Arrest warrant for brother of Berlusconi

ITALY'S 'clean hands' investigators drew closer to the Prime Minister, Silvio Berlusconi, with the issue yesterday of an arrest warrant for his brother, Paolo.

The whereabouts of the younger Berlusconi was unclear, although his lawyer said that he had declared himself ready to be questioned by the judges. A senior executive in the Prime Minister's Fininvest business empire has told the judges that Paolo Berlusconi had authorised three bribes to financial police carrying out tax inspections at Fininvest companies. A total of 330m lire ( pounds 150,000) was allegedly paid to corrupt police officers in return for favourable treatment.

News of the arrest warrant cranked up the feverish rumour mill in Rome, and the authorities were forced to issue denials, both that the Prime Minister was considering resigning, and that magistrates were preparing to notify him of investigation. The rumours hit the lira and the stock market dropped sharply.

Paolo Berlusconi, 44, has spent most of his adult life in his brother's shadow, taking over the running of companies within Fininvest after Berlusconi senior moved on to greater challenges.

This is the third time Paolo has been involved in corruption inquries. Last year he was charged with paying L150m to Christian Democrat politicians in Lombardy in connection with the illegal construction of a waste dump. Paolo said the payment was a 'personal electoral contribution'. The case still has to be heard. Last February, he admitted paying L540m into a savings bank which ended up in local Socialist and Christian Democrat Party bank accounts. Paolo said the sum was commission on a property deal. His brief arrest over the affair embarrassed his brother as he prepared his electoral campaign.

Under the terms of the warrant, the younger Berlusconi again faces preventive custody. It was this very power to order detention that the Prime Minister tried to scrap by emergency decree 10 days ago.

As the graft investigations have scaled Fininvest's executive ladder, Mr Berlusconi has come under increasing pressure to distance himself from the affairs of his business empire. Instead, he was under attack again yesterday for a speech in which he accused the judges of using Fininvest to take their revenge on him. 'Magistrates should stick to their jobs,' he told a congress of the Christian Democratic Centre, a minor coalition partner, on Tuesday night. 'If the magistrates want to govern they should get themselves elected.'

Mr Berlusconi was requested by a cross-party group of deputies yesterday to explain himself before parliament. His was an 'unprecedented attack on the judiciary', said Mauro Guerra of the hard-left Rifondazione Communista.

Not everything has gone the magistrates' way, however. Their request for an international arrest warrant in the name of Bettino Craxi, the disgraced former prime minister and Socialist leader, was refused yesterday. Mr Craxi, who is implicated in 20 different corruption cases, has refused to return from Tunisia, where he has a magnificent holiday home. He is already being tried in absentia in one corruption case, where the prosecution has asked that he be jailed for 11 years. Mr Craxi says that he is too sick to travel.

(Photograph omitted)