial point of view. In a word, a group of contractors were given the task of defining public interests, as well as a generous degree of freedom to manage the decision-making processes. As in the case of MOSE, this led to the implementation of huge projects with extremely high costs. The CVN itself pointed out that the private structure on which its activities are based “has made it possible to take action over the last few years with streamlined, efficient procedures.”20 The results of the investigation that began in 2011 show, however, that this mechanism based on criteria of liberalization and deregulation (1) made it possible to slip through the system of checks, (2) multiplied the number of contracts awarded without a tender process, and (3) caused costs to rise exponentially, even allowing companies under investigation for connections with the Mafia to become subcontractors. All this resulted in a similar outcome to the emergency situation arising from the real- ization of Milan’s Expo 2015 (see below). The make-up of the CVN reflects the welding together of a politi- cally protected business network, allowing space also for a series of sub-consortia in order to share the revenue with local firms. The collusive management of business coincided with the consocational attitude of a political class that was equally prepared to collude in a strong “centripetal equilibrium” managed by private operators, and this, with just a few adjustments, enabled the main protagonists to emerge unharmed from the judicial inquiries of the 1990s. According to the recent investigations, the MOSE model of systemic corruption takes the form of an “orderly and fair” way to deal with the huge revenue generated by corruption and shared by those taking part in it. The investigations reveal that at least 25 million euros of illicit funds were channeled through numbered bank accounts until reaching the final beneficiaries—politicians and officials—while the cost of the project rose from the 1.8 billion euros anticipated in 2002 to the 5.2 billion already financed in 2014. This type of secret share-out, which can whet the appetite and be tempting, requires discipline and “correctness.” Thus, the channels of occasional or regular payments are processed through representatives of political parties, administrative directors, and intermediaries, on the one hand, and magistrates from the Court of Accounts, generals from the Financial Guard, and secret services agents, on the other. The system is based on precise rules, which an entrepreneur is informed about by the CVN president, Giovanni Mazzacurati, when the former acquires shares in the Con- sortium: “Mr. Mazzacurati called me and asked me if, as well as getting the documents concerning my participation, I had been told about 204 Donatella della Porta, Salvatore Sberna, and Alberto Vannucci

the rules that operate within the CVN, that is to say, the commitments that we could call ‘non-transferable into statutory acts’. There were two particular commitments that he spoke to me about. One concerned the downgrading of a certain figure … in the eventuality of a decision on my part to carry out the stone work directly.”21 The regulator of the system of widespread corruption—the actor responsible for sorting out disputes, punishing recalcitrants, and coordinating the network of hidden exchanges to ensure that they function—holds a senior position in the CVN, thereby placing the informal and centralized structure of the “management” of corrupt transactions above the formalized organizational structure of the Con- sortium, which remains a private player. This person is referred to as the “supreme head,” “king,” “monarch,” “emperor,” or “doge,”22 and everybody recognizes his power to restore order after occasional disputes and to punish those who do not play the game by the rules. The politicians from the national ministerial level down to the regional and municipal levels provide “multi-level support” for corruption, mirroring the composition of the grand committee whose job it was to plan and supervise the activities of the Consortium. Take the role of Giancarlo Galan, the former Veneto governor, who guaranteed that there would be a rapid resolution of any problems or controversies thanks to the political protection he enjoyed. According to Mazzacu- rati’s witness account, this happened when Galan came back to town in response to a request made by Mazzacurati himself to ensure that a measure was approved without which the project would have been stopped with “a chain reaction on the construction work.” As the president of the Consortium said: “It was one of those moments when the work might have been halted, but instead it was able to go ahead.”23 The other recipients—magistrates and officials from the Financial Guard and the secret services—provide “intelligence” services with information about the progress of inquiries and general protection from procedural snags. As well as occasionally bribing some people, who in return would be expected to provide favors (no background checks being carried out, faster payments, etc.), the MOSE system includes provision for the payment of an annual “salary” that its beneficiaries can use as they please, whether it be for election campaigns or for their private needs. In return for the payment of bribes to politicians at regional and national levels, the corruptors—the leading figures in the CVN—can rely on these individuals to “resolve problems” over a long time period, no matter what positions they might hold. The flow of illicit finances strengthens the internal cohesion ofthe networks of corruption, ensuring that the Consortium is in a position to hold the recipients at ransom. Centripetal and Centrifugal Corruption in Post-democratic Italy 205

