US embassy cable - 04ROME191

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