‘Death of a Banker’ Spotlights Draghi and

The Dying, Criminal Financial System

by Emidio Castellani

Dec. 17—In 2012, “Whatever it takes” was the famous from the window of his MPS office, with the help of
statement with which current European Central Bank forensic experts and witnesses, and concludes that
(ECB) President Mario Draghi made it clear that the Rossi could not have done it alone. The reasons why
Eurosystem was ready to walk over corpses in order to Rossi might have been “suicided” are spelled out
save the euro-denominated financial bubble and its clearly: He knew about criminal actions involving very
banking system. The sinister implications of that state- high-level people, inside and outside the bank.
ment resonate when you watch the documentary film David Rossi’s was not the only mysterious death in
“Death of a Banker: Scandal over the World’s Oldest the MPS case. Less than a year after his death, on Jan.
Bank” (Tod eines Bankers: Der Skandal um die älteste 26, 2014, banker Will Broeksmit was found hanging
Bank der Welt). The 55-minute film was broadcast by from a dog leash in his London Apartment—reported as
the French-German TV channel ARTE on Dec. 12, a suicide. Broeksmit had been the head of Capital and
2017. Here we have a real corpse: David Rossi, head of Risk Optimization for Deutsche Bank until February
communications of Monte dei Paschi di Siena (MPS) 2013, and had worked at the bank until his 2014 death.
bank until March 6, 2013, the day when he fell from his Broeksmit had been involved in the sale of the deriva-
office window in an alleged suicide. tive instruments to MPS that have been the subject of
Although David Rossi’s mysterious “suicide” is criminal investigations in Italy. A third banker, Calog-
now an active case in Italy, and the Siena prosecution ero “Charlie” Gambino, was found hanging from an up-
has recently re-opened the investigation of his death, stairs balcony in his Brooklyn home three months later.
Moritz Enders’ ARTE documentary film has the merit Gambino had been a regulatory lawyer for Deutsche
of bringing that so-called suicide and its larger implica- Bank for 11 years.
tions to an international au-
dience. Not only that: “Death
of a Banker” brings to light
the international dimension
of what mainstream media
and economists call “the Ital-
ian banking crisis,” of which
MPS is the pivot. Far from
being a local or national
issue, the MPS crisis was
created by decisions taken in
the 2008 global bank bailout
by central bankers and su-
pervisors—the same central
bankers who today are blam-
ing Italian banks for being
mismanaged!
The film reconstructs the
dynamics of Rossi’s fall Screenshot of the the documentary, “Death of a Banker.”

20  The Presidency and the Future of Mankind EIR  December 22, 2017
 the world, Monte dei Paschi di Siena,
founded in 1472, have been so misman-
aged to create such a disaster?” Almost
every family in Siena is a shareholder and
many of them had lost all their savings.
The turning point was the acquisition
of the Italian bank Antonveneta from
Santander in 2008. Documents show that
Mario Draghi, then Governor of the Bank
of Italy, ignored his own supervisors in
allowing the MPS purchase of Antonve-
neta and misrepresented the real cost of
the operation. In the documentary, Paolo
Emilio Falaschi, attorney for MPS’ small
shareholders, shows the Draghi letter in
which he authorized the purchase, pre-
senting a total “cost” of 9 billion euro—
but that was the price, not the cost. Falas-
chi explains that the total cost, which
included Antonveneta’s liabilities, was
over 17 billion euro.
In an attempt to paper over the losses
creative commons/Vyacheslav Argenberg
produced by the real cost, MPS fraudu-
Headquarters of the Italian bank, Monte dei Paschi di Siena. lently altered its books through derivative
contracts, such as one sold by Deutsche
The MPS trail leads to the City of London and Wall Bank, called “Project Santorini.” The deal appeared on
Street. One thread connects the three murder victims: the books as an asset, whereas it was actually a loss
They all knew about fraudulent derivative deals be- shifted to the future. However, normal supervision
tween Deutsche Bank and MPS, aimed at cooking the would have immediately uncovered the fraud.
MPS books and covering losses, and they all were soon Financial expert Giuseppe Bivona, a consultant to
to be called as witnesses in official investigations. the Inquiry Commission of the Tuscany Regional Coun-
cil that issued a report on the MPS crisis in July 2016,
Cooking the Books says in the documentary: “If in the contract, the word
Three key elements of the MPS crisis are treated in ‘derivative’ pops up 447 times, it is not difficult to under-
the documentary: The bizarre acquisition of Banca An- stand that this is not about government bonds . . . From
tonveneta from Santander in 2008, the derivative con- 2010 to 2015, the bank engaged systematically in cook-
tracts to cover the losses, and the large loans to political ing its books, by the admission of its own managers.”
friends, which then turned into non-performing loans Indeed, a trial in Milan has recently exposed the fact
(NPLs). that the Bank of Italy at that time was aware of the fact
From 2008 to 2016, the equity capital of MPS had that such derivatives were created to cook the books of
lost over 90% of its value, going from 5.7 billion euro MPS, in order to cover half a billion euro losses. Former
to half a billion, despite two capital increases, a govern- senator Elio Lannutti, head of the Italian consumer as-
ment bailout, and a partial bail-in. With over 45 billion sociation Adusbef, says in the documentary that Mario
euro in NPLs, MPS was facing insolvency. Finally, in Draghi is responsible for “criminal activity.”
2017, in order to avoid insolvency, the Italian govern-
ment carried out a “pre-emptive recapitalization,” Privatization, Deregulation
which was a de facto nationalization. The final blow to MPS was delivered by the eco-
The shocked citizens of the Italian city of Siena nomic recession primarily caused by the austerity pro-
asked, “What happened? How could the oldest bank in grams implemented by the Mario Monti government in

