Arrests at Fiat shift scandal into top gear

A NEW chapter in the saga of Italy's political scandals opened yesterday when two top executives in the giant Fiat group were taken to jail on suspicion of corruption. The arrests of Francesco Paolo Mattioli, Fiat's chief financial officer, and Antonio Mosconi, managing director of Toro Assicurazioni, its insurance arm, shook the nervous markets just as they were recovering after the weekend's government reshuffle. The lira fell to a new record low of about 967 to the German mark.

They were not the first top managers of private firms to be arrested in corruption investigations - numerous heads of construction companies, particularly, have passed through Milan's San Vittore jail for allegedly paying massive kickbacks to political parties in exchange for big public-works contracts. But Fiat is Italy's biggest and most prestigious private concern; if the suspicions were proven, it would reveal yet another dimension to the corruption and connivance between the moneyed and the powerful in so many spheres of Italian public life.

Mr Mattioli and Mr Mosconi are under investigation in connection with activities while they were chairman and vice-chairman respectively of Cogefarimpresit, a Fiat company involved in public works and civil engineering. Their arrests reportedly followed confessions to the magistrates by Maurizio Prada, former secretary of the Milan branch of the Christian Democrat party, about alleged kickbacks paid on contracts for a railway project and the Milan underground network.

Fiat yesterday issued a statement expressing 'great astonishment' at the arrests and the 'absolute conviction' that its two executives will quickly be able to demonstrate their innocence.

A railway station in Rome was yesterday 'seized' by magistrates investigating abuses by the public authorities. The entrance was sealed off by police but it was of no inconvenience to the public. For the station, built at a cost of 81,500m lire (pounds 37m) for the 1990 World Cup football matches, had only been used for about 10 days and since then had remained derelict, accumulating grass and rubbish, and providing shelter for drug addicts and down-and-outs. If the magistrates' suspicions are proved correct, the station, in the suburb of Vigna Clara, will be one of a large array of extremely expensive white elephants, built more with an eye to the bribes that could be extracted than their actual usefulness to the public.

At the same time, another magistrate applied to parliament to consent to the arrest and prosecution of Severino Citaristi, the former administrative secretary of the Christian Democrat party, who is being investigated for around a dozen cases of corruption and related misdeeds. The latest move followed denunciations by several entrepreneurs who alleged they had to make payments to the party on the sale of numerous buildings for public use.

The future of Giuliano Amato's government still looks shaky, despite the weekend's reshuffle following the resignations of two ministers touched by scandal. Several members of the coalition parties are clearly unhappy with the changes. The Industry Minister, Giuseppe Guarino, who had responsibility for privatisations taken from him, has been muttering about resignation or revenge.