'Tsarina' arrested over slush fund allegations: Italian secret service cash 'spent on luxury apartments'

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A SECRETARY who is alleged to have spirited millions of pounds from the Italian secret service's slush funds into overseas bank accounts, property and private businesses, was arrested in Rome yesterday.

Matilde Paola Martucci, 55, was the secretary of Riccardo Malpica, former director-general of SISDE, the civilian security service for four years and also, it is alleged, his mistress. Top SISDE officials have told magistrates that she was called the 'Tsarina' because she exercised great power over Mr Malpica and effectively ran the slush funds and day-to-day decisions at SISDE.

She is alleged to have bought eight expensive apartments in Rome and a travel agency business for herself and members of her family. Huge amounts of money disappeared into bank accounts in Rome, San Marino and foreign countries, into real estate at home and abroad, and into businesses belonging to top SISDE officials, now charged with embezzlement. Ms Martucci and Mr Malpica are alleged to have pocketed 12bn lire (pounds 5m) between January 1990 and August 1991 alone.

The secret funds of the SISDE and SISMI, its military counterpart, are reported to have totalled dollars 700bn (pounds 292m) a year and were checked by no one except the Interior Minister once every three months, after which the accounts were supposed to be destroyed.

Some clearly were not, for documents have reached the press indicating that SISDE provided rich furnishings, antiques and equipment for politicians under the pretext of making their homes and offices secure. Items on the various lists included: air conditioning, pounds 50,000; antiques for living rooms, pounds 23,000; house plants, pounds 16,000; and a Christmas tree priced at pounds 1,458. Mr Malpica and two colleagues are in jail, and three others are being sought by police.

The SISDE officials caused a near-crisis last week by alleging that President Oscar Luigi Scalfaro and other former Interior Ministers had been paid illegal 'salaries' of pounds 42,000 a month from the slush funds. The President rejected what he and many others see as a plot to topple him and derail the Italian revolution. He refused to resign.

As more and more dirty linen from the past is hauled out by the magistrates Mario Segni, the electoral reformer, is making another attempt to create a modern broad-based, Anglo-Saxon-style political party to go with Italy's new majority electoral system.

Having failed to persuade existing parties to drop their rivalries and their pride and form an alliance, he is now appealing directly to the voters. In Turin at the weekend he launched a 'Pact for National Rebirth' and announced he would seek to collect one million signatures of support by 5 February to establish 'whether at least part of Italy wants to change'. If he failed, he said, he would quit politics.

Among his aims are reforms allowing the direct election of the Prime Minister by the voters, rather than parliament. Candidates would be chosen by American-style 'primaries' and the Pact would fight for a united Italy against the Northern League's pressure for federalism.

In theory, Mr Segni should get wide support. An opinion poll published yesterday found that 80 per cent of the population, including League voters, want to keep Italy united. Only around 10 per cent favour a federation and around 5 per cent think Northern Italy should secede.

But Mr Segni, who had overwelming success with his referendums for electoral reform, has little personal charisma and it is uncertain whether he can raise enough of a popular following in the few months before the elections are likely to be held.