To resist or not? What can we learn from the bizarre case of the Sala trust?

Resist, resist, resist. Ironically, when dealing with the public prosecutor’s office, one ought to adopt the phrase coined by Prosecutor Francesco Saverio Borrelli. This is what Milanese politics ought to be doing, yet instead it backs down. Always and in every instance. This is extremely problematic. However, let us proceed methodically, explaining the latest absurdity that is inflaming Milanese politics and exposing weaknesses, inconsistencies and the denial of due process rights – even by those who campaigned for a ‘yes’ vote in the referendum.

There is a company called Finalter. The shareholders of this company are another company, Cinque G, and Beppe Sala, the mayor of Milan. When he stood for mayor over ten years ago, he decided to place Finalter’s shares in a ‘trust’. What is a trust? It is a mechanism designed to prevent conflicts of interest: the owner’s shares are frozen; they cannot do anything with them, and everything is entrusted to a trustee, whom they cannot even ring up. Cinque G, on the other hand, is owned by Pietro Galli, a long-standing friend of Beppe Sala’s, whom he has wanted by his side in all the sensitive roles he has held, first at Expo and then in the various associated companies (he was on the board of directors of ATM). The trust was entrusted to another person whom Sala trusts (obviously), who is a notary. At a certain point – and this is where things start to get Kafkaesque – an engineering firm, Engineering, with a turnover of one billion seven hundred million (I repeat, one billion seven hundred million), paid two million to Finalter for work carried out. As it happens, in 2020 – six years ago – Finalter invested by purchasing a 9 per cent stake in a Luxembourg-based company that holds a small share in the giant Engineering. It did so through a capital increase which the trust administered by Sala’s notary did not subscribe to. What does the Public Prosecutor’s Office do? It investigates the sums paid by Engineering to Finalter. So far, so good. That is precisely what the Public Prosecutor’s Office does by trade: it investigates. But someone leaks the whole thing and makes it public. The story is a real juicy one: there’s the mayor, there’s a friend of his who served as a director of public companies, there’s the engineering giant, there’s Luxembourg, and there’s a notary who, incidentally, also works with the local council. Coincidentally, just like last year with the town planning issue, it all happened just before everyone headed off to the seaside.

There’s just one small, insignificant detail missing: but what exactly is the alleged offence? Did someone take money they shouldn’t have taken? Did the mayor favour someone they shouldn’t have favoured? Did the mayor know about anything strange or illegal? We have no way of knowing, because all the surrounding details are there – as if we were in the context of a crime thriller, but without a body or a murder weapon. And furthermore: they accuse the mayor of failing to declare this trust. Yet it turns out that, in fact, Sala did declare it to the Council; that the trust had been declared in 2016; and that there was no obligation to re-declare it unless there were changes. And there were no changes. Everything is in order as far as the mayor is concerned.

So much for the facts. Then there’s the politics. The mayor goes to the council chamber on Monday and professes his transparency, honesty and innocence. And quite rightly, he also takes a swipe at those who accuse him of these things. Because he’s never taken a single euro, and he couldn’t care less. He discusses Telecom, where he managed procurement, and no one has ever reproached him for anything – even though those were times when suppliers were ready (and willing) to do anything. Fine.

But then he does something which – in our considered opinion – is utterly wrong. Instead of standing up to them (and saying ‘arrest me!’ as he should have done on at least two other occasions: Expo and town planning), he backs down: he announces that he will sell the stake, currently frozen in the company’s trust, at face value. Why on earth should he sell that stake if there is (and there isn’t – it’s easy to see) nothing illegal or improper about it? Why on earth should he dispose of something held in a trust, set up specifically to prevent conflicts of interest, thereby sacrificing even a hypothetical value built up by the other shareholders for his benefit too, including for his own shareholdings? The mayor is wrong – if I may say so frankly. Because in doing so, he is jeopardising the future – and certainly not just his own. Whoever comes after him might have to contribute to a trust not a 10,000-euro share, but 10 million euros. Why on earth should he give up money to which he is entitled, taking into account all the fluctuations – for better or for worse – that will have occurred in the trust whilst he was engaged in an administrative role? More generally: why, if the public prosecutor’s office hypothesises any – often far-fetched – case of a crime, must one back down, divest oneself of the shares, accept a sort of preventive conviction or the primacy of suspicion (which usually arises or is fuelled by the press), and withdraw in good order? If the trustee has done his job properly, there can be no liability for Beppe Sala, the mayor of Milan. But unfortunately, in the real – or unreal – world of judicial politics, it is neither prudent nor far-sighted to try to resist, resist, resist. One final mention of demerit – extreme demerit – for the centre-right in the City Council. They waged a whole battle over the referendum and then, faced with a baseless investigation like this one, they put up placards reading ‘Milan is a feeding trough’. If the principle of due process applies only to one’s own side and not to one’s opponents, it is not due process but cronyism. If due process does not apply to one’s opponents, it is mere posturing, and one has no moral standing to advocate for anything. Unfortunately, the Milanese right – and most recently, as demonstrated by Ignazio La Russa’s own performance in the Council – has embraced the ‘hip-hip-hurrah!’ attitude towards the public prosecutor’s investigations into town planning without a shred of critical reflection. Perhaps Giorgia Meloni and Matteo Salvini should set up a joint political school on due process for city councillors and aspiring councillors. First lesson: ‘You don’t wage political battles using court reports’.