May 21, 2015 / 8:40 PM / 4 years ago

Italy passes law to tackle rampant corruption

ROME (Reuters) - Italy made a fresh attempt at tackling rampant corruption on Thursday when the Chamber of Deputies approved a strongly contested law stiffening penalties for various types of graft and balance sheet fraud.

Saint Peter's Basilica at the Vatican is illuminated as seen from the Tiber river in Rome, March 11, 2013. REUTERS/Paul Hanna

Corruption has long undermined Italy’s chronically stagnant economy by deterring foreign investors and pushing up costs. A previous “anti-corruption” package in 2012 proved to have little impact.

The last year has seen high-profile arrests of politicians and businessmen over graft allegations connected with the 2015 Expo in Milan, a 5 billion euro Venice flood barrier, and public contracts awarded by the city of Rome.

Italy ranked 69th in Transparency International’s 2014 Corruption Perceptions Index, joint last in the European Union with Bulgaria, Greece and Romania.

After a long parliamentary passage, the latest anti-corruption bill was approved by the lower house in a watered-down version more than two years after it was presented by Senate speaker Piero Grasso, a former anti-mafia prosecutor.

The legislation increases prison sentences for corruption by an average of two years up to a maximum of around 10 years for the most common varieties, involving bribery or offering or demanding favors to obtain public contracts.

The bill raises jail sentences for balance sheet fraud by two or three years to a maximum of eight years for listed companies, and six years for unlisted firms. It also makes all balance sheet fraud a criminal offense, unlike before, although if a judge decides the fraud is “mild”, the sentence can be as low as six months.

Critics say the higher sanctions will be useless because the many loopholes of Italy’s snail-paced justice system ensure that hardly anyone actually goes to prison for white-collar crimes, even if they are eventually found guilty.

The bill also precludes plea bargaining unless perpetrators pay back the money gained from their corrupt activity.

It passed by 280 votes to 53 in the 630-seat Chamber of Deputies, with the backing of Prime Minister Matteo Renzi’s centre-left Democratic Party and its small centrist allies.

Most opposition lawmakers did not take part in the vote. The anti-establishment 5-Star Movement said the bill did not go far enough, and Silvio Berlusconi’s center-right Forza Italia party said it would hinder business.

Justice Minister Andrea Orlando told reporters the law “makes Italy stronger” and was “hugely important.”

Renzi, in his customary tweet to celebrate the passage of government legislation, said: “We will change this country, whatever it costs.”

writing by Gavin Jones; Editing by Kevin Liffey

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