But the end of the Cold War wound up being more costly to the parties on the winning side. Anti-Communism was the glue that had held the government majority together and without it, the ruling coalition suddenly lost much of its reason for being. "Hold your nose and vote Christian Democrats" Indro Montanelli had advised the readers of Il Giornale in the mid- 1970s, when the choice had seemed to come down between an adventure in Euro-Communism and the safe and familiar but corrupt government parties. By the early 1990s, however, the economic unification of Europe had replaced the Cold War at the top of the political agenda, and Italians were much more worried about competing with German and Japanese cars and a flood of low-priced products from East Asia than they were about holding off an invasion of Soviet tanks. Italians had put up with one of the most corrupt and inefficient governments in Europe on the grounds that it was preferable to Communism. Now Italians could stop holding their noses, and they didn't like what they smelled.
The governing parties, feeling a false sense of omnipotence, ignored numerous alarm bells and signs of public discontent with a system that more and more Italians began to regard with contempt. Even as the Cold War threat diminished, the politicians' demands for bribes grew in size and scope, becoming like a second layer of taxes in an already overtaxed country, and a genuine drag on the economy. In the early 1990s, there were a growing number of scandals that were like tremors presaging the earthquake to come. There was the "golden prisons" case, involving government officials skimming money on prison supplies. There was the "golden bedpans" case, which revealed a nasty world of no-show patronage jobs and people paying party officials for even the lowliest hospital jobs. There was a curious story in the Rome papers about a woman who, in an argument with her politician paramour, threw a suitcase of lira notes out the window and shouted: "That's what I think of you and your bribe money!" In the course of this grande bouffe, the crime rate in Italy had risen to record highs - mostly concentrated in Southern Italy, where the Mafia seemed to reign unchecked and often in happy collusion with the government parties.
In keeping with the sense of a country careening out of control, Francesco Cossiga, Italy's president of the Republic, normally a quiet, dignified figurehead position, appeared to have gone mad, telephoning call-in radio shows at odd hours, making weird rambling speeches, threatening to resign one moment, to dissolve parliament the next) to have the leading magistrates in the country arrested (something he had no power to do) and then going on television vowing to take a "pickax" to the country's political system. But the wilder and more mercurial his behavior, the more popular he became, appearing a bit like King Lear, who began to speak the truth as he descended into madness. "In any normal country, they would have kicked me out by now. Does this seem like a normal country to you? " Cossiga himself said at one point.
People began to speak with great frequency and disgust about Italy's system as a "partyocracy," in which political parties invaded almost every corner of the Italian economy. In the 1970s and the 1980s, Italy had tried to spend its way out of every social problem, buying up failing businesses. propping up troubled industries, sponsoring public works in distressed areas. The Italian state sold cookies and pasta, owned supermarkets and insurance companies, controlled 75 percent of the banking system, ran the national airline, the electrical and telephone systems, and produced steel. oil, natural gas and chemicals. Italy's hypertrophic state had meant that by the early 1990s, Italy's national debt was actually greater than its gross national product-twice that of any major country in Europe. As a result, 10 percent of the government's expenditures went just to servicing the national debt. Italy's deficit was more than twice the ceiling required for it to participate in the single currency, the euro, that was scheduled to begin soon. Italy was borrowing and spending itself out of its place in the new unified Europe.
Growing public dissatisfaction began to manifest itself in the sudden proliferation of new political parties. As Italy prepared for elections in 1992, some 207 different political movements applied to get on the ballot. There were ecological parties, hunters' parties, antihunting parties, car owners' parties, pensioners' parties, regional parties, antiregional parties, and even something called the Party of Love - founded by two porn stars. The politics of antipolitics was in the air.