The center of power within this systemic corruption has shifted toward the senior CVN administrators, who, thanks to their role as “guarantors” of the distribution of contracts, finances, careers, and appointments, have acquired huge amounts of illegal capital, fidu- ciary links, confidential information, and the power to blackmail, all of which are reinvested as an instrument of political pressure. Gaining the necessary competences of illegality was sometimes del- egated to individuals who occupied formal positions in the Con- sortium, whereas there continued to be autonomous operators, somewhere between business politicians and fixers, who collected bribes.24 Leading political actors who were still in control of the public finances occasionally played the role of “veto players” of corruption. According to one CVN administrator, it was necessary to “pay all the parties” with “an ecumenical attitude toward the right and the left” in order “to have money up front and a favorable environment at a local level where the spending takes place,” especially if the flow of finances is interrupted. This is what happened to the Consortium when the minister of the economy, Giulio Tremonti, arrived. It was difficult for the Consortium to “find a way to contact Tremonti,” but its president succeeded. On his return after a meeting with the minister, Mazzacurati “reconvened the shareholders, with the usual emergency meeting, and said: ‘If you want to unblock [the funds], a figure of 500,000 euros must be delivered to the honorable Milanese gentleman, at least one week before the CIPE [inter-ministerial planning committee] meeting.”25

The Expo 2015 Affair and Centrifugal and Centripetal Forces in the Corruptive System

In March 2014, a huge police operation led to arrests and to dozens of searches in the city of Milan. Some prominent figures in public companies responsible for the organization of Expo 2015, the Milan world’s fair, were caught up in this, as were some leading figures in the private companies that had been awarded the main contracts, an ex-senator of the Republic, and new and old figures from local and regional politics of different political affiliations. All shared a common past and an involvement in the Tangentopoli investigations in Milan in the early 1990s. As a result of this operation, with just a few months to go before the official opening of the Expo in May 2015, many building works were still ongoing, with very few of them completed. If we compare the illicit conduct (corruption, misappropriation of public funds, disruption of tenders) brought to light by the authorities to the 206 Donatella della Porta, Salvatore Sberna, and Alberto Vannucci

information that emerged as a result of the “clean hands” investigations 20 years earlier, nothing seems to have changed in terms of the mechanisms of exchanges and influence, the systemic (and inescap- able) dimensions of the phenomenon, and the intermediary work of fixers, acting as a bridge between public authorities and corrupt private interests. Nevertheless, there have been some adjustments to the “post-democratic” evolution outlined above. In Milan, as in the case of MOSE, the investigators uncovered a vast network of corruption that shows, as in the past, the systemic nature of the exchanges in which individuals already under investigation for corruption were also involved. Again, according to the investigators, a cupola (dome) had been created that was able to coordinate corruptive activities with the aim of systematically influencing decisions made by various public companies, some regional firms in the hospitals sector, SOGIN SpA (Società Gestione Impianti Nucleari, a state-owned company responsible for the decommissioning of Italy’s nuclear sites and the management of nuclear waste), and then, in chronological order, the public companies involved in the organization of Expo 2015, in particular Infrastrutture Lombarde SpA and Expo 2015 SpA. The strategic aim of the “team” (as it was known by the suspects themselves) appears to have been set out by Gianstefano Frigerio, known by the other suspects as the “Professor” or the “Honorable Gentleman.” Previously a Christian Democrat member of Parliament and a regional secretary, Frigerio had received a sentence that had the force of res judicata (claim preclusion) for misappropriation of public funds, violation of the rules governing the financing of political parties, corruption, and the handling of stolen goods.26 At the time of his arrest, he formally held the position of assistant in the political office of the European People’s Party in Brussels. The investigators considered him the “head, initiator, and organizer of the association, charged with the role of directing and coordinating the other associates.”27 According to the investigations, another member of the “team” was a politician from Liguria who was close to the Unione di Centro (UdC, Union of the Center). This person helped to build relations between Frigerio’s network and the UdC’s political sphere, as well as some public officers with whom he himself had close ties. The third figure, another “ex-member” of the system in Lombardy in the early 1990s, was Primo Greganti, previously a Communist Party official, who had already been condemned with definitive sentences for 10 crimes related to taxes and for two violations of rules concerning the illegal financing of parties. According to the investigators, Greganti enabled links with cooperative companies within the area controlled by the Partito Democratico (PD, Democratic Party).28 Centripetal and Centrifugal Corruption in Post-democratic Italy 207

