BERLUSCONI,S TRIAL SEPARATED FROM CO-DEFENDANTS;

C O N F I D E N T I A L SECTION 01 OF 03 ROME 002284

SIPDIS

DEPARTMENT FOR EUR/WE, IRL

E.O. 12958: DECL: 05/22/2018
TAGS: PGOV PHUM PHUM PHUM IT ITPGOV ITPGOV
SUBJECT: BERLUSCONI,S TRIAL SEPARATED FROM CO-DEFENDANTS;
STAGE SET FOR "GUILTY BY ASSOCIATION" VERDICT

REF: A. ROME 1971


B. ROME 1835

C. ROME 737
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D. ROME 355

CLASSIFIED BY: A/DCM THOMAS COUNTRYMAN, REASON 1.5 (D).

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SUMMARY
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1. (C) A MAY 16 COURT DECISION TO SEPARATE THE PROSECUTION
OF PRIME MINISTER BERLUSCONI FROM OTHER DEFENDANTS IN A
CORRUPTION TRIAL WILL STRING OUT LEGAL PROCEEDINGS AGAINST
THE PM AND CERTAINLY EXACERBATE DOMESTIC POLITICAL BATTLES
AND INSTITUTIONAL STRUGGLES BETWEEN THE GOVERNMENT AND
JUDICIARY. THE EXPECTED GUILTY VERDICT AGAINST BERLUSCONI'S
CO-DEFENDANTS SETS THE STAGE FOR A "GUILTY-BY-ASSOCIATION"
VERDICT AGAINST THE PRIME MINISTER HIMSELF. BUT NONE OF THIS
SHOULD HAVE A DRAMATIC IMPACT ON ITALY'S UPCOMING EU
PRESIDENCY OR RUPTURE BERLUSCONI'S COALITION GOVERNMENT,
WHICH WE STILL THINK WILL BE THE FIRST ITALIAN POSTWAR
GOVERNMENT TO SERVE ITS FULL FIVE-YEAR TERM. AT MOST, IT MAY
IMPEDE BERLUSCONI'S ABILITY TO PERSUASIVELY BROKER THE
BACKROOM DEALS THAT ARE PART AND PARCEL OF EU SUMMITS, BUT WE
EXPECT MOST FELLOW EU LEADERS WILL CONTINUE DEALING WITH HIM
MUCH AS THEY HAVE. THE COURT'S DECISION AND THE EXPECTED
GUILTY VERDICT MATTER MOST TO ITALY'S POLITICIANS; MOST OF
THE PUBLIC IS INDIFFERENT. END SUMMARY.

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THE PROCEEDINGS
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2. (U) ON MAY 16, THE MILAN TRIBUNAL CONSIDERING THE "SME"
JUDICIAL BRIBERY CASE AGAINST PM SILVIO BERLUSCONI DECIDED TO
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SPLIT THE TRIAL. THE CASE STEMS FROM THE 1985 PROPOSED SALE
OF THE THEN-STATE-OWNED SME FOOD HOLDING COMPANY. BERLUSCONI
IS ACCUSED AS AN ACCESSORY TO JUDICIAL BRIBERY IN COMPLICATED
JUDICIAL PROCEEDINGS ARISING FROM THE EVENTUAL SALE. (NOTE:
THE CASE WAS BROUGHT AGAINST HIM BY THE MILAN COURT IN 1995,
SOME TEN YEARS AFTER THE ALLEGED CORRUPTION OCCURRED. END
NOTE.) CESARE PREVITI, DEFENSE MINISTER IN THE FIRST
BERLUSCONI GOVERNMENT, FORZA ITALIA PARLIAMENTARIAN, AND A
FORMER LAWYER TO THE PM, IS A CO-DEFENDANT, ALONG WITH SEVEN
OTHERS. DURING THE SCHEDULED MAY 16 HEARING, BERLUSCONI'S
LAWYERS REQUESTED YET ANOTHER DELAY OF THE TRIAL (THE SIXTH),
DUE TO GOVERNMENT DEMANDS WHICH, THEY CLAIMED, MADE IT
IMPOSSIBLE FOR BERLUSCONI TO APPEAR.