On a more serious note, a group of reformist Christian Democrats in Sicily protesting political collusion with the Mafia began to draw support in the South with a new party called La Rete ("The Network"). But the most important and emblematic of the new movements was the Lombard League (later called the Northern League), which advocated political autonomy and even independence for Northern Italy. At first blush, the Lombard League, which took its name from a military alliance of Northern Italian states during the Middle Ages, seemed a weird, anachronistic throwback: its party symbol was a medieval knight holding aloft a sword, and it fought for seemingly lost or marginal causes like having dozens of tiny local dialects used on street signs and limiting Southern Italians' access to public jobs. But in the early 1990s, the Lombard League began to strike a deep chord by attacking Italy's corrupt and parasitical central government. "Roma, Ladrona" ("Rome, the Big Thief ") was one of its favorite slogans. Rather than simply express nostalgia for a largely fictional medieval Northern Italian unity, the Lombard League turned into . modern tax-revolt movement, the first to call into question Italy's large and expensive modern welfare state. During the 1970s and 1980s, state spending had come to occupy 52 percent of the GDP, and in Southern Italy - which depended on public works projects, economic subsidies, disability pensions and welfare benefits - government spending made up some 70 percent of the local economy. The rebellion of the wealthy North against the bureaucracy in Rome and the assisted economy of the South very much resembled the Proposition 13 tax revolt in California in 1978, which was a harbinger of the Reagan revolution against the American welfare state in the 1980s. The Northern League appealed to a new and dynamic part of the population, the small and medium-sized businesses in Northern Italy that had become one of the motors of the Italian economy. Most of these businesses were family-owned, and many were operated by people who were not highly educated but were extremely hardworking, people who had gone to work straight out of high school and had never stopped. These were people who had managed to succeed despite the inefficiency and corruption of the Italian state, but who saw their hard-won prosperity threatened by government regulation and taxes.
These businesses on the whole got poor services and infrastructure in exchange for high taxes and much political interference. For example, in 1991, the Socialists and Christian Democrats were fighting over who would get to appoint the head of the national phone company, while no one was worrying much over how to make the phone system work. An incredible 47 percent of all phone calls in Italy were either cut off in the middle or never got through, and it took an average of thirty-three days to have a phone installed. Italy was paying three dollars a minute to call the United States; as a result, Italy was second to last in Europe, after Greece, in the number of phones per inhabitant.
How could Italian businesses compete under these conditions? There was a sense throughout the country that all the system's deficiencies were coming to a head and could no longer be sustained. "The contradictions of Italy are becoming increasingly evident," the governor of the Bank of Italy at the time, Carlo Azeglio Ciampi, warned. "Companies that compete successfully throughout the world must coexist with an inefficient state and with sectors of the economy protected from competition."
3. Heads Will Roll
When Operation Clean Hands began in early 1992, it was like starting a fire in a parched landscape waiting to burn. In April, just two months after the arrest of Mario Chiesa, Italy held national elections that made it clear how much the political wind had changed. The big winner was the Lombard League, which went from 0.7 percent to nearly 10 percent nationally, almost all of its support from Northern Italy. In some places, like Milan, it became the largest single party. The traditional parties, from Christian Democrats and Socialists to the ex-Communists, all suffered major setbacks. The five parties of the government majority actually received less than 50 percent for the first time and had to scramble to cobble together a government. They had been put on notice that voters wanted change, and this meant that when Operation Clean Hands started, the parties could not afford to stop it.
It is significant that the scandal broke in Milan, which had been the stronghold of Craxism and was now the base of the Lombard League. '' The investigation became unstoppable because of the great ability of the judges . . . but also because of the rise of the League and the general distrust of people in the parties," one of the confessed bribe-takers said during the summer of 1992. " 'Throw them in jail' is the cry of the crowd. And this undoubtedly helped the judges. . . . I don't know whether they could have succeeded in something like this four years ago." Popular support reached across the ideological spectrum. There were candlelight vigils outside of prosecutors' offices, and the walls of Italian cities were suddenly filled with pro-Clean Hands graffiti. The Milan magistrate who had started the investigation, Antonio Di Pietro, became a national hero overnight. Graffiti writers scrawled "Grazie Di Pietro!" (Thanks Di Pietro) and "Fateci sognare, Di Pietro" (Let us dream, Di Pietro) across walls throughout Milan. Di Pietro T-shirts became collectors' items.
