Bribe scandal threatens Berlusconi's brother

AS IF through broken floodgates, the stream of revelations that has damaged the Italian Prime Minister, Silvio Berlusconi, flowed on yesterday, implicating his brother in corruption investigations into the tycoon's business empire.

Salvatore Sciascia, the head of tax affairs in Mr Berlusconi's Fininvest holding company, told examining magistrates that Paolo Berlusconi, 44, had given him the money to buy off the finance police during inspections of the company's affairs.

A warrant was issued for Mr Sciascia's arrest at the weekend, following the breaking of a corruption ring among the Guardia di Finanza, the financial police. The executive turned himself in on Monday. He told the daily La Repubblica after his questioning that he had given investigators the name of the person who had provided him with the bribe fund. 'Paolo Berlusconi?' the interviewer asked. 'That's him', Mr Sciascia replied.

Paolo Berlusconi, who has headed several of his elder brother's companies, already faces corruption charges. Briefly arrested in the spring, he was ordered earlier this month to stand trial in a graft case involving property deals with an Italian bank. He has pleaded innocent. Rumours circulated yesterday evening that his arrest was imminent, but this could not be confirmed.

Although the Prime Minister is not implicated in the corruption inquiry, the latest blow is severe. Several of his closest lieutenants in Fininvest are under investigation already. One of them, Gianni Letta, was formerly a Fininvest director and is now Mr Berlusconi's cabinet under-secretary.

Mr Letta was one of several Berlusconi intimates present at a meeting the media magnate held at his Milan home on Sunday, reportedly to discuss the Fininvest inquiry. Leaked news of the meeting has aroused a storm. The gathering comprised members of his government - all former Fininvest employees - the company's chairman, Fedele Confalonieri, and the lawyers of Paolo Berlusconi and Mr Sciascia.

The meeting is seen as further proof that Mr Berlusconi is incapable of separating his business interests from affairs of state. Mr Berlusconi's coalition allies are losing patience.

'We always warned of the effects of this blending of Berlusconi as head of government and of a financial empire,' said Francesco Speroni, a leading member of the Northern League. 'He committed himself to untying this knot, but he hasn't and now the crunch has come.'

The League is unhappy about the concentration of power in Mr Berlusconi's hands since it agreed to co-operate with his Forza Italia party in March's elections. Since then they have pushed repeatedly for anti-trust legislation, partly because they feel the Prime Minister's access to friendly media has helped him to increase his party's popularity at their expense. Fininvest includes half the country's television stations and wide publishing interests.

'Silvio Berlusconi must choose whether to be a company boss dabbling in politics or a statesman. It is a very clear choice,' said Marco Taradash, formerly of the Radicals and now a senior deputy in the Forza Italia. 'The only way out of the impasse is that of a second Berlusconi government, removing the Fininvest ministers.'

The press joined the chorus of criticism. The editor of La Repubblica, Eugenio Scalfari, commented in a critical editorial: 'When three members of government meet the chairman of Fininvest just as the financial director of the group is being accused of bribing the financial police, it . . . must lead to suspicions of an attempt to affect the trial and tamper with evidence.'

The dailies Corriere della Sera and La Stampa, both less hostile to Mr Berlusconi than La Repubblica expressed similar reservations.

'How did they travel (to the meeting), in a Fininvest plane or in a government jet?' La Stampa asked. The question, the newspaper said, underlined 'the knot of contradictions into which Berlusconi has tied himself, together with the employees he promoted to ministers . . . (they) have committed an error of taste, style, public morality and professional ethics'.

Mr Berlusconi himself has refused to comment about either his brother or about the meeting. But as the Prime Minister arrived at a political convention yesterday, he was asked about the health of his government. 'Fine', came the terse reply.