3. (SBU) PRESIDING JUDGE LUISA PONTI SUGGESTED THAT
BERLUSCONI BE TRIED SEPARATELY FROM THE OTHER DEFENDANTS TO
AVOID HAVING HIS SCHEDULING CONFLICTS FURTHER DELAY THE
PROCEEDINGS AGAINST THE OTHERS. THUS, THE TRIBUNAL
DETERMINED, THE CASE AGAINST THE EIGHT CO-DEFENDANTS WILL
PROCEED; THE NEXT HEARING, AT WHICH PROSECUTOR ILDA
BOCCASSINI IS EXPECTED TO PRESENT HER CONCLUDING SPEECH, IS
SET FOR MAY 23. THE PRIME MINISTER'S TRIAL, MEANWHILE, WILL
BE CONDUCTED AT ITS OWN PACE, IN KEEPING WITH THE PM'S
SCHEDULE -- BEFORE THE SAME TRIBUNAL. IT MUST, HOWEVER,
START FROM SCRATCH, AS IT IS TECHNICALLY A NEW TRIAL.
(COMMENT: IRONICALLY FROM A U.S. PERSPECTIVE, THE SAME
TRIBUNAL CAN CONSIDER THE CASE, EVEN IF THE REMAINING
DEFENDANTS ARE FOUND GUILTY. AS U.S. DEFENSE ATTORNEYS TELL
US WHEN VISITING ITALY, THEY WOULD NOT WANT TO DEFEND A CASE
HERE. END COMMENT.)

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THE REACTION
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4. (SBU) THE CENTER-LEFT IMMEDIATELY WELCOMED THE
MAGISTRATES' DECISION, SAYING IT ALLOWS JUSTICE TO RUN ITS
COURSE WITH DUE CONSIDERATION FOR THE PRIME MINISTER'S
SCHEDULE. FORMER MANI PULITE (CLEAN HANDS) PROSECUTOR AND
LEADER OF THE "ITALY OF VALUES" PARTY ANTONIO DI PIETRO
CAPTURED THE OPPOSITION VIEWPOINT ELOQUENTLY: THE DECISION,
HE SAID, SAFEGUARDS THE DELICATE FUNCTION WHICH BERLUSCONI IS
ABOUT TO ASSUME WITH THE EU PRESIDENCY WHILE ALLOWING JUSTICE
TO RUN ITS COURSE. AT THE SAME TIME, IT GUARANTEES
PROSECUTION OF THE SME CASE, PERMITTING THE CITIZENS TO KNOW
THE TRUTH AS SOON AS POSSIBLE, PERHAPS IN TWO-THREE WEEKS.
PARLIAMENT NEED NO LONGER CONSIDER THE "LODO MACCANICO"
(PROPOSAL TO PROVIDE "TEMPORARY IMMUNITY" BY SUSPENDING CASES
AGAINST HIGH GOVERNMENT OFFICIALS WHILE IN OFFICE). AND
ABOVE ALL, THE CITIZENS WILL UNDERSTAND WHO WAS THE
INSTIGATOR OF ALL THE CASES, WHETHER THE SME CASE OR THE
"LODO MONDADORI" CASE (IN WHICH BERLUSCONI ASSOCIATE PREVITI
WAS RECENTLY FOUND GUILTY OF BRIBING JUDGES AND SENTENCED TO
11 YEARS IN PRISON; HE IS APPEALING THE VERDICT.) AND THIS,
DI PIETRO CONCLUDED, WILL HAVE POLITICAL CONSEQUENCES ALSO
FOR BERLUSCONI. (COMMENT: AS NOTED IN 02 MILAN 259, DI

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INFO LOG-00 NP-00 AID-00 AMAD-00 CIAE-00 INL-00 DODE-00
SRPP-00 DS-00 EB-00 VC-00 TEDE-00 INR-00 IO-00
LAB-01 L-00 VCE-00 AC-01 NSAE-00 NSCE-00 OIC-02
OMB-01 OPIC-01 PA-00 PM-00 PRS-00 ACE-00 P-00
SCT-00 SP-00 STR-00 TRSE-00 USIE-00 PMB-00 DSCC-00
PRM-00 DRL-01 G-00 NFAT-00 SAS-00 /007W
-------------- 699B60 221737Z /38
P 221731Z MAY 03
FM AMEMBASSY ROME
TO SECSTATE WASHDC PRIORITY 0058
INFO EUROPEAN POLITICAL COLLECTIVE
AMCONSUL FLORENCE
AMCONSUL MILAN
AMCONSUL NAPLES

C O N F I D E N T I A L SECTION 02 OF 03 ROME 002284

SIPDIS

DEPARTMENT FOR EUR/WE, IRL

E.O. 12958: DECL: 05/22/2018
TAGS: PGOV PHUM PHUM PHUM IT ITPGOV ITPGOV
SUBJECT: BERLUSCONI,S TRIAL SEPARATED FROM CO-DEFENDANTS;
STAGE SET FOR "GUILTY BY ASSOCIATION" VERDICT