In the past, Italian businessmen had refused to talk about the bribes they paid; now they were lining up in front of prosecutors' offices asking be heard. The prosecutors, moving gradually up the chain of responsibility, uncovered a system of bribery that was so pervasive, So rapacious and so scientific in its application that it was shocking to even the most cynical Italian observers. In the Milan subway, for example, the percentages being skimmed by politicians had crept up from 0.5 percent of all contracts to 3 to 4 percent on most new construction, and sometimes reached as high as 13.5 percent. The division of spoils was calculated down to the decimal point: 37.5 percent for the Socialist Party, 18.75 to both the Christian Democrats and the Communists, 17 percent to the tiny (but very greedy) Socialist Democratic Party and 8 percent to the Republican Party, another member of the government coalition. Milan became known as Tangentopoli, "Bribe City," a term that became synonymous for the corruption investigation throughout Italy.
According to one Italian economist, bribes were siphoning off about 10 trillion lire (about $8 billion) a year, which went quite a ways toward accounting for the national debt of $140 billion.
As prosecutors moved from businessmen and local officials to Party treasurers, members of parliament and top party officials, the Italian Parliament did not dare intervene. When the government tried to Pass a decree granting a kind of political amnesty for crimes of political corruption, crowds surrounded the Milan Palace of Justice in a scene that was reminiscent of Moscow in 1991 when the public crowded around the Parliament in order to protest a government coup. In an indecorous but indicative moment, a deputy for the Lombard League swung a noose from within the halls of parliament.
Berlusconi's attitude toward the investigation was initially ambivalent. He, too, considered himself a victim of the incessant demands of the Political parties and identified himself with a productive, competitive Northern Italy that had succeeded despite and not because of the government. His newspaper) Il Giornale, and its editor, Indro Montanelli, gave full and enthusiastic support to the investigation. But at the same time, Berlusconi understood that an investigation whose epicenter was Milan, dominated by Bettino Craxi and the Socialist Party, presented, if nothing else, the risk of losing the support of his principal benefactor.
In fact, on Febrary 21, 1992, just four days after the arrest of Mario Chiesa, Federico Orlando, who was then the deputy editor of Il Giornale, received an unexpected visit from Paolo Berlusconi (who was supposed to have taken over from his brother Silvio as the owner and publisher of the paper because of the Mammi law) and one of the top Socialist leaders of Milan, Ugo Finetti. "Finetti was carrying a folder of articles of our Milan coverage, marked up with a pea-green highlighter. He handed them to me so that I could give them to our journalists. 'The magistrates,' he said, 'start their cases with articles like these . . .' Paolo Berlusconi intervened and said, 'We have to work with city and the regional government, so we have to maintain good relations with the institutions."'
In the early days of the scandal, Craxi's son Vittorio, known as Bobo, phoned some of the journalists who were covering it for Il Giornale and issued an unmistakable threat: "After the elections of April 5, there's going to be a shake-up, and heads are going to roll at Il Giornale...Before talking to your boss, you should stop busting our balls." Federico Orlando also received an angry call from Fedele Confalonieri because Il Giornale had published a photograph of Mario Chiesa and Craxi together. "Is this an attempt to sabotage Berlusconil" Confalonieri asked Orlando. "If we have to make an enemy out of Craxi in order to keep Il Giornale, then we're better off giving up Il Giornale."
Montanelli, learning of the various attempts at interference, wrote a note to his journalists that included biting references to Bobo Craxi. "While remembering that we should not react to the intemperate behavior of others, especially that of politicians, and should simply tell the truth, all the truth, without prejudice or animosity toward anyone, I authorize you to tell that aforementioned gentleman [Bobo Craxi], that, if the occasion arises, the only head likely to fall after April 5, is his own. And you can tell him, on my behalf, that I don't consider it a great loss."
Montanelli went to see Berlusconi and told him that if his brother turned up again at the newspaper's editorial offices with a politician in tow, he would throw them both out on the street. Berlusconi replied by asking Montanelli not to alienate the Socialists at a moment in which they were working out the details of applying the Mammi law and assigning the television frequencies: "In fifteen days, I hope my plan for the frequencies will be taken care of. In the meantime, see if you can treat the Chiesa case as a purely criminal matter, without emphasizing his political ties."
