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Saturday, Nov. 3, 2012

EDITORIAL

Has Mr. Berlusconi's luck run out?

Former Italian Prime Minister Silvio Berlusconi has been found guilty of tax fraud and sentenced to four years in prison. Incredibly for a leader of a Group of Eight nation, this is not Mr. Berlusconi's first conviction — he has been found guilty in three other unrelated trials — nor might it be his last: The media magnate and power broker is on trial separately on charges of paying for sex with an underage prostitute. (He proclaims his innocence on all charges.) And once again, courtesy of the peculiarities of the Italian legal system, Mr. Berlusconi is unlikely to serve his sentence. Whether he will resume his political career is much less settled, but history shows it is never wise to count Mr. Berlusconi out.

In this case, Mr. Berlusconi was charged with orchestrating a scheme a decade ago in which he used offshore companies to purchase the rights to American movies and then resold them to Mediaset, his media conglomerate, at high prices, both to avoid paying Italian taxes and to use the profits for a secret slush fund. The gains totaled about ?250 million, or some $320 million. Mr. Berlusconi was convicted, sentenced to four years in prison — which was instantly cut to one year because of a law aimed at reducing prison overcrowding — and banned from politics for five years. (All sentences are suspended pending appeals.) The other defendants, including a longtime business partner, were acquitted.

The decision marked the former prime minister's fourth conviction — amid dozens of cases — in a lower court in Italy, although it is the first since he relinquished the prime minister's office a year ago. In previous cases, he has been found guilty of perjury, corruption and false accounting. In each case, however, the sentence was either suspended by amnesty laws, overturned on appeal or dismissed after the statute of limitations had expired. In one of those delightful paradoxes of Italian life, court decisions can only be enforced when a case is completely adjudicated — including appeals — within a certain time period. In Italy, the statute of limitations is not suspended even if a trial has started. Mr. Berlusconi has two means to fight the charges. The statute of limitations on these charges expire next year, and the wheels of Italian justice move slowly at the best of times. And Mr. Berlusconi also enjoys immunity as a member of Parliament, pretty much ensuring that he will elude justice.

The former prime minister insists that these charges — like all others — are false and that he is being hounded by a "dictatorship of the magistrature." He accuses the judiciary and his political opponents of political persecution, arguing that the courts are being used to undermine Italy's democracy. Those charges ring hollow given his ability to beat every case and the readiness of his allies to pass laws specifically designed to help out Mr. Berlusconi.

The steady drip of charges has eroded Mr. Berlusconi's credibility with the public, although the repeated failure of his government to deliver on promises to improve the lives of most Italians was more important in this regard. An ongoing case, in which he is alleged to have paid for sex with an underage Moroccan dancer and then used his office to cover up his behavior, may yet prove the final straw in his extraordinary political trajectory.

While this drama makes for lurid, if not entertaining, reading, it has potentially powerful repercussions for Italian politics as the government in Rome struggles with legitimacy problems and an economy that seems to be on the verge of imploding. Prime Minister Mario Monti took over from Mr. Berlusconi last year when the country seemed to be on the brink of bankruptcy. A nonelected government of technocrats has worked to restore both balance and confidence to the economy, primarily through the imposition of tough austerity measures that include tax hikes, spending cuts and a pension overhaul.

With official unemployment at 10.7 percent, and unions locked in bitter disputes with companies over layoffs, the government's survival is not guaranteed. Significantly, Mr. Monti has depended on the support of Mr. Berlusconi's People of Freedom party, which is now at risk as the former prime minister tries to bolster his personal and political fortunes in the runup to elections next April. Last week, he announced that he would not lead his party in that ballot, but there is little doubt that he will remain its most significant player regardless of his formal position.

The regional election in Sicily that was held on Sunday will shape Mr. Berlusconi's calculations. The center left candidate Ms. Renato Crocetta was elected as new governor, showing that Mr. Berlusconi and his party are not as powerful as before. Falling support for the People of Freedom party, the climb of protest candidates, and the more general sense of disgust with the established parties — abstention rates hit record levels — all suggest that Mr. Berlusconi has fewer cards to play and may be moving to the sidelines of Italian politics.

Nevertheless, the former prime minister has demonstrated an extraordinary ability to survive. As a member of Parliament, he maintains his immunity. As the head of Italy's largest media company and one of Europe's richest men, he retains the ability to shape the environment in which political decisions are made. Mr. Berlusconi remains formidable: No Italian politician would yet count him out.



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