What Makes Giancarlo Run?

Giancarlo Parretti, Cannon and The Wounded Lion

"Flamboyant and Mysterious"

No, not a still from a Breakdance 3 promo, but Mr Parretti (in red) sporting an MGM outfit just after buying the Company and merging it with Cannon/Pathe Communications Corp.

Legal Note:

These articles and images used here are for educational use and as an archive only. The original article/images and copyrights (where available)

cannon.org.uk comment

All I know about Mr Parretti is what I recall from the late 1980s when he reportedly bought The Cannon Group, Inc. for $US200,000,000 and quickly changed the name and then went on to buy MGM. That’s what I think I know from the press then and the articles below (all dated). I’ve also included an open letter from Mr Parretti to try and give some balance and if you have anything else I can add from Mr Parretti’s perspective please contact me. So, if interested, read the articles and decide for yourself. You might want to check out the article (“Who Killed Cannon?”) here

Whatever you decide, there’s no denying Mr Parretti is certainly an interesting figure and a lucky man. Why lucky? Had he been accused in today’s USA he may have found himself in jail for 25 years –guilty or innocent. These articles cover a decade roughly of Mr Parretti taking an interest in The Cannon Group, Inc. to his eventual purchase of MGM.

One of the oddest thing I’ve seen about Mr Parretti is this 1990 promotional VHS tape from the Netherlands (where his bankers were of course):

click for larger image

Note the “GIANCARLO PARRETTI PRESENTS” and the combined Cannon copyright notice at the bottom. Not sure what was happening there but I’m sure there’s a good story why. Either way, there’s no listing for Mr Parretti at the IMDb

Mr Parretti mentioned again on a UK cinema Cannon Group poster:

click for larger image

Slightly different on the US poster

All spelling/grammar is as I found it in these articles.

December 16, 1988

Group Set to Buy Film Giant Pathe

By DEBORAH WISE, SPECIAL TO THE NEW YORK TIMES

A French investment group with ties to the American film maker Cannon Group Inc. is ready to take control of the French film company Pathe-Cinema in a deal valued at about $157 million.

The deal is expected to give Cannon access to Pathe's large film library.

This is a deal that also involves the film heritage of France. Indeed, the French Government has expressed its concern that Pathe might fall into foreign hands. Founded in 1896, Pathe is renowned for producing films like Luchino Visconti's ''The Leopard'' and the French classic ''Les Enfants du Paradis,'' directed by Marcel Carne. Offer of $151 a Share

The investment group M. T. Investissements is expected to take control shortly after it begins its $151-a-share tender offer Friday morning. Banque Rivaud, which holds 52 percent of Pathe, has agreed to sell its stake. Pathe's three minority shareholders, Compagnie Financiere de Suez, Lyonnaise des Eaux and Societe Generale de Belgique S.A., are expected to sell their 42 percent stake.

M.T. Investissements is led by the 75-year-old French businessman Max Theret and includes Giancarlo Parretti, president and chief executive of Cannon.

Mr. Theret, who founded one of France's largest record and book discount chains, FNAC, said he planned to use Cannon's distribution network in the United States and exploit Pathe's film library. That library includes more than 400 feature films, 3,640 hours of newsreels dating back to 1905 and 1,200 hours of television series. A Film Distributor

Pathe does not produce films today, but it distributes them through a network of 150 theaters in France. For the last year it has distributed films made by Cannon.

M. T. Investissements received approval for its bid after assuring the Government that it is 80 percent French-owned, with Mr. Parretti holding less than 20 percent.

''I am very happy to be out of the dark,'' said Pierre Vercel, the president of Pathe. The shares of Pathe had been suspended on the French stock exchange since Sept. 9, when Banque Rivaud announced it was looking for a buyer. Initially, the high asking price, which is 300 times 1987 earnings, deterred interest.

''I have known Mr. Theret and find him a very dynamic man for his age,'' Mr. Vercel said of his new boss. Mr. Vercel is also familiar with Mr. Parretti, through Pathe's distribution agreement with Cannon.

Cannon, which recently experienced financial difficulties, is known among other things for its ''Superman'' films, its offbeat hit ''Runaway Train,'' and Franco Zeffirelli's ''Otello.'' But Cannon has not had a recent hit.

