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Witness Lists OK'd in Former Finmeccanica CEO's Corruption Trial

Sep. 6, 2013 - 03:45AM   |  
By TOM KINGTON   |   Comments
On Trial: Former Finmeccania CEO Giuseppe Orsi is accused of being connected with a bribery scandal involving efforts to win a helicopter deal in India.
On Trial: Former Finmeccania CEO Giuseppe Orsi is accused of being connected with a bribery scandal involving efforts to win a helicopter deal in India. (Finmeccanica)
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ROME — After two initial hearings this summer, the Italian corruption trial of former Finmeccanica CEO Giuseppe Orsi looks set to pick up steam with a potential lineup of influential witnesses from the UK, Italy and the US.

Orsi is accused of taking part in a bid to corrupt Indian officials during the competition for a new Indian Air Force VIP helicopter.

The competition, which occurred while Orsi was head of Finmeccanica helicopter unit AgustaWestland, was won by the Italian firm, leading to the signing of a €560 million (US $737 million) contract for 12 AW101 helicopters in 2010.

As such, the testimony of potential witnesses could provide a rare insight into how defense deals are made in emerging markets.

“The judge has now approved the lists of witnesses requested by the prosecution and the defense, and it will be up to them to decide during the course of the trial which of the witnesses they feel it necessary to call,” said a spokesman for Ennio Amodio, a lawyer representing Orsi, who has denied all wrongdoing.

The next scheduled court date is Sept. 17, the spokesman said, but a potential Italian lawyers’ strike could postpone it. “That could make the next date in October, with the witnesses starting to be heard in December,” he said.

Orsi, along with former AgustaWestland official Bruno Spagnolini, is accused of channeling funds through consultants Guido Hashke and Carlo Gerosa to three cousins of Shashi Tyagi, the head of the Indian Air Force from 2005 to 2007.

According to prosecution documents, specifications in the helicopter tender were crafted to suit the AW101, including the lowering of the operational altitude from 18,000 feet to 15,000 feet.

A requirement for flying after losing power in an engine was also allegedly added to favor the AW101, the only competitor with three engines.

Tyagi denies all wrongdoing, claiming the specifications were changed before he became head of the Air Force.

The accusations were first made made by former Finmeccanica executive Lorenzo Borgogni after he was sacked by Orsi for ethical violations following Orsi’s appointment as Finmeccanica CEO in 2011. Prosecutors then built their evidence on the strength of interviews, seized documents and wiretaps.

The Indian Defence Ministry will have ringside seats for the trial as it has signed up as a civil party to the proceedings, ensuring its lawyers have access to prosecution evidence, as has Italy’s tax office, which is claiming unpaid taxes from the defendants.

For the defense, Amodio has requested about 50 potential witnesses, including Tyagi, who may be called to testify about the competition, and Phillippe Harache, the former deputy CEO of Eurocopter. Christopher Kubasik, former chief operating officer at Lockheed Martin, and Australian truck and logistics millionaire Lindsay Fox may be called to testify about Orsi’s professional track record.

Vincenzo Camporini, former head of the Italian Air Force, and Guido Crosseto, former Italian undersecretary for defense, may be called to give evidence about the way defense exports are negotiated.

Geoff Hoon, the former UK defense secretary and now AgustaWestland manager; Tony Pawson, the head of the UK Defence Export Services Organisation (DESO); and Jackie Calcutt, a former DESO official now working for AgustaWestland in India, have been listed to give evidence about the Indian defense market. Also on the list is Ratan Tata, former chairman of the Tata Group.

Calcutt, as well as fellow AgustaWestland managers Chris Adams and Peter Hulett, are also listed to speak about the firm’s relationship with the Indian government.

Also approved to give testimony about the deal are managers Graham Cole and Alan Johnson, and Finmeccanica UK head Alberto De Benedictis.

Borgogni also will be questioned by the defense.

Lawyers connected to the case said despite early reports, Indian Defence Minister A.K. Antony is not a potential witness.

The prosecutor, Eugenio Fusco, has submitted a shorter list of witnesses he might call, including current Finmeccanica CEO Alessandro Pansa and former company director general Giorgio Zappa, who was involved in the India deal but has not been investigated.

At Finmeccanica, Pansa has worked to make good on Orsi’s plan to reduce debt by selling off nonstrategic assets, notably the company’s 55 percent stake in energy unit Ansaldo Energia.

Finmeccanica said on Sept. 4 that negotiations were “currently in place” to sell the stake, but declined to comment on press reports that it had reached a preliminary agreement to sell to South Korea’s Doosan Heavy Industries.

But any sale could be opposed by the Italian government, which owns a controlling share in the firm.

Industry Minister Flavio Zanonato said he prefers partnership agreements instead of selling off Finmeccanica units that do not fit the defense, aerospace and electronics profile Pansa is seeking. Unionists who are opposed to the sale have said Italian Prime Minister Enrico Letta has told them he would not move without their cooperation.

One Italian daily newspaper, La Repubblica, reported that government officials hailing from the center left element within Italy’s coalition government had proposed that Finmeccanica sell a stake in US electronics firm DRS to gain funds to restructure its Italian civil units.

A Finmeccanica spokesman declined to comment.

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