Battle at the Bank

Political meddling in business is as commonplace in Italy as pasta on the dinner table. The late Enrico Mattei, for instance, operated E.N.I., the giant government petroleum complex, almost as a financial arm of the Christian Democratic Party. A major exception to the rule has been Rome's Banca Nazionale del Lavoro, which for 53 years has kept out of politics even though the Treasury Ministry is its majority stockholder.

So adamant was longtime Director-General Imbriani Longo, now 72, about the proposition that politics and bank ing do not mix that he even declined government honors and decorations.

Longo's policies paid off. The Lavoro, which makes loans on everything from grain crops to Gina Lollobrigida movies, is now the world's eighth largest commercial bank. It has assets of $7.05 billion, last year earned $11,136,000 from the operations of 205 domestic and ten overseas offices.

Squabble Between Allies. Last week, though, the Banca del Lavoro was vault-deep in politics, and both Longo and Ettore Lolli, 58, his longtime No. 2 man and heir apparent, had resigned. Reason: a squabble between Christian Democrats and Socialists over who would be officially tapped to run Italy's biggest financial institution once Longo stepped out. The Christian Democrats favored Lolli, who has the backing of such important moneymen as Bank of Italy Governor Dr. Guido Carli and Treasury Minister Emilio Colombo. The Socialists, demanding jobs and economic power as the price for their 1963 split with the Communists and alliance with the Christian Democrats, urged the appointment of Paolo Pagliazzi, 58, a former professor who is currently the bank's real estate loan expert.

The Socialists so far have not been able to get Pagliazzi into the job, but they managed to keep Lolli out. As a stopgap while the parties argued, Longo moved up to board chairman and an aging interim director-general was named; Pagliazzi was made a deputy director-general, along with Lolli, who was running most of the bank's operations. Two weeks ago, Carli quietly informed Lolli that his chances of becoming director-general were nil; to solve the impasse the government will probably name another candidate.

Irreparable Consequences. Lolli's subsequent resignation and Longo's determination to leave with him turn the top management of the Banco del Lavoro into a lame-duck administration and hobble its operations. "We can do absolutely nothing about planning even six months from now," complains one bank official. Even some politicians resent the dumping of Lolli, an expert on international monetary matters whose views on the gold flow have been sought by the U.S. Treasury and Congress. The sequence of events that led to the Longo-Lolli resignations, said an editorial in the left-of-center Republican Party newspaper La Voce Republicana last week, could be "an error whose consequences could be irreparable."

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