US embassy cable - 05ROME3227

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