Total Italia CEO and MP in oil scam probe

| Wed, 12/17/2008 - 06:13

The chief executive of Total's operations in Italy and an opposition Democratic Party MP were served with arrest warrants on Tuesday in connection with a corruption probe into oil drilling contracts in the southern region of Basilicata.

Total Italia CEO Lionel Levha and MP for Basilicata Salvatore Margiotta were among 15 people named in the case on charges of corruption and collusive tendering.

According to Potenza prosecutor Henry John Woodcock, Total Italia directors made a 15-million-euro deal with local businessman Francesco Ferrara to grant Ferrara's consortium the oil-drilling contracts for the Tempa Rossa oil field.

Woodcock claimed that Ferrara had also promised Margiotta 200,000 euros to use his influence to put pressure on the Total directors in favour of the consortium.

The oil company is also alleged to have colluded with a local council worker to force some Basilicata landowners to accept little more than six euros per square metre for the expropriation of their land in the area.

The mayor of the Basilicata town of Gorgoglione, Ignazio Giovanni Tornetta, is meanwhile accused of receiving gifts of cash, valuable objects and business favours in return for illegal mediation efforts between the Total managers and the consortium.

Levha, several Total employees, Ferrara and Tornetta are in police custody, while prosecutors asked parliament to waive Margiotta's parliamentary immunity so that he could be put under house arrest along with four others allegedly involved in the scam.

A further five people are under investigation thanks to the police operation, which was carried out largely through the use of wiretaps.

Margiotta, who stepped down from his political duties on Tuesday, said he was innocent of charges in a statement.

The politician expressed his ''amazement and bitterness'' at his arrest.

Woodcock has led a number of high-profile investigations involving government ministers as well as Prince Vittorio Emanuele of Savoy, but these have yielded few results, critics say.

Discovered in 1989, the Tempa Rossa oil field in Basilicata is one of Europe's largest and is thought to have oil reserves of up to 200 million barrels.

Regional authorities signed an agreement with Total, Shell and Mobil to develop the oil field in 2006, and the government greenlighted plans in August.

Production is slated for 2010 with an estimated production of 50,000 barrels and 350,000 cubic metres of gas per day.

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