Original article http://query.nytimes.com/gst/fullpage.html?res=940DEFDB113BF935A25751C1A96E948260&sec=&spon=&pagewanted=print

March 7, 1989

Italian Financier's Plan for Cannon

SPECIAL TO THE NEW YORK TIMES

The Italian financier Giancarlo Parretti is asking shareholders of Cannon Group Inc. to approve a plan under which he would gain voting control of the Los Angeles film company. In a proxy statement filed with the Securities and Exchange Commission, Mr. Parretti said he would raise his stake in Cannon to 62.5 percent, from 39.4 percent, and change its name to the Pathe Communications Corporation. Mr. Parretti, who is Cannon's chief executive, also controls Pathe Entertainment Inc.

The plan is supported by Mr. Parretti and two major Cannon shareholders, Menahem Golan and Yoram Globus, so it is assured of approval.

Original article http://query.nytimes.com/gst/fullpage.html?res=950DE1D9153EF934A35750C0A96F948260

March 8, 1990

Ambitious Financier Behind Pathe

By ROGER COHEN

Giancarlo Parretti, the Italian financier, has stepped smartly from country to country and left a trail of lawsuits as he built a financial empire, rising far from his humble beginnings as a waiter on the Queen Elizabeth ocean liner.

An exuberant man given to hyperbole over his ambitions and vagueness about his finances, Mr. Parretti has said he intends to build the world's biggest movie group. Yesterday, his Pathe Communications Corporation agreed to buy the MGM/UA Communications Company for $1.2 billion in a deal that appears to advance his goal significantly and to quash, at least temporarily, persistent rumors that his appetite for media companies is not matched by the means to acquire them.

Mr. Parretti, who is 48 years old, could not be reached for comment. His spokesman, Craig Parsons, said Mr. Parretti had accumulated his wealth by ''buying companies in real estate and turning them around and selling them.''

Flamboyant and Mysterious

Certainly, he has spent freely since 1987, emerging as a flamboyant, if mysterious, force on the Hollywood scene, where his Beverly Hills mansion boasts paintings by Picasso and Goya. Proclaiming that communications - along with food and tourism - is an industry of the future, he bought control of the Cannon Group about two years ago, renaming it Pathe Communications. Mr. Parretti holds about 63 percent of the stock in the movie company.

His media acquisitions, which began with the French film company Pathe Cinema, have been largely coordinated through a web of closely held financial holding companies based in Panama and Luxembourg. The value of these assets, and the origin of the cash behind them, is unclear.

Until three years ago, Mr. Parretti had shown little interest in the movie business. Born in Orvieto, north of Rome, he worked as a waiter in London before moving to Sicily, where he said he used Government aid to buy and sell at least four hotels.

His next venture, a newspaper, was declared bankrupt in 1981, and Mr. Parretti is now on trial on charges that he falsified its balance sheet.

More Purchases

Mr. Parretti bought three Italian insurance companies in 1983 and sold them two years later to a Geneva-based merchant bank, Sasea Holding. Then he switched his interests to France, where for a while he said he was a representative of the Italian Socialist party, and to Spain, where he acquired real estate and tourism interests. The Spanish authorities have questioned Mr. Parretti over what they said was the illegal export last year of $459,000 to Andorra. No charges have been brought.

In Paris, meanwhile, Mr. Parretti's movie interests began with a meeting with the Rev. Cristiano Pagano, an Italian priest who was making a film about a young girl's vision of the Virgin Mary. Mr. Parretti invested in the movie and was rewarded with a private screening at the Vatican last year with Pope John Paul II.

He went on to buy control of Pathe Cinema, France's oldest movie company. But following French Government challenges and investigations into his past, Mr. Parretti reduced his holdings to a minority stake.

Original article: http://query.nytimes.com/gst/fullpage.html?res=9C0CE1D81430F93BA35750C0A966958260

April 2, 1990

Pathe's Chief Gets 4-Year Jail Term .

The president and chief executive of the Los Angeles-based Pathe Communications Corporation, has been sentenced in absentia in Italy to nearly four years in jail after being convicted on charges of fraudulent bankruptcy, an Italian news agency, ANSA, reported on Saturday.

The agency said the charges related to a Naples newspaper chain owned by Giancarlo Parretti. The chain went bankrupt in 1981 after two years of operation, and two years later, the company that managed the chain also went bankrupt.

