GOV'T-MADE COMMERCIALS BANNED IN ITALY

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ROME-Silvo Berlusconi's latest headache as Italy's new prime minister: One of the spots extolling the achievements of his government has been banned.

The ban by Giuseppe Santaniello, commissioner for information and broadcasting, followed days of mounting controversy about the legality of the advertising, which broke Aug. 6 on state-run RAI.

This is the latest of several setbacks for Mr. Berlusconi, allstemming from his dual role as politician and owner of the country's largest media conglomerate, Fininvest.

State-owned RAI is required to provide free ad time for government-sponsored social service messages, prepared by the prime minister's office. But the spot in question, created in-house by the Department of Information & Publishing, was deemed propaganda and promotion for Mr. Berlusconi's political party, Forza Italia.

Another spot in the campaign explaining tax reform measures has been allowed because it was considered proper use of government funds.

How much was spent on the effort is difficult to determine since the creative was done internally; there was no charge for airtime.

The disputed spot, under the umbrella campaign theme "Done," discusses topics like justice, environment, drugs, unemployment and health. It carries the slogan "Facts which citizens should know to exercise their rights."

The ad explains how new laws resolve such problems. The word Fatto, meaning both "done" and "fact" in Italian, appears on the screen as a stamp in bold letters.

The situation is very delicate since RAI itself is at the center of a political makeover. RAI and Fininvest each control almost half of Italy's TV audience and half of the $3.8 billion in annual TV ad revenue, making them direct competitors. But as Mr. Berlusconi's government increases its control over RAI, he will in effect be able to count on the backing of all six national networks.

His dual role as media baron and prime minister has produced several conflicts, which have festered into a series of setbacks.

In late June, Mr. Berlusconi moved to take more control over RAI's board with a clause, added to a government decree authorizing the state-run TV's debt, that would have given his cabinet the authority to appoint its own directors. Italy's President Oscar Luigi Scalfaro intervened, insisting that under the constitution only leaders of Parliament can appoint RAI's board.

Although this spot was thwarted, others will run. Gianni Letta, Mr. Berlusconi's undersecretary and former Fininvest VP, said other initiatives, including advertising and news capsules about government activities, are planned.

This week a new spot relating to the environment and tourism, encouraging citizens to keep the cities clean, to drive carefully and to be courteous to tourists, is set to break, the Department of Information said.

At a news conference last week, Mr. Letta justified the government's initiative: "The government is headed by a communications expert who knows how to use modern communications methods."

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