The network spread its illicit intermediary operations, moving into a number of regional policy-making areas that covered a wide and varied range of sectors, from construction and infrastructure to those providing services for hospitals. In the health sector, this included tenders for cleaning and disinfection services and the collection and transport of waste products to be carried out for about 10 hospitals in the Lombardy region. As for Expo 2015, the work involved the construction of major projects connected to the world’s fair, with an overall value of around 500 million euros. It was possible to gain access to the public decision-making process via a network of fixers who, by offering political protection, made a commitment to enable the companies under their protection to gain an advantage over competitors and to help them. The aim, according to the judges, was “to send the bidding processes off track, to influence the competitive process, and to undermine the freedom of those taking part.”29 This may have taken concrete form in the granting of an extension for supplying contracted services or submitting offers, or the manipulation of the assessment of bids to allow a greater distance between the protected company awarded the contract and the defeated companies, or in the divulging of “detailed information concerning the confidential content of the invitation to tender in order to enable the protected entrepreneur to decide whether or not to take part in the tendering process and to prepare an offer that would more probably receive a positive assessment from the awarding body than those of other competitors.” The fixers under investigation explained that they are useful “because [we have] relations with the institutions, with the administration, and with other companies that are working there … so that, if need be, we are there, in a word … we are there to hand you the keys in the sense that … we can help you with everything, you can be sure. First, we will set out the costs—you will definitely save money and time—and we will give you a hand.”30 The third strand of the network, unlike the cases of corruption at the time of Tangentopoli, does not consist so much of the indi- vidual politicians or party factions operating within the local bodies concerned as it does of the leading figures in public companies, that is, those public officials who hold full decision-making powers and control over tendering processes. With regard to these officials, it is possible to identify some deep changes compared to the past or to other corrupt contexts where the centripetal forces of the system are stronger (e.g., the MOSE affair). In the case of Expo 2015, in fact, the executives of the public companies are not the dominus of the corruptive system. They do not autonomously organize a web of exchanges, notwithstanding the decision-making powers that they hold. On the 208 Donatella della Porta, Salvatore Sberna, and Alberto Vannucci