A Naples court found the Italian financier and six others guilty of having concealed accounts relating to the business operations of the failed companies, the news report said, and sentenced Mr. Parretti to three years and 10 months in jail.

Mr. Parretti said the charges stemmed from the Italian company's failure to file its balance sheet on time and that the failure occurred after he had left the company. ''I will prove my innocence as I have done in the two prior cases in which I ultimately prevailed upon appeal,'' he said.

Last month, Pathe began a $20-a-share tender offer, for a total of $1.22 billion, for the MGM/UA Communications Company.

Original article: http://query.nytimes.com/gst/fullpage.html?res=9C0CE3DA153CF931A35757C0A966958260

Who is Parretti?

SPY
1990

by Edward Jay Epstein

Giancarlo Parretti, stunned Wall Street by bidding $1.2 billion in cash for MGM/ UA-- a movie company which both Rupert Murdoch and Ted Turner had looked at only months before but decided not to make an offer. Even more surprising, in the documents he filed with the SEC, he specified no source for where the money was coming from-- other than an "oral, non-binding agreement" for $200 million with an unnamed company-- and he did not even have an investment banker. "I do not need Wall Street's money", he told one New York investment banker, attempting to offer his services to him, "I can get one billion, two billion, whatever I need from European banks".

Parretti is Hollywood's latest Hero From Zero mystery. As later as 1982, he was an employee of a fish processing factory in Hong Kong. Now his empire, which includes movie studios, theaters, film laboratories, distributors, and production companies, is worth, according to Variety, $1.5 billion. In 1988, he bought the oldest film company in France, Pathe S.A., as well as the Hollywood studio, Cannon Films, which was best known for Ninja and vengeance fantasies (and which he re-named Pathe Communications). From that point on, at a breath-taking pace, he made announced a new multi-million dollar deal almost every month. In December 1988, it was a $160 million film production contract for Menachin Golan, the Israeli entrepreneur, who with his Israeli cousin, Yorus Globus, built Cannon into a trans-oceanic film maker. In January 1989, he announced a $80 million plan to bail out Dino Delaurentus' movie studio from bankruptcy so he could merge it into his own. In February, he made a $138 million offer for the television producer, the junk-bond financed TV producer New World Films. In March, he made a $39 million offer for the arty Kings Road Films. In April, he first floated the idea of taking over MGM for a cool billion. In May, he had bid $220 for Television Monte Carlo, which owned an Italian TV network.

As it turned out, none of these announced deals had been actually consummated. He aborted the Golem production deal a few months after it was announced. Ron Perlman outbid him for New World. The Kings Road deal fell apart. The Dino de Laurentius rescue mission failed. MGM accepted a bid from an Australian suitor, Quinex (which then failed to make the down payment and went bankrupt.) The Television Monte Carlo deal also evaporated. offer-- never got off the ground. And, adding insult to injury, the French government blocked his acquisition of Pathe SA because he had not accurately represented the principals behind the deal. But now, he found another $1.2 billion to buy MGM. Where did the money come from?

In Hollywood, Parretti lives Great Gatsby style-- when he is there. He bought a $8 mansion in Beverly Hills, where he proudly takes visitors there to his walk-in steel vault to see paintings he identifies as Picassos, Miros and Goyas. He lives there with Maria Ceccone, who he has been married to for over 20 years,two daughters and son and Fabio Serena, his 35 year old lawyer. (His wife, his 18 year old daughter, Valentina, and Serena are also executives of his holding company.) He also leases a $200,000 Rolls Royce for driving around town, and owns his own Italian restaurant, Maderos, on the ground floor of the CMA building (which has a private satellite hook-up to get Italian soccer games) and his own disco, Tramps`

