Italy pulls plug on the corporate connection: Patricia Clough in Rome on arrests that expose state industry as a political tool

THE fire-breathing, six-legged Agip dog has been dragged from his pedestal as the juggernaut of the Italian corruption investigations crashes through the country's prestigious state-owned industries.

The dog is the symbol of ENI, the petrochemicals, gas, engineering and pipeline colossus, the third biggest industrial conglomerate in Italy and one highly respected abroad. Its president, Gabriele Cagliari, and the chiefs of its four main subsidiaries landed in Milan's San Vittore jail last week, accused of passing huge sums of money to the politicians. Among them they controlled a turnover of about pounds 20bn and 73,960 employees worldwide.

The effective decapitation of a group providing nearly half the country's energy needs came in a week when the scandal over the illegal financing of the political parties had shaken the government. Scuffles had broken out in parliament, and the Prime Minister, Giuliano Amato, due in London today, survived a confidence vote on Wednesday.

In little over a month, Italians will be voting in a referendum which, though posing minor changes to the electoral system, will really be a plebiscite on the political system.

With the ENI arrests, the Milan magistrates conducting the investigations believe they have struck at the web of unhealthy ties that had grown up between political parties and the top echelons of the state-owned industries. ENI's founder, the brilliant and unorthodox Enrico Mattei, used to say he used the political parties 'like I use taxis'. He created and financed a faction within the Christian Democrats, and used his influence and money to get the decisions he wanted.

But after Mattei's mysterious death (perhaps murder), when his plane crashed in 1962, the relationship was reversed: the parties used ENI for their own ends. At first it was the fief of the Christian Democrat party. Then in 1979 the Christian Democrats passed it to the Socialists in return for political support.

But the same year the first scandal broke: the Socialist- backed president of ENI turned out to be a member of the P2 Masonic plot, a huge kickback was uncovered - not by magistrates but by a Socialist leader who feared it would go to another and make him more powerful - and the president had to go.

Not long afterwards, Socialist link-men are believed to have induced ENI to lend 150bn lire ( pounds 68m) to the crooked banker Roberto Calvi, to try to salvage his Banco Ambrosiano. In exchange, it is alleged, Calvi, later found hanged in London, had dollars 7m or more paid into a secret, numbered Swiss bank account. This account is figuring large in charges against Bettino Craxi, the Socialist former prime minister.

After a succession of three presidents, all effectively sacked by the party, two commissars and further murky affairs, a respected university professor was enlisted in 1983 to put the organisation, by then in a bad state, back on its feet. Then in 1989, Mr Cagliari became president. What happened after that, the magistrates are now in the process of finding out.

An important role appears to have been played by a Tuscan financier, Pier Francesco Pacini Battaglia, nicknamed Chicchi, who was arrested, interrogated for 14 hours, then released last week. Since 1987 he has headed a private bank in Geneva called the Karfinco, which is closely linked with ENI.

Karfinco was allegedly the means through which foreign- based ENI slush funds were paid into the Swiss bank accounts of political parties, not only, it is believed, those of the Socialists.

Karfinco's activities, according to Giuseppe Turani, La Repubblica's star economic writer, are liable to make ENI's previous secret doings look like youthful errors. 'Inside Karfinco and its relations with ENI is enough to bring down half of parliament.'

At present ENI is in the hands of its managing director, Franco Bernabe, who has called a shareholders' meeting for 31 March to nominate a new president and new boards of directors for the subsidiary companies, thus replacing those put there by the political parties. He is insisting that ENI will get over this difficult phase. 'We are a great company with a firm position on an international level and with a strategic role in our country,' he wrote to employees. His task, he said later, was to 'bring out the great human and industrial strengths, and show that the old, compromised spirit has gone.'

Start your day with The Independent, sign up for daily news emails
Homeless Veterans charity auction: Cook with Angela Hartnett and Neil Borthwick at Merchants Tavern
charity appeal
Amir Khan is engaged in a broader battle than attempting to win a fight with Floyd Mayweather
boxing Exclusive: Amir Khan reveals plans to travel to Pakistan
Arts and Entertainment
Strictly finalists Simon Webbe, Caroline Flack, Mark Wright and Frankie Bridge
tvLive: Simon Webbe, Caroline Flack, Mark Wright and Frankie Bridge face-off in the final
Ched Evans in action for Sheffield United in 2012
footballRonnie Moore says 'he's served his time and the boy wants to play football'
Have you tried new the Independent Digital Edition apps?
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Finance Director

£65000 - £80000 per annum: Recruitment Genius: Finance Director required to jo...

Recruitment Genius: Medico-Legal Assistant

£15000 - £25000 per annum: Recruitment Genius: This is a unique opportunity fo...

Ashdown Group: (PHP / Python) - Global Media firm

£50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...

The Jenrick Group: Quality Inspector

£27000 per annum + pension + holidays: The Jenrick Group: A Quality Technician...

Day In a Page

Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

Amir Khan attacks the Taliban

'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture