Finmeccanica Corruption Trial Opens In Italy

Published: 21 June 2013


The trial of former chief executive of Italian defense contractor Finmeccanica began this week, with Giuseppe Orsi facing fraud and corruption charges over a deal to secure a helicopter contract in India.

Finmeccanica, 30.2 percent owned by the state, is Italy’s biggest defense group. The company makes goods ranging from helicopters to trainer jets and missiles. The Indian government, the world’s largest arms importer, has a history of corruption in defense deals dating back to the 1980s.

Orsi has been accused of paying bribes to intermediaries to win a helicopter contract worth $749 million in 2010 when he was the head of a company called AgustaWestland, which is the division of Finmeccanica that sold the helicopters.

Former chief executive of AgustaWestland, Bruno Spagnolini, who took over the unit in 2011, is being tried alongside Orsi on the same charges. Finmeccanica and AgustaWestland have not been charged and have both offered to fully cooperate with investigators.

This scandal could result in Finmeccanica being blacklisted in India.

Orsi and Spagnolini left their companies shortly after their arrests on February 12. Both men deny any wrongdoing or responsibility in the matter.

"We will demonstrate that the tender in India was regularly carried out and nothing illegal was done in that country,” said Orsi’s lawyer Ennio Amodio to Reuters.

On the first day of trial neither Orsi nor Spagnolini were present.

A source at the Indian Defense Ministry told Reuters that they were investigating allegations of 40 million rupees being paid to officials as bribes for the contracts. India has frozen payments on the helicopters and is seeking to cancel the deal.

Defense Minister A.K. Antony has ordered an inquiry to be conducted by the Central Bureau of Investigation, the country's federal police force. The case also prompted Indian authorities to investigate AgustaWestland concerning a separate deal to sell 197 army helicopters.

These are not the first charges brough against Finmeccanica. In 2011, a Milan court ruled the confiscation of 98.7 million euros from their Ansaldo Energio unit regarding a 2003 graft case.