Like the hero of Gogol's "Dead Souls", who spawns rumor after rumor about himself as he moves through the Russian provinces trying to buy up rights to deceased serfs to further a financial scheme, Parretti, trying to buy up near-dead film companies, has stirred the collective imagination of Hollywood. "The word is the Mafia is behind him," a top agent suggests; "Parretti is a creature of Credit Lyonnaise," a studio executive theorizes, sent to America to salvage the bank's bad loans to Cannon, De Larentius, New World and other shaky Hollywood producers. "Parretti is laundering money for the drug cartel," a Hollywood investment banker states, pointing out that movie theaters are cash businesses, and what Parretti has bought in Cannon and Pathe is 800 movie theaters. "He is fronting for Sylvio Berlusconi,"the Milanese media king, an Italian director argues. "It's Qaddafi's oil money," a film producer asserts. Parretti indeed seemed to be Hollywood's number one mystery. The proliferation of Parretti rumors did not sit well with Alan Ladd, Jr., who since January 1989 has been Pathe's co-chairman. Like his father in Shane, he wasted no words. "Its all I hear. And its complete garbage", he said, leaning forward on the couch of his plush new office at Pathe Communications on San Vicenzo Drive. He had met Parretti at the home of Dino De Laurentius in late 1988, and immediately accepted his offer to head Pathe. Next to him sat his long time associate at the Ladd Company, Jay Canter-- Marlon Brando's first agent-- who is vice president of Pathe. Both men were now in the odd position of having to defend a stranger who they had met only a few months earlier. Shaking his head in disbelief, Ladd cited the recent allegation in newspapers that Parretti was involved with the Qaddafi. He explained "The reporter mixed up two countries-- Liberia, where Parretti had a shipping businesses and Libya". Parretti had nothing to do with Libya or Qaddafi, Ladd insisted. He found the Mafia money whispers equally absurd. Why would the Mob put money in someone as "high-profile" as Parretti, he asked. "Don't you think I investigated before I took this job? He explained that in the Spring of 1989 he went to Europe with him in his gulfstream, which, he recalled, was equipped with a kitchen where Parretti cooked spaghetti for everyone. During the trip, Parretti handed Ladd a telephone-size book listing the hotels in the Melia chain, which he claimed he owned. "There were hundreds of hotels, and each of them represented real money", Ladd recounts. He in fact sat in at a At a press conference in Cannes where Parretti suggested that these hotels earned $300 million a year. There is "no mystery" where Parretti money comes from, Ladd concluded.

As it turns out, however, Parretti does not own the Melia hotel chain. Nor did he own it when he handed Ladd the impressive Melia book. What had happened was that he, together with others, had bought the Melia Group in 1987 but the hotels themselves, which were the mail asset, were almost immediately resold to the Sol Hotel chain in a complicated transaction that left Parretti and his associate owning the name "Melia" and a few Spanish travel agencies and laundries that lost money and were deeply in debt. According to the 1988 annual report of his entire holding company, which included the "Melia Group", its net worth was not anything like the $1.5 billion figure he reported to Variety, but $3.6 million ( and even this meager total is based on questionable evaluations of illiquid investment.) Instead of his businesses making an annual profit of "$300 million", as he claimed at the press conference-- or a cumulative profit of a billion dollars as he claimed in an interview in the Italian newspaper, La Republica-- they had, according to this annual report, actually lost money in both 1986 and 1987. It, moreover, had only $9000 in its bank accounts and in short-term funds at the end of 1987 (the last time it filed an annual report). But if the Melia hotels did not supply Parretti with the $60 million or so of cash he used in his Hollywood buying spree, where did he get it?

According to his birth certificate, Giancarlo Parretti was born on October 26, 1940 in the town of Orvieto, Umbria, about 100 miles north of Rome. His father, whom he introduced to Ladd, had been a humble wine merchant (and still lived modestly in an apartment in Orvieto). At the age of 17, without the benefit of any higher education, Parretti went to work as a waiter. During the sixties, he says, he learned English working as a ship's steward on the Queen Elizabeth and as a waiter at the Savoy Hotel in London (though neither the Cunard Lines or the Savoy Hotel could find any record of his employment). Then Parretti moved to Sicily where he got a job waiting in a plush hotel in Syracusa owned by Palermo's political boss, Senator Graziano Verzotto. By 1973, he had worked his way up to being manager of the hotel and the aide de camp to Senator Verzotto. Senator Verzotto, who owned Syracusa' football team and supervised Sicily's state owned mineral company, then got into serious trouble. He was indicted for embezzling $3 million dollars from the mineral company in Sicily and, to make matters worse, was nearly gunned down by a team of presumably Mafia hit men. In 1975, he fled to Lebanon, leaving Parretti in charge of his hotels and the soccer team.

After Verzotto disappeared, Parretti went into the business of publishing weekly news letters, called "Diario". Beginning first in Sicily, Parretti then went in partners with Ceasare de Michealis, a key financier for the Parti Socialist Italia, or PSI, which in coalition with the larger Christian Democrat Party, had run Italy since World war II. Even though most of these "Diarios" had a circulation of under a thousand readers, they carried advertising from businessmen-- including those who wanted to curry favor with the PSI, which was a far more entrepreneurial organization than its name might imply. It had responsibility, within the political coalition that ran Italy, for overseeing a number of Italian state-owned enterprises including ENI-- the Italian equivalent Exxon combined with Dupont, which was the country's single largest generator of wealth and foreign exchange.

Parretti here had a crucially important connection: his partner's brother, Gianni de Michealis, now Italy's Foreign Minister, who then, as the PSI's Minister for State Participations, was in charge of ENI. De Michealis, a long-haired, jowly-faced intellectual, whose extra-curriculum interest is international discotheques (a subject on which he wrote a book), was in the late 1970s, because of his responsibility for ENI, one of the most powerful men in the PSI. By hitching his wagon to this rising star, Parretti moved into the inner sanctum of the party. He had been especially active in its finances, serving for a time as the treasurer for its Youth organization. He also became a member of the PSI's central committee, where he took credit for helping to bring De Michealis' close friend, Benito Craxi, to power as head of the party-- and Prime Minister. He also arranged for ENI to help finance the take over the newspaper Il Globo, so it could support the PSI-- but the deal never worked out. (It went bankrupt).

His dealings with ENI, and association with De Michealis, eventually brought him into contact with his future partner in international finance, Florio Fiorini. When they first met in the late 1970s, Fiorini was the finance director of ENI-- a position he had half for a decade. As such, he was responsible for depositing billions of dollars in ENI funds in off-shore bank accounts. Part of this money, as it later emerged in a Parliamentary investigation, came from off-the-books kickbacks and skims from Saudi Arabia and Libya-- ENI's two major sources of foreign oil-- and the off-shore accounts it went into benefitted PSI and other politicians. In documents that came to light in the ensuing scandal, for example, Fiorini, along with two other top ENI executives, had apparently authorized the transfer of millions of dollars into a numbered account. #63369 in the Union Bank in Switzerland, which in February 1982 was shuttled into the account of PSI politicians, including Prime Minister Benito Craxi, and then wired to an anonymous fiduciary account in Hong Kong. Even if such surreptitious transfers from state-owned enterprises to the coffers of political parties is tacitly accepted in Italy as part of the "system," and no wrong doing was involved, they gave Fiorini, and his associates at ENI, a perspective on Italian politics, which includes the routing of money between numbered accounts in Switzerland and Hong Kong.

In 1982, Parretti came to see Fiorini on an urgent matter. He was in serious financial trouble. his "Diario" newspaper, for which he had pledged Verzotto's former hotels as collateral, were $3 million in debt-- and facing imminent bankruptcy. Moreover, the Syracusa Football team which he headed, seemed to be missing large sums of money. Subsequently, Parretti was arrested on charges of falsifying the team's books and jailed for a week.

He explained to Fiorini that he had a three billion lire saving certificate-- the equivalent of about $3 million-- that had been given to him, through the PSI, by an unnamed businessman but, given his problems, he needed Fiorini's help in cashing it. Fiorini, who had always thought of Parretti as "De Michealis man", took this as, he explained, "a bit of PSI business". Using his formidable financial connections, he sent Parretti to a small Sicilian bank which accepted the certificate and gave him part of the money.

When the bank checked on the certificate, it found that it was a crude forgery. "Three zeros had been added to a certificate", according to Fiorini, changing a $3,000 certificate into a $3 million one. This debacle led to the re-arrest of Parretti in July 1982; this time on charges with bank fraud. Even after he was released, he was under tremendous pressure to reveal who gave him the certificate. He again went to Fiorini, telling him he needed $27,000 to and go to Hong Kong where De Michealis arranged a job for him at Italy's tuna fish plant (which came under his authority as Minister for State Participations). Fiorini provided him with money to get out of the country .

Shortly thereafter, Fiorini had his own troubles at ENI. The Banco Ambrosiano, a bank in which Fiorini had placed $160 million in off-shore deposits, announced it was in serious trouble, and was missing over a billion dollars. As the government moved to place it in bankruptcy, Fiorini became intent on saving the bank--and ENI's deposits. He called its chairman, Roberto Calvi, who had become known as "God's banker" because of his connections with the Vatican, and whom he had dealt with before, and offered a plan whereby ENI would rescue the Banco Ambrosiano, which he did not accept. Less than two weeks later, Calvi was found hanging from a rope under Blackfriar's bridge in London, and, in the ensuing scandal, ENI found it was missing $160 million, and Fiorini was forced to resign for his unauthorized offer to Calvi.

