Martedì, 16 Ottobre 2018
ROME

Berlusconi tax-fraud conviction explained

English
© ANSA

(By Emily Backus)
Rome, August 29 - Italian supreme Cassation Court
judges called media tycoon and ex-premier Silvio Berlusconi the
"creator" of a system for manipulating media rights in their
justification, released Thursday, for upholding the ex-premier's
conviction for tax fraud on August 1.
The definitive conviction, his first ever in nearly 20
years of legal entanglements, has deeply divided Italy's
unprecedented left-right government this month, threatening to
scupper the cabinet after just four months in office if the
media magnate is stripped of his Senate seat.
Berlusconi was the "creator of the mechanism for twisting
(film) rights" for the television broadcaster Mediaset "that
over a distance of years continued to produce (illegal) effects,
reducing taxes for the companies that he headed in many ways,"
the judges wrote.
Berlusconi knowingly allowed a system "without commercial
justification" to continue under people he hand-picked, the
judges continued.
The judges found that Berlusconi was still responsible even
after he vacated active managerial duties at Mediaset because,
"perfectly knowing the mechanism, he let it continue unaltered,
keeping subjects chosen by himself in strategic positions, who
continued to deal with management in such a way as to allow the
persistent rise of Mediaset's costs for the purpose of tax
evasion".
Berlusconi is guilty of devising a system in which offshore
companies purchased rights to Hollywood films for Mediaset,
which is part of a multi-billion-euro media empire controlled by
the centre-right leader's family.
According to the ruling, Mediaset then repurchased the
rights from the offshore companies at inflated rates, leading to
higher costs for Mediaset, pooling money in offshore funds, and
smaller margins in Italy on which to pay taxes.
The judges called Mediaset's treatment of television rights
"a systematic game of mirrors" that "reflected a series of steps
without commercial justification" and that "at every step the
rise in cost was (to say the least) imposing".
Key figures in the Mediaset affair were "largely maintained
in crucial positions even after Berlusconi's resignation from
corporate responsibilities, and were in continuous direct
contact with him," the panel found.
"Thus the lack of managerial power in the hands of
Berlusconi...is not given as a barrier to recognizing his
responsibility," the judges concluded.
Earlier this month, the Cassation upheld a four-year prison
sentence, which was reduced to one year of house arrest or
community service due to an amnesty.
But the high court tossed a five-year ban on Berlusconi's
holding public office to lower court.
While Berlusconi seems resigned to accept the one-year
term, his People of Freedom Party (PdL) says it cannot tolerate
working in the same government with the Democratic Party (PD) if
it votes next month in the Senate to strip him of his seat in
the Upper House.
The Senate is set to vote September 9 on removing
Berlusconi from office according to a new anti-corruption law
that kicked in after his August 1 conviction.
The Senate vote presents the second and more ominous threat
to government stability after Italian government ministers
finalized a deal to overhaul a property tax known as IMU on
Wednesday.
Eliminating the tax was a major PdL campaign promise, and
PdL leaders threatened to pull support for the government if it
failed to reach a deal with the PD.
Premier Enrico Letta on Thursday claimed the future looked
bright now that the tax controversy was behind him - despite
ex-premier Silvio Berlusconi's ongoing legal and political woes.
"I am not afraid that there will be an influence on the
life of the government...due to the convictions or legal
proceedings (of Berlusconi)," Letta told Italian radio.

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