THE NOT-SO-BEAUTIFUL GAME: CORRUPTION SCANDAL

UNCLAS SECTION 01 OF 02 ROME 001539 SIPDIS SENSITIVE SIPDIS E.O. 12356: N/A TAGS: PGOV ECON SCUL IT SUBJECT: THE NOT-SO-BEAUTIFUL GAME: CORRUPTION SCANDAL HITS ITALIAN SOCCER LEAGUE This cable is Sensitive but Unclassified. Not for distribution outside the USG, not for Internet publication. ¶1. (SBU) Summary: A scandal over alleged match-rigging by the Turin football squad Juventus is snowballing into a broader investigation of corruption in Italy's football league. Many top soccer federation officials have resigned, and shares of publicly-traded teams have crashed. Some members of the former center-right government are under scrutiny for their ties to disgraced ex-Juventus General Manager Luciano Moggi, and there may be greater political fallout from this scandal. AC Milan, a team owned by former Prime Minister Berlusconi, is one of the squads under investigation. Public prosecutors, who had planned to attend an Embassy-sponsored IPR conference the week of May 22, have cancelled due to the investigation. End summary. Juventus Accused of Match-Fixing -------------- ¶2. (U) The formation of a new center-left Italian government this week (as well as the appointment of Italy's new President of the Republic),faced strong competition for media space by a massive match-rigging scandal in the Italian soccer league. Prosecutors on Thursday had sealed off the offices of Turin's Juventus club, one of Italy's (and Europe's) most popular football teams. ¶3. (U) The scandal centers on allegations that former Juventus General Manager Luciano Moggi colluded with referees to fix the outcome of matches or, at the very least, ensure favorable calls in the team's favor. [Note: The tendency of referees to make controversial calls that go Juventus' way has long been a topic of debate among Italy's football fans. End note.] The Agnelli family, who control FIAT, owns 62 percent of Juventus. The entire Juventus board has resigned, reportedly under pressure from the Agnelli's; and most executives in the Italian football federation, including President Franco Carraro (a former Mayor of Rome),have quit. "Footballopoli" -------------- ¶4. (U) While Italy has dealt with match-fixing scandals before, the latest seems to go far beyond Juventus and involves rapidly expanding allegations of financial fraud, illegal betting, drug use by players, and collusion between Moggi and Italian politicians. Italian newspapers are comparing this scandal to the Tangentopoli (a.k.a. "Clean Hands") anti-corruption cases of the early 1990s. Among those under investigation is Moggi's son, who controls GEA, a sports agency that represents many Italian soccer stars. The younger Moggi allegedly coerced players into signing with GEA with the threat that not doing so would nix the possibility of career-enhancing trades. Other squads, including AC Milan (owned by former Prime Minister Silvio Berlusconi),Lazio, and Florentina are also under investigation. ¶5. (SBU) While former PM Berlusconi is not a target of investigators, former members of his government have come under scrutiny by prosecutors. According to news reports, investigators have wiretaps of conversations between Moggi and former Interior Minister Giuseppe Pisanu, who allegedly asked Moggi to "help" Pisanu's hometown third-division team. Other intercepted conversations allegedly include a call by Moggi to then-Finance Minister Domenico Siniscalco seeking favors for one of Moggi's friends, an officer in Italy's financial police. [Comment: While the leak of these wiretaps is certainly embarrassing for Pisanu and Siniscalco, it is far from clear that either minister did anything illegal. Moggi is a well- connected figure, and we doubt that these are the only government officials with whom he had regular contact. End comment.] The Financial Fallout -------------- ¶6. (U) Stock in the three publicly-traded teams fell ROME 00001539 002 OF 002 precipitously this week, with Juventus shares alone losing 42 percent. Although the 20 teams in Italy's A-division collectively enjoy annual revenue of euro 1.3 billion, most operate in the red because of high player salaries. This scandal will certainly hurt an already struggling league. Calling All Prosecutors -------------- ¶7. (SBU) Almost immediately after this scandal hit the papers, the Embassy received calls from prosecutors from Naples and Rome canceling their participation in an Embassy IPR conference May 22-24. The magistrates said they were unable to take time off to attend the popular Embassy-sponsored event due to the ballooning scandal, a sign that this is becoming a case of truly national proportions. Comment -------------- ¶8. (SBU) This case is rapidly expanding beyond the confines of Italy's sports world. With so many Italian political figures involved in soccer, there is a high potential for even more spillover into Italian politics. Romano Prodi's new government will be under pressure to clean up this rapidly expanding mess. ¶9. (SBU) Perhaps the greatest damage, so far, has been to Italy's international image. Since the "Clean Hands" campaign of the 1990s, Italy has taken pains to present itself as a normal country that has turned the page on this kind of endemic, deep-seated corruption. Italy's football league, like the pre-Clean Hands Christian Democrats, may not survive this investigation in one piece. Spogli