Death Before Disgrace

By JOHN MOODY/MILAN

If the winds of fortune blow kindly, Raul Gardini will be remembered as a shining symbol of his age, a captain of industry and a world-class sailor who piloted both his companies and his million-dollar yachts with joyous abandon. He worked hard for 60 years to cultivate that image, in a land where myths ripen richly and image often counts more than fact.

In these days of reckoning, however, it is more likely that he will be remembered by cartoon depictions of him wearing a pirate's black eye patch. Though he reigned as one of Italy's premier financial magicians during the 1980s, he had become only the latest of more than 2,500 business leaders and politicians to be implicated in Italy's omnivorous corruption scandal. But having lost his empire, his power and now his honor, the thought of a prison cell was apparently too much for him. Lying on a bed in his 18th century Milan palazzo two weeks ago, just hours before he would have been arrested, Gardini pressed a pistol to his temple and fired.

That made 12 suicides among the targets of Italy's 18-month investigation into fraud, kickbacks and political payoffs. Gardini's name surfaced over and over, as investigators probed a sweet deal in which his firm's share of a joint venture, called Enimont, with the state energy company was bought out for $2.5 billion, vastly more than it was worth. Last week investigators questioning two former Gardini executives reportedly learned that more than $90 million in payoffs may have landed in the pockets of leading politicians, including two former Prime Ministers, who denied the accusations.

Even so, prosecutors may never know the full story, because Gardini could have taken many of the secrets of Enimont to the grave. Nor will they get much help from the other major party to the scheme, Gabriele Cagliari, the former head of Italy's huge energy conglomerate ENI. Just three days before Gardini's death, Cagliari chose to tie a plastic bag over his head with a shoelace before telling investigators all he knew. Prosecutors believe that Gardini and his associates were responsible for the falsification of company books and sophisticated financial fraud, besides the payment of millions in bribes.

What a difference a year makes: Gardini reached the peak of his fame only last spring, when his racing yacht, Il Moro di Venezia, defied sailing experts and reached the finals in the America's Cup. Il Moro's success cast Gardini as the personification of Italian style, an image especially sweet for a man whose childhood on a farm in Ravenna earned him the lifelong nickname "il contadino," the peasant.

Gardini's upbringing led him to agricultural college; afterward he joined the firm of Ravenna grain dealer Serafino Ferruzzi. His charm, ambition and business flair brought him rapid promotion -- as well as marriage in 1957 to the boss's eldest daughter, Idina, which guaranteed that he would inherit company leadership from Ferruzzi, who died in 1979.

Gardini's financial success during the 1980s mirrored that of Italy's. His roll-the-dice executive style suited the spirit of his times: in 1987 Gardini won control, after a nearly $2 billion buyout, of Montedison, a chemical and pharmaceutical giant, transforming a prosperous family concern into Italy's second largest private company after Fiat.

From there Gardini masterminded Ferruzzi-Montedison's 1989 joint venture with ENI, which made him a global giant -- and began his downfall. From the start, there were rumors that kickbacks had been paid to political parties in return for approving the deal. Gardini soon found himself in conflict with Cagliari, ENI's ambitious chief. Each man controlled 40% of Enimont, but the Ferruzzi boss tried to tip the balance by having friends purchase a majority of the outstanding 20% stock. In the end Cagliari prevailed, and in November 1990 ENI bought out Gardini's stake at an apparently politically sanctioned inflated price.

The dismantling of Enimont was a major blow, but there was worse to come. In 1991 other family members balked at his attempt to pass control of the Ferruzzi empire to his children. Gardini, his wife and children split from the rest of the family, consoled by a golden handshake estimated at $380 million.

He might have walked away a rich if restless man, since investigators could not untangle his schemes without some inside help. But they found their songbird last month, when Gardini's successor at Montedison was arrested and extradited from Switzerland. Giuseppe Garofano was brought back to Milan and immediately began giving investigators a detailed rundown of the company's double bookkeeping and multimillion-dollar payoffs to politicians. He gave them enough to issue warrants for the arrest of five top Ferruzzi executives, including Gardini.

Aware that his former partner Cagliari killed himself after being told he could not leave jail while the investigation into his misdeeds proceeded, Gardini apparently decided not to endure a similar imprisonment. "He was a fighter and he had tremendous pride," says one of his friends, author and columnist Enzo Biagi. "Most of all he valued his freedom." On the morning of July 23 Gardini woke at 7 a.m., took a shower and scanned the newspaper headlines. One read: GAROFANO ACCUSES GARDINI. Next to the bed where he killed himself, he left a one-word note to his family. It said, Grazie.

With reporting by Leonora Dodsworth/Rome