Prime Minister Renzi says he will overhaul Italy's dysfunctional justice system. But politicians who stand to benefit from the status quo oppose any change.
Italy’s judicial shakeup caught in political conflicts of interest
ROME - Denis Verdini once told a group of friends there were three types of people he did not like: cardinals, policemen and judges. “Because they all tell you what to do,” he said, according to someone present.
Prosecutors have ordered the silver-haired Italian politician to stand trial six times since 2014 in an array of cases involving alleged graft and alleged financial wrongdoing. Verdini has denied all the charges against him.
The first trial, which revolved around allegations of irregularity over the awarding of a contract to build a police school in Florence, ended in March in a guilty verdict and a two-year prison term for Verdini.
He says he will appeal the sentence, but the outcome may not matter: Under Italy’s statute of limitations, which imposes deadlines on courts to complete legal proceedings, the case will automatically be shut down this summer.
Italy’s justice system has long been one of the most dysfunctional in Europe, especially when it comes to alleged white-collar criminals like Verdini. Prosecutors say it is all but impossible to reach a definitive verdict for a multitude of financial crimes within the prescribed time frame, which is seldom more than eight years. That’s partly because legal cases take so long in Italy. But it is also because Italy is unique in Europe: Its statute of limitations starts from the moment an alleged crime is committed rather than from the point it is discovered, and the time limit is not extended when a defendant is put under investigation or indicted or sentenced. No other country has both rules.
Prime Minister Matteo Renzi has promised to overhaul the sclerotic justice system and his coalition has already made some changes, including cutting the amount of holiday that magistrates can take, lengthening prison sentences for bribery and increasing legal costs to try to limit frivolous litigation.
But a determined group of politicians, including the powerful Verdini, is blocking more far-reaching reform, including to the statute of limitations. This conflict of interest is fueling a fierce confrontation between the judiciary and the government.
According to website L’incredibile Parlamento Italiano, more than 90 Italian parliamentarians – almost one in 10 – have either already benefitted from the statute of limitations or are currently on trial or under investigation for white-collar crimes and misdemeanours, many of which have a short judicial shelf-life.
The prime minister has pledged to break the deadlock before the August summer recess but has not said how. Because his Democratic Party does not have a majority in the 315-seat upper house Senate, it needs Verdini’s 19 senators to get any justice reforms approved.
“The politicians haven’t stopped stealing. They’ve stopped being ashamed of it.”
Verdini, who leads the Popular and Liberal Alliance for local Autonomy (ALA), declined to be interviewed for this article. His ally Lucio Barani, the ALA’s parliamentary leader, told Reuters the party was opposed to extending the statute of limitations because it would leave defendants in judicial limbo for too long.
“We represent the sovereign people. Only demagogues and the enemies of politics lengthen the statute of limitations,” said Barani, who himself benefitted from the procedural cut-off in 2012 in a case in which he was accused of abusing his powers as mayor of the small Tuscan town of Aulla. He is also on trial for alleged embezzlement in another case likely to be wiped out by the statute of limitations. He denies all the charges against him.
Only 286 people are serving time in Italian jails for white-collar offences compared with 7,986 in Germany, according to the Council of Europe, a democracy and human rights watchdog. This is despite the fact that according to Transparency International only Bulgaria in the 28-nation European Union has a worse problem with corruption than Italy.
Nicola Gratteri, chairman of a committee on judicial reform set up by Renzi in 2014, says around three-quarters of all trials for non-violent or non-drugs-related crimes expire before the appeals process is exhausted.
"In Italy there is a generalised spirit of indulgence to allow the guilty to go unpunished ... no one seriously believes in penal sanctions," says Pier Camillo Davigo, the head of Italy’s powerful Magistrates Association, who made his name in the "Clean Hands" corruption investigations of the early 1990s that swept away an entire political class.
Davigo said corruption had got worse since then. "The politicians haven't stopped stealing,” he said. “They've stopped being ashamed of it."
THE PUPPET MASTER
Always elegantly turned out in crisp suits and ties, Verdini likes to play by his own rules.
He comes from a modest background. To pay his way through university and a subsequent course to become an accountant, he sold meat wholesale, earning himself the nickname "the butcher.”
Through his second wife, Simonetta Fossombroni, who comes from a noble Tuscan family, Verdini gained access to the highest echelons of Italian society and, in the 1990s, entry into billionaire media mogul Silvio Berlusconi’s new centre-right party, Forza Italia (Go Italy!).
Verdini was elected to parliament in 2001 and grabbed Berlusconi's attention by giving him a painting as a present, said a former political ally, who declined to be named. Verdini quickly became Berlusconi’s numbers man in parliament, making sure he had enough votes to turn bills into law, including controversial items such as the decriminalisation of false accounting and shortening the statute of limitations to make it even harder for prosecutors to secure verdicts for many white-collar crimes.
