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A former Italian politician whose career ended over charges of corruption on construction projects, is doing a "good job" building model homes in the northern part of that country for Ottawa, the Public Works Minister said yesterday.

Alfonso Gagliano, facing accusations he awarded contracts to a friend, also refused to outline publicly the nature of his relationship with former Italian senator Maurizio Creuso.

During Question Period, Mr. Gagliano was grilled by the opposition about contracts awarded to Mr. Creuso by Canada Post and the Canada Mortgage and Housing Corp. -- two Crown corporations that fall under Mr. Gagliano's department.

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Mr. Gagliano insisted that he was not involved in handing out the contracts, but added that Mr. Creuso has obtained positive results for Ottawa. He did not address opposition claims that Mr. Creuso obtained the contracts because of a personal friendship with Mr. Gagliano.

"[Mr. Gagliano's] paesano on the payroll is the latest in a long list of unaccountable Liberal lapses in ethical judgment," Progressive Conservative MP Peter MacKay charged in the House.

Prime Minister Jean Chrétien fended off the first two questions directed at Mr. Gagliano, who is one of his loyal supporters.

"This is another accusation that is based on nothing," Mr. Chrétien said.

Later, Mr. Gagliano said CMHC had struck a fine deal with Mr. Creuso, which led to the construction of three model homes showcasing Canadian technology.

"He did a good job. In the space of a year and a half we are already building model houses so we can sell Canadian housing technology and Canadian businesses can do business outside Canada," Mr. Gagliano said.

Mr. Creuso also did work as an agent for Canada Post, trying to strike a deal with the Italian postal company. The contract never materialized.

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Mr. Creuso said he did not make money for that work.

After Question Period, Mr. Gagliano exited the House of Commons through a back door, avoiding reporters.

He has yet to say when he first met Mr. Creuso and when he first learned about the former Italian senator's legal problems.

The Globe and Mail reported details of Mr. Creuso's legal problems and his contracts with Ottawa last weekend.

Mr. Creuso, who became a Canadian citizen in 1998, agreed to pay a fine in 1994 to settle corruption charges involving numerous construction projects, but the matter is still before the courts.

Italian authorities also sentenced him to 16 months in jail in 1999.

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In an interview last week, Mr. Creuso said he has not been to jail and the matter is still before the courts.

A photograph obtained by The Globe and Mail shows Mr. Creuso, along with other high-ranking Canadian officials, representing Canada in Romania in January, 2000.

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