Parretti stayed only briefly at his sinecure in Hong Kong. In 1983, he turned up in Paris. His connections to the PSI apparently still intact, if not strengthened, he became its Secretary in France. As the "French Connection", as he explained it, he acted as liaison with French Socialist businessmen and politicians, on one hand, and their Italian counterparts, on the other. It was a particularly powerful position to be in, especially now that Craxi was Prime Minister.

To aid in this liaison, Parretti set up a shell company, called Interpart in 1984 with the assistance of another PSI financial backer, Lamberto Mazza. It was strategically located in the 999 square mile kingdom of Luxembourg, which provides such corporations maximum secrecy for their transactions. While this shell began with only $20,000 in capital in 1984, at the end of the year, according to corporate statements,, $1 million in cash had been deposited in its account. Three months later, in April 1985, another $4 million materialized. And in December 1986, it received as infusion of $55 million in cash. As this sixty million dollars flowed in, so did Florio Fiorini, who, after buying his own shell company in Switzerland, became a partner and officer of Interpart.

The Luxembourg money first was discreetly channeled into a few select causes sponsored by French Socialist politicians. For example, Parretti, the liaison for the PSI in France, made available $7 million through Interpart subsidiary's, Interpart editions, to buy the French Socialist newspaper, Le Matin; and then turned over 48 per cent of the stock in this company to Paul Quiles, who had been the Defense Minister in the Socialist Government. (In 1987, Le Matin, like so many of Parretti's other publishing enterprises, went bust). Parretti also through Interpart established a shell company for one of the Socialist's main financial backer, Max Theret, called MTI, which was then used by Parretti and Fiorini to buy Pathe S.A with financing supplied by the French state-owned Credit Lyonnaise Bank.

The same $60 million pot was also used by Parretti in 1988 to buy his Hollywood empire. The a complicated series of transaction began with Parretti's Interpart and Fiorini's Swiss holding company buying 90% of the Melia Group in 1987 for $90 million (Parretti's share was about $60 million). After selling the hotels, and making a small profit, they used the proceeds to buy a bankrupt Madrid property company called Renta, which became their holding company, and advanced $90 million to acquire Cannon Films.

But where did Parretti get the $60 million in 1986? Up until that time, most of his businesses in Italy, including his newsletters, football team, consulting company, and hotels wound up bankrupt. He also seemed pressed for cash as late as February 1986 when he was arrested at the Rome Airport on an extortion charge proceeding from a threat he made to a bank to get a mere $20,000. Such desperation over what in Italy is the price of a car suggests that Parretti had no great reserve of cash.

Parretti himself suggested in his interview with me that the money transferred to Luxembourg came from a Panamian holding company he controlled, also called Interpart, which, if anything, raises the question of where the money in Panama came from. Nor are Interpart's scant corporate records of any use in this regard. His own accountant described the Luxembourg "headquarters" as an "empty room", administered on paper by his wife and daughter. And his independent auditing at the time of the injections, Arthur Anderson, noted its concern that there were not any documents explaining the origin of money deposited in Interpart.

Florio Fiorini offered to answer this $60 million question.

He arranged by fax to meet me on a hot Saturday in July at precisely 4 p.m in Monte Carlo at "his bank",the Seychelles Island bank. It turned out to be a dog-eared three room suite on a sub-ground level floor of a large apartment building with a travel poster of a palm tree on a beach in the Seychelles Islands plastered on one wall. He was a large, chubby man, with a cherubic face, who, in his safari jacket, reminded me of the character played by Robert Morley in the film "Beat The Devil. "It seemed like an appropriate name for this bank," Fiorini chuckled with disarming honesty, "since it is a shell company". (One of his associates in this "bank", he later mention, is Giovanni Mario Ricci, an Italian financier closely involved with the government of the Seychelles) .

