Massimo Ciancimino, the son of a Mafia don who was close to the head of the Sicilian mafia's "boss of bosses", Bernardo Provenzano alleges Sicily's Cosa Nostra helped finance Mr. Berlusconi's housing project.

He claimed his father, Vito Ciancimino, along with two Mafiosi connected to the building industry, invested "dirty money" through front companies into Mr. Berlusconi's sprawling housing estate. There has been speculation as to how the young Mr. Berlusconi, who came from a modest middle class family, raised the capital to fund the construction of the apartment complex, known as Milano 2, which included lakes, tennis courts, schools and shops.
Mr Ciancimino told the court: "My father diversified his investments to evade anti-Mafia investigators. He considered the Milan megaproject a bit pharaonic and he was hesitant, but then he decided to participate through various companies.”

Niccolo Ghedini, Mrs. Berlusconi's lawyer, denied the claim that the Italian prime minister had ever accepted Mafia money and said he would sue Massimo Ciancimino for defamation. "All the flows of investment into Milano 2 were transparent and they've been subject to scrutiny many times," said Mr. Ghedini.

Mr. Ciancimino, who was testifying in the trial of a senior Carabinieri police officer, is accused of giving protection to Provenzano and helping him evade capture. There have been suspicions that the Italian state struck a "truce" with mobsters which lasted for decades. Provenzano was finally arrested in April 2006 in a shack outside Corleone, after being on the run for 43 years.

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Tags: Cosa Nostra, Italy, The EU