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Español Italy – 37,5 billion dollars lost
Cigarette Smuggling in the European Union - Philip Morris won't have to pay.
On May 22nd 1995 the General Manager of the Italian State Monopolies, Ernesto Del Gizzo, transmitted to the SECIT (the Italian Tax Inspectors Office), a report on the unpaid tax on Philip Morris revenues in Italy: a total of 60,591 Billion lire (37.5 Billion dollars) over a 20-year period. So how much was the total amount of unpaid taxes in all the European Union countries combined?
Del Gizzo added that income from cigarette smuggling in Italy, thanks to the profits on products passed on through the illegal market, amounted to a net annual profit for the multinational manufacturer of about 1,100 billion lire (650 million dollars).
On July 9th 2004 an important agreement was signed by the EU and Philip Morris, the leader of European smuggling. The tobacco giant agreed to pay 1.2 Billion dollars, in instalments over a ten-year period and interest free, to bury the hatchet on all the past activities. Why so little?
The European Commission President at the time, Italian Romano Prodi, was evidently satisfied and declared: "I welcome the conclusion of the negotiations of this important agreement. This agreement is to the advantage of the EU to protect its financial interests".
Big Tobacco mafia at work
Ernesto Del Gizzo's May 22nd report was repeatedly ignored by the Italian governments that followed, both the left-wing and the right-wing, in spite of the fact that report had been prepared by a very highly reliable source: the General Manager of the Italian State Monopolies.
The first to receive the report was a Tax inspector of the SECIT, Mario Casaccia, who immediately informed the Public Prosecutor of Rome, the Finance Ministry and the director of the SECIT, his superior.
Minister Fantozzi (right-wing government), on the left, with Montezemolo, ex-Ferrari president
This last, Alberto Cozzella, declared that he was not competent to handle this delicate matter, even though by law, the SECIT is the agency that was set up to handle this sort of investigation.
The Finance Minister of the time, Fantozzi, without going into the issue, shelved the expose.
Inspector Casaccia didn't give up. On July 23rd 1996, he wrote to the new Finance Minister Visco, explaining the sensational facts that clearly emerged from Del Gizzo's report. Visco, in his answer, asked him surprised "Which penal regulations do you believe were violated".
Inspector Casaccia explained that it was a matter involving smuggling and three times he explained the activities to Minister Visco. The Minister either did not understand, or he attacked the Inspector: "Which are the passages of De Gizzo's Report that point to criminal offences", "Your affirmations are seriously incautious".
Mario Casaccia held his job for only a short time after that; he was removed in 1997 from his position as inspector (as were two of his colleagues, Porreca and Mari, who had collaborated in the attempts to clarify the matter). Following an alleged corruption attempt, he was removed from his office as General Manager of the State Monopolies and sent into retirement. He made this comment: "Every year that passes wipes out a year of tax evasion".
Minister Visco (left-wing government)
At the end of 2000, when the European Union moved officially against Philip Morris, according to the Italian magazine l'Espresso, that was advancing some conclusions of an enquiry of the fiscal police of Milan and of the public prosecutor Raimondi, the multinational tobacco maker, even considering the sums cancelled by the statute of limitations, still owed 8,000 million lire (4 billion euro) to the Italian State.
"Italy passes to the attack"
The announcement appears a bit pathetic, of the Finance Minister of the period, Ottaviano del Turco: he declared, in November 2000, that Italy was going to intervene with its own legal initiatives to back the petition presented by the European Commission against Philip Morris and RJ Reynolds.
The charge was built up on the same base as the European Commission's petition: the two multinational manufacturers were alleged to be "directly involved in smuggling activities" that "hid also other illegal activities including money laundering". It was a noble initiative, we must agree: but, as we have seen, it came much too late!
"We are here to assure the European Commission of the unconditioned support of Italy in the fight against cigarette smuggling, and the legal initiative of the Italian government that takes up the European initiative", explained Minister Del Turco, who was accompanied by the top officials of the Parliamentary Antimafia Commission: president Giuseppe Lumia (of the Democratici di Sinistra - centre-left party), the vice president Nichi Vendola (extreme left - Rifondazione Comunista), and the secretary Euprepio Curto (right-wing - Allianza Nazionale).
Minister Ottaviano Del Turco (left-wing government)
Del Turco explained later, in an interview of the Turin newspaper "La Stampa", the reasons that induced the Italian government to support the recourse of the European Commission against Philip Morris. A sort of "Good for you, government" and Good for you, European Commission of Mr Prodi. And he added that it was the first time Europe was proposing such an ambitious operation.
Basically, explained Del Turco, "the European Commission was defending the territory from criminal attacks that strike the various Member States. It makes up for a delay. The operation conceived by the European Commission president, Romano Prodi, is brilliant".
It's a pity that from the report of the ex-general manager of the Monopoli di Stato, a full five years had passed. The institutions had already known it all for some time, and so had the Italian Prime Minister, also president at the time of the European Commission, Romano Prodi, who had suddenly taken some action in the war against the tobacco multinationals.
The result of July 9th 2004 was an agreement that shelved forever all the claims of the European Union against Philip Morris. The multinational cigarette maker came out of it all with the payment of a penalty almost 50 times less that what was actually owed, and without opening any prison doors for any of its men. Brilliant work!
Why aren't they in jail?
We are not looking at only 37,551 Billion dollars of unpaid taxes in Italy alone over a twenty-year period. "Illegal cigarette sales have become one of the primary vehicles used by drug smugglers to recycle their profits. Philip Morris has become a principal party involved in this activity" (Official EU Documents).
After running activities like these for years, not only should the perpetrator pay an adequate amount, but he should also be in prison. Instead, here is what www.europa.eu, the Portal of the European Union said on July 9th 2004:
"The European Commission, together with 10 Member States of the European Union and Philip Morris International, today announced a multi-year agreement that includes an efficient system to fight against future cigarette smuggling and counterfeiting, and which ends all litigation between the parties in this area."
Philip Morris had shrewdly crossed over to the opposite side of the barricades!
"280 Billion Dollars"
It is unthinkable that in Italy, and in Europe, there is no one able to defend the citizens in appropriate ways, in cases like these, with multi-billion dollar damage to the finances of the Nations.
Today cigarette smuggling is dead, and Italy has handed over to Great Britain the European leadership that it held firmly until 1999. But the people responsible for the smuggling, both in the Italian governments that followed and in the lines of Philip Morris, have so far paid absolutely nothing.
And starting from July 9th, 2004, Philip Morris no longer owes a single dollar to the European Union, except for the sum agreed on in that brilliant agreement!
Why in America, do they have lawsuits that condemn Big Tobacco to payments up to 280 billion dollars and in Europe the request is only for 1,2 billion, in convenient instalments of 120 million dollars a year, interest-free, for 10 years? What's going on with the Americans?
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