Billionaires Behaving Badly: Silvio Berlusconi

By Justin Rohrlich  OCT 21, 2010 7:50 AM

Silvio Berlusconi says he reached the pinnacle of success though hard work and determination. But a bit of bribery and corruption never hurts, either.


Seventy-four year-old Italian Prime Minister Silvio Berlusconi, a man with a net worth of approximately $9 billion, was born into a working-class family in the northern part of the country.

His entrepreneurial streak came to the fore when he entered college, which he paid for by working as a singer on Mediterranean cruise liners.

In the early 1960s, Berlusconi began a transformation of sorts, into Italy’s version of Donald Trump.

He became a successful real estate developer in the Milan area, putting up massive complexes comprised of tens of thousands of apartments. Although accusations have been made that Berlusconi’s financing came from the Sicilian Mafia, this has never been officially confirmed.

Berlusconi added a bit of Rupert Murdoch to his existing Trump in 1973, by setting up a cable television company that provided service to his residential properties. From there, he acquired two more channels, which he later folded into a larger holding company called Fininvest.

Fininvest branched out across the country, offering local programming on a national level -- at that time, the only true national network Italian law permitted was the state-run RAI, which operated RAI Uno, RAI Due, and RAI Tre.

After RAI’s monopoly was broken by a court ruling in 1976, Berlusconi seized upon the opportunity. He rebranded Fininvest as Mediaset, and established three truly national, privately-owned channels: Canale 5, Italia 1, and Rete 4.

Over the next fifteen years or so, Silvio Berlusconi expanded his empire, with Italy’s largest publishing house, its top advertising agency, its biggest department store chain, the AC Milano soccer team, and a highly influential investment firm.

His relatives also did quite well; Berlusconi’s brother Paolo owns the newspaper Il Giornale -- which makes no secret of its pro-Berlusconi stance -- and his soon-to-be ex-wife, Veronica Lario, is part-owner of Il Foglio, which, like Silvio Berlusconi himself, has been historically conservative in its political bent.

In 1994, Berlusconi was elected Prime Minister, though, his victory was not without controversy.

Because he owned all the major private channels -- and Italian state TV does not allow political advertising -- Berlusconi’s networks put him front and center, while his opponents’ campaign commercials were shunted to late-night and otherwise inconvenient time slots, virtually guaranteeing they would not be seen by the public.

The people running against him were also forced to pay the man seeking the same office for airtime.

"This is the only country in the world where the political parties must pay their political adversary in order to run an election campaign," said Giuseppe Giulietti, then a parliamentary representative of the Left Democrats.

Berlusconi was able to use this advantage to, well, his advantage. He outspent all other candidates by an order of 20-to-1 and ended up securing absolute majorities in both houses of parliament.

It was then that Berlusconi managed to pull off something unseen in any other civilized country.

As prime minister, Berlusconi not only controlled Italy’s state-run television stations, but his own, private stations, as well. This gave him control over 90% of Italy’s airwaves.

He was swiftly dubbed “Sua Emittenza,” or, “His Transmittance,” by Italians.

"It's a situation without precedent in the Western world," Giovanni Sartori, professor emeritus of political science at Columbia University and a longtime observer of Italian politics, said at the time.

Author Martin Lee likened Berlusconi to "Citizen Kane on steroids."

Even the Economist, the conservative, pro-business British magazine, weighed in, declaring Berlusconi “unfit to govern.”

During his tenure as Prime Minister, which is still ongoing, Berlusconi was investigated and charged with bribery, dating back to his early real estate ventures in Milan. The situation had to do with a complex series of payoffs, which ultimately wound up in the pockets of judges that were crucial to Berlusconi’s business ventures.

However, after taking office, Berlusconi had certain laws changed that forbade criminal charges from being brought against a sitting Prime Minister. During this time, these cases -- and others -- were dropped after the statutes of limitations ran out.

Berlusconi is at once loathed and loved by his constituents for his brash style.

At a political event in September, Berlusconi told the crowd that young women should “look for a wealthy boyfriend. This suggestion is not unrealistic."

He may have had a tinge of self-interest in making this statement, as his divorce from wife Veronica, his second, was entering its final stages. (The final straw for Lario came after reports surfaced that Berlusconi had been carrying on with an 18 year-old girl from Naples by the name of Noemi Letizia. “I cannot be with a man who spends time with under-age women,” Lario said, announcing her intent to divorce.)

Berlusconi added that women prefer older men because they think, "He's old. He dies and I inherit."

But Veronica Lario won’t have to wait until Berlusconi dies to “inherit.”

She is currently receiving a stipend of 300,000 euros per month while the final details of the divorce are worked out. Italian news agency ANSA reports that she is seeking monthly payments of 3.5 million euros—about twice what Berlusconi had offered.

The next hearing will take place in December.

Lest one think Silvio Berlusconi has mellowed with age and experience, consider this:

Berlusconi and his son Piersilvio are now targets of a tax-evasion investigation, which Berlusconi’s legal team dismisses as something of a non-issue.

"It is nothing new," said Pier Longo, one of the attorneys. "It's a small part of the investigation that is taking place in Milan."

The investigation to which Longo refers is one that accuses Berlusconi and 12 others of tax fraud and false accounting, which stems from Mediaset’s purchase of certain US film rights.

The outcome of Silvio Berlusconi’s latest legal tangle is, of course, yet unknown. Though, one thing is for certain:

“Sua Emittenza” won’t be able to count on positive coverage from Il Foglio -- to borrow, and mangle slightly, a phrase -- hell hath no fury like a woman scorned who also owns a national newspaper.

No positions in stocks mentioned.

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