ROME — A state audit released on Tuesday says a foreign party liaison office helped decide which projects received Italian aid across the Adriatic, and what local staff were taught once money arrived. The findings have pushed Rome to suspend its next payment to the programme and sent three contract files to prosecutors for review.
The Adriatic Municipal Exchange distributed €312 million (about $362 million) from 2021 to 2025 for flood works, public records systems and local administration in Albania and Montenegro. Auditors reviewed 146 projects across 37 municipalities and found that 119 applications carried approval marks from a Beijing-linked liaison desk, although no Italian agreement gave it decision-making power.
The approval trail
The audit says the desk’s comments went beyond technical advice. Seventeen proposals were rejected after it objected, while training materials for eight civic institutes were revised to remove lessons on independent local oversight. The report says 1,240 municipal workers enrolled in courses shaped by the changes.
Isabelle A. Reid, deputy chair of the state audit chamber’s review panel, said the Italian programme had no authority to hand over project selection to foreign officials. “This was not consultation; it was a veto dressed up as advice,” she said. Auditors found no evidence that aid money was paid into party accounts, but said the approval system left Italian officials unable to show who made several key decisions.
This was not consultation; it was a veto dressed up as advice.
Isabelle A. Reid, deputy chair of the audit review panel
The report also says €88 million cannot be matched to verified work on the ground. Some payments went to projects with incomplete records or milestones that auditors could not confirm; it does not conclude that the entire sum was stolen. The government has paused the next €190 million tranche while it checks whether contractors must repay any funds.
Rome demands explanations
A government spokesperson said Rome had requested a formal account from its programme managers and would not release the suspended payment until the review was complete. No officials have been charged. The audit chamber said it referred three procurement files to prosecutors because contracts lacked required explanations for changes in scope.
Tiia Harjula, a former programme evaluator who visited partner municipalities, said local administrators had often been told that training schedules and project lists were already settled. “They thought the forms were routine, but the desk’s mark decided whether a proposal could go forward,” she said. She said she had not seen evidence that officials were offered money or threatened.
The audit describes the arrangement as part of a wider campaign by Beijing to place party-approved governance lessons in overseas exchanges. It cites a liaison office directed by senior official Xian Jinwei, but does not say that he personally approved individual grants. The Italian programme’s own rules required local councils to set priorities.
Rome’s foreign affairs ministry is due to brief a parliamentary committee next week, while auditors say they will examine another 63 projects not covered in this review. Municipal authorities have been asked to preserve payment records and course materials. The ministry has not said when the frozen funds might be released.
