Communism Can Be Profitable

Eugenio Reale, 50, is a debonair little Neapolitan of cultured tastes who has done time in Fascist jails, served in Parliament, and represented his country abroad (as ambassador to Warsaw). He is also a Communist.

In Italy, where Communism is big business, Reale held the key position of party administrator. As such he sat on a three-man committee, supervising the flock of import-export firms which the party has set up or taken over to handle Soviet-bloc trade in Italy. Italian businessmen rapidly found out that the only sure way of doing business east of the Iron Curtain was to let these Red companies handle their trade. By last year, U.S. experts estimate, the firms handled more than half of Italy's $123 million East-West trade.

This was a clever way to finance the huge Italian Communist Party, the biggest west of the Iron Curtain (estimated 1,600,000 members). "The party cannot exist on dues," says Reale frankly. Apparently, however, the profits have been too big for individual Communists to leave solely to the party. Two years ago Augusto Doro was accused of making lucrative side deals for personal gain while manager of the oldest Red trading agency (SIMES) in Milan. Shortly afterward Eugenio Reale himself quit all his party offices, including his key post overseeing the foreign-trade agencies.

Behind the Art. That was how things stood on May 17, when a disgruntled Zurich lawyer named Bruno Greuter told a reporter from Rome's conservative Il Tempo a startling story. Back in 1951, said Greuter, his friend Reale dropped in at his office, said he was tired of political life, and asked for help in setting up a little import-export business in art objects. Greuter arranged to sell him the stock of an acquaintance's long-moribund holding company, Terbita. But far from quitting public life, Reale got elected to the Italian Senate, and sent a young Italian named Norberto D'Allessandri to Zurich to take care of Terbita. D'Allessandri conducted affairs well, for he soon drove a Jaguar, took an expensive apartment. Yet when tax officials called, D'Allessandri could show them no books. Swiss police then raided his headquarters and found a notebook that disclosed a thriving business--not in antiques but in contraband smuggling of strategic goods to Eastern Europe.

Terbita's system was a model of simplicity. The agency would request an import license from France or Britain for some hard-to-get strategic item. With this in hand, it would then get an Italian license to export the raw materials to the allied country. But no consignment ever got to Britain or France. Either in Switzerland or in Belgium, where customs officers paid small heed to in-transit goods, the agency transshipped the stuff--from Switzerland by rail to Vienna and the East, from Antwerp by sea to Polish Gdynia.

Action at Last. D'Allessandri's little black book showed that in eight months of 1953, Terbita shipped thousands of tons of such strategic commodities as vanadium, cobalt, nickel, copper and molybdenum (listed as Portuguese cork) to Soviet-bloc countries. The record showed that Terbita paid $3,000,000 in profits to the Italian Communist Party. Police also have record that another $1,000,000, transferred from Poland to Terbita's account, never reached the party chest, and Lawyer Greuter said that the Italian Communist Party should ask Reale about that.

Much of this has been known to the Italian police since 1953, when the Swiss deported D'Allessandri and his assistants, and sent their findings to Rome. After Il Tempo's reporter got his story, some action followed at last. Italian police arrested 24 men in Milan and charged them with "conspiracy with foreigners against the national interest." One was D'Allessandri. In Rome, Communist ex-Senator Reale continued to enjoy his singular immunity, and insisted he had done nothing wrong. Said he: "I'm not taking this seriously."

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