contrary, they behave like the companies that wish to take part in the exchanges, seeking out services of intermediation not from the “career” politicians and those in office (even less so from those very politicians who have nominated them) but from fixers with considerable experience. Thus, it is no longer the political and party actor who directly carries out intermediary or strategic decision-making functions; instead, there are other subjects who “sell” their services to regulate the corruptive network. As far as the public executives are concerned, no monetary remuneration is established. Rather, benefits derive from career progression, thanks to “systematic and attractive promises of notable ‘value’ for public officials in terms of ‘political protection’ and of ‘career progression’” within the same public companies or in other more prestigious public companies.31 In fact, the fixer often repeats the same proposal, “because, at a push, I will send him [the executive] to Arcore,32 and I will get him … a political blessing, because [executives] need a political blessing so that they can get out of trouble … Otherwise, they will always have problems with people … how can I put it, who put you under pressure … and it’s best to avoid this.”33 The crisis of political intermediation expressed by the traditional parties, accentuated in post-democratic times by the less important role for institutional politics in public decision-making, thus leads to the fixer taking a more central role in the governance of corruption than in the past. The intermediation services provided therefore call for a certain degree of professionalism, recognized and “sold” as such by the fixers themselves, who spare no criticism of those who dare to become involved in similar media- tions without any previous experience. Every fixer must cultivate a relationship with his own interlocutors and build up a certain degree of trust before proposing corruptive exchanges. To quote one of them: “I went there for two years to talk to them [the executives of a public company]. Every Wednesday I took them out for lunch or aperitifs. I pampered them like two beautiful women.”34 Furthermore, as far as the regulation of corrupt exchanges is concerned, the system of corruptive transactions that came to light from the Expo 2015 case is not regulated by one single subject, who takes a central role in terms of both the functions of intermediary/link person between the various parts of the corruptive network and the functions of decision-making. On the contrary, various centers evolve and become institutionalized with different functions, producing a more polycentric organizational field of exchanges with centrifugal tendencies. The central position assumed by one of the fixers is not the product of a hierarchy governed by formal rules within the association, but the result of his privileged position as an intermediary, not only between Centripetal and Centrifugal Corruption in Post-democratic Italy 209 those who actually belong to the network, but above all between these people and the political and institutional actors outside the network. It is his connections with the “world of Roman politics,” with the leaders of the large public companies at national and regional levels that make him the natural center for interconnections between the network and possible “protectors and political interlocutors” on the outside. The fixer himself maintains contacts with the Popolo della Libertà (PdL, People of Freedom), boasting of relations with its president, along with his wing of the party at national and regional levels, which is different from—and in many ways in competition with—another wing of the party that, in turn, has strong roots at the regional level and is close to the Catholic association Comunione e Liberazione (CL, Com- munion and Liberation). To retain this privileged position, the fixer, an ex-Christian Dem- ocrat MP, carries out the role of strategic guide for the network while siphoning off many of the rewards coming out of the corrupt exchanges. Other fixers become involved, for instance, when it seems necessary to have a temporary overlapping between cartels of firms as bearers of their own networks of personal relations, which are functional to the creation of a cartel between corruptive networks and firms. In fact, the alliance responds to a need to resist the natural centrifugal forces in the system that would see them competing with each other and that only a polycentric structure could help to stabilize. It is no coincidence that the fixers’ main concern is not so much the desire to take centralized control over all the transactions as it is to ensure the very survival of the network, which is under threat due to competition within the system, the danger of investigations, and the presence of criminal competitors, such as Mafia organizations. Even making agreements stick can cause frequent moments of crisis, such as when a decision had to be made in one of the million-euros competitions for Expo 2015 as to which company would take the lead within the Temporary Association of Firms (a position fought over by Maltauro and the Manutencoop Group, with the former coming out on top), or when the missed payments between the firms belonging to the same network undermine “the credibility” of the secret pact and of the fixers in charge of it, or when relations with competing firms have to be resolved, making it necessary to agree on a handsomely financed “non-aggression treaty” with them. The Expo system does not involve, as in the case of MOSE, the presence of a single master. The system is more fragmented and com- prises various competing cartels that lack a hierarchical form. This configuration is the result of various factors, some within and some outside the organizational field that we are analyzing. 210 Donatella della Porta, Salvatore Sberna, and Alberto Vannucci

