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Public Corruption Sicilian Style
by Roberto Paglia

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Too many euros spent on useless projects.Hardly a month passes without the Giornale di Sicilia, Sicily's most important newspaper, running an article on the problem of millions of euros misappropriated from the European Union for aid programs purported to help bolster Sicily's chronically crippled economy by developing practical job skills and, more importantly, creating actual jobs. Yet, as one article said, the so-called professional development courses "don't develop anybody's skills or create a single lasting job." Hundreds of "development projects" have been established to cash in on the windfall from Brussels, and no accountant, except those of the Guardia di Finanza (Italy's treasury police), ever seems to notice or care.

It's all part of Sicily's ongoing public project scandal, but we cannot help wondering: How many computers could be purchased for Sicilian schools with those millions of euros? What's amazing, from a pragmatic point of view, is that such cases are so commonplace in Italy that few are even touched by the national Italian wire services. That's right; stories about the alleged misappropriation of millions of euros rarely make the national news. That's understandable in a nation where the Parmalat scandal, Europe's biggest-ever international financial fraud (comparable to the Enron case in the United States) involves sums approaching billions of euros, but it's still extremely disturbing.

As we describe the problem, it's important to keep in mind that most Sicilians are far more honest than the handful of "project managers" we're describing. If it were otherwise, the actions of these individuals, when made known, would not provoke public outrage in the minds of five million people living in Sicily. It's important to remember that the public projects represent only one form of corruption present in Sicily. Another important point to consider is that many public projects, though perfectly legal and free from corruption per se, exemplify inefficiency, incompetence and waste.

It's not the Mafia. Not precisely. Though increasingly sophisticated, organized crime rooted in Mafia-style practices (bribery, extortion, murder, public contracts, vote-buying) represents only a fraction of Sicily's endemic political corruption and it typically involves particular areas, such as building construction (and restorations) and of course most money laundering. Naturally, some of the people laundering money or buying politicians for project managers also work for the Mafia; some may be actual "made" (inducted) Mafiosi. Yes, the interests of corrupt politicians (and public employees) and the Mafia often overlap, but they can also function in a parallel existence. It's more pragmatic to view the violent Mafia and tamer political corruption as two (out of many) facets of the same form of institutionalised criminality. Mafia-like organisations are more common south of Rome, while more widespread corruption is normal throughout Italy. In the south, it just happens to involve a pre-existing criminal structure in many instances, but that depends on the industry involved. Despite what many non-Italians believe, institutionalised corruption in this country does not involve one end of the political spectrum or another; leftists (liberals) are just as likely to be involved as conservatives.

Corruption can be rooted in any activity where public money is spent in substantial amounts. In recent years, with the abolition of many national Italian programs (despite what the island's politicians would have you believe, most public money spent in Sicily actually comes from the national tax base and is sent from Rome), it has become fashionable to milk European Union (EU) funds to help "underdeveloped" areas like Sicily.The Agenda 2000 fund is infamous in this regard, but it's only one of dozens of social funding programs. Certain practices, though deplorable, are not necessarily illegal in Italy, where conflict of interest laws are lax and things like nepotism and cronyism are a normal part of professional life. (It is still possible, for example, to obtain a high grade at the University of Palermo through an offer of money or even, in the case of a pretty studentessa, sex.) In practice, corruption takes many forms --from providing public contracts to politicians' friends (clientelism) to outright bribes and bustarelle (illegal kickbacks and bribes). Funding could be for a construction project (such as building or expanding a hotel), an education program, a skills development program, or almost anything deemed to improve the regional economy. Agricultural subsidy programs are notoriously corrupt. This funding won't last forever; many countries entering the EU are poorer than southern Italy and will need this money in the future. But while it lasts, some folks can expect pleasant sinecures only occasionally investigated by the EU. That's because the monies are Cash flow in a typical development project.usually managed through local political organs, and here in Sicily local politicians are readily "bought." Tragically, to the "typical" Sicilian man employed in a high-paid position in the public sector, honesty with public money cannot be presumed. (As they say in The Sopranos, "Forget about it.")

Our chart shows how it works. There are literally thousands of variations on this scenario, but we'll outline a more or less typical one. A self-appointed progettista (a project manager who heads a legitimate organisation or has established some kind of socially-oriented "non-profit" organisation of his own as a "cover" or facade) makes a proposal to the EU, but he needs a governmental "sponsor" to present it credibly, and such a sponsor may even be required by the officials in Brussels. Does the sponsor work in the interest of the Italians he supposedly represents? Probably not; he expects a bribe or bustarella (kickback) from the progettista for approving the project. Moreover, matching government funds (from the Italian government) are required for many projects, making government connections essential if one wants to milk the EU cow. In practice, even where all the funds come from the EU, it's possible that part of the sum must be administered through local public agencies. It's unrealistic to presume that a bribe or kickback, perhaps disguised as a "consulting fee," is likely to be discovered by the authorities; in Italy a public servant can legally hold multiple offices, professorships and consulting posts, with no conflict of interest in law, and "consulting fees" are a normal part of life.

Job training is a favorite premise (and promise) of project proposals, ready to get easy approval because it offers the hope of actually improving the economy. The drawback is that training now presumes jobs later, and these rarely exist in Sicily. In principle, anything that supports the Sicilian economy has a good chance of acceptance by the EU bureaucrats, ignorant as they are of the inner workings of Sicilian society and politics. There are over three thousand Sicily-based organisations authorised to receive some form of EU funding, utilising almost nine hundred million euros between 2000 and 2006, often on useless programs, in some four hundred courses annually.

