Banking Foundations, Finance, Turnstiles & Politics: A Complex Web

Of Alessio Colomeiciuc

PISTOIA – In recent months, the press reported the signing by the Ministry of Economy (MEF) and Acri (the organization representing banking foundations and Casse di Risparmio Spa) of an Addendum to the 2015 Memorandum of Understanding.

According to the intentions stated at the time by the contracting parties themselves, this Protocol should have marked the start of a self-reform of the foundations of banking origin, solemnly committing them:

• to adopt adequate diversification of their investments;
• not to use the huge assets (of public origin and nature, today worth almost 50 billion euros) in exposures towards a single entity for a total amount exceeding 1/3 of the total assets of the balance sheet.

At the same time, the Protocol had required banking foundations to also regulate delicate aspects of governance, with specific regard to the maximum duration of mandates in the various internal bodies, the fees for their members, incompatibilities and ineligibility.

Ten years later, faced with obvious and foreseeable critical issues, MEF and Acri have recognized the opportunity to integrate some of the provisions of the Protocol through a specific Addendum which, again, aims to intervene on the same crucial aspects (finance and governance), with a series of important provisions.

Given the undoubted relevance of the subject, it may be useful to examine them analytically.

1. The first group of provisions (art. 1) has the aim of regularizing the financial exposure of various foundations towards the transferee banks, which has progressively increased in contrast with the provisions of the 2015 Protocol, which imposed (by the spring of 2018 or 2020, depending on whether it was a listed bank or not) the reduction of the invested assets by the amount exceeding 1/3 of the total assets of the balance sheet calculated at fair value.

Drawing on the prices of listed companies (especially banks) – which have increased to the point of causing breaches of the investment limit mentioned above – the Addendum has chosen to revise the maximum ceiling upwards, bringing it from 33% to 44%.

The meaning of this choice is unequivocal, representing an explicit confirmation of the original and constitutive financial nature of banking foundations and of the role they play in guaranteeing the structures and stability of the Italian banking system: an important role, but very little philanthropic, reiterated even at the cost of denying the opposite direction that, in the past, some foundations (including the Pistoia one) had taken as a pretext for hastily divesting their shareholding in the transferee bank, ignoring the irreplaceable support ensured by historic credit companies to local economic systems, especially smaller ones.

2. A second group of provisions (art. 3) has, however, governance as its object and aims (once again) to stem the uncontrolled formation of self-referential groups or power groups within the entities, interested in defending the roles and benefits gradually acquired and, more generally, in defending the status quo, counteracting – even with ingenious statutory devices – any innovation or management change, making themselves a convenient shield of a regime of secrecy of documents and of internal minutes which, among other things, prevents us from knowing (and checking) who and with what reasons contributed to the decisions regarding the direction or administration of foundations which manage, with private criteria, enormous assets of public origin and nature.

In this specific case, the target of the Addendum is in fact represented precisely by the reprehensible practice of the so-called internal turnstiles, which recently hit the headlines on the occasion of the sensational affair of the Cassa di Risparmio di Torino (CRT), the third largest Italian foundation in terms of assets, whose president has publicly denounced and documented ‘hidden pacts’, ‘opportunistic behaviour’ and ‘partition logic’ attributable to the members of the internal bodies.

Also in this case, to understand what we are talking about in concrete terms, it is necessary to return to the 2015 Protocol, which established the prohibition for the individual who had held two consecutive mandates in the bodies of the foundation to be appointed again, unless after a three-year “decantation” period.

This requirement implemented the provisions of article 4, paragraph 1, letter. i), of the Legislative Decree. 153 of 1999, which still provides that the members of the Foundation’s bodies are appointed for limited periods of time and can be confirmed only once.

Which is well understood, taking into account the enormous power attributed to the bodies of the foundations, called to manage huge collective financial resources, a real ‘river of money’ (over 1 billion in 2024) destined every year to an infinite number of uses (‘liberal’ donations, financial and real estate investments, large or small artistic events, adventurous cultural institutions, various allowances and tokens, professional fees, hiring, contracts, imaginative plans more or less strategic, continuous and heterogeneous public events, etc.), inevitably reciprocated by easy consensus and widespread complacency.

There is no need to dwell on the unrealistic nature of the ban as introduced above in 2015, which can be easily circumvented (and in fact circumvented) by those ‘in decantation’ through placement in more or less instrumental bodies and companies, appointment in more or less community-based foundations, obtaining (paid) professional positions, all in a context substantially lacking in clear and effective control and sanction mechanisms.

Faced with the commendable situation that has inevitably arisen, the Addendum intervened (art. 3, paragraph 1) to clarify, first of all, that the person who has held two consecutive mandates in the bodies of the foundation, of which at least one in the administrative body or in the control body or as president, cannot assume – in the year following the termination of the office – new positions of direction, administration, control and management in other foundations of banking origin, in companies and entities instrumental to the same or start collaborative relationships of any kind with the same foundations or the aforementioned companies and bodies. The ban has been extended (art. 3, paragraph 2), for a period of three years, also to the assumption of tasks or collaborative relationships with companies and instrumental bodies of the foundation of origin.

At the same time, the Addendum provides (art. 3, paragraph 3) that the person who has held two consecutive mandates in the steering body cannot, in the year following the termination of the office, take on new roles or start collaborative relationships with the same foundation.

Finally, the Addendum established the prohibition (art. 3, paragraph 6) for the person who has held two consecutive mandates in the bodies of the foundation, at least one of which as president, from assuming, for the duration of time corresponding to that foreseen in the statute for the last mandate held, in the foundation and in its companies and instrumental bodies, new roles of direction, administration, control and direction or from starting collaborative relationships of any kind with the same foundation and with the aforementioned companies or bodies.

3. The third group of provisions (art. 4), which does not require comments, revealing an embarrassing situation that has arisen in the (not exactly philanthropic) actions of Italian banking foundations, concerns the so-called remuneration policies, providing that the members of the internal bodies who assume positions in companies and instrumental bodies, in addition to the emoluments already received, can accumulate an overall remuneration for these additional positions held up to a maximum of 20,000 euros per year gross. Once this threshold has been exceeded, the interested parties will then have to repay the amount received to the Foundations, through the prior identification of specific (and at the moment completely unknown) mechanisms which do not in any case lead to greater tax burdens or burdens of any kind for the individual subject.

In conclusion, it must be recognized that we are faced with a significant set of provisions, aimed at regulating or removing critical situations, which have long been known to most people.

At present, in anticipation of a necessary statutory reform, it would be comforting to know that, in recent years, the turnstiles have not turned in Pistoia, with reference to the many instrumental companies and foundations gradually established (including Uniser, GEA, Pistoia Eventi Culturali; Smart Energy Toscana; the indecipherable Net City Led Srl; etc…).

In any case, the recent provisions will not be able to resolve the new and serious problems that can already be seen on the horizon, starting from the unsustainable practice of transfers (even during the course of the mandate) from one (administrative) body to another (administrative), up to the delicate relationship between the members of the foundation’s bodies and politics.

A crucial relationship, which cannot be addressed with the formal and paper-based assumption of ethical commitments whose compliance is unknown by who should verify and possibly sanction, but requires adequate regulatory interventions, in order to prevent the capital of notoriety and power more or less casually and personally acquired thanks to the role exercised in one of the administrative, management and control bodies of banking foundations, from being unduly transferred and invested in political and/or administrative adventures and careers of any nature.