by Mueller, Tom
According to Ribatti, the charges made against him that he sold fake extra virgin olive oil made with hazelnut oil and other cheap vegetable oils were completely false. He says the authorities “seized about 5,500 samples of 100 grams each, and they never found a gram of this goddamn hazelnut oil! . . . Analyses, laboratories—the companies I delivered the oil to, they weren’t stupid, eh? Bertolli, Unilever, they analyzed [it]! Do you think they took seed oil for olive oil?” He claims that ignorant investigators and farm union leaders attacked him because they wrongly believed the collapse of olive oil prices was due to adulteration, rather than to natural fluctuations in the oil market. He describes the incursions of military police investigators in his oil facility, the seizure of documents, his eventual arrest. “This song and dance went on for a year and a half, but they never found a fucking thing.” Even before that time, he says, he knew that he was under surveillance by the authorities, both at home and when he traveled. “But I’m used to it, I’m coolheaded. I’m very human and affectionate, but I have that sixth sense that the Lord gave me, the good fortune to have a firm wrist.”
He looks at me, his eyes sharp with challenge. “Since Mimmo Ribatti left the business, olive oil has gone deeper and deeper into the shit, right?” he repeats. “Why has it gone to shit? Today the price of olive oil is at €2, €2.20—these are prices from twenty-five or thirty years ago, from 1980! Was it Ribatti with hazelnut oil?”
By now he is shouting, red in the face. “That’s something done by traveling salesmen, at the neighborhood market! We’re talking here about the international olive oil trade!”
His voice has grown deep and gravelly and powerful, and he’s breathing openmouthed, sending a dense breeze of coffee and cigarette smoke across the desk to me.
“They should have come here to talk to me! But they’re afraid to talk to me.”
ITALIAN INVESTIGATORS tell Domenico Ribatti’s story differently. According to them, Ribatti’s fall began on August 10, 1991, when a rusty tanker called the Mazal II docked at the industrial port of Ordu, in Turkey, and pumped 2,200 tons of hazelnut oil into its hold. The ship then embarked on a meandering voyage through the Mediterranean and the North Sea. By September 21, when the Mazal II reached Barletta, a port in northeast Puglia, its cargo had become, on the ship’s official documents, Greek olive oil. It slipped through customs, possibly with the connivance of an official, was piped into tanker trucks, and was delivered to the refinery of Riolio, Ribatti’s company. There it was sold—in some instances blended with real olive oil—to Riolio customers.
Between August and November of 1991, the Mazal II and another tanker, the Katerina T., delivered nearly 10,000 tons of Turkish hazelnut oil and Argentinean sunflower-seed oil to Riolio, all identified as Greek olive oil. Domenico Ribatti grew rich, assembling substantial real-estate holdings, including a former department store in Bari. According to Italian court documents, he bribed two officials, one with cash, the other with cartons of olive oil, and made trips to Rome, where he stayed at the Grand Hotel, and met with other unscrupulous olive oil producers from Italy and abroad.
However, by early 1992 Ribatti and his associates were under investigation by the Guardia di Finanza, the finance ministry’s military police force. One officer, wearing a miniature video camera on his tie, posed as a waiter at a lunch hosted by Ribatti at the Grand Hotel. Others, eavesdropping on telephone calls among Riolio executives, heard the rustle of bribe money being counted out. During the next two years, the Guardia di Finanza team, working closely with agents of the European Union’s anti-fraud office, pieced together the details of Ribatti’s crime. They identified Swiss bank accounts and Caribbean shell companies that Ribatti had used to buy the ersatz olive oil, and deciphered code names and aliases in company records: “O.T.” for olio turco (“Turkish oil,” which investigators say meant hazelnut oil), and “Nicola da Bari” for his co-conspirator Nicola Scirone (a play on Saint Nicholas, the patron saint of Bari, whose bones are said to exude a holy oil). The investigators discovered that seed and hazelnut oil had reached Riolio’s refinery by tanker truck and by train, as well as by ship, and they found stocks of hazelnut oil waiting in Rotterdam for delivery to Riolio and other olive oil companies.
