Berlusconi's conflicts of interest hold back vital reforms

By Paul Betts

Published: June 8, 2010

Temperatures are rising in Italy and not just because summer has arrived. In Italian politics the atmosphere is tense. All the more so following the government's tardy admission that after all, the country is no different from other eurozone members in requiring speedy and unpopular austerity measures.

But one issue generating significant heat has, on the face of it, little to do with the economy. This is a law the Berlusconi government is attempting to ram through parliament, aimed at choking off the widespread use by investigating magistrates of telephone intercepts to expose crime and corruption, and the media's right to publish the transcripts.

The leaking and the publication of wiretap transcripts has seemingly become the rule rather than the exception when exposing dubious dealings and outright criminality. No friend of the magistrates, Silvio Berlusconi, prime minister, has made it his priority to legislate to restrict the use of such intercepts.

Many see this as the latest in a long line of measures designed to serve his personal interests. Indeed, transcript-inspired scandals have once again erupted uncomfortably close to Mr Berlusconi. A few weeks ago, Italy's industry minister was forced to resign, while denying wrongdoing and pledging to defend himself against claims that an apartment he owned was partly paid for by others.

Restricting the use of wiretaps to cases involving the mafia and terrorist activity, as the draft law proposes, would see other equally reprehensible activities slip through the net. Think of the 2005 transcripts in which the then governor of the Bank of Italy, Antonio Fazio, was revealed to be in cahoots with Gianpiero Fiorani, the head of Banca Popolare Italiana, over the latter's dubious tactics in the battle for the bank Antonveneta. Both men were forced to resign in disgrace. Without the transcripts they would probably have escaped sanctions.

But it is the frequency of the taps that points to the real problem - a structural breakdown in trust between the judicial system and those in government. With the process of bringing all kinds of wrongdoers to justice in Italy so easily obstructed by the procedural tricks of highly paid lawyers, trial by media has come to be seen in some legal quarters as the only chance of securing a conviction, even if only in the court of public opinion.

This suggests the Italian state faces an institutional crisis as grave as its financial woes. The need for major structural reform, including an overhaul of the justice system, was recently highlighted by employers' leader Emma Marcegaglia in her punchy public critique of the government and the endemic problems of doing business in Italy.

Italian businesses and the country's economy are much the poorer for having a legal system that feels obliged to resort to unconventional measures to defend itself from a constant undermining of its foundations by those in power.

Sadly, a credible reform of the legal process will be virtually impossible while Mr Berlusconi remains in power, given the patent conflict of interest his myriad legal problems have created for him.

While waiting for reform, intercepts and the publication of their content will continue to fill the lack of trust between the judiciary and the executive. This places on magistrates and the media a duty of care in the way they deploy this tool. Used in isolation it may not be sufficient to convict the guilty. Applied in too cavalier a way, it can ensnare the innocent, ruining reputations. This is one more problem Italy could do without. But the alternative of an impotent judiciary and a gagged media is certainly worse.

Copyright The Financial Times Limited 2010

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