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    Italy politician arrested in widening funding scandal

    ROME, Oct 2 (Reuters) - A senior Italian regional politician

    was arrested on Tuesday in a widening corruption scandal that

    could damage former Prime Minister Silvio Berlusconi's already

    weakened centre-right party ahead of a national election in

    April.

    Financial police arrested Franco Fiorito, former leader of

    Berlusconi's People of Freedom (PDL) party in the regional

    parliament of Lazio, on suspicion of embezzlement, a justice

    system official said. His lawyers confirmed the arrest.

    The arrest is the latest development in a scandal that has

    further tarnished the already abysmal image of Italian politics

    and weakened the PDL, which has been deeply divided since

    Berlusconi was forced to step down last year.

    Dozens of other regional politicians are also alleged to be

    involved in the scandal which prompted the resignation last week

    of Lazio president Renata Polverini, whose departure is expected

    to trigger new regional elections within the next few months.

    Italian newspapers have carried accounts of lavish parties

    and dinners apparently paid for with public funds and held by

    politicians in Lazio, the region surrounding the capital Rome.

    One particularly damaging series of photographs shows

    revellers clad in togas and pig masks, underscoring the decadent

    image of the political class in a country facing deep recession

    and financial crisis.

    The portly, bearded Fiorito had already been under

    investigation by magistrates over accusations that he embezzled

    around 1.3 million euros of party funds and used the money for a

    Sardinian holiday, expensive restaurants, cars and luxury goods.

    In Italy, political parties receive state financing, meaning

    the money alleged to have been embezzled ultimately came from

    public funds.

    However Fiorito's lawyer Carlo Taormina said his client

    should not have been arrested for embezzlement and that many

    other politicians were also involved in the affair.

    "There's a legal argument which says that when this public

    money goes into the pockets of the party, whether you like it or

    not, it becomes private money," he told TGCom24 television. "And

    you also have to say that if they've arrested Fiorito, the other

    70 regional councillors in Lazio are missing from the list."

    Earlier this month, Fiorito told investigators that many

    other regional councillors were involved in a well-established

    system of sharing out party funds among themselves.

    Berlusconi and PDL party secretary Angelino Alfano have

    attempted to distance themselves from the scandal, calling for

    an overhaul of party financing rules and tougher penalties on

    those guilty of abusing party funds.

    But with recent opinion polls showing the PDL trailing both

    the centre-left Democratic Party and the anti-establishment 5

    Star Movement, the scandal has added a further obstacle six

    months away from the election.