SILVIO BERLUSCONI: Media moghul/politician
by Alan Long
Silvio Berlusconi, born September 29, 1936, was raised in the middle-class surroundings of Milan, Italy. Seemingly destined for the business life he was to lead, Berlusconi, as a youth, charged entrance fees for puppet shows and, in high school, ghost wrote homework for other students, who then paid on a sliding fee scale; highly graded papers commanded full price, while those less successful were free. While studying law at the University of Milan, Berlusconi paid his tuition by selling vacuum cleaners, photographing social events, and booking his successful band on summer cruise ships. At the university, Berlusconi befriended Bettino Craxi, the future prime minister of Italy. Completing his studies at age twenty-five, Berlusconi was offered a position at the bank his father worked at, and in refusing, managed to talk the bank into a loan to finance a construction firm he named Edilnord. Founded in 1962, Edilnord became a successful real estate development company, and, in 1969, Berlusconi built an entire suburb north of Milan, naming it Milano 2, which eventually housed ten thousand people. Confessing a fantasy of the ideal community, and fascinated by Thomas More's "Utopia", Berlusconi dreamed of building the perfect city. His detractors, however, cited his success to favorable rulings by local socialist politicians and financial backing from Propaganda 2 (P2), a secret and powerful anti-communist organization (Graham, p.49).
Berlusconi, in 1974, expanded his growing empire by founding Telemilano, a cable television station that serviced Milano 2. Realizing the potential involved, Berlusconi, in 1978, invested 2.5 million dollars to challenge Italy's state-run television monopoly, Radiotelevisione Italiana (RAI). Skirting the law that only allowed RAI to broadcast nationally, Berlusconi set up a system of local stations that simultaneously broadcasted the same programming. In 1980, he established Canale 5 (channel 5), an erstwhile nationally broadcasting television station that offered Italian game shows and first-run American sitcoms such as Dallas. Berlusconi then seized the economic opportunity that television-aired commercials represented, and harking back to his ghost writing school years, approached 3rd-ranked companies with a program that swapped air time for a percentage of any increased future sales. This, Berlusconi noted, "got market leaders to buy time", and resulted in the advertising agency Publitalia 80; Berlusconi's ad agency quickly became the largest in Europe, generating 2.5 billion in annual revenue (Graham, p. 50).
In the 1980's Berlusconi both diversified his holdings and consolidated his grip on the media. Finivest, a private holding company formed in 1975 with Berlusconi as its president, bought the other two major private television stations - Rete 4 and Italia Uno. Hoping to encourage alternative broadcasting, the Italian government, in 1976, loosened its monopoly on the medium, and, instead, helped create what has been described as a "duopoly" of RAI and a conglomeration of local television stations, owned by Berlusconi, acting as a national broadcasting system (Sassoon, p.167). Berlusconi diversified his empire with acquisitions in the print media (Panorama being his news weekly flagship) , publishing (Mandadori), retailing, and the soccer team A.C. Milan (Shuggar, p.15-16). He had so permeated Italian life that a new term, Berlusconism, "entered the Italian vocabulary, meaning a way of life where people live in houses built by Berlusoni, watch TV controlled by Berlusconi, shop at supermarkets owned by Berlusconi, relax on tennis courts and in restaurants built by Berlusconi, and adore a soccer team bought by Berlusconi" (Vulliamy, p. 4). By 1989, Berlusconi's prime time television shows had cornered 45 percent of the audience and 60 percent of the advertising revenue; his personal wealth was estimated at 6.25 billion dollars. Berlusconi was simply the richest man in Italy (Shugaar, p.15).
Berlusconi's friendship with the socialist Bettino Craxi, then prime minister of Italy (1983-87), and his ties to the socialist party (PSI) in general, helped to grease his empire building, at least by some accounts. Craxi, in 1984, over-ruled a court order banning Berlusconi from broadcasting, due to infringement of the law. This ruling, nicknamed the Berlusconi decree, recognized private ownership of the medium, and with it, the right to run it as a competitive business (Gundle and Parker, p. 131). Berlusconi was not shy about touting his relationship with the prime minister; Craxi's son was on the board of A.C. Milan, Bettino and wife Anna are godparents to two of Berlusconi's children. But perhaps Craxi's biggest contribution to Berlusconi's empire was his help in modifying and passing what has been called the Legge Mammi's law of 1990, which codified Finivest's (and the RAI's) share of the media market, and , in effect, created the Berlusconi/RAI duopoly. The law was ostensibly designed to limit ownership to either broadcast or print media; Berlusconi, ever the entrepreneur, outflanked this ruling by appointing his brother Paulo as editor of the conservative paper "Ill Giornale". In fact, Berlusconi was able to purchase Mondadori, the largest publishing company in Italy, after the law went into effect (Sassoon, p. 168).
Berlusconi's plunge into the Italian political scene was precipitated by the Tagentopoli ("kick back city") scandal. Italian politics, especially in the South, had long relied on a client/patron system, where quid pro quo relationships garnered votes for politicians while guaranteeing pensions and jobs for the electorate. This was common knowledge, and a normal way of doing business with the bureaucratically-endowed Italian government. What was not expected, however, was the depth of bribe- taking and the powerful political figures involved. Best described as a "legal revolution", Tagentopoli was a judge's campaign, nicknamed "operation clean hands", which examined kickbacks and bribes taken by politicians at all levels of government. These bribes insured that publicly funded projects would go to those who bestowed monetary favors. Italian judges, using criminal legislation enacted by politicians, pursued them as a class, unencumbered by political loyalties or governmental restraints. The result was that "In the two years following April 1992 all the parties of government in Italy were swept away in the course of judicial investigations which revealed centrally organized systems of illegal financing of political parties and corrupt agreements between politicians and businessmen" (Grundle and Parker, p. 191-195). Scandal had reached the highest level of government, bringing down the ruling coalition of Christian-Democrats and Socialists, the powerful CAF (Craxi, Andreotti, and Forlani). Italian parties, some as old as one-hundred years, collapsed, leaving a political void into which Berlusconi stepped.