As Berlusconi's fortunes faded – he resigned as prime minister in 2011 – Verdini also suffered setbacks. He broke with Berlusconi last July and pledged support for Renzi, a fellow Tuscan.
Perhaps the most serious case Verdini faces revolves around the 2010 collapse of Credito Cooperativo Fiorentino, a bank where he served as chairman for 20 years. Prosecutors say he used the bank to build up a powerbase that helped him in politics. They say he offered loans to friends and associates without proper guarantees – loans that ultimately undermined the bank, they allege. The bank case carries a statute of limitations of around 20 years that will almost certainly not expire before a definitive verdict is reached – a relative rarity in Italy.
"The bank was used to create a personal power system. It essentially made Verdini become the person he became," said an experienced prosecutor involved in several investigations into the senator.
Verdini has said he did no wrong. In April, he told a Florence court hearing in the case that he was misunderstood: “I am made out to be a little devil, but in reality, I have always acted correctly and in respect of the norms established in the law.”
In a separate case Verdini is accused of belonging to a secretive lobbying group known as Propaganda Tre. Prosecutors say the organisation plotted in 2009 to lean on Constitutional Court judges before they ruled on a measure to grant Berlusconi and others legal immunity. That case is in court; the next hearing is due in July. Verdini’s lawyers say he is innocent.
TO THE LIMIT
Italy’s statute of limitations in criminal cases is designed to protect defendants from persecution by the state.
“A fundamental purpose of government is to create a judicial system that produces efficient, fair, and predictable results.”
But in Italy, the time limits work quite differently to the way they do in other rich countries. In France, for example, the time allowed for a case is stopped and re-set at 10 years every time a judge takes any action – an indictment or a summons, say – which shows the state is still interested in reaching a verdict.
In the United States there is no time limit once a defendant is sent to trial, which means they have no interest in dragging out proceedings. In Britain there is no limit as soon as police open investigations into a suspect.
In Italy, though, the clock starts when a crime is committed and keeps ticking until the statute of limitations runs out. That gives every incentive for a defendant to prolong proceedings, according to lawyers.
The rules are different in civil cases, where it’s almost impossible to run down the clock – and politicians opposed to reforming the penal code point to the endless proceedings in the civil courts as an argument for maintaining current time limits on criminal cases.
But reformers say the scales are weighted too heavily in favour of the accused. Even after a guilty verdict at the initial trial, defendants are allowed two appeals and are considered innocent until the final court ruling is delivered. For financial crimes, where wrongdoing is often not discovered for years, there is then little time left to secure three guilty verdicts before the case expires.
“Finance police only investigate tax returns with a four year delay,” making it close to impossible to convict people for things like tax fraud, said Florence prosecutor Luca Turco, who is leading the case against Verdini over the bank collapse.
EFFICIENT, FAIR AND PREDICTABLE?
Italy’s courts have a backlog of eight million cases – 4.5 million in the civil system and 3.5 million in the penal tribunals, according to the Justice Ministry. Over the past 11 years, the statute of limitations law has seen 1.68 million cases thrown out.
“Lawyers make their money from litigation so most of them advise against mediation,” said Raffaele Rotondaro, a lawyer in Rome. Of around 25 cases in which his clients had attempted mediation, not one had reached a successful conclusion.
To speed up the justice system, Rotondaro suggests hiring more judges. As a proportion of its population, Italy has one of the lowest number of judges in the EU, according to the European Commission. At the same time, it has some 237,000 registered lawyers, or 370 per 100,000 inhabitants, one of the highest rates in the bloc. France has fewer than 100, Germany around 200.
But Italy’s creaking public finances can ill afford to pay for thousands of new judges. And streamlining the system – by, for example, eliminating the automatic right of appeal – would hit lawyers’ profits and could make thousands unemployed.
“Can you imagine any prime minister actually taking on the lawyers?” said the chief magistrate Davigo. “It’s never going to happen.”
Economists say the dysfunctional justice system is a huge drag on growth – as serious as better-known problems such as Italy’s massive public debt.
U.S. ambassador to Italy John Phillips makes the comparison between Italy’s Supreme Court, which ruled on 77,628 penal and civil cases in 2015 and has 140,541 cases pending, to the U.S. Supreme court which typically makes around 80 rulings a year.
“A fundamental purpose of government is to create a judicial system that produces efficient, fair, and predictable results,” Phillips told students in a speech in Milan in April. “Does Italy have this? Many potential investors have told me that, simply put, the answer to that question is ‘no.’ And that is the number one reason why they decide against investing in Italy.”
By Crispian Balmer and Gavin Jones
Photo editing: Simon Newman
Graphics: Jessica Wang
Design: Catherine Tai
Edited by Simon Robinson