The first factor pointing to a polycentric configuration is the high level of political competition between different and fragmented political actors, who represent different parties or factions within parties. This condition follows a historical phase of dominance by one single political component in the system, representing the party with a relative majority within the PdL. The “CL associates,” that is, those who were identified by the investigators as being close to Communion and Liberation, led regional politics in Lombardy for 20 years, providing not only the president of the region, Roberto Formigoni, but also some of the leading figures in the regional administration (including the bodies responsible for political and administrative policy), in regional public- owned companies, and in public health. Taking an overview of the relations and connections as a whole and of some of their permutations, as in the case of the administration of the regional health system, the Milan Public Prosecutor’s Office requested that the ex-president and other persons be put on trial for criminal conspiracy and corruption.35 The Expo system observed by the investigators is therefore a system in turmoil, if not in crisis. The fragmentation of the political arena and its instability, indicated by the uncertainty and the high turnover rate of leading figures in government institutions and in the administration of public companies, are the outcomes of a political system that has no strong political majorities at any levels of governance—at either the regional level, with the Formigoni era coming to an end, or the national level, with the uncertain results of the 2013 general elections, followed by weak governments propped up by broad coali- tions (the Monti government before the elections and the government led by Enrico Letta up to January 2014).36 The political instability had repercussions particularly on the central-peripheral axis of the network. With no stable reference points at the national level to rely on, the picture that emerges is unprecedented insofar as it seems to demonstrate how the administrative decentralization even of corruptive phenomena has produced a disconnect between the center and the periphery of the system, particularly so in the absence of large national party organizations. Alongside this element, there was also greater instability within the organizational area of the center-right parties, brought about by the split within the PdL and the foundation of the Nuovo Centro Destra (NCD, New Center-Right), on the one hand, and by the increasing hostilities among those who continued to support the former prime minister Silvio Berlusconi and his refounding of Forza Italia. Accord- ing to those being investigated, the protection of the Catholic Church, which had traditionally been close, in their view, to the ex-Christian Democrats, was also withdrawn.37 The players in the field were well Centripetal and Centrifugal Corruption in Post-democratic Italy 211 aware that in a sense the most dangerous enemy was the one “within” their own ranks, so much so that it was justifiable to forge tactical cross-party alliances with the other side. Indeed, there was no shortage of criticisms toward a party that had little in common with the old Christian Democracy party, which had held a relative majority in the country. Frigerio said to one of the officials he was protecting: “Allow me to introduce […], one of the old [guard] from that old party that used to exist and that used to work better than the one now. First of all, it didn’t use to break up so much; in fact, that never happened in my time. We used to create factions, but there were no splits, never.”38 There was strong hostility toward ex-party colleagues who had subsequently left the PdL but remained close to the CL fold. It is no coincidence that the network led by Frigerio was able to take over new positions within the regional arena precisely as a result of the weakening of this faction. The network succeeded because it diversi- fied its contacts with a number of political actors before everybody else and formed transversal relations, reaching an “overall coverage agreement” with the various political groups that made up the grand coalition governments in Rome. It was also for this reason that the contacts with Greganti were to become crucial, and it would be the “reds,” as he himself called them, who would make a victory more likely in the Expo 2015 orders. In Frigerio’s opinion, “the alliance with Primo [Greganti]’s cooperative is a channel that can work well. These people are getting bigger, eh … In Rome they carry loads of weight, so we would be stupid if we failed to take this into account.”39 At the same time that political fragmentation was increasing, there was a corresponding increase in the fragmentation of organized private interests and of the demand for protection. In the case of the Expo affair, for example, various competing cartels were fighting for the biggest orders. There were at least three competitive offers from different political-business groups to build the “Città della Salute” (City of Health). The fixers were aware of this too, and they responded to the market dynamics, boasting of the low costs that they requested from firms. This came to the fore in a conversation between Frigerio and one of his associates: “We are not overexpensive, come on! There are people who keep 4 or 5 [percent]. We have only ever asked for 1 [percent] or thereabouts, I think.”40 When the network ran the risk of being taken over by centripetal groups, such as Mafia-style criminal organizations, there was internal opposition due to fears about the judicial consequence, given that the presence of actors of this kind leads to greater visibility and attention from the magistracy, rather than fears about the Mafia organizations themselves or the higher moral cost of such types of collusion. As far 212 Donatella della Porta, Salvatore Sberna, and Alberto Vannucci

as legality was concerned, Frigerio had very clear ideas, as he stated in a call that was wiretapped: “Legality is not a value, it is a condition. So if you treat it as if it were the only value a country holds, you will destroy everything. I mean there is illegality all over the world, and it should be treated as normality … Don’t make it become a crusade about everything … otherwise, we shall ruin everything.”41

Concluding Remarks: What Is Ongoing and What Is Changing in the Equilibria of Systemic Corruption

