Berlusconi staff are sought in new graft inquiry

ROME - Magistrates, unbowed by an attempt to clip their wings, have launched an inquiry into Italy's finance police that may prove an embarrassment for Silvio Berlusconi, the Prime Minister. Just days after Mr Berlusconi was forced to kill a decree limiting powers of pre-trial custody, magistrates sought the arrest of two managers at his Fininvest company, which controls the media tycoon's empire.

The two, Salvatore Sciascia, the group tax director of Fininvest, and Gianmarco Rizzi, his assistant, were among 20 businessmen and police in Milan who were issued with arrest warrants. The warrants were handed out by Milan's elite pool of anti-graft magistrates looking into allegations that businesses paid bribes to ensure easy treatment by police in tax investigations and other inquiries.

There was no indication that Mr Berlusconi was directly involved in the scandal and the affair does not involve any political parties. But the fact that two of Mr Berlusconi's employees are being sought lays him open to opposition criticism of alleged conflicts between his business empire and government role.

'We have a Prime Minister with so many interests that condition him,' said Massimo D'Alema, leader of the former-communist Democratic Party of the Left (PDS). Mr D'Alema, noting that Giulio Tremonti, the Finance Minister, faced litigation with tax authorities and that Cesare Previti, the Defence Minister, had worked for a large defence contractor, added: 'It seems everyone has had the right Cabinet post to take care of his own affairs.' Other figures held included Felice Vitali, director-general of one of Italy's biggest holding companies, Gemina, which controls the authoritative Corriere della Sera newspaper. The two Fininvest managers were at large yesterday but Mr Sciascia's lawyer said his client would soon turn himself in.

Giuseppe Cerciello, the Finance Police General, who was freed only recently under Mr Berlusconi's decree, was detained once again in the wave of arrests on Saturday. Mr Cerciello was one of 2,500 people, including more than 230 graft suspects, who left jail after the government passed the decree. Most of them were under house arrest.

In his first political defeat since entering politics Mr Berlusconiwas forced last Tuesday to withdraw the decree because of widespread concern that it would hamper corruption investigations. Mr Berlusconi defended it as a charter for human rights.

The dispute, which brought Mr Berlusconi's government to the brink of collapse, was fuelled when the Milan magistrates asked to be transferred to other jobs. Yesterday a leading member of Mr Berlusconi's Forza Italia party accused them of vengeance.

'They are taking their revenge,' Tiziana Maiolo, the head of Parliament's Justice Commission, said: 'It's as if (Antonio ) Di Pietro (a Milan magistrate) was telling the country: 'Look, with the decree our hands were tied, but without it we continue to send people to jail'.'

In an editorial Corriere della Sera said the magistrates had no choice but to root out corruption.