Spy scandal keeps pressure on Telecom Italia

Telecom Italia SpA remained under pressure this week as revelations continued about the illegal espionage allegedly carried out by the security department of the Italian telecom incumbent.

The scandal will inevitably affect Telecom Italia’s image for a while, and particularly the way it is viewed in relation to corporate responsibility issues, industry experts say.

A new round of sniping in the press was sparked when Marco Tronchetti Provera, the chairman of tire and cable manufacturer Pirelli SpA and chairman of Telecom Italia at the time of the alleged abuses, responded to the arrest last week of four of Telecom Italia’s security staff by writing an open letter to the Turin daily La Stampa to deny all knowledge of their alleged illegal activities.

“Never in my life and in the course of my professional activity have I acted in violation of the law, either directly or by giving instructions to others to do so,” Tronchetti Provera wrote in the letter, which was published on the front page of the newspaper Sunday.

The Pirelli chairman rejected Milan magistrates’ accusations that he had used the resources of Telecom Italia to spy on politicians, members of the Communications Authority, rival businessmen and journalists.

Tronchetti’s letter evidently failed to convince Massimo Mucchetti, a deputy editor of the Corriere della Sera, who was allegedly spied on by the Telecom Italia security team because of his critical articles about the company.

In an article published by the Milan daily Tuesday, Mucchetti claimed Tronchetti had tried to pressure the Corriere della Sera management into rescinding his appointment as deputy editor. Telecom Italia’s security team had investigated him on the assumption that his critical articles about the company must have been commissioned by their competitors, he said. “This is a sign of a culture of suspicion that sits uneasily with Tronchetti’s statements,” Mucchetti wrote.

Another article published by the Corriere della Sera Tuesday challenged Tronchetti’s claim to have cooperated wholeheartedly with the judicial investigation. The paper quoted from one of the prosecutors’ reports claiming that Telecom Italia had stalled on providing information about Internet traffic once it realized that it implicated one of its own computers in an illegal hacking operation.

Details of the ongoing investigation that have been published in the press are probably only the tip of the iceberg but they are already enough to undermine confidence in Telecom Italia’s reliability, according to Stefano Zanero, an independent technology security consultant.

“Other large companies almost certainly do these kinds of things,” Zanero said in an interview. “That’s why you need to have check and balances within the company to keep things under control. It seems that at Telecom Italia all the checks and balances went out the window. The abuses seem to have been systematic, that’s what’s alarming.”

The fact the company was responsible for managing Italy’s telecommunications infrastructure makes the loss of confidence all the more grave, he said.

Zanero said he interviewed Giuliano Tavaroli at length and had been impressed by the professional competence of the arrested former head of Telecom Italia’s security department, incarcerated on illegal espionage charges. “His staff was well known and respected. I have to say, I have been deeply surprised at what has happened.”