PIETRO IS NOT A LEFTIST EXTREMIST; HE IS IN FACT A CENTRIST.
HOWEVER, HE CONSIDERS BERLUSCONI A "MORTAL ENEMY" OF
DEMOCRACY AND THE LEGAL SYSTEM. END COMMENT.)
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5. (SBU) NOT SURPRISINGLY, THE CENTER-RIGHT -- MOST VOCALLY
THE PRIME MINISTER HIMSELF -- SEES THINGS DIFFERENTLY. IT
VIEWS THE MOVE BY THE TRIBUNAL AS YET ANOTHER EXAMPLE OF
BLATANT ACTION BY A POLITICIZED JUDICIARY TO MANIPULATE THE
JUDICIAL SYSTEM TO ACHIEVE WHAT THEY CANNOT AT THE BALLOT BOX
-- DESTRUCTION OF THE CENTER-RIGHT GOVERNMENT, INDEED THE
ENTIRE CENTER-RIGHT POLITICAL STRUCTURE. CENTER-RIGHT
REPRESENTATIVES CHARGE THAT, BY SPLITTING THE SME TRIAL, THE
MAGISTRATES GUARANTEED THAT THE TRIAL OF BERLUSCONI'S
CO-DEFENDANTS WOULD CONTINUE, LEADING TO AN EXPECTED GUILTY
VERDICT, PRESUMED BY ALMOST ALL ITALIANS TO BE IMMINENT.
THEY ASSERT THAT THIS IS A DELIBERATE ATTEMPT TO REFLECT THE
"GUILT" OF OTHERS ONTO THE PRIME MINISTER, EVEN AT THE RISK
OF JEOPARDIZING HIS EFFECTIVENESS WHILE ITALY HOLDS THE EU
PRESIDENCY. AS FORZA ITALIA DEPUTY AND FORMER INTERIOR UNDER
SECRETARY CARLO TAORMINA SAID WHEN THE DECISION WAS MADE

SIPDIS
PUBLIC, "IT WILL GRAVELY PREJUDICE THE (PRIME MINISTER'S)
CASE." HE ADDED THAT A GUILTY VERDICT WOULD "CERTAINLY" BE
ISSUED IN THE CASE AGAINST BERLUSCONI'S CO-DEFENDANTS,
BECAUSE "IT IS THE MILANESE SYSTEM." (COMMENT: MAGISTRATES
IN MILAN HAVE A PREDOMINANTLY LEFTIST ORIENTATION; THEIR
NUMBER INCLUDES SOME WHO SPEAK OF A SACRED OBLIGATION TO
PURSUE "DEMOCRATIC REVOLUTION" THROUGH THE COURTS. END
COMMENT.)

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MEANWHILE, BACK AT THE PARLIAMENT
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6. (U) IN THE MEANTIME, BERLUSCONI CONTINUES TO PRESS FOR
JUDICIAL REFORM AND THE REINSTATEMENT OF PARLIAMENTARY
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IMMUNITY (ABOLISHED IN THE AFTERMATH OF ITALY'S CORRUPTION
SCANDALS). THAT REQUIRES A CONSTITUTIONAL AMENDMENT,
HOWEVER, AND IS A MONTHS-LONG PROCESS. WHILE THERE IS SOLID
AGREEMENT IN HIS MAJORITY COALITION ON THE NEED FOR REFORM,
THERE IS SOME DIFFERENCE IN THE DETAILS. DEPUTY PRIME
MINISTER GIANFRANCO FINI (NATIONAL ALLIANCE),FOR EXAMPLE,
HAS DEMURRED PUBLICLY THAT "WE CANNOT GO BACK TO TEN YEARS
AGO" (I.E., FULL PARLIAMENTARY IMMUNITY, SUGGESTING SOMETHING
LESS MIGHT BE ACCEPTABLE). THERE ARE BOTH CONSENSUS WITHIN
THE MAJORITY AND INDICATIONS OF SUPPORT FROM PRESIDENT CIAMPI
FOR THE SO-CALLED "LODO MACCANICO" PROPOSAL TO SUSPEND TRIALS
FOR THE FIVE HIGHEST INSTITUTIONAL FIGURES (PRESIDENTS OF THE
REPUBLIC, CONSTITUTIONAL COURT, SENATE, AND CHAMBER OF
DEPUTIES, AND THE PRIME MINISTER) WHILE THEY ARE IN OFFICE.
IF SUCH A LEGAL PROVISION WERE TO PASS, THE BERLUSCONI TRIAL
WOULD BE SUSPENDED UNTIL HE NO LONGER HELD OFFICE. (NOTE:
WE PRESUME, ALTHOUGH IT IS STILL UNCLEAR, THAT THE STATUTE OF
LIMITATIONS WOULD ALSO BE SUSPENDED FOR THE INTERVAL. END
NOTE.) CENTER-RIGHT CRITICS COMPLAIN, HOWEVER, THAT THE
ACTION BY THE MILAN TRIBUNAL RENDERS FURTHER DISCUSSION OF
THE LODO MACCANICO MEANINGLESS, AS BERLUSCONI WILL BE
EFFECTIVELY TRIED "IN ABSENTIA" AT THE CONTINUING TRIAL OF
THE SEVEN CO-DEFENDANTS.