He told me, with a nothing-to-hide angelic smile that he had recently come back from Tripoli in Libya (not Liberia). He explained that he went to Libya on a regular basis because he was a financial adviser to Qaddafi's Libyan-Arab Bank, and had indeed acted as an intermediary in buying and selling assets for Qaddafi. He explained he was in a rush because he was leaving the next day for an extensive vacation on a private island in the Bahamas but he wanted to talk to me about Parretti.

Just two days before, a warrant had been issued in Spain for the arrest of Parretti on the charge that he had been smuggling currency to Andorra. Fiorini seemed embarrassed by this development and eager to distance himself from Parretti. Pointing to a chart of his own holding company, which had six rows of neat boxes in it, he circled the one that contained the Melia-Renta-Cannon-Pathe entity, and said "This is only a small part of our operation.". As he began telling me of his relationship with Parretti, he took out a pad of graph paper, and neatly outlined the story, as if he was writing out a confession.

He explained that their original purpose was to put the money in safe commercial real estate in Spain-- which was why he had bought Melia and Renta. He said that he had also envisioned Cannon as primarily a conservative real estate investment based on the value of theaters it owned in England, Italy, and the United States. But then Parretti had become "infatuated by the movie media", as he put it. Instead of quietly disposing of the film business, he had hire Alan Ladd, announced new productions at a press conference in Cannes, and became part of the Hollywood scene.

In reply to the sixty million dollar question, he replied jovially "Where had the Luxembourg money come from? That's easy. I made it for Parretti. I sold two Insurance companies for him." But when he sketched out this deal, it was anything but easy.

How had Parretti gotten two Insurance companies? Fiorini explained he had traded two broken-down hotels he had owned in Sicily to Guissippi Cabassi, a Milanese businessman and financial supporter of the Socialist Party, for the controlling blocks of stock in two large Italian insurance companies, Ausonia Assurance and Intercontinale Assurance.

How had Fiorini gotten involved? He explained that in November 1985, he had just acquired a shell company that once belonged to the Vatican, and, together with a group of partners from the Arab Bank for International Investments,, he had organized it into an international "lavanderie", as he put it, or laundry to make "soiled companies sparkle". Parretti, interested in his services, had come to him with a deal he could not refuse. In return for selling these insurance companies, Parretti would pay Fiorini's Swiss holding company 50 per cent of the profits. And, in addition, give Fiorini personally 20 per cent of his holding company, Interpart (which would get the rest of the profits). This meant Fiorini would get 60 per cent of the total profit-- an incredibly high fee for selling Insurance companies listed on the Milan exchange.

Fiorini claims that he was immediately able to sell these companies for a windfall profit of over $160 million, which, if true, might explain how Parretti's holding company got $60 million in Luxembourg (assuming there were some deductions for fees and other expenses from his share of the putative $160 million). But, it turned out on checking through the financial records of these insurance companies, at least three flaws in his account.

First, Cabassi never his insurance companies for Parretti's hotels. He paid what amounted to three million dollars for the hotels, after provision for their' debts ( a sum coincidentally about the same as Parretti needed to offset the forged saving certificate from the unnamed Socialist financier) but he never actually got them. As he explained to the Wall Street Journal "Parretti apparently wasn't in a position to sell them to us." and, bearing this out, as late as 1986, the insurance companies belonged to the Cabassi Group, as, in the case of Intercontinale Assurance, is acknowledged in the annual report of Fiorini's own holding company. Moreover, since the value of the stocks was listed on the exchange-- and hitting record highs-- Cabassi was well aware of their market value.

Second, if Fiorini's holding company made a profit of $80 million on these transactions, it would show up in financial results in its annual reports. But it didn't, not in 1986, 1987 or 1988. In fact, the whole profit over these three years averaged less than $7 million per year. So there couldn't have been any windfall.

Finally, and most definitive, Parretti's holding company, Interpart, reported the $60 million in cash deposits that materialized in 1984, 1985 and 1986, not as any sort of capital gain or profit, but as a new investment for which shares of stock were issued in return. While Fiorini and Parretti might have provided Cabassi and other PSI-backers with a dazzling off-shore daisy-chain of shell companies in Luxembourg, San Marino, Anguilla and Switzerland through which insurance shares could be shuttled around, for whatever purpose, it did not produce the $60 million dollars infusion of capital in Luxembourg. So the mystery remained: Whose anonymous money was it?

