ITALIAN PM BERLUSCONI HEADING BACK TO THE DOCK

C O N F I D E N T I A L ROME 000191

SIPDIS


STATE FOR EUR/WE

E.O. 12958: DECL: 01/16/2014
TAGS: PGOV IT ITALIAN POLITICS
SUBJECT: ITALIAN PM BERLUSCONI HEADING BACK TO THE DOCK

REF: ROME 0122

Classified By: A/POLMINCOUNS JOHN BASS FOR REASONS 1.5 (B) AND (D)


1. (C) Summary. A suspended corruption trial against PM
Berlusconi will resume this Spring. A new three-judge panel
that will decide his case may be more favorable to him than
the team it replaced. Berlusconi's defense lawyer told the
Embassy he thinks the trial will wrap up quickly and that
there is a good chance the PM will not be found guilty of
judicial bribery. To head off any verdict, the Government
will reintroduce as a constitutional bill the ordinary
immunity law that was annulled by the Constitutional Court on
January 13. Berlusconi's leadership of the center-right
majority is secure for now. Only in the event of a guilty
verdict followed by a poor center-right performance at the
June European elections would his position atop the governing
coalition be called into question. End Summary.


2. (U) As we reported reftel, a suspended Milan-based
corruption trial in which PM Berlusconi is the featured
defendant will re-start in the Spring following the
Constitutional Court's annulment of a June 2003 immunity law.
Berlusconi will face the same hard-nosed prosecutors who
were on the verge of moving to closing statements when the
proceedings were suspended in June by the Schifani Law
(reftel). However, the case will be decided by a new set of
judges.


3. (C) Francesco Castellano, chief of the three-judge panel
that will adjudicate the case, is a moderate (Note: Most
Italian magistrates belong to one of several associations
that roughly correspond philosophically with Italy's main
political parties. End Note),who in another corruption
trial against Berlusconi found the PM innocent. Gaetano
Pecorella (strictly protect),a key member of Berlusconi's
defense team (in addition to his role as President of the
House of Deputies Justice Committee),told us on January 16
he believes the new judges are on the whole less biased than
the previous team.


4. (C) Castellano is weighing the possibility of putting the
proceedings on a special fast track that will make any
delaying tactics by the defense more difficult. Pecorella
said he believes the case could be wrapped up in a month or
two once it kicks off. Pecorella told us there are solid
grounds for believing that Berlusconi will be found
not-guilty; he reportedly was against a legislative fix,
believing that the case against Berlusconi is weak. He
argued that the Milan Court's November 2003 decision to find
Berlusconi's former lawyer Cesare Previti not guilty on
judge-bribery charges should work in the PM's favor. (Note:
Previti was sentenced to five years in prison on lesser
corruption charges. Both he and Berlusconi were being tried
in the so-called SME Case, which 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. In May 2003, the Milan court decided to separate the
prosecution of Prime Minister Berlusconi from other
defendants, including Previti. End Note)


5. (C) Meanwhile, the Government is examining its
legislative options. An assistant to Senator Renato Schifani
told us on January 15 that the Government will submit to
Parliament a constitutional bill to try to solve the immunity
conundrum. The Constitutional Court's full decision
explaining the legal rationale for annulling the regular
Schifani Law probably will be released next week. The
technical details of the decision will determine how much
room the center-right majority has to merely reintroduce the
Schifani Law as a constitutional bill. Another option being
considered is the reinstitution of full parliamentary
immunity--partially lifted in the wake of widespread
political corruption in the early 1990s--which could help PM
Berlusconi as he also has a seat in the House of Deputies.


6. (C) Comment: The Constitutional Court decision is creating
some turbulence for PM Berlusconi, as it comes on top of
another significant legislative defeat (Note: President
Ciampi's decision to remand to Parliament for further review
a television broadcast system reform bill. End Note) and a
push by some of the governing coalition's junior partners for
a reshuffle. Nevertheless, it does not threaten Berlusconi's
still undisputed leadership of the center-right. The outcome
of an eventual guilty verdict (if a constitutional law was
not passed and upheld by the High Court in the meantime) is
tricky to predict. Berlusconi has said repeatedly he will
not resign if the Milan court decides against him. Moreover,

if the decision comes before the European Elections in June,
we think he is likely to rely on them as a referendum on his
leadership. If his Forza Italia party and the center-right
do well, a guilty verdict would fade from view. However, a
guilty verdict combined with a a poor performance at the
polls could, for the first time since Berlusconi took office
in June 2001, place his position atop the governing coalition
in question. End Comment.

SKODON


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2004ROME00191 - Classification: CONFIDENTIAL