Italians Seek Election Reforms Amid Arrests : Scandal: A referendum is set on a winner-take-all system, to ease the grip of political parties whose officials are landing in jail.

Like the sodden late winter storm that swept down from the Alps on Friday, the unfolding drama of organized crime and political corruption investigations marched south down the Italian peninsula, a harbinger of deepening national turmoil.

Amid new arrests and street demonstrations demanding political and economic rebirth, a divided Parliament agreed to a reform that would provide for direct elections of mayors. The change is one of a series intended to break the grip on power of political parties that have dominated Italian governments for nearly half a century.

A national referendum scheduled for April 18 proposes to revolutionize the Italian electoral system by replacing the proportional system with direct, winner-take-all parliamentary elections such as are used by Italy’s West European partners and the United States.

A seemingly bottomless scandal of kickbacks, payoffs and bribes for public contracts involving virtually all major political parties and some of the most influential political and entrepreneurial names in the country has quickened national demands for reform.

The scandal investigation is focused in Milan, Italy’s economic dynamo, but its eddies are reaching steadily south. There were new arrests Friday in Milan, in soggy Rome and in Naples.

In Naples, a Christian Democratic member of Parliament and a Socialist city councilor were jailed. Both have admitted being part of a city council bribery system.

As in mob-ridden Sicily, the Neopolitan corruption probe is moving into the explosive nether world where, investigators believe, political parties, big business and organized crime worked together for their mutual profit.

In Sicily, police arrested the fugitive son and two henchmen of Mafia boss Giuseppe Pulvirenti, while a former mayor of Palermo tantalized investigators with testimony that could forge a missing link between organized crime and the Italian political Establishment.

White-bearded Vito Ciancimino, the former Palermo mayor jailed for Mafia connections, has been under interrogation by Judge Giancarlo Caselli since January, and Italian newspapers say he is beginning to reveal mob secrets.

Although he is not considered a informer, Italian judges say a cooperative Ciancimino could provide critical testimony linking the Mafia to major national figures in the Italian political Establishment.

Speaking to journalists after a visit Friday to his father in Palermo’s jail, Ciancimino’s son Massimo scoffed at the speculation. “My father,” he said, “greeted me with these words: ‘Me repentant? And of what?’ ”

Friday’s arrests in Milan were of two businessmen and an official of the state electrical authority on charges of corruption and violating laws on party finance.

In Rome, an official of the state agency that insures Italian foreign investment was arrested as part of an inquiry into Italy’s aid to the Third World. Earlier this week, political payoff inquiries penetrated the Foreign Ministry and Italy’s Third World development agency.

Ambassador Giuseppe Santoro, who headed the cooperation for development section of the Foreign Ministry from 1990 to 1991, then become Italy’s ambassador to the U.N. Food and Agriculture Organization, went to Rome’s Regina Coeli jail on charges of complicity in bribery and abuse of office.

Santoro was a protege of former Socialist Foreign Minister Gianni De Michelis, himself under investigation for bribery and illicit party funding.