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SO, CAN BERLUSCONI EFFECTIVELY MANAGE ITALY'S
EU PRESIDENCY? AND WILL THE COALITION HOLD?
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7. (C) WITH APOLOGIES TO VON CLAUSWITZ, LEGAL PROCEEDINGS
IN ITALY ARE OFTEN POLITICS BY OTHER MEANS. THE PROSPECT OF
A GUILTY VERDICT -- WHETHER DIRECT OR BY ASSOCIATION --
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AGAINST PRIME MINISTER BERLUSCONI HAS THE OPPOSITION
SALIVATING AND HOPING TO TRANSLATE IT INTO ELECTORAL GAINS IN
MAY 25-26 LOCAL ELECTIONS. THE INTEREST OF THE "ECONOMIST"
AND OTHERS ASIDE, HOWEVER, AND SOMEWHAT CONTRARY TO WHAT WE
MIGHT EXPECT, WE HAVE YET TO SEE THAT BERLUSCONI'S LEGAL
TRAVAILS MAKE A DIFFERENCE TO THE ITALIAN ELECTORATE. THE
PRIME MINISTER CONTINUES TO EVOKE STRONG FEELINGS IN
ITALIANS, AND THEY HAVE ALREADY DECIDED WHAT THEY THINK OF
HIM; WE SEE LITTLE EVIDENCE THAT THIS TRIAL, WHATEVER ITS
OUTCOME, WILL CHANGE MANY MINDS.


8. (C) THE JUDICIAL PROBLEMS MATTER MORE ON THE
INTERNATIONAL SCALE, TO THE EXTENT THEY IMPEDE BERLUSCONI'S
ABILITY TO LEAD EFFECTIVELY ITALY'S EU PRESIDENCY AND ADVANCE
U.S. INTERESTS. WE DO NOT SEE THE IMPACT HERE TO BE THAT
GREAT, EITHER. IT IS TRUE THAT BERLUSCONI IS MORE DISTRACTED
BY THE NEED TO ATTEND TO HIS JUDICIAL AFFAIRS, BUT HE IS A
MAN OF GREAT ENERGY AND IT DOES NOT SEEM TO CAUSE EITHER
DISRUPTION IN COALITION MANAGEMENT OR LACK OF ATTENTION TO
ISSUES WHICH DEMAND IT. HE ALSO HAS MANY ABLE SUBORDINATES,
FROM FINI TO FOREIGN MINISTER FRATTINI TO INTERIOR MINISTER
PISANU AND MORE. SOME SUGGEST A GUILTY VERDICT, WHETHER
DIRECT OR BY ASSOCIATION, MIGHT WEAKEN HIS STATURE VIS-A-VIS
HIS EUROPEAN COLLEAGUES DURING THE PRESIDENCY. THAT PROBABLY

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INFO LOG-00 NP-00 AID-00 AMAD-00 CIAE-00 INL-00 DODE-00
SRPP-00 DS-00 EB-00 VC-00 TEDE-00 INR-00 IO-00
LAB-01 L-00 VCE-00 AC-01 NSAE-00 NSCE-00 OIC-02
OMB-01 OPIC-01 PA-00 PM-00 PRS-00 ACE-00 P-00
SCT-00 SP-00 STR-00 TRSE-00 USIE-00 PMB-00 DSCC-00
PRM-00 DRL-01 G-00 NFAT-00 SAS-00 /007W
-------------- 699B65 221737Z /38
P 221731Z MAY 03
FM AMEMBASSY ROME
TO SECSTATE WASHDC PRIORITY 0059
INFO EUROPEAN POLITICAL COLLECTIVE
AMCONSUL FLORENCE
AMCONSUL MILAN
AMCONSUL NAPLES

C O N F I D E N T I A L SECTION 03 OF 03 ROME 002284

SIPDIS

DEPARTMENT FOR EUR/WE, IRL

E.O. 12958: DECL: 05/22/2018
TAGS: PGOV PHUM PHUM PHUM IT ITPGOV ITPGOV
SUBJECT: BERLUSCONI,S TRIAL SEPARATED FROM CO-DEFENDANTS;
STAGE SET FOR "GUILTY BY ASSOCIATION" VERDICT

