Suicide exposes tobacco cash racket: EC official masterminded massive subsidy payments for unsaleable product

THE ITALIAN European Community official who jumped to his death last week was the mastermind in a massive tobacco payments racket, but is not believed to have had any links to the Mafia or to Italy's domestic corruption row. The real scandal is that the EC has spent hundreds of millions of pounds to subsidise the growing of Italian and Greek black tobacco, for which there is virtually no demand, writes Leonard Doyle.

Italian tobacco growers managed to increase their production by 300 per cent until auditors came across the official's illegal scheme in 1990. Associates of Antonio Quatraro, 59, believe he committed suicide rather than face a disciplinary committee last Monday when he was certain to be dismissed with the loss of pension rights. Investigators who have been on his case for more than a year say speculation that he had links to the Mafia is unfounded. It is not known how much he gained personally from the scheme.

What the case has highlighted is the huge waste of EC money. Tobacco processors are subsidised to buy the tobacco from Greek and Italian farmers and are then paid a second time to 'sell' the unwanted weed at giveaway prices in Eastern Europe and North Africa. Dark, air-cured tobacco is used in Gauloises and Gitanes, but nowadays 65 per cent of French smokers prefer to buy the blond 'American blend' cigarettes.

Just to produce and then dispose of 390,000 tons of tobacco in 1992 the EC paid the processors pounds 1bn, a rate of subsidy 35 times higher per acre than the subsidy paid to cereal farmers. The EC is paying around pounds 5,600 a year for every tobacco farmer. At the same time, the Community spends pounds 7m a year promoting its 'Europe against Cancer' programme.

Mr Quatraro, who headed the EC tobacco section, was removed from his job last year. His crime, EC investigators say, is that he brought about an explosion of subsidies from pounds 250m in 1980 to pounds 990m in 1991 by organising a cartel that excluded other dealers.