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More to come in huge Venice flood barrier graft scandal - prosecutor

Source: Reuters - Sun, 8 Jun 2014 14:01 GMT
Author: Reuters
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Rowers on a gondola take part in the Vogalonga, or Long Row, in the Venice lagoon June 8, 2014 REUTERS/Manuel Silvestri
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* Court issued 35 arrest warrants last week

* PM Renzi says will present anti-corruption package Friday

By Steve Scherer

ROME, June 8 (Reuters) - An Italian investigation that last week named 35 suspects in a massive graft scheme to cheat the "Moses" flood barrier project in Venice is far from over, the lead prosecutor in the case said on Sunday.

A court issued arrest warrants last week for suspects including Venice Mayor Giorgio Orsoni, a close aide to former Economy Minister Giulio Tremonti and a former governor of the Veneto region, Giancarlo Galan. All have denied any wrongdoing.

They are suspected of having engineered a complicated series of kickbacks in the more-than 5 billion euro project designed to protect the canal city with a flood barrier named after the biblical prophet said to have parted the waters of the Red Sea.

"The investigation has not ended with the arrest warrants," lead prosecutor Carlo Nordio said in an interview with Il Messaggero daily. "We are pursuing several investigative lines," he said without providing any details.

The kickbacks for Moses, a project begun a decade ago to isolate the Venice Lagoon from the Adriatic Sea at high tides, apparently involve far larger sums than the "Bribesville" scandals that rocked Italian politics two decades ago.

"The figures are stratospheric," Nordio said.

Italian media on Saturday reported the kickbacks may have gobbled up as much as 1 billion euros ($1.36 billion), almost 20 percent of the state funds so far spent on the project.

RENZI TO FIGHT BACK

The arrests came less than a month after a similar corruption scandal linked to the Milan Expo 2015 project, meaning two of the country's biggest public infrastructure projects are suspected of being rife with corruption.

The scandals involving politicians, administrators, police and even members of the secret services have prompted Prime Minister Matteo Renzi to add anti-corruption measures to his already ambitious programme of economic reforms.

"On Friday, we will pass an ad-hoc measure to fight corruption," Renzi said on Saturday, adding it would be a "radical reform" followed in a few weeks by a broad overhaul of the judicial system.

Though Renzi provided few details, one of the main issues would be to simplify a cumbersome public bidding process where too many people are given power over a project. Anyone found to have taken or handed out bribes be banned forever from any future role in public works projects, he said.

The scandals come as Italy struggles to recover from a prolonged recession. In part because of the country's reputation as corrupt, foreign direct investment has plummeted in recent years, research institute Censis said this weekend.

Foreign direct investment fell 58 percent in 2013 compared to 2007, before the long economic slump began, Censis said.

"Today, reputation is a decisive factor in a country's competitiveness," Censis said.

"But over the years, Italy has earned a bad reputation," it added, citing "widespread corruption, political scandals and organised crime" as some of the main the reasons. ($1 = 0.7345 Euros)

(Reporting by Steve Scherer; Editing by Tom Heneghan)

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