Berlusconi's formation of the political party Forza Italia, in April 1993, was as much a reaction to his own personal situation as it was to the general malaise of Italian politics. Berlusconi recognized that politics would be galvanized into parties of the left and right by the new electoral system set up by a April 1993 referendum, which featured a more American-style first- past- the -post political race. Moreover, the left had emerged relatively unscathed by the Tagentopoli scandal, with the PDS still well organized. Berlusconi's hatred of the left was only surpassed by his political and business dealings with the right; by that time he was heavily indebted to a number of publicly held banks. With debts estimated as high as 24 billion dollars, and facing a political horizon where the right was regulated to the sidelines, Berlusconi's decision to enter the political arena was not surprising. Indeed, it was noted that "Having lost his ability to influence the political class, Berlusconi decided to supplant it" (Gundle and Parker, p. 137).
Forza Italia was as much a populist movement as it was a political party. Berlusconi, using his powerful ad agency Publitalia, set up Forza Italia clubs throughout Italy, ostensibly searching for political candidates who embraced the principles of "Good Government", the Forza Italia manifesto which exulted market forces and the "politics of efficiency" as saviors of Italian culture (Grundle and Parker, p. 138). Trading on the popularity of A.C. Milan (Forza Italia - a soccer chant of "let's go Italy"), Berlusconi also presented himself as an independent, self-made man, who would cut Italian bureaucracy that was strangling the creation of wealth. This appealed to the small entrepreneur, whose numbers were increasing as factory worked lagged, particularly in the industrial north. A television blitzkrieg then followed, as Berlusconi announced his candidacy two months before the March 28, 1994 elections. Forza Italia emerged, victorious, as Italy's largest party, by appealing to a politically devastated country which traditionally embraced popular figures (Gundle and Parker, p. 136,143).
In May, 1994, Berlusconi unveiled his coalition government of Forza Italia, the Lega Nord (a pro-northern party with Umbertto Bossi as its head), and the neo-fascist party of the Alleanza Nazionale (AN). Dealing with the Lega Nord proved to be troublesome; Bossi, who Berlusconi depended on for votes in the senate, tended to flaunt his independence from Forza Italia, often thwarting Berlusconi's plans. Berlusconi's government became ever more impotent as arbiters in the complex maneuvering of the Italian political scene. Berlusconi piously began publicly alluding to his resemblance to Christ, referring to Bossi as his Judas (McCarthy, p.169). Berlusconi, from the beginning, also faced criticisms of conflict of interest. Berlusconi continued to use his media empire as a political propaganda tool, continuously turning to the people to strengthen his populist stance. There were, also, investigations by the clean hands committee into Finivest's role in Tagentopoli, with Berlusconi being the ultimate target of prosecution. Berlusconi's political maneuvering were often heavy-handed; campaigning on the promise of tax cuts and unleashing the latent power of Italian entrepreneur, he proposed cuts in pensions, which, along with tax cuts for the self-employed, brought on national strikes in the fall of 1994. During Berlusconi's short term, the stock market lost 25 percent of its value, the lira continued to devaluate, and national debt increased, while unemployment, a key theme of Berlusconi's campaign promises, hovered at 12 percent. As the fall of 1994 progressed, Berlusconi's position became ever more tenuous. The magistrates deepened their investigations into Finivest corruption, calling Berlusconi up to testify and eventually arresting two employees of Finivest. The coalition government lost the support of the Lega Nord, as Bossi, who had always clashed with Berlusconi, withdrew from the government. These factors, along with the budget fiascos surrounding his government, forced Berlusconi, on December 21, 1994, to resign his post as prime minister. A transitional "technocrat" government, with former Berlusconi financial minister Lamberto Dini as its head, was then appointed. Berlusconi's government, which at first seemed to offer a way out of politics as usual, in the end resembled the self-serving governments that had preceded it (McCarthy, p.174-191).
Berlusconi did not go gently into the night. Forging a coalition with the AN and Forza Italia (Freedom Alliance), Berlusconi made an unsuccessful bid to topple the technocrat Dini government. Berlusconi continued to battle his conflict of interest issues involving Finivest; there were both popular and legal movements to limit his media holdings. The beleaguered Berlusconi continues to hold his own, participating in politics while battling to keep his empire intact. Berlusconi, who has two children from his first marriage, and three from his marriage to actress Veronica Bartolini, resides in his seventy room villa north of Milan, Italy (Graham, p. 52).
Graham, Judith. Current biography yearbook 1994. H.W. Wilson,1994.
Gundle, Stephen and Parker, Simon. The new Italian republic. Routledge, 1996.
McCarthy, Patrick. The crisis of the Italian state: from the origins of the cold war to the fall of Berlusconi. St. Martin's press, 1995.
Sassoon, Donald. Contemporary Italy. Addison Wesley Longman,1997.
Shugaar, Antony. Columbia journalism reveiw. July/August 1994. P. 15-16.
Vulliamy, Ed. Manchester guardian weekly. April 3,1994. P.4.
26 April 1998