Florentine attorney Manfredi Burgio, an expert in business law, examines the Mayor of Venice’s decision
By Gianni Favarato
MESTRE. In order to avoid conflicts of interest, Mayor Luigi Brugnaro has entrusted his business ownership to Studio Withers, a firm run by U.S. attorney Ivan A. Sacks. However, according to an expert on the subject, attorney Manfredi Burgio, “it is difficult to assert that this trust is effectively ‘blind’” in the literal sense of the term “blind trust”.
Attorney Manfredi Burgio, an expert in business, commercial, contractual and international law, practices law in Florence and Milan, and teaches at the University of Florence. He says he has a “wonderful memory” of Venice and the imaginary defense of Shylock, the well-known and controversial character from “The Merchant of Venice” by Shakespeare, during the simulated trial held in July of 2016 at the Scuola Grande di San Rocco, with a jury presided over by Ruth Bader Ginsburg, Supreme Court Justice from the U.S., and with the U.S. Ambassador to Italy, John Philips, as judge.
What is a “blind trust” from the legal point of view?
“The trust has its roots in English law and one can arrange it in various ways. In Italy there are no laws which regulate this institution, however there is a great deal of case law regarding the subject. An essential element in a trust is the transference of the ownership of properties from the business to the “trust”. As the word implies, a blind trust stipulates that the business will not be informed of the development of the trust holdings, thus preventing a possible conflict of interest. For this exact reason there is no obligation for the business to receive any reports regarding the management of the assets by the trustee”.
The “LB Holding, SpA”, managed by the trustee, regroups the businesses and properties owned by Mayor-Businessman Luigi Brugnaro and is administrated by the same trustees who administrate, for some time now, the most important businesses that are at the top of the Umana group, which was founded by Brugnaro as well. Can one say, therefore, that Brugnaro’s trust is really blind?
“I don’t know if the deeds that constitute the trust have been disclosed. Reading the statement from Studio Withers one notes that this trust’s purpose is the exclusion of the Mayor of Venice from the ownership and control of his own economic activities. But this is the purpose, in general, of all trusts, also in the cases of generational passage and the continuity of management of the Umana group.
The statement asserts that the purpose of the trust is to limit, but not to prevent, the Mayor’s access to information regarding the management of his properties. As things stand, I don’t believe that one can, upon examination, find the trust to be “blind”, or if it conforms, or not, to the goals of American blind trusts”.
The fact is that since Brugnaro has announced the blind trust he has in fact continued to show favor to his businesses, as demonstrated by the agenda voted on by a majority in the City Council regarding the urban planning in the area of Pili, which is his property. And then there is the recent trip to Japan to publicize Chianina beef from San Giobbe. This is without mentioning Reyer, which has won the Mayor’s own seat.
“If the Mayor behaves in ways and makes declarations which demonstrate his specific personal interest towards businesses and activities which he was already engaged in, such as the basketball team Reyer, the area of Pili, the agricultural business San Giobbe and above all his certain awareness of these investments, it is hard to sustain that his trust is blind; this really puts him in a position where he needs to be completely cut out of the management of his many businesses”.
Then what would be the right solution in order to guarantee to the citizens that a businessman who has become mayor does not run into conflicts of interest?
“Every solution for avoiding conflicts of interest for those who hold public office inevitably starts from respect of ethical norms and the principle of personal responsibility. In general terms we can say that it is not useful to build sophisticated business structures with the stated purpose of hiding information, such as that under discussion, if the information ends up passed on anyway. So, one could say that the instrument being used by the Mayor of Venice is inadequate with regards to its stated intentions”.
Source: La Nuova Venezia, 11 March 2018
One thought on ““Brugnaro’s blind trust is not blind”. Legal expert: “instrument is inadequate with regards to its stated intentions””