Italian connection

FBI probes producer's Berlusconi ties

A long-simmering investigation into the business affairs of Silvio Berlusconi, Italy’s wealthiest media mogul and the country’s former prime minister, has heated up in Hollywood.

FBI officials, acting on a tip from Italian authorities, earlier this month raided the Bel-Air home and Sunset Boulevard offices of film and TV producer Frank Agrama.

Agrama, whose company Harmony Gold produced the 1980s miniseries “Shaka Zulu” and “Queen Kong,” was first fingered by Italian authorities for alleged misdeeds some 15 months ago (Daily Variety, Nov. 13, 2005).

Italian authorities then accused Berlusconi and a dozen others, including Agrama, of scheming to inflate the acquisition price of TV rights to U.S. movies so that millions of dollars in untaxed kickbacks could be diverted to top brass at Mediaset, the TV conglom owned by Berlusconi. The parties all deny wrongdoing.

At the time the Italian probe first came to light, Agrama, who is 79, said through his three lawyers that the authorities did not understand the “complex” nature of the rights trading business. They told Daily Variety at the time that their client was not mixed up in anything illegal and that as a middleman, Agrama was independent of his program suppliers and of Berlusconi. Paramount was the chief supplier of product to Agrama for many years.

“His aim was to buy low and sell high, just like any other rights trader,” they said.

Agrama’s Paris-based American lawyer Leonard Rosman could not be reached for comment Wednesday.

Several times during the 1980s and 1990s, Paramount brass apparently looked into the unusual arrangement of having a middleman handle its rights in Italy, eventually phasing out the relationship with Agrama. Paramount did cooperate with Rome authorities 18 months ago in allowing investigators to rummage through old files in the studio’s Rome office.

It’s unclear whether such questionable rights trading abroad by U.S. program sellers was widespread, though several sources said Wednesday that “checks and balances” are definitely more stringent today.

Rome daily La Repubblica has reported that Agrama, whom the paper refers to as Faruk rather than Frank (a reference to the fact that Agrama was born in Egypt) later became, according to investigators, “socio occult” (a shadowy accomplice, as it were) of the Italo TV titan.

There were, according to Italian authorities, secret bank accounts in Switzerland that were the repository for these over-the-top payments. The Italian paper Corriere della Sera has reported that Swiss accounts worth $130 million belonging to Agrama had been frozen by prosecutors.

Other reports suggested that Berlusconi personally pocketed $275 million from these questionable deals and never paid tax on that sum.

There’s also a dusty letter that was found at Par 18 months ago by Italian authorities. It was written by Agrama to then Par Intl. TV prexy Bruce Gordon in 1988 and begins “Dear Bruce.” The letter explains that Berlusconi might become the principal shareholder in Harmony Gold but that Agrama would be setting up a separate entity called Wiltshire not subject to Italian law. (As it turned out, Berlusconi never did buy into Agrama’s company.)

Still, per judges in Milan, the letter (dated from the early ’90s) is “a smoking gun” that identifies Berlusconi and Agrama as jointly complicit in the buying and selling of programming rights and then divvying up the excess payments. (Wiltshire appears on one of the Swiss bank accounts.)

The trial of Berlusconi resumes on Friday, having been delayed a few days due to his poor health. Agrama, as an American citizen, can not be tried in Italy for any alleged misconduct.

Berlusconi was released from a Milan hospital Wednesday with what doctors are calling “a clean bill of health” three days after he collapsed at a political rally in Tuscany.

Berlusconi fainted during a speech and had to be helped from the stage by bodyguards.

The 70-year-old Berlusconi had been kept in the intensive care unit of Milan’s San Raffaele hospital since Sunday night after doctors diagnosed him with an irregular heartbeat.

On Wednesday, doctors gave him permission to leave but cautioned that his workaholic routine could trigger repeat scares.

“His body is like a Ferrari, but he is driving it at a crazy speed,” Alberto Zangrillo, a doctor who treated Berlusconi, told La Repubblica.

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