The investigators also discovered where Ribatti’s adulterated oil had gone: to some of the largest producers of Italian olive oil, among them Nestlé, Unilever, Bertolli, and Oleifici Fasanesi, who sold it to consumers as olive oil and collected the equivalent of about $12 million in European subsidies intended to support the olive oil industry. (These companies claimed that they had been swindled by Ribatti, and prosecutors were unable to prove complicity on their part.) Yet this incident was only a drop in the dark sea of counterfeit oil. “We managed to catch wind of these two ships, but there have been hundreds of others we know nothing about,” Domenico Seccia, the prosecutor in the case, told me. “It’s a traffic of colossal proportions.”
In March 1993, Domenico Ribatti was arrested, along with his chief chemist and three other accomplices, and charged with contraband, fraud against the European Union, operating a criminal network, and other crimes. During an extended legal battle, he insisted that he had been defrauded by his suppliers—Caribbean shell companies that had sold Riolio hazelnut oil instead of olive oil. But when Pascal Brugger, a Swiss financier who handled financial transactions for these companies, turned state’s evidence and revealed that Ribatti himself controlled them, his defense collapsed. In the end, Ribatti plea-bargained a thirteen-month prison term.
Leonardo Colavita, former president of ASSITOL, the olive oil trade association of which Domenico Ribatti was a leading member, and the owner of the Italian olive oil company Colavita, told me that the group’s policy is to expel member companies which are accused of illegal activity, so that, as he put it, “no one can attack us, no one can say, ‘You have criminals in your organization!’” According to Colavita, when Ribatti resigned from the organization he said, “If I leave, everybody’s got to leave.” (No other company left ASSITOL at the time, however.) “Mimmo Ribatti was a gentleman, because he didn’t name names,” Colavita said. “If he had named names, a lot of folks would have gone to jail.” He claims that many oil firms, including major Italian brands, knew that Ribatti was selling them adulterated oil (Colavita said his firm did not buy oil from Ribatti). “They say they didn’t, but they knew. If they didn’t know, then they were incompetent—just as I knew, they had to know, too. And since they aren’t incompetent, it means that they knew.”
OLIVE OIL is one of the most frequently adulterated food products in the EU; within Europe, the problem is particularly acute in Italy, the leading importer, consumer, and exporter of olive oil and the hub of the world olive oil trade. (For the past twenty years, Spain has produced more oil than Italy, but much of it is shipped to Italy for packaging and is sold, legally, as Italian oil.) “The vast majority of frauds uncovered in the food-and-beverage sector involve this product,” Colonel Leopoldo Maria De Filippi, the commander for the northern half of Italy of the NAS Carabinieri, an anti-adulteration group run under the auspices of the Ministry of Health, told me.
Many olive oil scams involve straightforward mixing of low-grade vegetable oils, flavored and colored with plant extracts and sold in tins and bottles emblazoned with Italian flags or paintings of Mount Vesuvius, together with the folksy names of imaginary producers. More sophisticated scams, like Domenico Ribatti’s, typically take place in high-tech laboratories, where cheaper oils of various kinds, made from olives but also from seeds and nuts, are processed and blended in ways that are extremely difficult to detect with chemical tests. One popular technique is “mild deodorization,” by which cheap lampante oil is cleansed of its unpleasant tastes and odors by heat-treating it at 40–60 degrees Celsius. (Alfa Laval, the leading manufacturer of extraction equipment for olive oil and other vegetable oils, produces the SoftColumn refining system, a low-temperature deodorizer which the company markets for seed oils but which is re
portedly used to deodorize large quantities of olive oil as well.) Deodorized oil, though unnaturally bland and devoid of the fruitiness required by law in extra virgin olive oil, is also largely free of defects, and lacks the telltale chemical signatures left by conventional refining.
