Disgrace No Obstacle to Italy’s Likely Premier

Silvio Berlusconi’s term as prime minister in 1994 lasted only seven turbulent months, but never mind. That matters as little now as his three subsequent convictions--overturned on appeal--for false business accounting and bribing the tax police, and the four indictments he still faces.

Nor does it matter much that Berlusconi, Italy’s richest person, wants to govern again without giving up control of the country’s three largest private television networks and the rest of his corporate empire.

In Italy, where corruption is a native tradition and “conflict of interest” a foreign idea, polls make Berlusconi the favorite to lead the next government after parliamentary elections May 13.

To millions of voters, the 64-year-old tycoon who heads the center-right Freedom Alliance coalition is a visionary politician with a Midas touch. They see him as a self-made billionaire who could enrich the country as he enriched himself--if only those pesky left-wing magistrates would go away and let him be “the best leader in the world,” as he still calls himself.

To many others, however, Berlusconi’s swaggering comeback is a reminder of Italy’s failure to complete a political transformation after the massive Tangentopoli (Bribesville) scandals that shook the country nearly a decade ago.

Then a political novice, the mogul from Milan stepped into the void left when a group of prosecuting magistrates brought down the parties that had ruled Italy since the end of World War II. But soon after his election, he too became a target of the “Clean Hands” anti-corruption crusade and remained under investigation after leaving office in disgrace.

Italy’s recovery from all this upheaval, though incomplete, is a European success story. The center-left Olive Tree coalition elected in 1996 has fixed the corruption-drained, debt-burdened economy and, to the surprise of the country’s more disciplined neighbors, met the strict criteria for entering Europe’s single-currency union. Inflation and unemployment have dropped steadily.

But Berlusconi’s own recovery and his ongoing battle with the magistrates have kept Italian politics unsettled.

After the collapse of Benito Mussolini’s wartime dictatorship, Italians rigged the system in favor of small parties to prevent anyone from amassing too much power. The downside was a string of weak, often corrupt multi-party coalition governments--58 since the war--whose leaders felt more accountable to each other than to the electorate.

In the wake of Tangentopoli, reformers pushed for a U.S.-style two-party system and a stronger executive. But a bipartisan assembly on constitutional reform ended in failure two years ago after the center-left rejected Berlusconi’s demand that the magistrates’ powers be weakened.

The deadlock has deflated much of the initial public enthusiasm for political reform and weakened voter confidence in the center-left.

3 Leaders in 5 Years

An unwieldy amalgam of seven parties, Olive Tree has bickered its way through three prime ministers in five years and nominated a fourth man, former Rome Mayor Francesco Rutelli, 46, to lead its ticket in next month’s vote. Berlusconi, the consistent voice of opposition for the last 6 1/2 years, outpolls Rutelli by anywhere from 3 to 10 percentage points in recent polls.

“We cleaned up the country’s finances, but we lost support because we fell short of our promise to deliver a new kind of politics,” says Sen. Tana de Zulueta, a member of Rutelli’s coalition. “A very large number of Italians now believe that politics are unreformable, and this cynicism benefits an outsider like Mr. Berlusconi.”

As the rival coalitions make similar promises of lower taxes and a freer economy, Berlusconi has fended off every attempt to make his wealth, business ethics and would-be conflicts of interest the central campaign issues.

When an investigative reporter asserted on state television that associates with Mafia ties financed Berlusconi’s start in real estate in the 1970s, the candidate’s approval ratings inched up. Public debate shifted quickly from mob money to the state channel’s right to air such an allegation, which the candidate denied.

The muted reaction to such allegations is a measure of public boredom with Berlusconi’s endless legal saga and his success in casting himself, with help from his TV networks, as a victim of judicial harassment.

“He’s creating jobs for people,” said Claudio Valorani, co-owner of a cafe near the Roman Colosseum. “Let him work.”

Another measure of the tycoon’s comeback is the eclipse of his nemesis, Antonio Di Pietro, poster boy of the Clean Hands crusade and a national hero in the 1990s. Today the former magistrate is a marginal politician leading a tiny reform party called Italy of Values and running a long-shot campaign for mayor of Milan.

“Twelve years after the fall of the Berlin Wall . . . our leaders are still debating left and right ideology, instead of legality and illegality,” Di Pietro complains. “People are disillusioned with the way issues of criminality have become so politicized.”

In fact, many Italians view the magistrates as politically driven agents of a state that often makes up for negligence with sporadic excess. Or they accept Berlusconi’s defense that in the 1980s and ‘90s, he, “like tens of thousands of other Italian businessmen, was subjected to a system of extortion [by the tax police] that we were powerless to oppose.”

“It’s amazing, but there’s not a tremendous outcry against Berlusconi,” says Franco Ferrarotti, sociology professor at the University of Rome. “Deep down, people regard entrepreneurial wealth as the ultimate proof of success. They distinguish between him and the old-style politicians, who became rich by stealing from the state. They don’t see you as a threat to the public good if you spend your own money to acquire public office.”

Berlusconi, whose fortune is estimated at $12.8 billion by Forbes magazine, is busy these days doing just that.

Biography in Every Pot

Kicking off his campaign this month, he spent an estimated $20 million to publish his biography in the form of a 128-page magazine and mail a copy to each of Italy’s 12 million households.

“An Italian Story,” featuring gauzy photographs of the bronzed, smiling tycoon with his family, employees, voters and world leaders, depicts a self-made man achieving Italy’s version of the American dream--corporate and political power, without the burden of American-style laws forcing one to choose between the two.

Because Italian industrialists were traditionally content to manipulate politics from behind the scenes, the term “conflict of interest” was rarely heard in Italian before Berlusconi’s brief stint in office made it an issue. Italians now talk about conflitto d’interessi but are still struggling to grasp the concept.

Three years ago, in the spirit of bipartisan reform, the tycoon went along with a bill that would require entrepreneurs who join the government to sell their assets or place them in blind trusts. The bill passed the Chamber of Deputies, Italy’s lower house of Parliament, but stalled in the Senate until two months ago, when it was amended to bar such sales to one’s relatives.

Berlusconi, who has five children, objected to the change, and the bill died after returning to the lower house. If elected again, he says, he would do what he did last time: hand over his holding company, Fininvest, temporarily to his second-in-command. Fininvest controls his TV networks, Italy’s largest publishing group, a film company and the AC Milan soccer team.

Influential conservatives have warned, however, that his every act as prime minister might come under scrutiny if he failed to divest himself of such diverse holdings. He would wind up, they note, controlling every major TV network, public and private--a concentration of media power almost unheard of in the West.

“He will be forced to spend much of his time explaining that he doesn’t use his companies to further his political battles and that he doesn’t use his public position to favor his business,” Sergio Romano, a conservative commentator and former Italian ambassador to the Soviet Union, wrote in the newspaper Corriere della Sera.

Voters care far less. Berlusconi’s dynamic image adds credibility to his promises for economic growth, public works and modernization.

“I’m sure that everyone in politics has conflicts of interest,” says Roberto Di Carlo, who runs a small transport company in Rome. “The other side must have its own private interests--it just doesn’t let you see them. But let’s allow Berlusconi to govern for five years. I’d like to compare the results.”