On Friday, August 12, after calling back Members of Parliament (MPs) from their summer holidays, Italy’s government approved €45.5 billion (close to $65 billion) in additional austerity cuts over the next two years. The cuts were made in response to demands by the European Central Bank (ECB), which wants Italy to balance its books a year earlier than had been anticipated, in exchange for its purchase of Italian government bonds, to prop up Italy’s economy.
Italian politicians had previously passed a €70 billion ($99 billion) austerity package, in late July, but since then, the ECB and the Italian government acknowledge that the financial crisis has worsened in Italy. New measures are urgently needed to stimulate growth in Italy’s faltering economy—which is projected to grow by only about 1 percent this year. And, while Italy’s debt is among the highest in the euro zone—at close to 120 percent of GDP—low growth is a critical reason why Italy can’t improve its public finances.
Around the time that the news of the new budget cuts hit, the Italian public also learned that their MPs were paying heavily-subsidized prices for gourmet Italian meals at Parliament’s official restaurants, in addition to receiving many other perks and subsidies. And, what’s more, when the initial budget cuts were announced in July, they did not include cuts for Parliament.
Based on blog posts, and a parliamentary menu that was posted online, Italians learned that their MPs can dine on a plate of spaghetti with anchovies for just €1.60, a beefsteak at €2.68, or a swordfish fillet at €3.55—all prices that are, on average, a fraction of what an ordinary restaurant would charge. While Italian citizens are being told to tighten their belts, Italian MPs have been dining on these dishes, and more, at bargain-basement prices—at the expense of the Italian taxpayer.
In this column, I will outline the benefits and perks that Italian MPs currently receive, and explain how these perks came to light. I will also discuss why reform is necessary now, and how social networking may provide an important catalyst for greater openness in Italian politics.
What Italian MPs Get—and How the Public Learned About it
Italy has an amazing number of public sector workers—150,000—for a country of its size. Public-sector workers include politicians—who cost each Italian citizen nearly $38 a year, compared to $7 per politician in the United States.
Italy has 946 elected members of parliament—the highest number of elected representatives in Europe. In 2009, there was reportedly one MP for every 60,371 inhabitants, compared with one for every 91,824 people in the UK; every 112,502 in Germany; and every 560,747 in the United States.
In addition to having the most politicians, Italy also pays them the highest salaries in Europe. Its MPs receive more than $16,000 a month, even before perks. And perks include free phone service, free train and air tickets, and even steep discounts at Rome’s designer boutiques. MPs also have a special pension, which exceeds those of normal civil servants—and they earn such a pension at age 60, if they have served in office for a mere 30 months.
Italian members of the European Parliament are also well-paid. In 2009, the basic salary of an Italian MEP was €149,215 annually—double the salaries of the Germans and the British, three times the salary of the Portuguese, and four times that of the Spanish. Moreover, Italian MEPs’ travel expenses are automatically calculated based on the most expensive air ticket to Brussels—without the need for any documentation showing that they actually bought a ticket of or near that price.
In at least one previous study, the 78 Italians who are MEPs, despite earning the highest salaries among the 27 countries that are members of the European Parliament, came in dead last among the same EU nations when it came to actually turning up in Brussels and Strasbourg, appearing at only 72 percent of sittings from 2005–2009.
This was more than 20 percentage points worse than the best attendees—the Austrian MEPs—who attended an average of 93 percent of parliamentary sessions each.
In 2007, political journalists Gian Antonio Stella and Sergio Rizzo exposed the excesses of the political class in their book, The Caste: How Italian Politicians Have Become Untouchable. The book was a bestseller, and Stella and Rizzo became popular speakers and commentators as a result.
The Caste detailed how Italian MPs are paid three times as much as their French counterparts, and enjoy perks that range from chauffeured bulletproof cars, to bodyguards, to heavily-discounted air travel, to individual tennis lessons.
Rizzo and Stella also estimated that, at the time they wrote, the costs of running Italy’s presidential palace were four times that of running Buckingham Palace.
Still, Rizzo and Stella’s expose did not lead to major changes in the nature of political perks. But at the time they wrote, the Italian economy had not yet gone south in the way it has now.
A Recession—and Better Publicity Through Social Networking—May Eventually Mean the End of Italian MPs’ Perks
Now, an interesting new blog may have the potential to change the tenor of Italian public debate regarding MPs’ expenses. The blog is maintained by a whistleblower known only as “Spider Truman” on the social-networking website Facebook. Truman’s Facebook page is called “The Secrets of the Society (or “caste”) of Montecitorio.” (Montecitorio is home to the Italian Parliament’s Lower House—the Chamber of Deputies.)
On his page, “Spider Truman” has alleged that Italian politicians enjoy free airline tickets for their friends and family; receive reduced telephone rates; and can obtain police escorts when they wish to go shopping. He also makes more serious allegations that some MPs falsely report that their computers and other equipment have been stolen so that they can claim the costs for replacements. Truman also claims that some Italian politicians even send themselves death threats so that they will qualify for free bodyguards.
Overall, the page claims, Italian taxpayers spend billions each year on Italian MPs’ benefits, including their chauffeured cars, free air and rail travel, cinema and theater tickets, and large discounts on healthcare and restaurant meals. To prove the point, the page displays, for example, letters from cell phone carriers offering hefty discounts to MPs, and airline tickets showing that MPs’ friends and family got travel perks.
