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Italian police arrest ex-Finmeccanica exec

Published October 23, 2012 9:05 pm

This is an archived article that was published on sltrib.com in 2012, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Milan • An Italian investigation into alleged corruption in the awarding of international contracts to aerospace and defense giant Finmeccanica led to the arrest Tuesday of the company's former commercial director and has implicated a former Cabinet minister.

The probe by Naples prosecutors is one of several currently looking into alleged corruption at Finmeccanica, a global player in defense and aeronautics that is 30-percent owned by the government and was once considered a jewel among Italian companies.

Shares in the company dropped 3.8 percent to (euro) 3.89 ($5.05) in trading Tuesday.

Former economic development minister Claudio Scajola is under investigation for alleged corruption in connection with Finmeccanica contracts in Brazil for the supply of Naval frigates, according to Italian media reports.

Scajola, who resigned from former premier Silvio Berlusconi's last government in a private housing scandal, denied any wrongdoing.

"I always carried out the duties of economic development minister, which took me around the world, in full respect of the laws and rules," Scajola told TG 24 Italian television. "I never had private meetings. I am not worried, and I don't know what is behind this, but I am available to the prosecutors if they want to hear what I have to say."

Police earlier arrested the former commercial director for Finmeccancia, Paolo Pozzessere, on suspicion of international corruption related to the supply of helicopters and other technology to Panama. Naples prosecutors allege that a Panamanian company acting as an intermediary for the deal was "secretly" controlled by a Panamanian politician.

Finmeccanica issued a statement denying payment of any kickback related to the 2010 contracts, worth (euro) 180 million ($234 million), to supply Panama with a national security and costal surveillance system.

The contracts, involving the Finmeccanica companies SELEX, AgustaWestland and Telespazio, had the backing of then-Premier Berlusconi and Panamanian President Ricardo Martinelli.

Pozzessere resigned from his position in September 2011, saying that he was stepping down to protect the company's reputation and denying any involvement in illegal activities. He remains an adviser to the company for the Russian market related to partnerships in regional aircraft and defense electronics sectors, Finmeccanica said.

Former Chairman and CEO Pier Francesco Guarguaglini and his wife are the subject of a Rome probe that alleges involvement in a scheme generating false invoices to evade taxes and set up a (euro) 2 million ($2.7 million) slush fund to pay off political go-betweens. Both have denied wrongdoing. Guarguaglini resigned under government pressure last December.

His replacement, chairman and CEO Giuseppe Orsi, also is under investigation over a helicopter contract in India.

The government came under some heat for not responding to the latest developments.