BERLUSCONI ACQUITTED YET AGAIN

C O N F I D E N T I A L ROME 003227

SIPDIS


E.O. 12958: DECL: 09/27/2015
TAGS: PGOV PHUM IT KCRIM ITALIAN POLITICS
SUBJECT: BERLUSCONI ACQUITTED YET AGAIN

Classified By: POL-MIL COUNSELOR JONATHAN COHEN FOR REASONS 1.4 (B) AND
(D).


1. (C) Summary. On September 26, a Milan court acquitted
Italian PM Berlusconi of charges of false accounting dating
back to 1999 charges that his financial company Finivest
engaged in false bookkeeping from 1989-95. The acquittal was
based on a ruling that the statute of limitations had
expired; in 2001 the Berlusconi government enacted
legislation shortening the statue of limitations for this
crime. As expected, the center-left renewed its claims that
Berlusconi had abused his power to alter the law for his own
benefit, and the center-right again accused the judiciary of
a witch hunt against the PM. Berlusconi has been acquitted
of every charge filed against him to date. The Italian
public is sadly accustomed to corruption allegations, and
this case is unlikely to affect voter attitudes toward
Berlusconi. End Summary.


2. (U) On September 26, a Milan court acquitted PM
Berlusconi of charges of false accounting in the so-called
"All Iberian" trial. The trial, named after an off-shore
company, dates back to 1999 charges that Berlusconi's
financial company Finivest maintained false books between
1989-1995. The acquittal was based on a court ruling that
"the case is no longer an offense in the law." In September
2001, the Berlusconi Government enacted a law which
downgraded false accounting as a crime when committed by
private companies and reduced the statute of limitations for
such cases from 15 to seven and a half years.


3. (C) The prosecutor had originally accused Finivest of
using the company to channel more than 20 billion lire in
funds to the late Bettino Craxi's Socialist Party.
Berlusconi and Craxi were close friends and some of Craxi's
policies appeared designed to favor Berlusconi's media
empire.


4. (U) In June 1998, the court split the All Iberian case
into two sections, one addressing the party funding issue and
the other addressing false accounting. In July 1998,
Berlusconi was found guilt on the first set of charges and
given a suspended sentence of two years and four months and
fined the equivalent of $5.5 million. Craxi, then living as
a fugitive from Italian justice in Tunisia, was given for
years and fined $11 million. However, in October 1999, these
convictions were overturned when an appeals court ruled that
the statue of limitations had run out.


5. (U) In May 2004, the European Court of Justice (ECJ)
rejected a challenge filed by Milan prosecutors that the 2001
Italian law on falsified bookkeeping contravened an EU
directive. The ECJ ruled that EU directives could not be
applied directly to individuals facing criminal prosecution,
but it noted that Italian courts could still abrogate the law
if they believed it was incompatible with EU standards of
punishment.


6. (C) Comment: Berlusconi has been at the center of
numerous corruption investigations involving his vast
business empire. He has been acquitted in every case,
sometimes because the statute of limitations had expired. He
has always denied any wrongdoing and consistently claimed the
investigations were politically motivated. Italy's
left-leaning magistrates certainly have shown what appears to
be politically motivated timing, frequently serving notices
at particularly sensitive moments for Berlusconi. Whether
politically motivated or not, the Italian public has been
accustomed to allegations of corruption by politicians, and
this case is not likely to affect voter attitudes toward
Berlusconi.
SPOGLI


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2005ROME03227 - Classification: CONFIDENTIAL