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5th Cabinet Member Quits in Italy : Scandal: President searches for broadly based government to rule until after referendum.

TIMES STAFF WRITER

Politicians fiddled Tuesday as the credibility of Italy’s government and its currency burned at the vortex of the worst national political crisis since World War II.

Another Cabinet minister--the fifth--resigned after being told that he is under investigation for corruption. Embattled Prime Minister Giuliano Amato offered to resign, but an anxious round robin of political consultations failed to produce a successor government.

It was not clear Tuesday night if Amato would leave office, or remain to head a new, caretaker government that would probably include former Communists for the first time.

President Oscar Luigi Scalfaro spent a long day of talks with legislative and party leaders in a search for a broadly based government that would rule until after a referendum on electoral reform April 18.

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“The republic is solid in its institutions,” Scalfaro said in a statement aimed at what he called “tendentious” street talk of a possible Latin American-like coup.

As the politicians conferred Tuesday, the crisis triggered by an ever-growing investigation into huge, systematic payoffs and bribes for public contracts took new bites at the national psyche.

Judges in Naples issued 116 arrest warrants, naming two former ministers, businessmen, public officials and organized crime figures; charges ranged from drug and arms trafficking to corruption in public housing, hospitals, and toxic and city waste disposal.

The magistrates charged that the Camorra, the local branch of the Mafia, divided much of Naples’ toxic waste disposal contracts. In one case, 1,800 tons of waste a day were dumped in a national park, according to Italian press reports.

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Finance Minister Franco Reviglio, the former president of ENI, the scandal-ridden state energy conglomerate, resigned after he was formally notified that he is under investigation for payoffs the company is charged with making to political parties while he headed it from 1983 to 1989. Reviglio’s successor at the company is in jail in Milan.

Reviglio appeared voluntarily before Milan Magistrate Antonio Di Pietro, who has emerged as the leading investigator of the tangentopoli (Bribegate) scandal that has by now reached into almost every major city--and many smaller ones.

The mayor of Caserta near Naples went to jail Tuesday with four others charged with accepting payoffs for building permits. There were more than a dozen arrests in a housing scandal in Sicily, including a bank manager, and 18 arrests in Rome in a real estate scam.

Reacting to the crisis, the Milan stock market took a header, down more than 2%, and the Bank of Italy had to intervene forcefully to protect the crumbling lira.

In office since last summer, Amato, a former treasury minister, has been attempting to erase an alarming public deficit while at the same time privatizing key companies in the huge state sector of Italy’s industry.

His government has promised to submit its 1994 budget by July in order to clear the way for national elections in the fall. That vote would be the first under reforms expected to be adopted in the April referendum to scrap the current system of proportional representation.

The political atmosphere has become so charged, however, that Scalfaro may have trouble finding a successor for Amato. That could bring potentially explosive elections even before the referendum.


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