* Giuseppe Mussari summoned as investigation widens
* Prosecutors target former bank management
* Rome prosecutors look at possible Vatican bank link
By Silvia Ognibene
SIENA, Italy, Feb 4 Italian prosecutors called
in the former chairman of Monte dei Paschi di Siena on
Monday as they pursued their corruption investigation into an
opaque series of loss-making derivatives trades at the bank.
Giuseppe Mussari, who stepped down as Monte Paschi chairman
in April last year as the bank's problems mounted, was driven to
the prosecutors' office in Siena by his lawyer and left without
speaking to reporters.
One of his lawyers said his full legal team had not been
available and he had sought a new appointment on Thursday with
prosecutors, who are investigating a series of bribery and
corruption allegations against former managers of the bank.
A former Dresdner Bank employee, Antonio Rizzo, who has been
one of the key witnesses in the case, spoke to financial police
on Monday and said he had repeated earlier testimony he had
already given to investigators.
Rizzo's testimony mentioned a group of former executives
within Monte Paschi he said were known as the "5 percent gang"
because of the commissions they were said to take on every deal.
Italy's third largest bank has been at the centre of a
financial and political storm since last month when it revealed
that it faced losses of some 720 million euros ($986 million
from a series of derivatives and structured finance trades.
The losses, apparently linked to Monte Paschi's costly
acquisition of smaller rival Antonveneta in 2007 have raised
questions over the future of the Tuscan bank, which depends on a
3.9 billion euro state loan.
The case has also become a burning political issue, three
weeks before Italians vote in a general election on Feb. 24-25
because of the tight links between Monte Paschi and regional
politicians who dominate the shareholder foundation which
controls the 540-year-old bank.
On Monday, Rome prosecutors said they were looking at a
report in the Corriere della Sera daily which said that Monte
Paschi executives had concealed secret payments related to the
Antonveneta deal that were apparently routed through accounts at
the Vatican bank IOR.
Mussari, chairman of the bank until April last year, has
been the target of stinging criticism over his stewardship and
was forced to step down as head of the Italian banking
association when the losses were revealed in January.
Monte Paschi executives are believed to have used the
derivatives trades to massage accounts and conceal losses
following the 9-billion-euro Antonveneta deal, which left the
bank badly weakened just before the 2008 financial crisis.
The bank's new leaders and the Bank of Italy have accused
the former management of concealing details of a complex
derivatives operation linked to Italian government bond prices,
which left Monte Paschi badly exposed when many European bond
markets collapsed in 2011.
The Bank of Italy has faced increasing pressure over its
supervision and Mario Draghi, who was governor of the bank
before becoming president of the European Central Bank in
November 2011, has also been drawn into the criticism.
Prosecutors are looking into allegations that the price tag
for Antonveneta concealed massive bribes paid to facilitate the
deal and that fraudulent accounting was used to hide the true
nature of the derivatives contracts.
The case has been complicated by parallel investigations
into other aspects, including a probe by prosecutors in the
small southern town of Trani who are looking into allegations
from a consumer group that the Bank of Italy was lax in its
supervision of the sector.
Mussari pursued the Antonveneta deal to consolidate Monte
Paschi among the front ranks of Italian banks. However even at
the time eyebrows were raised when he paid around 9 billion
euros in cash for a bank which Spain's Santander had acquired
for just 6.6 billion euros only weeks earlier.
In addition to Mussari, prosecutors have targeted former
managing director Antonio Vigni and the former head of the
bank's finance department Gian Luca Baldassari as well as a
string of other senior executives.