Over the last 20 years, the survival of new and old protagonists in the networks of systemic corruption reflects how they have adjusted to changing external conditions. With the increased risk of harsh punish- ments—clearly seen when the “clean hands” investigations erupted, but then rapidly fading away—there followed the reduced capacity of the parties and their main leaders to regulate these networks.42 As corruption had been (erroneously) defined as an evil mainly belonging to the world of politics, political scandals helped to legitimize neo-liberal policies of deregulation, privatization, and liberalization. However, these policies did not lead to fewer corrupt exchanges; instead, they moved their governance structures toward private figures who, via the free market, often have access to better means to corrupt or to be corrupted. In Italy, even more so than in other countries, the switch to neo-liberalism did not lead to a better government, since, as Colin Crouch observes, “the innovations [of the Chicago school of econom- ics] did nothing to resolve the central issue: economic and political power translate into each other.”43 The ongoing equilibria of systemic corruption have led to a dual outcome. In the “centripetal” model, which appears to characterize the MOSE scandal, there is a regulatory structure of hidden exchanges within which “the dynamics of interaction converge towards a com- monly recognized centre of authority: an effective third-party guarantor, who has the authority, thanks to a mixture of enforcement capabil- ity and reputation, to adjudicate disputes among participants on their ‘property rights’ at stake in the exchange, sanction illicit deals, protect from external intrusion of police or prosecutors.”44 This single regulatory mechanism, via a centralized control center, allows an increase of scale in illicit activities that eventually involve wide networks of subjects, multiplying trading schemes and the types of resources involved, with a reinvestment of the proceeds from corruption in election campaigns. A different regulatory model of systemic corruption, more closely linked to the findings of the investigation into Milan’s Expo 2015 affair, Centripetal and Centrifugal Corruption in Post-democratic Italy 213 is of a “centrifugal” type. In this case, the trust-based ties that hold the protagonists together are strengthened by a combination of rules of rec- iprocity and the reputation that some of the protagonists have built up, in particular, as we have seen, the fixers who provide the nodes within the network of hidden exchanges. In some cases, these ties are supple- mented by the efforts of aspiring “protectors,” who are, however, able to provide their enforcement services to only some of the protagonists. In other words, we are looking at a model of systemic corruption in which the carrying out of the corrupt exchanges is “subject to decen- tralized sanction.” This might restrict the capacity to expand, given the growing instability and the difficulty in managing corrupt exchanges in a situation where exchanges are extended to subjects who have no reliable information on past performance and where competition can degenerate into conflicts between the protagonists. In both scenarios, whether they be centripetal or centrifugal networks, there are forms of a criminal organization of corrupt exchanges, albeit with some differences. In a country like Italy, these networks can sometimes imitate and adopt organizational models that have already been tried and tested over a long period of time in many parts of the country, as in the case of the Mafia-style criminal organizations. A good example of these organizational changes emerged with the “Mondo di Mezzo” (Middle World) operation carried out in Rome in the last month of the year.45 In fact, this was a wide-ranging investigation that led to the dismantling of an organization that the investigators believed to be a Mafia-type one and which they called “Mafia Capitale” (Mafia Capital). As well as controlling some illegal markets in the capital, this criminal group had managed to gain systematic control over public tender processes set up by the municipality for reception services for refugees and for the Roma community. The operation led to the arrest of the alleged boss, Massimo Carminati, along with 36 others, and involved a further 101 suspects, including the ex-mayor of Rome, Gianni Alemanno, and many other politicians from various parties still at their posts in the municipality and at the Lazio region headquarters. The charges involved participation in Mafia-type organizations, extortion, usury, corruption, interference in tender operations, false invoicing, fraudulent transfer of securities, money laundering, and other offenses. The network of connections turned out to be so vast and rooted within the administration of the municipality that the prefect of Rome appointed a committee with access to the municipality’s documents, a first step toward a possible request for the body to be closed down due to Mafia infiltration.46 In conclusion, when explaining how systematic corruption took root in Italy, we need to consider not only the overall transformations 214 Donatella della Porta, Salvatore Sberna, and Alberto Vannucci

