De Benedetti says bribes 'extorted' from Olivetti

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ROME - Carlo De Benedetti, the chairman of Olivetti, has admitted his company paid bribes to political parties, declaring that they were extracted under duress by politicians who used their power 'as a means of embezzlement and extortion', writes Patricia Clough.

Over the past 10 years this pressure had mounted alarmingly until it reached 'paroxysms of pressure, threats, blackmail and an atmosphere which . . . it is absolutely not inaccurate to call a racket,' he said.

Mr De Benedetti's attack was contained in a voluntary statement made on Sunday to the Milan magistrates investigating political corruption scandals. On Monday the former head of Olivetti's Rome office, Giovanni Cherubini, was detained but later released in connection with an alleged kickback paid to the state telephone company.

Mr De Benedetti stated that he took full responsibility for bribes paid by the company even when he was not involved himself. According to his lawyer, he is under investigation but no charges have been pressed.

The 58-year-old industrialist, who is also the biggest shareholder in the large computer and office equipment company, is one of the most prominent figures to be caught up in the corruption scandals. He paints a picture of an industry forced by politicians into corruption to obtain public contracts on the principle that 'if you don't pay us you don't get work'.

The Vatican newspaper, L'Osservatore Romano, said that at this stage, one year after the corruption investigations began, 'those who make themselves out to be moralists and courageous accusers of the illegal system appear scarcely credible . . . it would have been much more courageous if they had denounced the system earlier'.

Mr De Benedetti, who had earlier denied that Olivetti paid bribes, said he had done so out of a sense of responsibility towards Olivetti shareholders and employees, and that magistrates had to be told the truth first.

He said he held out from 1978, when he took over the firm, to 1988, by which time the company was in a 'state of real desperation' for lack of post office contracts. At that stage any company that refused to pay up was not even allowed to compete for contracts. Olivetti made general donations to the Christian Democrats, but Socialists they paid on a case-by-case basis.

Thus, after the first bribe in 1988, the value of contracts with the post office increased more than a hundredfold, until 'at the end of 1991 I decided to rebel and stop all payments. From then on we received practically no more orders from the post office.' During this period Olivetti had paid more than 10bn lire ( pounds 3.7m) in bribes, he said.