Is Italy Backtracking on the Fight Against Foreign Bribery?

Press reports, informed commentary, and the recent acquittal of ENI and Royal Dutch Shell despite overwhelming evidence they bribed Nigerian officials provide alarming evidence that Italy’s commitment to curbing foreign bribery is waning.

That commitment was never that strong to begin with. Although bound by the OECD Antibribery Convention to investigate and prosecute foreign bribery cases, in 2011 the OECD Working Group on Bribery found Italy had done little to comply. In the decade since ratifying the convention, only a few dozen cases had been brought, almost all against individuals for small-time bribery, and most had ended in acquittals. This dismal record was not surprising, the Working Group observed, given no one had been trained on how to investigate foreign bribery cases, and no public prosecutor’s office specialized in such cases.

The one bright spot the Working Group found was the Milan office of the public prosecutor.  It had aggressively pursued foreign bribery cases, opening by far the lion’s share of cases, including all those where a corporation was involved. Its future is now in doubt.

Reports in the press and conversations with Italian academics and other close observers say there is a move afoot led by powerful Italian companies to cut its budget.  In response to the 2011 OECD report, the office established a special unit devoted to foreign briber cases.  The talk is now of shutting the unit down and transferring its current head to another office where he would have little if any involvement in foreign bribery cases.

That these reports are appearing now is no coincidence. Francesco Greco, the head of the Milan office head and thanks to his role in prosecuting the mafia perhaps Italy’s most respected prosecutor, retires in November. The fear is his replacement will be someone who will end the office’s active prosecution of Italian companies for foreign bribery. A mark of how serious concerns are about the office’s future is that Greco, a notoriously reserved figure, gave an interview to Il Corriere della Sera calling attention to the recent attacks on the office and offering a full-throated defense of Fabio De Pasquale and Sergio Spadaro, the two who prosecuted ENI and Shell.

De Pasquale and Spadaro are under attack by other prosecutors who appear angling to replace Greco. Most worryingly, criminal charges are about to be filed against them. Nuhu Ribadu, who fought corruption head on until multiple assassination attempts drove him into exile once said: “When you fight corruption, corruption fights back.” Corruption in Italy now seems to be fighting back.

The charges against De Pasquale and Spadaro are based on withholding a video tape and a draft report by a Milan financial police from the defendants. The tape and the draft report, it is alleged, both cast doubt on the credibility of former ENI executive Vincenzo Armanna, both a defendant and prosecution witness in the case. Under Italian law, it is claimed, the prosecutors had an absolute duty to disclose both the tape and draft report to defendants. 

As Greco explained in the Il Corriere della Sera interview, the charge the video tape was withheld is groundless. Court records show ENI had the tape and a transcript of it for years.  

The decision not to turn over what was still a draft report was an exercise of prosecutorial discretion. The draft is part of an obstruction of justice investigation prompted by allegations ENI pressured Armanna to “soften” claims of ENI wrongdoing.  Armanna declined and instead provided damning testimony against ENI at trial.

The claim the draft report should have been disclosed has been sharply criticized by Italian prosecutors, academics, and commentators. It contains communications protected by legal privilege and is part of a separate criminal investigation. Italian law bars the introduction at trial of evidence obtained in separate criminal investigation as well as the disclosure of material protected by legal privilege. 

If indeed criminal charges are filed against De Pasquale and Spadaro, it would show the lengths to which some in the Italian system are going to quash efforts to hold Italian companies to account for bribing public officials.  For it would be a grave abuse of process to do so. The international standard governing the institution of criminal proceedings provides that a prosecutor will proceed with a criminal case only when it “is well-founded upon evidence reasonably believed to be reliable and admissible” and that he or she “will not continue with a prosecution in the absence of such evidence.” Under this standard, it is simply inexplicable that the two could be charged with a crime.

Charging the two will be to ENI and Shell’s advantage no matter the outcome. Neither is likely to be assigned to handle the appeal of the trial court’s acquittal if charges against them are pending. That means responsibility for the appeal  will likely fall to Celestina Gravina, a recent transfer to the Milan office after, as one report put it, “a non-brilliant” performance as public prosecutor in Matera. She has publicly denigrated prosecutions of organized crime and corporate wrongdoers and, most troublingly, has endorsed the acquittal on appeal of two defendants in the ENI-Shell case convicted at trial (here). 

If powerful forces in one country can block vigorous implementation of the OECD Antibribery Convention, it will provide impetus to those in other countries who long for the good old days when buying a public official, almost always one from a poor country, was business as usual.  The whole global fight against corruption could thus be in jeopardy if Italy’s apparent backsliding is not arrested.  The Italian government, its parliament, and its citizens must say “NO” to any lessening of the commitment to combatting foreign bribery. The other parties to the OECD Anti-bribery Convention and indeed all those committed to ending foreign bribery need to make their voices heard

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