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In May 1993 Mr Prodi became chairman of IRI once again, with a mandate to privatise chunks of it. He inherited a plan to sell SME in three divisions. In October 1993, Mr Prodi sold SME’s food-production arm, Cirio-Bertolli-De Rica (CBD), to Fis.Vi, an agricultural consortium. A clause in Fis.Vi’s purchase contract with IRI allowed Fis.Vi to sell Bertolli, the edible oils business, to Unilever, which Fis.Vi soon did. Goldman Sachs advised Unilever, for whom Mr Prodi had served as an international advisory director from 1990 to May 1993. In October 1993 Mr Prodi also sold Italgel, SME’s ice-cream division, to Nestlé.

Mr Prodi left IRI in April 1994, entered politics in 1995 and served as Italy’s prime minister in 1996-98. The privatisation of SME finished in 1996, and raised a total of 2.05 trillion lire. The last bits to be sold were GS Supermercati and Autogrill.

Before long, there were allegations that if the companies comprising CBD had been sold separately, IRI would have received a better price. As a result, magistrates investigated the sale and Mr Prodi’s role in it. In December 1997 a judge at a preliminary hearing concluded that no charges should be brought as "the facts alleged are non-existent". He also stated that IRI had not suffered a loss and neither had Fis.Vi made a profit, and that if CBD had been sold piecemeal, IRI would have got less.

There were similar allegations over the sale of Italgel. Another investigation started in Rome in 1997 and closed without charges in March 1999 because the allegations were groundless.

By the end of May 1999, Mr Prodi was president-designate of the European Commission, but not yet formally appointed, a lengthy process. On June 12th 1999 the Daily Telegraph, a British newspaper, published an article about Mr Prodi’s business activities, and two further articles followed. The first article claimed that he was paid £1.4m in consulting fees in 1991-95 that he had failed to reveal while in public office, in possible violation of Italian law. It also said that both Goldman Sachs and Unilever were clients of a consultancy (ASE), belonging to Mr Prodi and his wife. (Unilever was not a client of ASE. From March 1990 to May 1993, when not in public office, Mr Prodi had acted as a consultant to Goldman Sachs. In total ASE received 3.1 billion lire from Goldman Sachs in 1991-95, including a total of 1.45 billion lire of bonuses paid in 1993 and 1994, but relating to periods prior to May 1993.)

According to Italian magistrates, the article insinuated that Mr Prodi had not declared the £1.4 million to the taxman. It suggested (correctly) that ASE’s fee income from Goldman Sachs rose sharply in 1993, but claimed: “ the surging payments in 1993 raise eyebrows, because Mr Prodi [sold CBD that year and] Mr Prodi’s former paymasters at Goldmans Sachs [advised the buyers]…The [CBD] group was sold for half its real value to a front company…then immediately resold in part to another of Mr Prodi’s former paymasters, …Unilever (Mr Prodi’s other ASE client).” Il Giornale, owned by your brother, Paolo, picked up some of the Daily Telegraph’s allegations.

Because of the Daily Telegraph’s article, magistrates in Bologna, ASE’s base, asked the Guardia di Finanza to investigate whether Mr Prodi and ASE had completed their tax returns correctly. The Guardia di Finanza concluded that the tax returns were accurate so the magistrates came to the same conclusion.

Magistrates in Rome investigated whether the fees from Goldman Sachs could be connected to the sale of CBD. They concluded that all the fees to ASE from Goldman Sachs were solely connected to Mr Prodi’s consultancy work and that he had severed links with Goldman Sachs by May 1993. In their written report, dated March 11th 2002, to the preliminary judge, the Rome magistrates stated the same allegations as those made in the Daily Telegraph were repeated in “Corruzione ad alta velocita”, a book by Ferdinando Imposimato, a former Italian judge.

Mr Imposimato told the magistrates that his source was Ambrose Evans-Pritchard, the Daily Telegraph journalist who had written the articles about Mr Prodi. Mr Imposimato said that Mr Evans-Pritchard had shown him two notes, one dated August 24th 1993 and the other November 26th 1993, which he had quoted in his book. According to Mr Imposimato, the notes would have shown collusion between Mr Prodi, Unilever and Fis.Vi. But he had no copies of the notes. The magistrates said that Mr Evans-Pritchard had not answered their questions and had not sent a memorandum on the two notes, as he said he would. Mr Evans-Pritchard says he did not answer magistrates' questions because he believed that they were engaged in a time-wasting exercise and that they had no desire to get to the bottom of the matter.

Mr Imposimato claimed to the magistrates that Mr Fimiani had given Mr Evans-Pritchard the two notes. So the magistrates concluded that it was “ likely” that Mr Fimiani was one of Mr Evans Pritchard’s two sources. They also concluded in effect that the “mythical documents” apparently given by Mr Fimiani to Mr Evans-Pritchard were most likely “artfully fabricated”. Mr Evans-Pritchard says that those documents in his possession that allege collusion between Mr Prodi, Unilever and Fis.Vi. did not come from Mr Fimiani and are certainly genuine.

You referred to evidence from Mr Fimiani in your spontaneous declarations, and asked your lawyers to submit written evidence to the court from him.

Is Mr Fimiani, to whose oral and documentary evidence you referred in your spontaneous declarations, a reliable source?

Are you aware that Mr Fimiani was convicted for “serious bankruptcy” in Salerno on November 12th 1993?

Are you aware that the criminal court in Salerno in November 1993 ruled that Mr Fimiani bore “a very heavy responsibility” for the bankruptcy of Co.Fi.Ma?

Are you aware that on June 13th 1995 Mr Fimiani made a complaint against “unknown persons” for abuse of office? (He claimed that Co.Fi.Ma’s bankruptcy was due to a need to eliminate the firm when he had got in the way of IRI’s sale of SME to Buitoni in 1985.)

Are you aware that magistrates investigated Mr Fimiani’s complaint and that, in March 1997, a preliminary judge closed the investigation because Mr Fimiani’s “j’accuse” was groundless?

Did Mr Fimiani make his bid for SME in 1985 on your behalf?

*We have compiled this section from documents (in Italian) which have been available on the website of the president of the European Commission since May 2003.

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