The Mafia Infiltrates Telecom? Say It Ain’t So…

February 27th, 2010 by · 1 Comment

The news this week over in Italy has been surreal to say the least.  According to papers justifying the arrest warrants, the Calabrian Mafia infiltrated or otherwise corrupted senior management figures in two of Italy’s largest telcos:  Fastweb and Telecom Italia Sparkle.  Silvio Scaglia – the founder of Fastweb, Stefano Mazzitelli – former CEO of Sparkle, and Nicola Di Girolamo – a Senator from the prime minister’s party were at the head of the list, while additional top figures currently at the company are also under scrutiny.  You can almost hear the pens in Hollywood scratching away a plot outline for another installment of the Godfather can’t you?

The plan of attack was nothing particularly surprising – trading fictitious telecom services and then laundering the profits all over the world, while using intimidation and probably violence as well to keep a lid on the whole thing.  But it went on for years and the cabal apparently made over €2B off of it directly, and even used the fake transactions to evade another €400M in VAT taxes.  Who did they take it from?  It looks to me as if it was the shareholders of the companies involved, plus taxpayers in general for the tax fraud obviously.

The companies themselves say this all happened years ago and they are of course the victims, but the problem is that the extent of the scandal suggests many, many people must have known what was going on, or at least pieces of it.  Figuring out who was dirty and who wasn’t will probably turn into a giant finger pointing game, which is something Italian politicians are especially good at (although I don’t mean that in terms of their accuracy).  Prosecutors are already looking to take over operations of the two companies, I find it difficult to imagine how they might put this particular puzzle back together again.

So where’s the money itself?  Hah, I’ll bet you the real masterminds are long gone with that already.  Given the interconnectedness of the telecommunications world, does anyone think this scandal will spread outside Italy to additional carriers and perhaps regulators as well?

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Categories: ILECs, PTTs

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