Italy regional governor rebuffs calls to resign

ROME Thu Oct 11, 2012 3:39pm EDT

Letizia Moratti (R), mayor of Milan, waves to supporters with Lombardy Region governor Roberto Formigoni during a political meeting in downtown Milan May 26, 2011. REUTERS/Paolo Bona

Letizia Moratti (R), mayor of Milan, waves to supporters with Lombardy Region governor Roberto Formigoni during a political meeting in downtown Milan May 26, 2011.

Credit: Reuters/Paolo Bona

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ROME (Reuters) - The governor of Lombardy refused to resign over a widening graft scandal on Thursday but said he would appoint a new government for Italy's wealthiest and most populous region, adding to political disarray six months from general elections.

Roberto Formigoni, who has led the northern region since 1995 and is a prominent ally of ex-Prime Minister Silvio Berlusconi, announced his decision after the arrest of a senior official on Wednesday on suspicion of buying votes from the southern Calabrian mob.

"I will proceed to form a new government," Formigoni told a news conference on Thursday. "I will choose people who will pursue a policy of excellence."

The shake-up in Lombardy adds to a wave of scandal washing over Italian regional governments, which control significant areas of spending, including health, and which have been a longstanding source of political cronyism.

It comes days after the centre-right president of the Lazio region around Rome quit in the midst of a scandal over the embezzlement of state funds which has seen a senior councilor in Berlusconi's People of Freedom (PDL) party arrested for embezzlement.

In a separate case on Tuesday, Prime Minister Mario Monti dissolved the government of the southern regional capital Reggio Calabria because of mafia infiltration.

PDL secretary Angelino Alfano defended Formigoni's refusal to stand down despite the scandal, which comes on top of a separate corruption investigation.

"You don't get rid of an administration that has been governing and continues to govern well," he told a news conference in Rome.

However, backlash over the scandals has undermined public trust in the main political parties and fed a mood of populist protest reflected in the rise of groups like the anti-establishment 5 Star Movement of comedian Beppe Grillo.

Foreign investors consider uncertainty over the political outcome of next year's elections as the single biggest risk factor hanging over Italy as the debt-laden country struggles to survive the euro zone crisis.

The steady stream of corruption investigations is reminiscent of the many probes of the so-called 'Bribesville' era of the early 1990s, which ultimately led to the collapse of Italy's old party system.

Fourteen of Lombardy's 80-strong regional council are under investigation over corruption or abuse of power.

(Writing by Lisa Jucca; Editing by Michael Roddy)

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