If Parretti himself did not have millions of dollars to put into Interpart, as seems evident from his business failures and bankruptcy problems, the Luxembourg money must have come from some one else-- a party that, first of all, had $60 million hidden away in Luxembourg or other discrete banking centers; and, secondly, who trusted Parretti enough to let him act as custodian for it while it was transformed into more conventional commercial real estate investments.

The key to this mystery lies in Parretti's status in 1984 when cash first began coming into Interpart. At that time, he was not primarily a usual businessman. He was the representative of a political party: the PSI, which previously had taken care of him in Hong Kong (where the PSI had at least one of its anonymous fiduciary accounts). To state the relationship bluntly: The PSI was the principal, Parretti, its agent abroad. Moreover, it was a connection that had persisted throughout most of Parretti's business career. He had collected money for the PSI's Youth Organization, published "Diario" newsletters that supported the PSI, worked as a go-between for the PSI and ENI in arranging the take over of the magazine, Il Globo, ran travel camps for PSI workers, and allied himself for over a decade with Gianni De Michealis, whose faction prevailed in the PSI. Nor did he act alone for Interpart: its original administrator was Lamberto Mazza-- who had served as a trusted financier for the PSI in Italy. And Interpart's early disbursement of funds in France were hardly conventional business investments; the money went directly to PSI's allies in the Socialist network, such as Max Theret (who while facilitating Parretti's take over of Pathe was indicted for inside trading in the take-over of Nelson Pelz Triangle industry by the French state-owned Pechiney company).

Parretti's partner, Florio Fiorini, also had an important involvement with the PSI. Fiorini, at ENI, along with ENI President, Giorgio Mazzante, and his deputy, Leonardo Di Donna, helped run the off-shore banking labyrinth through which ENI passed funds earmarked for the PSI. It was along this money trail that the $70 million that ENI received kickbacks from the Saudi Arabian oil sales agency, Petromin, moved in the late 1970s. Even after it leaked to the press in late 1979, and Mazzante was forced to resign, another skimming arrangement was established, according to Fiorini, and approved by the government because it meant "lower oil prices for Italy". This time the deal was with Qaddafi's Libyan Oil Company. Rather than direct kickbacks a la the Saudis, the Libyans agreed to defer 40 per cent of the money ENI owed them for crude oil purchases for two years. If, for example, ENI sold a barrel of Libyan oil to Italian consumers for $30, it paid the Libyan oil agency only $18, and kept the balance of $12 in its own bank account, earning interest. Fiorini estimated that by 1982 ENI was holding $3 billion of this Libyan money and, at the double-digit rates that existed in the early 1980s, it was earning hundreds of millions of dollars of interest on it. Part of this interest was concealed, or made "black", through simple book-keeping artifices at the off-shore banks that held the money, and these "black" funds, like the Saudi kickbacks, were then deposited in designated numbered accounts for Italian politicians that were the beneficiaries of the scheme (and Libyan officials that facilitated it).

Enter Roberto "God's Banker" Calvi, whose Banco Ambrosiano, which was partly owned by the Vatican, provided ENI with highly-discrete off-shore banking services. Fiorini negotiated a deal with Calvi ENI deposits were transferred first to ENI subsidiaries in Nassau, Dutch Antilles and Grand Cayman island and then to Banco Ambrosiano's off-shore subsidiaries. By the early 1980s, ENI was supplying these subsidiaries, including the branch in Luxembourg with well over half of all its medium-term funds. But in 1982, everything suddenly changed when the Banco Ambrosiano collapsed. Calvi died under a bridge in London, auditors found $1.3 billion had disappeared from its Luxembourg branch-- including $160 million of ENI's deposits, and Fiorini was fired. The ensuing financial scandal also left the parties with numbered accounts in off-shore branches with a problem: they had to reclaim the "black" funds that had been stashed away for them without arousing public attention. This, in turn, required a front, one preferably veiled by the secrecy of Luxembourg's banking laws, in which the money could be deposited and gradually be converted into legitimate investments.

At our initial meeting at l'Circe, Parretti had philosophized "life is like a movie. You can look at the parts you like." The version that he preferred is a heroic saga that traces a young waiter's miraculous rise, against all odds, to the commanding heights of the international film business. The alternative version would be a comedy of errors in which a political hack given the job of rescuing a slush funds lost in bank crash winds up buying a bankrupt Hollywood company-- and a disco, for good measure.