in the relations between state and market, but also the robustness of the self-governing mechanisms of the networks of illicit relations. The political administrative habitus in Italy appears to be characterized by a multi-layered legacy of corruption that is endemic in some areas and sectors, where it generates practices, expectations, models of behavior, competencies of illegality, and criteria of legitimization of illicit behaviors rooted in the entire ruling class. As for systemic corruption, both centripetal and centrifugal, the measures taken by the institutions appear at the moment to be insufficient in terms of preventing and combating the phenomenon. Indeed, it is very doubtful whether the new law-making framework will have any significant impact on the structure of opportunities that exist in Italy and that have allowed endemic corruption to develop in important areas of public intervention. Law No. 190/2012, which was passed during Mario Monti’s government, and Decree Law No. 90/2014 seem to have had only a marginal effect on the structure of institutional incentives that steer the decisions of the protagonists in their corrupt activities. In particular, the main recommendations from GRECO (Group of States against Corruption) were no more than empty words concerning the failure of measures that included “the revisiting of the laws on corruption and the limitation periods for the crimes, the special training of the forces of law and order and the strengthening of the coordination between investigative bodies, the checking mechanisms for the effectiveness of measures concerning the seizure and confisca- tion of proceeds from crimes involving corruption, measures to combat money laundering and fraud.”47 These failures have not been swiftly addressed, even after the investigations into the Mafia in Rome, as the government currently in office has decided to present a draft law to the chambers that is unlikely to be debated and passed in the near future.

— Translated by David Bull

Donatella della Porta is a Professor of Sociology in the Department of Political and Social Sciences at the European University Institute.

Salvatore Sberna is currently a Research Fellow at the European Uni- versity Institute.

Alberto Vannucci is an Associate Professor of Political Science at the University of Pisa. Centripetal and Centrifugal Corruption in Post-democratic Italy 215

Notes

1. D. della Porta and A. Vannucci, Mani impunite: Vecchia e nuova corruzione in Italia (Rome: Laterza, 2007). 2. La Repubblica, 17 May 2014. 3. Giovanni Chiodi, ex-president of the regional council in Abruzzo, was caught up in the “Rimborsopoli” scandal, along with 24 other elected members of the local administration and the regional council. Some were accused of systematically defrauding the region through embezzlement, falsification of documents, and making illegal use of reimbursements paid to regional groups for their personal financial gain (Il Fatto Quotidi- ano, 23 January 2014). In Piedmont, Roberto Cota, ex-president of the region, was indicted for irregularities with regard to reimbursements and institutional expenses, totaling around 25,000 euros, that were considered illegal by the Public Prosecutor’s Office (Corriere della Sera, 14 January 2014). 4. One of the most famous cases was the granting of the request for the precautionary arrest of the PD deputy Francantonio Genovese for tax offenses and for criminal association with the objective of recycling (laundering?), embezzlement and fraud for the awarding of public contracts, within the context of an investigation into finances for professional training in Sicily (Chamber of Deputies, 7 May 2014). In the Senate, instead, Roberto Formigoni, ex-governor of the Lombardy region, was indicted for criminal association and corruption as part of the investigation into the regional health system and the finances provided for the Maugeri Founda- tion in Pavia (La Repubblica, 3 March 2014). 5. D. della Porta and A. Vannucci, The Hidden Order of Corruption: An Insti- tutional Approach (Farnham: Ashgate, 2012). 6. A. Pizzorno, “La corruzione nel sistema politico,” in Lo scambio occulto, ed. D. della Porta (Bologna: Il Mulino), 13–74. 7. D. della Porta, Social Movements in Times of Austerity: Bringing Capital- ism Back into Protest Analysis (Cambridge: Polity Press, 2015). 8. See, for example, C. Crouch, The Strange Non-death of Neo-liberalism (Oxford: Polity Press, 2012). 9. See, for example, J. E. Stiglitz, The Price of Inequality: How Today’s Divided Society Endangers Our Future (New York: Norton, 2012). 10. C. Crouch, Post-Democracy (Oxford: Polity Press, 2004). 11. Ibid. 12. Stiglitz, The Price of Inequality, xix. 13. B. Amable, “Morals and Politics in the Ideology of Neo-liberalism,” Socio- Economic Review 9, no. 1 (2011): 3–30, here 6. 14. Crouch, The Strange Non-death of Neo-liberalism, 25, 93. 15. W. Streeck, “Taking Crisis Seriously: Capitalism on Its Way Out,” Stato e Mercato, no. 1 (2014): 45–68, here 63. 16. D. della Porta and A. Vannucci, “Centripetal versus Centrifugal Corruption: A Framework for the Analysis of Corrupt Exchange and Hidden Gover- nance Structures,” ANTICORRP, 11 December 2014, http://anticorrp.eu/ 216 Donatella della Porta, Salvatore Sberna, and Alberto Vannucci