The Sack of Rome: How a Beautiful European Country with a Fabled History and a Storied Culture Was Taken Over by a Man Named Silvio Berlusconi - Aleander Stille (The Penguin Press; 2006; pp. 120-129)
The governing parties, feeling a false sense of omnipotence, ignored numerous alarm bells and signs of public discontent with a system that more and more Italians began to regard with contempt. Even as the Cold War threat diminished, the politicians' demands for bribes grew in size and scope, becoming like a second layer of taxes in an already overtaxed country, and a genuine drag on the economy. In the early 1990s, there were a growing number of scandals that were like tremors presaging the earthquake to come. There was the "golden prisons" case, involving government officials skimming money on prison supplies. There was the "golden bedpans" case, which revealed a nasty world of no-show patronage jobs and people paying party officials for even the lowliest hospital jobs. There was a curious story in the Rome papers about a woman who, in an argument with her politician paramour, threw a suitcase of lira notes out the window and shouted: "That's what I think of you and your bribe money!" In the course of this grande bouffe, the crime rate in Italy had risen to record highs - mostly concentrated in Southern Italy, where the Mafia seemed to reign unchecked and often in happy collusion with the government parties.
In keeping with the sense of a country careening out of control, Francesco Cossiga, Italy's president of the Republic, normally a quiet, dignified figurehead position, appeared to have gone mad, telephoning call-in radio shows at odd hours, making weird rambling speeches, threatening to resign one moment, to dissolve parliament the next) to have the leading magistrates in the country arrested (something he had no power to do) and then going on television vowing to take a "pickax" to the country's political system. But the wilder and more mercurial his behavior, the more popular he became, appearing a bit like King Lear, who began to speak the truth as he descended into madness. "In any normal country, they would have kicked me out by now. Does this seem like a normal country to you? " Cossiga himself said at one point.
People began to speak with great frequency and disgust about Italy's system as a "partyocracy," in which political parties invaded almost every corner of the Italian economy. In the 1970s and the 1980s, Italy had tried to spend its way out of every social problem, buying up failing businesses. propping up troubled industries, sponsoring public works in distressed areas. The Italian state sold cookies and pasta, owned supermarkets and insurance companies, controlled 75 percent of the banking system, ran the national airline, the electrical and telephone systems, and produced steel. oil, natural gas and chemicals. Italy's hypertrophic state had meant that by the early 1990s, Italy's national debt was actually greater than its gross national product-twice that of any major country in Europe. As a result, 10 percent of the government's expenditures went just to servicing the national debt. Italy's deficit was more than twice the ceiling required for it to participate in the single currency, the euro, that was scheduled to begin soon. Italy was borrowing and spending itself out of its place in the new unified Europe.
Growing public dissatisfaction began to manifest itself in the sudden proliferation of new political parties. As Italy prepared for elections in 1992, some 207 different political movements applied to get on the ballot. There were ecological parties, hunters' parties, antihunting parties, car owners' parties, pensioners' parties, regional parties, antiregional parties, and even something called the Party of Love - founded by two porn stars. The politics of antipolitics was in the air.
