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BERLUSCONI FACES QUESTION CORRUPTION INVESTIGATION REACHES PRIME MINISTER, MEDIA MOGUL

By Published on .

ROME-Italy's anti-corruption investigation has reached media mogul and Prime Minister Silvio Berlusconi, who will be questioned for the first time by magistrates about his role in the payment of bribes to tax inspectors on behalf of his Fininvest group.

Fininvest media conglomerate is also the subject of a series of investigations ranging from government allegations of trying to set up a cartel to control national TV advertising rates to violating rules on maximum ownership of a pay-TV channel called Telepiu.

Political sources said Mr. Berlusconi may soon be dragged into those investigations, too.

If Mr. Berlusconi is directly implicated in any of the corruption charges, he may not be prime minister much longer.

In the case of the bribes to tax inspectors, Fininvest officials including Mr. Berlusconi's brother, Paolo, have already admitted making the payments.

Potentially one of the most serious charges, because it occurred after Mr. Berlusconi became prime minister in May, is that Fininvest tried to persuade the three-channel state TV network RAI to create an advertising cartel with Fininvest's three channels.

Gianni Locatelli, RAI's former director-general, told magistrates that Mr. Berlusconi tried to convince RAI executives to raise RAI's ad rates and lower audience viewing figures to make his channels look better.

In another major blow, a Supreme Court in Rome ruled Nov. 24 that Italy's current media legislation impedes fair competition by allowing one person to own three national TV channels.

The decision appears to mean that Mr. Berlusconi, the only person who owns three channels, will have to sell some of his broadcasting interests. The case challenging the media law was brought by another channel, Telemontecarlo, and two small commercial TV companies. Until now the Italian Parliament, controlled by Mr. Berlusconi's Forza Italia Party, has shown little interest in passing a new media law.

The conflicting interests of running Italy-including state-run TV network RAI-and being Italy's biggest media owner have dogged Mr. Berlusconi since he became prime minister.

"Berlusconi is obligated to resolve the conflict of interest problem because every time it comes up, it is very destabilizing for the country," said Alberto Contri, president, Italian Advertising Association. Fininvest and RAI control 90% of the Italian TV ad market, he said.

Two weeks ago Mr. Berlusconi said he plans to sell part of his $7 billion Fininvest empire, an apparent attempt to distance himself from the corruption investigation. But he has made similar offers before.

There seems to be no end to Mr. Berlusconi's woes. The Financial Times has reported that two of his children were under investigation for alleged false billing in connection with Fininvest's advertising arm, Publitalia.

But even opposition parties want Mr. Berlusconi to stay until the contentious national budget for 1995 is passed by Parliament. The deadline for passage is mid-December. After that, Mr. Berlusconi's survival is likely to depend on how closely he is linked to Fininvest's corruption probes.

Memo to Berlusconi: Sell or go. See editorial on Page I-6 in Ad Age International's Dec. 12 issue.

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