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Berlusconi Tells Italian Firms to Keep Bribing After Orsi Arrest

Former Italian Prime Minister Silvio Berlusconi
Former Italian Prime Minister Silvio Berlusconi praised Orsi and said prosecutors were setting an example that could hurt Italy’s biggest companies from Finmeccanica to oil company Eni SpA and power producer Enel SpA. Photographer: Filippo Monteforte/AFP/Getty Images

Former Italian premier Silvio Berlusconi criticized prosecutors for arresting Finmeccanica SpA’s ex-chief executive officer, Giuseppe Orsi, and said global companies that shun graft are destined to fall behind.

“Bribes are a phenomenon that exists and it’s useless to deny the existence of these necessary situations,” Berlusconi, 76, said today in a televised interview on state broadcaster RAI3. “These are not crimes. We’re talking about paying a commission to someone in that country. Why, because those are the rules in that country.”

Berlusconi praised Orsi and said prosecutors were setting an example that could hurt Italy’s biggest companies from Finmeccanica to oil company Eni SpA and power producer Enel SpA. Orsi was jailed this week as Italian prosecutors probed a helicopter contract he oversaw in India. Rome-based Finmeccanica, Italy’s biggest defense company, promoted Alessandro Pansa to CEO yesterday.

“No one will negotiate with Eni or Enel or Finmeccanica anymore,” said Berlusconi. “It’s pure masochism.”

Berlusconi, a billionaire media magnate, has for years criticized Italian prosecutors for what he calls poor decisions and politically motivated charges. Berlusconi was convicted of tax fraud in October and is standing trial on allegations he paid a minor for sex and abused the power of his office while premier.

Shares Tumble

Finmeccanica is moving to reassure shareholders, after the stock slumped as much as 14 percent on Feb. 12, the day Orsi was arrested. The company, which lost more than half of its market value during Orsi’s tenure as CEO, said yesterday that it remains “fully operational,” even as authorities probe allegations of illegal payments tied to a 560 million-euro ($753 million) contract for helicopters in India in 2010.

Pansa had previously served as chief financial officer before becoming chief operating officer. Pansa has been a central figure in shaping Finmeccanica’s transformation, including asset disposal and efforts to streamline the defense subsidiaries.

Finmeccanica said it plans to convene a shareholder meeting on April 2 to appoint a new board. While Orsi formally retained the title of chairman, Pansa has effectively been given those powers because only the shareholder congregation has the authority to strip Orsi of that position.

Asset Sales

Pansa will now be charged with guiding Finmeccanica through its biggest revamp in at least a decade as it seeks to deliver 1 billion euros in asset sales to reduce more than 4 billion euros in debt. The company had been pushing to dispose of its Ansaldo Energia business, with the goal of announcing a buyer before Italian elections begin on Feb. 24.

The Milan offices of Finmeccanica, Orsi’s house and premises of the AgustaWestland helicopter subsidiary in Italy were searched this week, two people familiar with the probe said, who asked not to be identified because the investigation is continuing.

Orsi became CEO of Finmeccanica in 2011 after winning the endorsement of Berlusconi, then serving his third term as prime minister. The Italian Finance Ministry owns 30 percent of Finmeccanica and 31 percent of Rome-based Enel. The ministry has indirect control over Eni through a 26 percent stake owned by state lender Cassa Depositi e Prestiti SpA.

‘Absurd Moralisms’

“These are absurd moralisms,” Berlusconi said of those who condemn bribery conducted outside of Western democracies. “If you want to make moralisms like that, you can’t be an entrepreneur on a global scale.”

The Indian Defense Ministry has asked the country’s Central Bureau of Investigation to probe the charges. The contract signed with AgustaWestland includes “specific contractual provisions against bribery and the use of undue influence as well as an integrity pact,” the ministry said on Feb. 12.

Orsi’s lawyer, Ennio Amodio, said in a statement that evidence against his client is “inconsistent” and that the arrest is “unjustified.”

Berlusconi is seeking a political comeback and campaigning ahead of Feb. 24-25 parliamentary elections. He is running second in opinion polls to a coalition led by Pier Luigi Bersani. Berlusconi is appealing the tax fraud conviction, which carries a four-year prison sentence, and has denied the abuse-of-power and sex charges.

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