On a more serious note, a group of reformist Christian Democrats in Sicily protesting political collusion with the Mafia began to draw support in the South with a new party called La Rete ("The Network"). But the most important and emblematic of the new movements was the Lombard League (later called the Northern League), which advocated political autonomy and even independence for Northern Italy. At first blush, the Lombard League, which took its name from a military alliance of Northern Italian states during the Middle Ages, seemed a weird, anachronistic throwback: its party symbol was a medieval knight holding aloft a sword, and it fought for seemingly lost or marginal causes like having dozens of tiny local dialects used on street signs and limiting Southern Italians' access to public jobs. But in the early 1990s, the Lombard League began to strike a deep chord by attacking Italy's corrupt and parasitical central government. "Roma, Ladrona" ("Rome, the Big Thief ") was one of its favorite slogans. Rather than simply express nostalgia for a largely fictional medieval Northern Italian unity, the Lombard League turned into . modern tax-revolt movement, the first to call into question Italy's large and expensive modern welfare state. During the 1970s and 1980s, state spending had come to occupy 52 percent of the GDP, and in Southern Italy - which depended on public works projects, economic subsidies, disability pensions and welfare benefits - government spending made up some 70 percent of the local economy. The rebellion of the wealthy North against the bureaucracy in Rome and the assisted economy of the South very much resembled the Proposition 13 tax revolt in California in 1978, which was a harbinger of the Reagan revolution against the American welfare state in the 1980s. The Northern League appealed to a new and dynamic part of the population, the small and medium-sized businesses in Northern Italy that had become one of the motors of the Italian economy. Most of these businesses were family-owned, and many were operated by people who were not highly educated but were extremely hardworking, people who had gone to work straight out of high school and had never stopped. These were people who had managed to succeed despite the inefficiency and corruption of the Italian state, but who saw their hard-won prosperity threatened by government regulation and taxes.
These businesses on the whole got poor services and infrastructure in exchange for high taxes and much political interference. For example, in 1991, the Socialists and Christian Democrats were fighting over who would get to appoint the head of the national phone company, while no one was worrying much over how to make the phone system work. An incredible 47 percent of all phone calls in Italy were either cut off in the middle or never got through, and it took an average of thirty-three days to have a phone installed. Italy was paying three dollars a minute to call the United States; as a result, Italy was second to last in Europe, after Greece, in the number of phones per inhabitant.
How could Italian businesses compete under these conditions? There was a sense throughout the country that all the system's deficiencies were coming to a head and could no longer be sustained. "The contradictions of Italy are becoming increasingly evident," the governor of the Bank of Italy at the time, Carlo Azeglio Ciampi, warned. "Companies that compete successfully throughout the world must coexist with an inefficient state and with sectors of the economy protected from competition."
3. Heads Will Roll
When Operation Clean Hands began in early 1992, it was like starting a fire in a parched landscape waiting to burn. In April, just two months after the arrest of Mario Chiesa, Italy held national elections that made it clear how much the political wind had changed. The big winner was the Lombard League, which went from 0.7 percent to nearly 10 percent nationally, almost all of its support from Northern Italy. In some places, like Milan, it became the largest single party. The traditional parties, from Christian Democrats and Socialists to the ex-Communists, all suffered major setbacks. The five parties of the government majority actually received less than 50 percent for the first time and had to scramble to cobble together a government. They had been put on notice that voters wanted change, and this meant that when Operation Clean Hands started, the parties could not afford to stop it.
It is significant that the scandal broke in Milan, which had been the stronghold of Craxism and was now the base of the Lombard League. '' The investigation became unstoppable because of the great ability of the judges . . . but also because of the rise of the League and the general distrust of people in the parties," one of the confessed bribe-takers said during the summer of 1992. " 'Throw them in jail' is the cry of the crowd. And this undoubtedly helped the judges. . . . I don't know whether they could have succeeded in something like this four years ago." Popular support reached across the ideological spectrum. There were candlelight vigils outside of prosecutors' offices, and the walls of Italian cities were suddenly filled with pro-Clean Hands graffiti. The Milan magistrate who had started the investigation, Antonio Di Pietro, became a national hero overnight. Graffiti writers scrawled "Grazie Di Pietro!" (Thanks Di Pietro) and "Fateci sognare, Di Pietro" (Let us dream, Di Pietro) across walls throughout Milan. Di Pietro T-shirts became collectors' items.
