Dodgy deals: One in 10 Italian contracts is corrupt, says EU anti-fraud office report

Italy hands out half of corrupt public contracts awarded in the EU, representing dodgy deals worth $60bn each year, according to a new report.

The survey, performed for the EU anti-fraud office OLAF by PricewaterhouseCoopers (PwC), found that one Italian public contract in 10 is tainted – three times more than the number in France and 10 times more than Holland.

Work in water supplies, roads and railways were the three biggest areas of corrupt activity.

The report warns that too few officials are trained to combat corruption and that this is a particular problem in countries such as Italy where the reach of organised crime is extensive.

“In many states public officials are not specifically trained to ensure transparency… this creates opportunities for fraud and corruption, especially where powerful private cartels and criminal organisations can influence the policy-making process,” it said. Algirdas Šemeta, the EU taxation commissioner, said: “There is no doubt that we are talking about a serious problem. Every public project affected by corruption is a project that does not reach its full objectives. It is an affront to taxpayers’ money – whether funded from national budgets or EU funds.”

He noted that the overall estimate of the costs of corruption in the EU, based on the study of eight EU countries – Italy, France, Netherlands, Lithuania, Hungary, Spain, Poland and Romania – was 3 to 4 per cent of the total procurement budget. “This seems, at first sight, much higher than the estimate published by the Commission two years ago,” he said.

Last month OLAF announced a new co-operation agreement with the General Prosecutor of the Italian Audit Court, which monitors graft.

In February this year, Salvatore Nottola, attorney-general of the Audit Court said systemic corruption had cost the Italian economy more than €1bn in European Union funding over the past decade.

In one major example of graft hitting the pockets of European tax payers, it emerged in July last year that EU anti-fraud investigators had found that a motorway project in the south of the country was riven with mafia infiltration, corruption and kickbacks.

As a result, Rome repaid a record £307m to the EU. The graft accounted for over half of the £555m of detected and recovered fraud in the EU’s 2011 budget.

The “irregularities” were found in repairs to a stretch of the A3 motorway between Salerno, south of Naples, and Reggio-Calabria, further south in the Calabria region. Both areas are known for the mafia strong presences.

The Expo 2015 World’s Fair in Milan is another major project over which there are concerns that mafia groups will try to cream off huge profits.

Italy’s parliamentary Anti-Mafia Commission has warned that organised crime is increasingly ditching violent methods and seeking to move into high finance. It says Italy needs to urgently draw up an action plan to stop mob tendrils spreading further into the mainstream economy.