Film rights corruption trial resumes in Milan in March

It’s a convoluted court story with a strong Hollywood hook worthy of “Law and Order’s” Dick Wolf.

Act One kicks off March 1 when the multimillion-dollar film rights corruption trial involving Italo prime minister and Mediaset controller Silvio Berlusconi that began in 2006 resumes in a Milan court.

The figure of U.S. film producer Frank Agrama looms large in the prosecution’s plans.

Mediaset allegedly exaggerated the cost of purchasing Hollywood content from the late 1980s onward.

The Milan prosecuting magistrates say Agrama fronted the intermediary companies that enabled Mediaset to siphon off excess cash to overseas slush funds.

Proving his connection to Berlusconi is the problem, since Berlusconi denies meeting Agrama.

Milan prosecutors hope the testimony of former Twentieth Century Fox Intl. TV president Mark Kaner and Paramount’s former head of international television, Bruce Gordon, will make the connection. Both have been ordered to testify via video link.

In the best Hollywood tradition, there’s a ticking clock — Italy’s statute of limitations will kill the case later this year.

But even if the trial runs out of time, another is just around the corner.

The Milan magistrates’ probe into Mediaset subsid, Mediatrade-RTI, involving a group of 12 execs — including Berlusconi, his son Piersilvio, Mediaset topper Fedele Confalonieri and Agrama — is effectively an extension of the first case, relating to similar activities that occurred after 1999.

A report for the prosecution by financial consultants KPMG says $40 million vanished from the coffers of Mediaset between 2000 and 2005. In addition, Mediaset executives were allegedly paid millions of dollars from the slush fund for their silence.

Once again, Agrama played a pivotal role in events, according to the prosecution.

The Mediatrade-RTI inquiry began in 2007 with the seizure of $100 million from the Swiss bank accounts of a Hong Kong-based company belonging to Agrama.

Testimony from senior Mediaset executives, including Roberto Pace, managing director from 1998 to 2001, claims the alleged kickbacks were common knowledge among in the company.

Observers note it will be harder to show the prime minister was in on any such scam after 1999, when he was more immersed in politics and less involved in running Mediaset.

It’s not surprising then, that Milan magistrates are keen to link Berlusconi to Agrama.

Enter Gabriella Ballabio, a former Mediaset executive also under investigation, who has told Milan magistrates that Agrama sent her a copy of a photo of both men together.

That photo could be among evidence in the possession of the U.S. Attorney’s Office in Los Angeles.

Having promised to hand over the evidence to Italian magistrates, the U.S. Attorney claimed that the FBI had made errors in the way it acquired the documents and returned them to Agrama.

Magistrate Fabio de Pasquale has written to U.S. Attorney General Eric Holder lambasting the decision, which he says has compromised the case.

The Attorney’s Office in L.A. declined to comment on the situation or on de Pasquale’s criticism.

Berlusconi and Agrama deny all the allegations against them.

Similarly, Mediaset has denied wrong-doing, saying in a statement, “The cinema rights that are the subject of this inquiry were bought at the market rate. The accounts and tax declarations were made transparently and in strict accordance with the law.”

The final act in this drama remains to be written.

It will be interesting to see if Berlusconi, who has won many legal battles since he burst on to the political scene in the mid-1990s, can keep his unbeaten record.

It’s not for nothing that he is widely known as the Teflon politician — nothing seems to stick.

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