Monte Paschi probe enters crucial week as Italy elections near
By Philip Pullella
ROME (Reuters) - An investigation into possible fraud by Monte Paschi bank enters a crucial few days as magistrates question key witnesses in a scandal that has touched off a political fire storm just three weeks before Italy's elections.
Magistrates in the Tuscan city of Siena, where the world's oldest bank is based in the 14th century palazzo of Rocca Salimbeni, are due to question its former president Giuseppe Mussari and former director general Antonio Vigni this week.
About 10 people are being investigated but Mussari and Vigni will be the highest-ranking former executives to be questioned so far in the probe, which has helped the center-right of former Prime Minister Silvio Berlusconi narrow the gap with the center-left in the run up to the February 24-25 elections.
The 450-year-old bank is under investigation for possible fraud over opaque derivatives and structured finance contracts between 2007 and 2009 that have left it facing losses of 720 million euros and dependent on a state lifeline.
The probe is also trying to determine whether bribes were paid at the time it purchased Antonveneta for 9 billion euros ($12 billion) from Banco Santander in 2007, just a few months after the Spanish bank had bought it for just 6.6 billion.
LINKS TO LEFT
Berlusconi and allies have used the scandal to attack both center-left rivals and outgoing prime minister Mario Monti, whose Treasury approved the Monte Paschi bailout last month.
Tuscany is a traditionally leftist area. Monte Paschi has for decades had close ties to the Democratic Party (PD), the largest in the center-left opposition coalition, through local government and dominance of a charitable foundation which is the bank's largest shareholder. Continued...