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A landmark corruption probe into urban redevelopments in Milan is hanging by a thread after Italy’s Supreme Court upheld a ruling that found prosecutors lacked evidence to substantiate their accusations.
The country’s highest court last week said six defendants in the case — including the chief executive of Qatar-backed developer Coima, Manfredi Catella, and a former city councillor — should not have been detained. Five had been under house arrest, while one was held in prison.
The Supreme Court’s ruling upheld a Milanese court’s decision to release the defendants because of what it said was a lack of proof of the graft claims. Prosecutors had appealed last month against that decision.
The corruption charges against the six and dozens of others remain, according to the prosecutor’s office. Officials have pushed on with their investigation, seizing more building sites this month — bringing the total seized over the past two years to 150 — and freezing construction on the projects.
But the Supreme Court’s ruling has thrown into doubt the future of the high-profile investigation, in which prosecutors have claimed Italy’s financial capital owes its rapid real estate expansion to corruption.
According to documents filed in the case earlier this year, they allege developers bribed public officials to obtain fast-tracked building permits for “highly speculative transactions” that ignored height limits and rules on buildings’ impacts on the landscape.
The defendants in the case have denied the claims, which the Milanese court found in its ruling had not been proven “beyond reasonable doubt”. The case has not been brought to trial.
The city council’s landscape committee, tasked with vetting new real estate projects, operates on a pro bono basis and is made up of experts including architects who also work for property developers.
Prosecutors claimed in their court filing that the committee was at the heart of a corruption “system” in which developers bribed architects and others by overpaying them for their work in exchange for approving or fast-tracking projects in their roles on the committee.
Members of the committee, some of whom were arrested, have denied wrongdoing.
Catella said the Supreme Court had “rejected all allegations”. “The fast-track detailed judgment in this case has represented a positive example of how the Italian justice system can be . . . efficient,” he said, adding it had “unequivocally affirm[ed] our integrity”.
Despite the setbacks to the probe, experts said it had left a cloud over Milan’s real estate sector, whose high-end developments had proven divisive.
Mario Calderini, a professor at the Politecnico di Milano School of Management, said: “The outcome couldn’t have been worse . . . The probe is ongoing [and] there’s a lingering cloud of uncertainty over Milan which represents an immense cost for the city.”
Calderini said planning regulations and the allocation of public money needed an overhaul. In particular, he said, the choice not to pay the members of the landscape committee led to an “environment of suspicion”.
“[They] must be paid and the public administration must make sure its offices have the competences to face negotiations with the big developers or there will always be an asymmetry in the parties’ strength,” he added.
An international developer, speaking on condition of anonymity, said the “judiciary took on the public administration’s oversight role” in the investigation, something he said was a “frightening” prospect for foreign investors.
Many Milan residents have blamed the glitzy developments, which have helped to attract ultra-rich expatriates, for soaring real estate prices and social disparities.
But businesspeople have defended them. “Milan is the wealthiest and most international city in Italy, the urban regeneration projects have changed the city’s face, and we must be clear it’s a good thing, not a bad one,” said a local entrepreneur.
“But as one of the last centre-left strongholds in the country, it’s also crucial [that] politicians take responsibility for the rising social tensions. It’s time to do something bold about those too.”
Catella wrote on LinkedIn this week that “blocking building sites means less housing on offer and therefore an increase in prices which is unsustainable for almost everybody”.