wp-content/uploads/2014/12/D1.1_Part6_Centripedal-versus-centrifugal- corruption.pdf. 17. Still under construction, MOSE is an engineering project whose objective is to protect the city of Venice and its lagoon from high waters. This is to be accomplished by building rows of mobile gates. 18. Tribunale di Venezia, “Ordinanza misure cautelari,” p.p. n. 12236/13 R.G.N.R., 9476/13 RG Gip e n. 12646/13 R.G.N.R., 9595/13 RG Gip, 31 May 2014 (hereafter, “Venice Tribunal”), 96. 19. G. Barbieri and F. Giavazzi, Corruzione a norma di legge (Milan: Rizzoli, 2014), 41. 20. See the web page of the Consortium, as archived at https://web.archive. org/web/20150515231805/http://www.consorziovenezianuova.com/ natura_struttura.htm. 21. Venice Tribunal, 235. 22. Ibid., 87. 23. Ibid., 502. 24. Pizzorno “La corruzione nel sistema politico,” 23–24. 25. Venice Tribunal, 468–469. 26. Tribunale di Milano, “Ordinanza di applicazione di misure cautelari,” p.p. n. 948/11 R.G.N.R, 6 May 2014 (hereafter, “Milan Tribunal”), 23. 27. Ibid., 4. 28. Ibid., 23–24. 29. Ibid., 15. 30. Ibid., 415. 31. Ibid., 85. 32. Arcore is Silvio Berlusconi’s municipality of residence. 33. Milan Tribunal, 44. 34. Ibid., 399. 35. According to the Public Prosecutor’s Office, Formigoni provided the Maugeri Foundation with “global protection” and “took steps to ensure that measures be taken by the council, from one year to the next, to issue large sums of money to the Foundation and to provide it with other improper economic advantages, contravening laws and obligations of impartiality and the duty to pursue the public interest exclusively.” See Tribunale di Milano, “Avviso di conclusione delle indagini,” p.p. n. 6473/13 R.G.N.R, 12 February 2013, 6. 36. At a local level, the Milan municipality is led by the center-left and the region by the center-right. The presidency is held by the Northern League, which is not the coalition party with the relative majority. The lack of a single coalition in charge at all levels of governance makes the centraliza- tion of corruptive exchanges within one single network less likely. For a summary of the results of the 2013 general elections, see C. Fusaro and A. Kreppel, Italian Politics: Still Waiting for the Transformation (New York: Berghahn Books, 2014). For the government crisis of 2014, see the relevant chapters in this volume. 37. During the investigations, Frigerio stated: “There is no protection in the Vatican because the new Pope could not care less about Italy, and then among those cardinals there is not one who is capable of providing Centripetal and Centrifugal Corruption in Post-democratic Italy 217

protection … Even my friend, Cardinal […], clearly offers the CL support- ers no protection, and then there is the one who has just made it into the state secretariat … [T]hese people will just keep on creating havoc with the CL” (Milan Tribunal, 521). 38. Milan Tribunal, 294. 39. Ibid., 262–263. 40. Ibid., 135. 41. Ibid., 30. 42. Della Porta and Vannucci, Mani impunite; A. Vannucci, L’Atlante della corruzione (Torino: Edizioni Gruppo Abele, 2012). 43. Crouch, The Strange Non-death of Neo-liberalism, 70. 44. Della Porta and Vannucci, “Centripetal versus Centrifugal Corruption.” 45. Tribunale di Roma, “Ordinanza di applicazione di misure cautelari,” pro- cedimento penale n. 30546/10 R.G.N.R, 28 November 2014. 46. Il Messaggero, 14 December 2014. 47. SAET (Anti-corruption and Transparency Task Force), Relazione al Parla- mento 2010 (Rome, 2011), 30. See also http://www.itaca.org/documenti/ news/Anticorruzione.pdf.