Cardinal in Italian corruption probe denies blame

ROME (Reuters) - An Italian cardinal, caught up in a vast corruption probe that has already tainted the government, said on Monday he had done nothing wrong and had the support of the Vatican.

"I did everything with the upmost transparency," said Cardinal Cresenzio Sepe, the archbishop of Naples, who is under investigation by Italian magistrates for questionable real estate transactions when he was a top Vatican official in 2005.

Sepe, 67, is being investigated for alleged corruption when he was running the Congregation for the Evangelisation of Peoples, a cash-and-real-estate-rich department of the Vatican that finances the work of missions abroad.

Sepe, who ran the department until he was moved to Naples in 2006, is suspected of aggravated corruption with Pietro Lunardi, then infrastructure and transport minister in the centre-right government of Prime Minister Silvio Berlusconi.

"I have always acted in good conscience, my only aim was the good of the Church," he told a news conference in Naples, adding that he had received dozens of phone calls of support from Italian Church and Vatican officials.

The magistrates say Lunardi bought a building in Rome from Sepe's department in 2004 at a price well below market value.

But Sepe said the price of the building was affected by the fact that it was in extremely bad condition and his department could not afford to fix it.

Sepe said only after the decision to sell was made did he learn that Lunardi had taken an interest in buying it.

The next year, when Lunardi was minister, he approved a decree allocating funds for the restoration of historic church buildings, including the 16th century headquarters of the mission department facing Rome's Spanish Steps.

Sepe said the two events were not connected and that money received from the sale was sent to the Vatican to be used to support Catholic missions abroad.

WEB OF FAVOURS

Magistrates in the central Italian city of Perugia have been investigating a web of corruption and favours involving public works contracts, mostly in construction for major events, such as last year's G8 summit and the Millennium celebrations.

Sepe said he would cooperate with the magistrates but it was still not clear if he would invoke his Vatican citizenship, obliging magistrates to use a lengthy bureaucratic procedure to question him.

Last month, the Perugia investigation claimed the head of Claudio Scajola, a close Berlusconi ally, who resigned as industry minister.

Scajola resigned after it was found that 900,000 euros ($1.11 million) worth of cashier cheques used to buy his luxury Rome apartment overlooking the Colosseum came from a constructor arrested in the political corruption probe. Scajola denies any wrongdoing. (Additional reporting by Laura Viggiano in Naples and Maurizio Troccoli in Perugia; editing by Mark Trevelyan)