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FCPA Blog Daily News

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Tuesday
Mar252014

More Finmeccanica execs arrested for bribery

Lorenzo Borgogni, former head of external relations at Finmeccanica; courtesy of YouTubeTwo former managers of Finmeccanica SpA, Italy's state-controlled defense and industrial group, have been arrested over allegations of international corruption connected to a tracking system for waste-hauling trucks.

Lorenzo Borgogni, Finmeccanica's former head of external relations, and Stefano Carlini, former operating manager of Selex Service Management, a Finmeccanica subsidiary running the Sistri project, were placed under house arrest on Monday.

Two other men, including a member of Italy's parliament, were also arrested.

The Italian government owns about 30 percent of Finmeccanica.

Former senior executives from the company's British-Italian subsidiary company, AgustaWestland International, are on trial in other cases for corruption. Prosecutors say Giuseppe Orsi and Bruno Spagnolini bribed Indian officials to win a 2010 contract to produce a dozen helicopters for use by India’s political leaders.

India terminated the £466 million helicopter order with AgustaWestland because of the bribery allegations in early January.

As reported Monday by the Financial Times, Naples prosecutor Francesco Greco said the Finmeccanica corruption investigations had allegedly revealed false billing and overcharging within the Sistri project.

Fineccanica created a pool of funds, prosecutors said, and set up shell companies in Delaware and accounts in Switzerland that could be used to bribe officials.

The Sistri project was awarded to Finmeccanica by Silvio Berlusconi's government in 2009. It involves electronically tagging waste and collection trucks to prevent mafia involvement in illegal waste dumping.

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Julie DiMauro is the executive editor of FCPA Blog and can be reached here.