Existing structures may be utilised to furnish certain services required in the "projects." By their very nature, most projects are conveniently short-term and cannot substitute for effective social programs, though numerous projects are administered more-or-less directly by public agencies (and given to clientelism). In theory,such programs might be better administered by universities (which may be corrupt in certain respects), and critics of such spending often note that the administrators chosen have no business administering any program. What often happens is that the project manager encourages his friends to set up companies exclusively to work for his organisation at inflated fees. This partly accounts for the large number of (for example) advertising agencies in Palermo run by unprofessional people who depend almost exclusively on public contracts and bizarre EU projects. Invariably, a few legitimate companies and honest people work on Sicily-based EU projects, but they may have to resort to shady practices (such as bribery or kickbacks) to get selected.

A legion of "consultants," some contracted (outsourced) directly by government agencies, work on the various publicly-funded projects. Many are actually "clean" and quite professional, though rarely the best qualified people in their respective fields. The very idea of resolving a serious social problem such as unemployment through a short-term project is absurd. (Ask any competent economist.) The scandals involving EU funds used for agriculture and infrastructure (public construction) are just as shocking as those regarding job training and education. It took thirty-five years --and untold millions-- to complete the Palermo-Messina motorway, and some fifteen million euros mysteriously disappeared during the restoration of Palermo's Teatro Massimo opera house.

Is widespread corruption a natural condition of Sicilian society? Unfortunately, it is endemic today, mostly (but not exclusively) where public funding is involved. Sicilians are more conservative in spending their own money. The situations created by the project managers are human tragedies in a land of poverty and high unemployment, where there are vast differences between rich and poor, and where even a simple job is considered a privilege. How would a rich progettista explain to a poor mother that he is paid millions to produce little or nothing, while others work humble jobs just to make ends meet? What many Sicilians find disturbing about this new class of opportunists is their complete lack of any sense of responsibility or guilt.

The comments below (received from one of our readers) are typical of genuine Sicilian attitudes to the problem, especially as expressed by younger people. The young author refers to "the useless, money-eating figure of the progettista."

Money laundering and false accounting are often --but not always-- part of an EU project in Sicily. These services take many forms. In the scheme of things, twenty million euros, while substantial, are not an exceptionally high sum to spend on a project, especially where tangible "bricks and mortar" services are involved. Restoring a seventeenth-century palazzo could easily cost ten million euros, and the construction companies would probably be connected to the Mafia. Yet, there's something ridiculous about overcharging for professional services, especially when fraudulent invoices are being presented at tax time. Some schemes are truly amazing, in all their details. A particularly costly tourism promotion project published a thick, glossy quarterly magazine (intended to be sold at subscription for about a eighty euros per year) featuring mediocre translations into English and, as authors, pretty young women who looked good in miniskirts but really couldn't write very well --a sexual element not to be overlooked in a society controlled by aging (and often sexist) males. Sadly, many EU-funded projects are characterised by gross incompetence or deception of this kind. With a budget of ten or twenty million euros for professional development courses, one might hope for at least a few jobs to result from the mix (apart from occasional writing work for aspiring fashion models), even if the managers had to create positions and pay a few employees from the interest earned on the association's huge bank accounts.

In a place where, in very real terms, unemployment hovers around twenty-five percent (if not more!), many project managers are plainly unethical. In effect, they are intentionally taking large sums of money from the people whose needs they claim to serve, hawking false hopes and dreams while arrogantly pocketing millions. Costly projects of this kind would be deceptive, wasteful and misleading even if the accounting were accurate and no overt proof of wrongdoing were demonstrated (by Italian standards of legality). That's because, in most cases, the projects themselves exist solely to make money for their managers and need not show real results.

Why do people tacitly accept such behavior by our public officials? Sicilians often ignore project scandals and other forms of corruption because these things are part of our daily lives. Cronyism, nepotism, payoffs and even sexual harassment are considered perfectly normal in Italy. Of course, that doesn't mean that these things are legal, just that they're not new.

Is there a solution to Sicily's rampant project abuse problem? There are several ways of bringing it under control. Any project, whether its focus is job training or infrastructure, should be required to produce tangible results, just like a private-sector business would have to, and a provision of project contracts should be that the EU funds are provided in limited phases, administered directly by specially-appointed employees of public agencies. Many project managers certainly should not be writing checks --either to themselves or to others. More effective monitoring and auditing by law enforcement agencies would be a good practice, perhaps complemented by a telephone service to receive complaints (without fear of reprisals against whistle-blowers). This seems to work in some countries. Sicily may be ready for it, too. Some projects are legitimate; it would be better if they all were.

Quoted comments in the original Italian: "Sono un ricercatore siciliano che è emigrato all'estero per fuggire dallo schifo della (sigh) nostra terra. Cercando alcune info per amici che venivano in Sicilia mi sono imbattuto nel vostro sito ed improvvisamente ho ritrovato le parole che da sempre uso per descrivere ai miei amici stranieri i problemi della Sicilia e della Mafia, compresa la figura inutile e mangiasoldi del progettista... Non ho avuto modo di vederlo tutto ma l'ho già aggiunto ai favorities. E' difficile incontrare ancora ragazzi con un pò di coscenza critica e davvero non politically correct! Continuate così anche se qualche "cieco e sordo" vi accuserà di vilipendio alla Sicilia Bedda!" (Return to article.)

About the Author: Palermo native Roberto Paglia has written about social issues and education for several Italian, British and American newspapers. This is his second contribution to Best of Sicily.

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© 2005 Roberto Paglia