Italy's financial police today placed the mayor of Venice under house arrest in a sweeping corruption investigation into a multi-billion-euro flood barrier project to save the island city from rising sea levels.
Prosecutors accused mayor Giorgio Orsoni of benefiting from illegal party financing linked to the embezzlement of public funds for the project, which began in 2003 but has been badly delayed and is now set to be completed in 2016.
Orsoni's lawyers said the charge was "hardly credible."
Nine other politicians and business leaders were placed under house arrest and 25 more have been jailed in a fraud investigation involving around 100 people in total including a retired top police general.
Prosecutors have also requested the arrest of two lawmakers - former culture minister Giancarlo Galan and European Parliament member Lia Sartori - both from former prime minister Silvio Berlusconi's Forza Italia (Go Italy) party.
The police said they had traced some USD 27 million in kickbacks from contractors for the "Mose" (Moses) project that were transferred into foreign bank accounts allegedly used for political party financing.
"Most of these funds were used for financing political parties on a local, regional and national level," chief prosecutor Luigi Delpino said at a press conference.
Some 300 officers took part in raids in different parts of the country and seized assets worth 40 million euros.
The scandal is the latest surrounding a major public works project in Italy, following similar investigations into building for Milan Expo 2015, post-quake reconstruction in L'Aquila and preparations for the G8 summit in 2009.
"The way we handle public works in this country generates bribes. Everything is concentrated in the hands of very few entities and people to move fast," Massimo Cacciari, a former mayor of Venice, told news channel SkyTG24.
