Italy's 5-Star aims to reform as Rome fiasco threatens its future

By Gavin Jones

ROME (Reuters) - Rome Mayor Virginia Raggi, one of the most prominent faces of Italy's anti-establishment 5-Star Movement, had hoped that recruiting a former magistrate would restore some order to her chaotic city government. What happened shows how the party must change if it is ever to rule the country successfully.

Raffaele De Dominicis, whom she named as finance chief, was supposed to undo the legal tangles and bureaucratic blunders that had beset the first two months of rule in Rome by 5-Star - whose electoral appeal rests on voters' weariness with rampant corruption in the political establishment.

So when De Dominicis acknowledged just four days into the job that he himself was the subject of a judicial inquiry, the mayor felt obliged to sack him. "That phone call with De Dominicis was a real low point," said a close Raggi aide, who asked not to be named. "She was very shocked and bitter."

Raggi, 38, has been beset by resignations, infighting and scandals since her landslide election victory in June - a record that risks undermining 5-Star's ambitions to win power nationally and offers a warning of the difficulties it is likely to face if it does.

When De Dominicis departed on Sept. 8, he became the second finance officer and sixth top official Raggi had lost within barely a week.

Rome's problems with services such as rubbish collection and public transport long pre-date Raggi, and 5-Star is successfully running the large northern city of Turin, its other major victory at the June elections.

But the Rome mayor's missteps in getting her administration off the ground still underline the challenges faced by anti-establishment parties across Europe in turning from protest movements into a permanent political presence.

So far, opinion polls suggest the damage to 5-Star has been modest. It remains easily the strongest challenger to center-left Prime Minister Matteo Renzi, and its hopes of winning the next parliamentary election due in 2018 appear intact, for now.

For millions of Italians - especially the young - Raggi's setbacks bear no comparison with the corruption exposed in other parties. For them, 5-Star still remains the country's only hope for more honest and open government.

Analysts say that for Italy, a victory for the movement founded seven years ago would unnerve investors due to its inexperience of government and its promise to hold a non-binding referendum on whether to leave the euro zone.

5-Star insiders admit they have been shaken by the debacle in Rome, but believe it can be a spur to reform the movement and make it more resilient.

"We need to reorganize and expand our leadership structure," Barbara Lezzi, a prominent 5-Star senator, told Reuters. "We have grown too big to be run by just a handful of people."

She called for the five-member "directorate" which has run the movement for the last two years to be broadened to up to 40 lawmakers, mayors and regional councillors.

SHALLOW TALENT POOL

Critics say 5-Star's problem is not only the size of its leadership, but also the lack of clarity over how it is selected and a very shallow talent pool.

Some of its candidates, like Raggi, are chosen by members in internet ballots - in line with the party's credo of direct democracy - while others are selected more informally at "meet-ups" of local branches.

The national directorate was picked by the movement's founders: comedian Beppe Grillo and internet guru Roberto Casaleggio, who died in April. The appointments were then rubber-stamped by an on-line vote.

"5-Star has to evolve into a more traditional kind of party," said Raffaele De Mucci, politics professor at Rome's LUISS University. "It cannot carry on with an informal organization of power, without any proper rules."

Raggi found she had a dearth of 5-Star members with administrative expertise to draw on when she tried to form a cabinet, and she also found few experienced civil servants willing to lend their services to the upstart movement.

Her false starts began as soon as her victory party was over. Internal bickering delayed the formation of her city government and then five top officials quit in a chain reaction after Italy's anti-corruption authority said she had not followed correct procedures in choosing her chief of staff.

A few days later her councillor responsible for tackling Rome's chronic trash collection problems admitted she had known since July she was under investigation for alleged malpractice in her last job, despite previous staunch denials.

At that point 5-Star went into a tailspin, with accusations flying over which national leaders knew about the investigation and when, all fanned by a hostile media.

EXPANDED LEADERSHIP

Alessandro Di Battista, a member of the national directorate, said the body would soon be expanded, but he added that at the local level in Rome the problem was that too many people had been involved in decision making, not too few.

Desperate to make Rome a success, the party set up a team of its more experienced politicians to advise the new mayor.

Raggi and her councillors even agreed to sign a contract binding them to pay a fine of 150,000 euros ($167,000) to the movement if they betrayed its principles. The Rome "sub-directorate" has already been disbanded, and the contract is widely mocked as unenforceable.

The contrast with Turin has been striking. There Mayor Chiara Appendino, left far more to her own devices, had her new team in place in a matter of days and has been running the city with scarcely a trace of controversy.

"Lots of people wanted to lend a hand in Rome and that was a mistake because it created confusion," Di Battista told Reuters. "But now Virginia is totally autonomous, with all the weight on her shoulders that that entails."

That is a daunting responsibility. Rome has a long history of corruption, suffers from regular garbage crises when the bins overflow and its public transport system grinds to a halt every time it rains heavily. It is also saddled with 13 billion euros of debt which makes the problems hard to fix.

The city's woes are so entrenched that before the election Italians joked that the mainstream parties wanted 5-Star to win and take on a poisoned chalice that could prove its undoing.

That seems a greater risk than ever. Raggi is still looking for a new finance officer and chief of staff, and has made enemies among senior party figures.

The 68-year-old Grillo, who had played little public role in 5-Star for the last two years, has returned to try to unite his bickering creation. On Thursday he was forced to publish a post on his blog, still the 5-Star's official mouthpiece, defending Raggi from internal attacks.

"Leave Virginia Raggi alone," he wrote. "She has my full confidence and the whole of 5-Star supports her so that she can carry out the program the Romans voted for."

For now, the chances of Raggi being left alone, or succeeding, do not seem very high.

(editing by David Stamp)

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