December 22, 2017  EIR The Presidency and the Future of Mankind  21
2011. Monti was appointed prime minister under a con- eral. What you see here is a deliberate intention to shut
spiracy “led by Brussels, Frankfurt, and the Quirinale down community banks altogether, forcing them to
in Rome,” according to the then Finance Minister merge into investment megabanks in order to survive.
Giulio Tremonti—meaning the European Union (EU) In the documentary, financial expert John Chris-
Commission, the ECB, and the Italian State Presidency tensen states that the Italian banking system was “well
under Giorgio Napolitano. Tremonti’s government, led regulated” until it was privatized and deregulated—that
by Prime Minister Silvio Berlusconi, was given an ulti- it is now following the “British model of high-risk fi-
matum through a letter written by the outgoing and the nancial investments.” In an interview with the German
incoming heads of the ECB, Jean-Claude Trichet and online newspaper Deutsche Wirtschafts Nachrichten
Mario Draghi, who stated that the ECB would stop sup- (DWN), filmmaker Moritz Enders insisted that “MPS is
porting Italian debt paper—unless the government im- only one example of an entire group of banks which in
plemented “reforms” including a change in the consti- the meantime have gotten into trouble in Italy. But
tution, labor reforms, brutal budget cuts, and tax twenty-five years ago Italian banks, including MPS,
increases. were very healthy. It was the privatization wave, in the
Facing ECB retaliation, the Berlusconi cabinet re- banking and industrial sectors, which was supposed to
signed in November 2011. The technocratic govern- make Italy ready for the euro, which played a role in the
ment led by Mario Monti executed the ECB orders, speculation against the Lira, and has fundamentally
plunging the country into a recession. As a consequence changed the situation.”
of a wave of corporate and household insolvencies, Who was responsible for that? Well, it started with a
NPLs mushroomed in the Italian banking system. directive issued in December 1989 by the EU Commis-
Today, MPS has a backlog of over 45 billion in NPLs; © European Union 2017

the entire Italian banking system is estimated to hold European Central Bank (ECB) President Mario Draghi.
one third of the total one trillion euro of NPLs in the
Eurozone. sion under Jacques Delors, which mandated all member
Meanwhile, banking supervision has been central- states to lift national regulations and bank separation
ized in the EU under the European Banking Authority, provisions, in favor of a “single banking model” in the
which is a branch of the ECB. The ECB is exclusively EU—universal banks. The directive listed all permis-
focusing on the Italian NPL crisis and demanding action sible activities under the new banking model, including
to defuse what it claims is the unique systemic risk to investing in a detailed list of derivative products.
the European and global financial system. Mainstream
economists and media have made the Italian problem a Why Was MPS Sacrificed?
totem, while ignoring the much bigger risk posed by the That directive was implemented in Italy by two fig-
derivatives exposure of German, French, and British ures—Mario Draghi, then director-general of the Ital-
banks. ian Treasury, and Giuliano Amato, prime minister in
EU rules have made it impossible for banks to find 1992-1993 and 2000-2001. After participating in the
solutions, by imposing rules that prohibit further loans famous meeting on board the Queen’s yacht Britannia
to defaulting customers. Banks are thus prevented from with City of London bankers on June 2, 1992, Draghi
any negotiated solutions with their customers. Bridge was appointed head of the Privatizations Committee,
loans, for a certain period, would allow business cus- which oversaw all Italian privatizations, starting with
tomers to keep going, and be in a position to repay their banks, including MPS. At the same time, Draghi and
loans, or allow individuals to have some breathing Amato drafted the two bills that deregulated the bank-
room while finding a new job. On top of that, the ECB ing system and lifted banking separation rules, called
is now considering a new rule by which banks would “the Amato-Draghi Bill” or the Single Banking Act of
have to put up a 100% reserve for NPLs. 1995.
While doing this, the ECB has also issued a deadline Draghi eventually left the Treasury in 2002 and
for banks to get rid of their NPLs, forcing them to sell became head of European operations at Goldman Sachs
the loans to hedge funds which buy them for ten cents in London. In 2006, he became Governor of the Bank of
on the dollar and make up to 400% profit on the collat- Italy after his predecessor, Antonio Fazio, had been

