Venice's mayor and more than 30 other people have been arrested in a corruption scandal in which politicians allegedly financed election campaigns with €25 million (HK$264 million) in bribes from the consortium building underwater barriers to protect the lagoon city from flooding.
One of a series of bribery probes into major public works projects in Italy, the web revealed in Venice has many of the same characteristics as Italy's "Kickback City" scandal of 20 years ago that toppled an entire political class.
"There are even some of the same players," prosecutor Carlo Nordio, who was involved in the 1990s investigations, said. "This system, however, is much more sophisticated and much more difficult to discover."
The head of the consortium building the so-called Moses barriers was placed under house arrest last year in an earlier phase of the investigation. He along with others created a €25 million slush fund abroad that was used to bribe politicians, who then used the money for election campaigns as well as personal gain.
The illicit funding was at the city, regional and national level, prosecutors said.
Mayor Giorgio Orsoni was placed under house arrest, accused of illegally financing political parties. The others were accused of illicit party financing, corruption and fiscal fraud, among other charges.
Orsoni's lawyer released a statement denying wrongdoing.
Two others are lawmakers and procedure requires a parliamentary vote before they can be arrested.
The slush fund was created through a system of overbilling, often for nonexistent services, ultimately paid for by taxpayers who are funding the construction of the ambitious and long-delayed system of barriers.
"It is doubly serious because in the end it was citizens who paid the bribes," Nordio said.
The cost of the Moses project, now running at €5 billion, has run well above initial estimates. But Nordio said the investigation would have no impact on construction, 80 per cent of which is now completed.
The project was launched with great fanfare more than a decade ago, and the first barrier was installed only last summer.
The arrests marked the most high-profile of a spate of unrelated corruption investigations, mostly involving bribery or embezzlement, that have implicated public officials and former high-ranking ministers. They have revolved around some of the biggest Italian public works projects, including the Milan world's fair, Expo 2015, and an Italian-funded water project in Iraq.