Other large-scale frauds succeed thanks to the powerlessness, acquiescence, or even complicity of officials responsible for detecting oil crime. In April 2008, for example, investigators in Puglia confiscated nearly three million liters of olive oil from the Azienda Olearia Basile, which they say was falsely marked as organic, or as “100% Italian” when the company had actually imported it from North Africa. Among the suspects in the case was Tonino Zelinotti, head of the chemical analysis laboratory and taste panel of the Italian customs agency and a central figure in the creation of olive oil laws and authenticity tests in Rome and Brussels. Prosecutors accused Zelinotti of wrongly certifying oil from Azienda Olearia Basile as extra virgin grade when it was in fact virgin or worse, and falsifying chemical analyses to throw off investigators. (Zelinotti died a short time later and is no longer a suspect in the case, which has not yet gone to trial.) Complicity exists at the highest levels of the Italian administration. In 2007, an EU investigation determined that 95 percent of detected misappropriations of European agricultural subsidies, a large portion of which had occurred in the olive oil sector, had taken place in Italy. Brussels has charged Italy with negligence in recovering these funds, and is suing the Italian government for €311 million in unrecovered subsidies. Sometimes, in fact, the deck seems intentionally stacked against investigators in olive oil crime, who are hampered by bureaucratic delays, legal cavils, low sanctions, and the fact that producers fined for infractions can postpone payment for years. Colonel De Filippi acknowledged that some companies are essentially immune to investigation. “Unfortunately, there are big producers who have strong political ties,” he said.
Certainly ASSITOL and its member companies have considerable influence both in Rome and in Brussels. The heads of the oil laboratories of several ASSITOL member companies sit on the Italian government’s Technical Commission on Oils and Fats, which helps draft olive oil regulations. (Domenico Ribatti’s chief chemist, Gioacchino De Marco, was a member of the commission until his involvement in the Riolio case.) Senior members of the commission, and of the analogous EU olive oil technical commission in Brussels, have also served ASSITOL as scientific consultants. ASSITOL enjoys close ties with the Italian ministry of agriculture, as is clear from joint projects such as the plan to form a “Mediterranean Axis of Olive Oil,” described in a 2004 government document as “an informal cartel of international dimensions among olive oil producers.” According to Leonardo Colavita, ASSITOL’s former president, the project was initiated by Giovanni Alemanno, the agriculture minister from 2001 to 2006, and would be financed by the Italian government. The goal, he said, was to expand olive oil production in Syria, Morocco, Turkey, and other southern Mediterranean countries outside the EU and to facilitate the sale of the oil in Italy, using a duty-free storage facility in a southern Italian port.
Paolo De Castro, who replaced Alemanno as agriculture minister, told me that he was unfamiliar with the project, and there is no evidence that it was ever implemented. But when I described it to him he said that he supported its aims. “We have to avoid distortions, not place limits on business,” he told me. “The important thing is that people don’t act like wise guys, and that this Tunisian oil doesn’t become extra virgin olive oil from Puglia. Now, this is quite a little problem, eh?” However, any plan to create a cartel among olive oil producers violates Article 101 of the European Union Treaty, which specifically prohibits cartels as harmful to free trade and consumer choice. If carried out, such a scheme would also appear to facilitate the evasion of duties on oil imported from outside the European Union. A plan like the Mediterranean Axis of Olive Oil would seal the fate of small Italian oil-makers like the De Carlos, who, betrayed by the agriculture ministry that should be defending their interests, would be swamped by cheap imported oil.
WHILE INVESTIGATING Domenico Ribatti, the European anti-fraud team discovered that the two tanker ships he had used to import hazelnut oil had also transported further contraband oil to Monopoli, another port in Puglia. The team traced this oil to an acquaintance of Ribatti’s named Leonardo Marseglia, the managing director of Oleifici Italiani, an olive oil and vegetable oil company in Monopoli. This company, now called Casa Olearia Italiana, became one of the leading olive oil importers in Europe, and owns one of the largest edible-oil refineries in the world.
Even his enemies speak of Leonardo Marseglia as a man of unique talents. An officer in the Guardia di Finanza who spent years investigating him and his associates for allegedly importing contraband, misappropriating EU funds, forming a criminal network, and committing other offenses—charges later dismissed on statute of limitations—described him as “a person of great astuteness, with an exceptional business mind.” An elderly resident in Marseglia’s nearby hometown of Ostuni, who had known him since childhood, said he was widely admired in the area, where he was nicknamed “Onassis” for his flamboyant lifestyle. “He’s audacious, hardworking, courageous as a lion, utterly unscrupulous,” the man told me.
