Monti Approves Regional Budget Cuts to Battle Local Corruption

Italian Prime Minister Mario Monti’s Cabinet approved cuts to regional-government budgets aimed at curbing corruption and excessive spending, exemplified by accusations against a politician arrested this week.

“It’s important that we save something worth even more than money, the trust citizens have in their institutions,” Monti told reporters last night in Rome after a cabinet meeting. The government will give an estimate next week of the savings derived from the measures, Finance Minister Vittorio Grilli said.

Monti was pushed to act after travel and entertainment expenses of regional politicians were detailed and lampooned on the front pages of Italian newspapers last month. Franco Fiorito, the ex-lawmaker who headed former Prime Minister Silvio Berlusconi’s People of Liberty Party in the Lazio region, was taken into custody and charged with embezzlement.

Monti increased the powers of Italy’s Court of Auditors to inspect regions’ finances and set penalties for non-compliance. Regional presidents and other officials must publish their incomes and personal wealth on their regions’ websites, according to a statement from the government.

Carlo Taormina, a lawyer for Fiorito, said his client was simply managing an expense organization that was put into place before he took office.

“We’re talking about a system he found where money was distributed to everyone,” Taormina told reporters on Oct. 2, according to a video posted on the website of Corriere della Sera. “It was a kind of habit for everyone to manage the public sector this way, and it certainly needs to be changed.”

Taormina wasn’t available to respond yesterday to a request for comment.

Prosecutors are investigating about 1.3 million euros ($1.7 million) of expenses by Fiorito, Il Sole 24-Ore reported, citing court documents. The former regional party head allegedly spent 35,000 euros to buy a jeep during a snowstorm in Rome and used 29,000 euros of public funds for a 10-day vacation in a resort in Sardinia.

To contact the reporter on this story: Andrew Frye in Rome at afrye@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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