Saddam Hussein and Fausto Bertinotti
What do a Middle East rogue dictator and a West European Communist leader have in common? Judging from appearances, savoir-faire in getting away with making a killing with insider trading in the futures markets.
The last time I came back to Italy from the States, I read a delightfully amusing editorial in the New York Times. The piece was written in the form of a note to the author’s literary agent reminding the agent of a previous proposal for a novel based on the personality of the Iraqi dictator, Saddam Hussein, and proposing a new novel based on the same character. In both "novels" the author reveals the naiveté of the international community in scratching its head in bewilderment over why this dictator would make such outrageous statements risking the annulment of the food for oil agreements with the United Nations and further hindering the condition of his people who are in dire need of both food and medicines. The would-be novelist goes on to point out that the dictator couldn’t care less about the welfare of his people. As he sees it, the dictator’s seemingly crazy and certainly inflammatory exhortations are coy manipulative maneuvers to fill his own pockets with the hard cash he needs to restock his arms supplies. He buys oil futures, ruffles his feathers, makes a lot noise until oil prices go up, cashes in, and then lets the steam fizzle out of his whistle.
Last month the Italians were scratching their heads in similar fashion when the hard-line Communists threatened to withdraw their support of the government. Everyone was baffled by the self defeating attitude of the Communists. Many prominent supporters of the party begged Bertinotti to reconsider acquiescence. It was the first time that the Communists together with former Communists had formed an Italian government. And Bertinotti and company were ready to throw it all out the window. Steadfast and heeding no appeals to reason, the Communists let Prodi’s government fall.
I have seen countless governmental crises since I have lived in this country but none had ever seemed to me as far-fetched as this one. I couldn’t help thinking of the editorial I had read in the NYT and wondering if Communist leader Fausto Bertinotti wasn’t trying to compensate for the fact that the Soviet Union is no longer funding the interests of foreign Communist parties by rocking the boat just long enough to have a go at the futures market of Italian treasury bonds. No sooner had this little devious thought formulated in my mind than the governmental crisis evaporated into thin air.
A week later one daily newspaper in Italy, Il Giornale, reported my fantasies on the front page. Exactly eight minutes before the final agreement between Prodi and Bertinotti had been made public a huge order for BTP futures, Italian treasury bonds, hit the London International Financial Futures and Options Exchange (LIFFE): 1,600 contracts worth about $200 million. The London operators were taken by surprise by such a sudden substantial surge of action in what had otherwise been an exceptionally calm day of trading. Eight minutes later the explanation arrived: the order had come from a single broker, REFCO, one of the principal world operators in derivative products with headquarters in Chicago and London and an office in Milan.
Who gave the order to Refco is, of course, confidential information. Whoever it was made a killing: almost $4 million in the time it takes to drink a cup of coffee. With an original investment of almost $9 million, the earnings were calculated at 44.4%.
It doesn’t take much to come up with the name of someone close to the Communist leader with enough savvy with the financial markets to be able to pull off such a stratagem: Nerio Nesi, Bertinotti’s economic advisor and former president of the Banca Nazionale del Lavoro. His name as well as that of the bank may be familiar to Americans who remember that day in August 1989 when FBI agents raided the BNL branch located in Atlanta for its alleged involvement in questionable funding to Iraq to the tune of $4 billion. This, of course, was back in the days when the US was sustaining the secular government in Baghdad against the religious fundamentalist fury of Teheran. Nesi was forced to resign following this incident, but it is doubtful that he has forgotten the tricks of his trade.
As far as Saddam Hussein is concerned, now that he is acting up again, it is difficult to decide which of the two evils we should hope for: If his antics are serious, then we may be witnessing the first act of Gulf War II. If he is bluffing and the aspiring novelist of the NYT is right about his ploys to play oil futures in order to gather funds to refurbish his arsenal, the prospects may be less imminent but even more formidable.
November 1997
Return to home page Return to list
Editors interested in subscribing to this syndicated column may request information by sending an e-mail to: giogia@giogia.com