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An Example Of a Small Italian Enron

Gilberto Gelosa's picture
Published: 11/12/17 - Country: Italy

The Italian magistrates are investigating over a suspicious exchange of confidential government information between Susanna Masi, Treasury official and Ernst and Young, EY, the important Professional Services and Accountancy Company.  Prosecutors in Milan have brought forward dynamic allegations on the profound basis of intercepted telephone calls and also exchange of important emails.

Such statement reveals that Susanna Masi has been working for the Italian Ministry (the government) for over 4 years and allegations against her were brought forward based on the fact that in exchange of economical gains – returns, exchanged privileges and confidential information related to planned exclusive tax reforms were given to EY and its important clients which also included important bankers. This was happening long before these laws became effective in order to assist the clients and bankers with major advantages over their rivals.

Also in addition to selling these secret and confidential information, the official is now under investigation over lobbying on behalf of Ernst and Young and its clients with whom she had exchanged this private and confidential materials in pursuance for major reforms and modifications of the tax code as well as issuing proposal to change both tax and fiscal legislation in their favor.

Susanna Masi has also been contested for false pretenses not being transparent in the conflict of interest about both identity and personal qualities because the Treasury official in question was working for EY as a tax advisor. For the years under investigation, even if the working relationship was over, continued transfer of monies were received by the official from EY (€ 220.000 between 2013 and 2015).

Nobody under indictment is releasing comments but the Treasury official is prepared to face the judicial authorities even if formal charges have not yet been made.

Lobbying is a widespread and common act of fanciful flattery in modern democracies to earn political support. But if these allegations will be confirmed, lobbying, for the Italian Ernst and Young, could have gone far beyond any democratic logics and means.  

The risk of having personal and instructed moles to transfer confidential information as well as changing rules and laws in order to have all advantages over their rivals in the markets and in politics it is now something that could be seen less far from utopia. It is thus important to be aware that such risks could possibly exist and that consequently comes the need to find a way to prevent them.

What happened in the case of Ernst & Young, if the allegations are confirmed, should not become a modus operandi for multinational companies practicing lobbying but an example to keep in mind about how far a democracy system should not go.

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Gilberto Gelosa's picture

Gilberto Gelosa founded the firm in 1988, bringing the corporate brand Interconsulting to life. In the years since,

Gelosa made valid partnerships and together with his partners, associates, Italian and foreign colleagues, created an international network.

His specializations and areas of expertise are company, commercial and tax law and he coordinates all activities of the firm. Moreover, he supports institutions and contributes to the development of academic research.