22  The Presidency and the Future of Mankind EIR  December 22, 2017
overthrown by the scandal around Antonveneta bank. dollars and euros to bail out insolvent megabanks.
Fazio had opposed the sale of Antonveneta to ABN When ABN Amro became insolvent and a chain-
Amro, but had to resign when the media published reaction was threatened, it was bailed out by a consor-
wiretapped conversations between Fazio and the Italian tium of banks in what was the largest European insol-
rivals of ABN in the purchase. vency of all time, with over 60 billion euro. The consor-
Giuliano Amato, between his two mandates as Ital- tium was composed of the Royal Bank of Scotland, the
ian prime minister, was hired by the EU Commission to Belgian Fortis, and the Spanish Banco Santander. They
draft what became the Lisbon Treaty in 2006. After the chopped up ABN Amro and took over its parts—
original “European Constitution” text was rejected by Santander got Antonveneta. However, as a result,
referenda in France and Holland, Amato was assigned Santander found itself in trouble and announced a capital
to change the text a little in order to reintroduce it in increase of ten billion euro in order to offset the losses.
form of a treaty. That treaty is today the primary source Was MPS sacrificed to bail out Santander? Was
for European Law. Draghi’s fraudulent authorization motivated by the
A member of the British Fabian Society, Amato has higher purposes of saving the global financial system
been the deus ex machina of MPS, together with his “whatever it takes”? It is a fact that the sale of Antonve-
ally Franco Bassanini, a former minister and a member neta brought 17 billions into Santander’s vault and the
of parliament from Siena. Amato and Bassanini have capital increase was cancelled.
been the sponsors of Giuseppe Mussari, the CEO of
MPS, who launched the Antonveneta operation and the Plan B for the Next Crisis?
subsequent derivative orgy. (Mussari left MPS in 2010 The rest is known. Members of the Investigating
and became head of the Italian Banking Association Committee on the Banking Crisis of the Italian Parlia-
until his resignation in January 2013.) See “A Four- ment, which has discussed the MPS case, have asked
Century-Old Nemesis Casts Its Shadow over Upcom- Draghi to testify before the committee. The ECB made
ing Elections” in EIR, February 1, 2013, for more back- known that the head of the ECB is not accountable to
ground. any national parliament. This makes it even more urgent
This is a closed circle: It is hard to imagine that MPS to replace so-called “EU Law” and the EU institutional
CEO Mussari, a lawyer by profession, decided, by him- framework with a system of cooperation among sover-
self, to buy Antonveneta in 2008 with nothing but a eign nations allowing nations to re-establish banking
phone call to Santander’s head Emilio Botin—without separation systems, among other regulations.
due diligence—while knowing that the price was over- Such an urgent banking reform was an issue during
blown. It is easy to imagine that Mussari was told to do the discussion with a selected audience of journalists
so by someone who had enough power to guarantee that and bankers at the showing of the documentary in
things would eventually be smoothed over and fixed, Berlin. The former head of the Association of Public
and that he would be protected. Mussari’s protector Banks in Germany, Bernd Lüthje, called for separating
Amato fits the description. But what was the higher “normal” banks from investment banks. Normal banks,
reason for deliberately exposing MPS to bankruptcy? he said, which manage savings and deposits, should not
What was a reason strong enough to consider the oldest be allowed to speculate. On the other side, investment
bank in the world “expendable”? banks should be “strictly controlled.”
Mario Draghi could answer that question. At the In his interview with DWN, filmmaker Moritz
time of the Antonveneta takeover, Draghi was not Enders describes the dead end which the euro system is
only the head of Italy’s central bank, but also head of in now and said, “I really hope that in the [German] Fi-
the Bank for International Settlements connected Fi- nance Ministry they have a Plan B for the next euro
nancial Stability Forum, a body created in 1999 to crisis. In an uncertain situation, a controlled demolition
suggest proposals to “reform” the financial system in is better than an uncontrolled collapse, which could be
the wake of the 1997-98 collapse, but also to take provoked by an Italian exit. I believe that this issue is of
action in case of a crisis. In 2008, the world financial fundamental importance for the EU. And I believe that
system was on the verge of collapse. Governments our film on the Monte dei Paschi helps a bit in the nec-
throughout the world were handing out trillions of essary debate.”

December 22, 2017  EIR The Presidency and the Future of Mankind  23
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