OVERSTATES THE CASE; THERE IS LITTLE TO SUGGEST IT WILL
AFFECT MANAGEMENT OF BASIC PRESIDENCY RESPONSIBILITIES OR THE
OVERALL RELATIONSHIPS BETWEEN BERLUSCONI AND HIS COUNTERPARTS
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(FOR BETTER OR WORSE). INDEED, THE FRENCH DCM TOLD US ON THE
DAY OF THE DECISION TO SPLIT THE CASES THAT IT WAS IRRELEVANT
TO HIS GOVERNMENT, PROVIDED BERLUSCONI PAID ATTENTION TO EU
MATTERS WHILE ITALY HELD THE PRESIDENCY. IT MIGHT IMPACT ON
BERLUSCONI'S ABILITY TO BROKER THE LAST-MINUTE, BACKROOM
DEALS OF WHICH EU SUMMITS ARE MADE, BUT AGAIN, WE THINK THE
LIKELIHOOD IS MINIMAL.


9. (C) WILL THE GOVERNMENT STAND? WE THINK IT WILL, AND AS
OF NOW WE CONTINUE TO PREDICT IT WILL BE THE FIRST POST-WAR
GOI TO COMPLETE ITS FIVE-YEAR TERM. WHILE THERE MAY BE
DIFFERENCES AMONG SOME COALITION PARTNERS AS TO HOW BEST TO
REFORM THE JUDICIARY, OR THE SPEED AT WHICH THAT REFORM
SHOULD PROCEED, AS WELL AS ON ISSUES COMPLETELY UNRELATED TO
THE JUDICIARY, WE SEE VIRTUAL UNANIMITY IN THE BELIEF THAT
THE MAGISTRACY IS HIGHLY POLITICIZED AND THAT IT SEEKS TO
ACCOMPLISH POLITICAL "REVOLUTION" THROUGH THE JUDICIAL
SYSTEM. THIS WILL NOT BE THE ISSUE THAT BREAKS THE COALITION.


10. (C) A GUILTY VERDICT WOULD BE EMBARRASSING, BUT IT
WOULD NOT HINDER THE GOVERNMENT'S IMAGE OR PROGRAM.
RELATIONS WITH THE OPPOSITION WILL REMAIN AT LOGGERHEADS, AS
THEY WILL WITH THE JUDICIARY -- BUT BOTH ARE FRUITLESS NOW.
(BERLUSCONI ANNOUNCED ON MAY 22 THAT HE WANTED TO SPEED
CONSIDERATION OF THE GOI'S JUDICIAL REFORM PROPOSALS,
INCLUDING SEPARATION OF CAREER TRACKS FOR PROSECUTORS AND
JUDGES -- ANOTHER GAUNTLET FLUNG AT THE MAGISTRACY.) THE
GOVERNMENT RECOGNIZES THE DRAWBACKS, AND PERHAPS ABOVE ALL
THE DISTRACTION, OF SUCH A VERDICT, AND THAT IS WHY
BERLUSCONI, SENATE PRESIDENT PERA, CHAMBER PRESIDENT CASINI,
UNION OF CHRISTIAN DEMOCRATS (UDC) SECRETARY FOLLINI, AND
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NORTHERN LEAGUE SECRETARY BOSSI AGREE THAT SOME FORM OF
IMMUNITY/SUSPENSION OF CASES AGAINST THE PRIME MINISTER IS
IMPERATIVE. BUT WHATEVER THE VERDICT, BE IT AGAINST HIS
ASSOCIATES OR AGAINST HIM PERSONALLY, BERLUSCONI WILL RESPOND
THE SAME WAY: HE WILL CHARGE THAT IT IS A POLITICAL DECISION
BY A POLITICIZED JUDICIARY, DECLARE HIS INNOCENCE, FILE AN
APPEAL -- AND MOVE ON. HE IS, UNDER ITALIAN LAW, INNOCENT
UNTIL ALL APPEALS ARE EXHAUSTED. THE OPPOSITION WOULD HOWL
-- BUT THEY DO A LOT OF THAT ANYWAY. WOULD IT AFFECT ITALIAN
VOTES IN THE 2004 EUROPEAN PARLIAMENT ELECTIONS OR THE 2006
NATIONAL ELECTIONS? MAYBE -- BUT WE WOULDN'T BET ON IT.
SKODON

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2003ROME02284 - Classification: CONFIDENTIAL