Why should we believe “Spider Truman”? He says that his insider knowledge of MP perks and falsified expense claims is based on his years working for Italy’s Chamber of Deputies, before he was terminated. Critics say he’s simply a disgruntled axe-grinder. One thing, though, is clear: His Facebook page—which now has over 373,000 fans (as of the date of this column)—has been a catalyst for public debate.
Moreover, there is evidence that the Italian government is paying attention. When Spider Truman claimed that Italy’s Parliament employs nine hairdressers who each earn €11,000 ($16,000) a month, the government insisted that there are only seven barbers on the payroll who each earn €2,400 a month.
The straw that may break the camel’s back, though, is the menu that another source posted online—perhaps emboldened by Truman’s blogging. As Italians endure a €70billion austerity package, with public services slashed and wages frozen, the menu that MPs enjoy has sparked outrage. Here is a listing of the dishes on offer at Italian Parliament:
- Carpaccio of beef with lemon sauce: €2.76
- Strips of chicory and sea bass with almond: €3.34
- Melon and ham: €2.33
- Filet of sea bream in a potato crust: €5.23
- Veal with green pepper: €5.23
- Grilled loin of veal: €3.55
- Wine: €0.67
- Risotto with courgette flower: €3.34
- Spaghetti with anchovies: €1.60
- Beef steak: €2.68
- Swordfish fillet: €3.55
Translating a few other dishes into dollars should make the point for U.S. readers: An MP’s antipasto of sea bass and chicory, and a risotto with turbot and zucchini flowers each cost $4.60. A normal restaurant price would be closer to $30. Italian taxpayers pay the difference.
This menu, it turns out, is not an isolated outrage. The catering at Italy’s parliament in Rome is said to come to more than €1 million—and MPs are even entitled to claim what they pay in the subsidized canteens as an expense for which they can be reimbursed.
As if that were not enough, the parliamentary restaurants are decorated in an exorbitant ‘Liberty style’ (think art noveau); provide solid silver cutlery embossed with the logo of the Upper and Lower Houses; and are replaced frequently (again at taxpayers’ expense) as they are often pocketed by MPs and their guests as souvenirs.
As a result of the outrage sparked by the menu, the leader of the Senate (Italy’s Upper House), Renato Schifani, said, “The prices will be raised to reflect true costs.”
What Next: Will Italian MPs Tighten Their Belts? The Resolution of a Parallel UK Scandal May Be Instructive
As in many scandals, it is the little details that make the public mad For Italians, the fine dining by MPs that is paid for by taxpayers may be the issue that prompts reform. By comparison, in the UK’s similar scandal, much was made of a Tory MP’s claim for a wooden duck house.
As in Italy, in the UK too, much more was at stake: In Britain, widespread actual and alleged misuse of permitted MP allowances was made public. Parliament had tried (and failed) to prevent disclosure of the documents at issue, when they were sought under UK Freedom of Information laws. The scandal aroused widespread anger among the British public against their government, as the economy started to deteriorate. It also resulted in numerous resignations, firings, and retirements. The UK Crown Prosecution Service also pursued criminal charges against some MPs.
Fortunately, the UK scandal led to the creation of new processes to ensure transparency and accountability in the British system. UK MPs now have to submit all claims through the Independent Parliamentary Standards Authority (IPSA), which was created in 2009, and intended to ensure that Members’ expenses were dealt with at “arm’s length” from the House, ending The British Parliament’s self-policing of its Members’ expenses.
The IPSA will be responsible for many things, including paying MPs’ annual salaries; drawing up and administering MPs’ allowances scheme; preparing the MPs’ code of conduct relating to financial interests; and determining the procedures for investigations and complaints relating to MPs.
Will the Italian government now tackle the issue of MP perks head on, as the UK was eventually forced to do?
Two Key Issues: Excessive Perks, and Allegations of Fraudulent Expense-Reimbursement Claims
There are two major concerns raised in Spider Truman’s blog: (1) the sheer excess of Italian MPs’ perks, particular at a time of financial crisis; (2) as-yet unproven allegations that some MPs abuse their offices to gain favorable treatment from restaurants, shops, and the like, and that they file fraudulent expense claims.
Regarding the first concern, there are signs of some belt-tightening. According to news reports, Italian MPs—previously untouched by austerity measures—are to have €110 million slashed from their salaries and perks. What shape and form these cuts will take still remains to be seen, however.
Finance Minister Giulio Tremonti has also cut MPs’ “special” pensions by 5 percent. This supplementary pension reportedly entitled former MPs to an extra €3,000 a month, on top of their standard pensions. And the Cabinet has ordered that all members of Parliament, public administrators, and state workers fly coach class when on official business
These measures surely are wise. For a country that has weak finances compared to the rest of the Euro Zone to give its government officials the highest salaries and some of the best perks is foolish at a time like this.
What about the allegations of fraud or misrepresentation by MPs regarding their expense claims? If the allegations are accurate, these problems may be harder to solve. And, more generally, how will Parliament instill trust in the public with respect to their MPs’ integrity after this scandal? Will there be greater transparency, to allow citizens to see how their tax dollars are being spent—in terms of MP privileges? Will Italy investigate current allegations of wrongdoing? Will measures be put in place to provide greater accountability for MPs in terms of their expense claims?
Spider Truman’s blog shines some sunlight on an important issue for Italy—and perhaps for other countries whose politicians live expensively on the public’s dollars, in the midst of recession, as well. If Truman’s allegations are inaccurate or exaggerated, then the best way to dispel them is for the government to provide the public with real facts and figures. Now, it remains to be seen whether social networking and Italy’s fiscal crisis can together propel the public to demand greater transparency and accountability from the very people they elected to represent them.