Rome politicians seek new sources of funds

ITALY'S political parties, most of them disgraced and broke after stealing public money for years, have begun discussions to work out how to get an honest income.

They are in a hurry, for if they do not pass a new law on party financing soon, a referendum will be held later this year in which the disgusted public can be expected both to stop their present state funds and give them yet another huge vote of no-confidence.

Sceptics also detect designs to rescue the scores of colleagues being prosecuted for demanding kick-backs from public works contracts to finance their parties. For if the new law reduces or abolishes the punishments prescribed in the old one for violations, the charges against these politicians would automatically be dropped.

The Christian Democrats, the Socialists and the Social Democrats, who are in the deepest trouble, are all proposing such changes, although all swear that they want the culprits to be punished just like ordinary citizens.

President Oscar Luigi Scalfaro warned in his New Year address that there must be no attempt to 'pass a sponge' over the parties' crimes. At present the parties share 83bn lire ( pounds 45m) of taxpayers' money a year, and have election costs refunded under a 1974 law designed - ironically - to keep them honest after an earlier corruption scandal. This sum, which has remained virtually unchanged over the past decade, is regarded as inadequate to finance their huge party machines.

But the only other legal source is members' subscriptions and donations on which there is a ceiling of about pounds 2,700 - and these have all but dried up since the present corruption scandal broke. So for years, by tacit agreement, the parties demanded huge rake-offs from public contracts - which have now also come to a sudden halt. Desperate for cash, they are being evicted or having to give up their headquarters, phones have been cut off, cars sold, publishing operations abandoned and staff laid off. Financially as well as politically, their survival is at stake.

The search for a solution began this week in the Chamber of Deputies' constitutional affairs committee. All parties appear agreed on ending state funding but differover how to replace it. A popular idea is that a tiny percentage of Italians' incomes should be channelled to the parties, as it is to the church, unless they state otherwise on their income-tax forms.

Meanwhile the public mood is hostile and protest movements, such as the Northern League and La Rete are growing without the finances or the infrastructure of the old parties. Marco Pannella, head of the tiny opposition Radical Party, which is behind the referendum, speaks for many: 'Their only motive is to perpetuate themselves and the old abuses. They deserve neither money nor help.'

MILAN - Magistrates leading a corruption probe into the affairs of Italy's Socialist leader, Bettino Craxi, told the former prime minister yesterday that he was under investigation on two further counts, Reuters reports.