Private Lies, Public Figures

Antonio Fazio is not the type of man most Italians associate with corruption. Governor of the Bank of Italy, the 69-year-old father of five is the very picture of civic rectitude, with a loving wife and a reputation for fairness and scrupulous honesty. Or is he? When a transcript of an illicit midnight telephone call landed on the front pages of the country's newspapers last month, Italians couldn't get enough. Eavesdropping on Italy's powerful elite has become a national pastime, and Fazio's late-night call was script-perfect:

"Did I wake you?"

"No, no," said Gianpierro Fiorani, chief of Banca Popolare Italiana.

"I've just signed it," said Fazio, referring to a legal document that, with his imprimatur, could be used to thwart a Dutch takeover of one of Italy's largest financial institutes, Banca Antonveneta.

Fiorani was delighted. "Ah, Tonino," he glowed. "I'm overcome with emotion. Thank you. Thank you. I have goose bumps. Tonino, I'd like to kiss your forehead."

With the Dutch sidelined, Fiorani's bank was able to secure Banca Antonveneta earlier this summer for 5.5 billion Euros. But then the transcripts leaked out, and within hours both the deal--and Fazio's career--were all but history. Yet the affair didn't end there. In another intercept from the frantic corporate coupling, Fazio's wife, Maria Cristina, is heard comforting not her nerve-racked husband, but Banca Popolare's Fiorani. "Relax," she coos, spelling out the word suggestively.

"Thanks, dear," he purrs back. Italians could only wonder at the intimacy of it all.

The Fazio debacle is just the latest in a steady stream of investigative wiretaps leaked to the Italian tabloids and mainstream press in recent months. And thanks to what Justice Minister Roberto Castelli calls "total anarchy" with regard to electronic eavesdropping, there is definitely more to come. A report called "No Secret," issued in August by the research firm Eurispes, estimates that the Italian government has paid 1.3 billion Euros over the past five years to the nation's phone companies, directing them to listen in on their most select clientele. At one point last year, the Eurispes report charges, one mobile-phone company had 7,000 taps in place. The government's eavesdropping business has grown so large that it must outsource much of the transcription work. The result: leaks, often for hefty fees, of the most luscious details of private lives and legal proceedings.

Evidence from the taps is used increasingly in Italian courts. Voice matching is considered as conclusive as DNA testing, and testimony (or confessions) over the phone can seal a verdict. In the past several months, Italy has caught several big-name criminals, including Hamdi Issac (a.k.a. Osman Hussain), the would-be London bomber whose calls to his brother were traced for days before his arrest in Rome on July 29. Before that, taps led to mafia and Red Brigades arrests and a handful of white-collar detentions for crimes ranging from bribery to corruption. In late June, Milan magistrates issued arrest warrants for 13 supposed CIA agents for the alleged rendition kidnapping of Imam Abu Omar in Milan, all based largely on mobile-phone taps and traces over the course of a year.

Lately even Prime Minister Silvio Berlusconi has been swept up in the frenzy. On Aug. 14, La Repubblica published excerpts of a phone call between two of Italy's most influential businessmen, Stefano Ricucci and Emilio Gnutti. In them, Gnutti brags about his cozy relationship with the prime minister and outlines his plans to "press" Berlusconi to help them buy RCS Mediagroup, which owns Corriere della Sera, Italy's largest newspaper.

Needless to say, Berlusconi's government has made its displeasure clear--and may take steps to rein in errant wiretapping. Under the current regulations, prosecutors can authorize taps for any number of suspected crimes. Only members of Parliament are exempt. And once the transcripts have been handed over to defense attorneys, they are considered public information--though it's usually the transcribers and typists who come across the hottest tidbits and sell them to the press well before they are introduced as evidence in criminal cases. In the Fazio case, no charges are even pending yet.

Berlusconi has promised to change all that. New laws to be introduced this month would authorize government wiretapping only for mafia or terrorism investigations. Transcripts would be confidential, and anyone selling or publishing excerpts (including local and international press) would face five to 10 years in prison. The proposed changes are not likely to pass, if only because critics of the legislation include members of Berlusconi's own governing coalition. The Northern League's Robert Maroni told NEWSWEEK that the legislation won't pass, adding: "These measures are far too restrictive and might actually be detrimental to public security." Nor is there any shortage of people who suspect that Berlusconi's interest in restricting such fare is chiefly to protect himself.

Berlusconi will have none of that, saying he is more concerned with the privacy of everyday citizens--an astounding 30 million of whom have been tapped in the past decade, according to the Eurispes report. "This violates the rights of Italians," the prime minister told reporters from his vacation home on Sardinia, denouncing the publication of private conversations as scandalous. "We are not a civilized country if we can read in a newspaper what a lady tells her boyfriend or her husband." Oops. Did he just spill the beans?