Not long ago I traveled to Monopoli to visit Marseglia at Casa Olearia. The coastal highway ran through a series of ancient olive groves, trees of the local ogliarola cultivar with huge barrel-shaped trunks and short branches, some of which were a thousand years old. Through occasional gaps in the trees, the Adriatic shone pale green, bordered by low dunes and broad yellow-sand beaches. Puglia’s flat, sandy coastline and numerous small bays, together with its proximity to the Balkans and North Africa, has long made the region a haven for smugglers. Before a sweeping government crackdown in 2000 disrupted the trade, cigarette smugglers ran nighttime convoys of custom-armored SUVs through the back roads of the region, with front bumpers made from railroad iron to act as battering rams and tires filled with silicone to prevent them from being shot out by police. “Criminal organizations large and small tend to divide up the coast of Puglia into little fiefdoms, each specializing in its own illegal trade,” says Pasquale Drago, an investigative magistrate in Bari who has been a leader in fighting contraband in cigarettes, marijuana, and heroin, and has successfully prosecuted prominent mafia figures. Puglia remains a primary doorway into the EU for illegal immigrants, drugs, and, as in the Riolio case, illicit olive oil and other vegetable oils from Turkey and the Maghreb, much of which is resold as Italian extra virgin oil.
Since 1994, Antonio Barile, the farm union president in Puglia, has led tens of thousands of olive farmers in blockades of the ports of Monopoli, Bari, and Barletta, where many tankers carrying foreign oil arrive. Some oil shipments are outright contraband, he says, but others enter the country with government approval, though in violation of European law, which allows oil to be imported from countries outside the EU only when local supplies cannot meet demand. He denounces “the shameful silence of the port authorities and the customs office,” who fail to report how much foreign oil arrives in Puglia, and has repeatedly criticized the Italian agriculture ministry, particularly under the former minister Giovanni Alemanno, for authorizing illegitimate importations, which undercut local producers and benefit only the olive oil industry. “He must revoke the authorizations, because they are killing Puglia’s olive oil,” Barile said of Alemanno in an interview in 2004, another crisis year for local olive farmers. So much of this cheaper foreign oil enters the local market that, for example, according to investigators at the Guardia di Finanza, only 1 per cent of the oil made in Puglia during the 2003–4 harvest and intended for sale in Italy actually sold at a profit for local producers. “Thousands of olive oil producers are victims of this ‘drugged’ market,” Barile told me.
At Monopoli, the highway skirts the Casa Olearia plant, a gleaming expanse of stainless steel silos, office buildings, smokestacks, and warehouses set, incongruously, in a grove of mass
ive olive trees, like a space station that has just touched down. Since Leonardo Marseglia bought the complex in 1981, it has grown fifteenfold; in 2005 the company, which also operates in energy, tourism, construction, real estate, and finance, processed about a million tons of olive oil and vegetable oils. The Italian press has called Marseglia, who began his career driving a delivery truck for his family’s olive oil company, “the emperor of Italian oil” and the “baron of extra-virgin.” Nonetheless, Marseglia says he recently decided to leave the olive oil business because of incessant attacks by local authorities, who for years have accused him of a range of olive oil crimes. Instead, he is using oils to make biofuel and generate electricity, because, as he told me, in these fields (which also happen to be subsidized by the EU), the authorities “break your balls less.”
On a wall in the reception area at Casa Olearia was a gaudy, expressionistic oil painting of three peasant women gathering olives from the ground beneath a gnarled olive tree—a tree that resembled those visible through the window. Marseglia, who is sixty-five, has the powerful frame, thick neck, and heavy-lidded eyes of an aging prizefighter, and the ready, raffish grin of a fighter still game to go a few more rounds. Despite a habit of referring to himself in the first person plural, he is disarmingly informal, and he prodded my arm companionably from time to time to emphasize a point. I asked him whether he was guilty of olive oil adulteration, contraband, or the other crimes with which he had been charged. “We have never been convicted of anything up to this point,” he replied. “Therefore we don’t think there’s anything to add. We have suffered trials, and we have been acquitted because the events did not take place.” He said that he knew Domenico Ribatti but had never done business with him. “He was convicted, and ended up in prison. To us this didn’t happen.”