In the past, Italian businessmen had refused to talk about the bribes they paid; now they were lining up in front of prosecutors' offices asking be heard. The prosecutors, moving gradually up the chain of responsibility, uncovered a system of bribery that was so pervasive, So rapacious and so scientific in its application that it was shocking to even the most cynical Italian observers. In the Milan subway, for example, the percentages being skimmed by politicians had crept up from 0.5 percent of all contracts to 3 to 4 percent on most new construction, and sometimes reached as high as 13.5 percent. The division of spoils was calculated down to the decimal point: 37.5 percent for the Socialist Party, 18.75 to both the Christian Democrats and the Communists, 17 percent to the tiny (but very greedy) Socialist Democratic Party and 8 percent to the Republican Party, another member of the government coalition. Milan became known as Tangentopoli, "Bribe City," a term that became synonymous for the corruption investigation throughout Italy.
According to one Italian economist, bribes were siphoning off about 10 trillion lire (about $8 billion) a year, which went quite a ways toward accounting for the national debt of $140 billion.
As prosecutors moved from businessmen and local officials to Party treasurers, members of parliament and top party officials, the Italian Parliament did not dare intervene. When the government tried to Pass a decree granting a kind of political amnesty for crimes of political corruption, crowds surrounded the Milan Palace of Justice in a scene that was reminiscent of Moscow in 1991 when the public crowded around the Parliament in order to protest a government coup. In an indecorous but indicative moment, a deputy for the Lombard League swung a noose from within the halls of parliament.
Berlusconi's attitude toward the investigation was initially ambivalent. He, too, considered himself a victim of the incessant demands of the Political parties and identified himself with a productive, competitive Northern Italy that had succeeded despite and not because of the government. His newspaper) Il Giornale, and its editor, Indro Montanelli, gave full and enthusiastic support to the investigation. But at the same time, Berlusconi understood that an investigation whose epicenter was Milan, dominated by Bettino Craxi and the Socialist Party, presented, if nothing else, the risk of losing the support of his principal benefactor.
In fact, on Febrary 21, 1992, just four days after the arrest of Mario Chiesa, Federico Orlando, who was then the deputy editor of Il Giornale, received an unexpected visit from Paolo Berlusconi (who was supposed to have taken over from his brother Silvio as the owner and publisher of the paper because of the Mammi law) and one of the top Socialist leaders of Milan, Ugo Finetti. "Finetti was carrying a folder of articles of our Milan coverage, marked up with a pea-green highlighter. He handed them to me so that I could give them to our journalists. 'The magistrates,' he said, 'start their cases with articles like these . . .' Paolo Berlusconi intervened and said, 'We have to work with city and the regional government, so we have to maintain good relations with the institutions."'
In the early days of the scandal, Craxi's son Vittorio, known as Bobo, phoned some of the journalists who were covering it for Il Giornale and issued an unmistakable threat: "After the elections of April 5, there's going to be a shake-up, and heads are going to roll at Il Giornale...Before talking to your boss, you should stop busting our balls." Federico Orlando also received an angry call from Fedele Confalonieri because Il Giornale had published a photograph of Mario Chiesa and Craxi together. "Is this an attempt to sabotage Berlusconil" Confalonieri asked Orlando. "If we have to make an enemy out of Craxi in order to keep Il Giornale, then we're better off giving up Il Giornale."
Montanelli, learning of the various attempts at interference, wrote a note to his journalists that included biting references to Bobo Craxi. "While remembering that we should not react to the intemperate behavior of others, especially that of politicians, and should simply tell the truth, all the truth, without prejudice or animosity toward anyone, I authorize you to tell that aforementioned gentleman [Bobo Craxi], that, if the occasion arises, the only head likely to fall after April 5, is his own. And you can tell him, on my behalf, that I don't consider it a great loss."
Montanelli went to see Berlusconi and told him that if his brother turned up again at the newspaper's editorial offices with a politician in tow, he would throw them both out on the street. Berlusconi replied by asking Montanelli not to alienate the Socialists at a moment in which they were working out the details of applying the Mammi law and assigning the television frequencies: "In fifteen days, I hope my plan for the frequencies will be taken care of. In the meantime, see if you can treat the Chiesa case as a purely criminal matter, without emphasizing his political ties."
The Sack of Rome: How a Beautiful European Country with a Fabled History and a Storied Culture Was Taken Over by a Man Named Silvio Berlusconi - Aleander Stille (The Penguin Press; 2006; pp. 120-129)
