Sunday, May 26, 2013

Berlusconi Is Ineligible

In an article in Sole-24 Ore of Sunday 26 May 2013 (Ineleggibilità e Democrazia dei Partiti: Le ragioni legali che i saggi non svelano) Giuliano Amato adds his voice to those such as Valerio Onida, Luciano Violante, and now no less than the new leader of the PD, Gugliemo Epifani, who oppose the notion of Silvio Berlusconi's non-elegibility to Parliament, alleged by many on the ground of his conflict of interest as beneficiary of economically significant TV concessions by the State. 

The eminent jurist and statesman rejects the argument used by others that, since the relevant legislation has not been invoked for twenty years, it cannot begin to be applied now. It would be like arguing, he writes, that, if a serial killer has not been condemned for his first six murders, he should be acquitted once he is caught for his seventh murder. The trouble, Amato argues, is that the Electoral law of 1957, which is still in force, is not as clear-cut as the law on murder.  That law declares ineligible, among others, "those who on their own account [in proprio] or as legal representatives of companies or enterprises are involved with the State by concessions or administrative authorisations of considerable economic significance [in qualità di rappresentanti legali di società o di imprese risultino vincolati con lo Stato per concessioni o autorizzazioni amministrative di notevole entità economica]...".  Berlusconi, argues Amato - as has Valerio Onida, a former President of the Constitutional Court and one of Napolitano's "wise Men" - is neither the legal representative of such a company, nor a direct concessionary, even though he is the uncontested main shareholder, the "boss, l`ideatore e il regista".  According to the Italian Constitution, norms that limit any rights cannot be interpreted extensively, for in that case the hostility towards laws ad personam would be replaced by a peculiar predilection for interpretations ad personam.  Therefore, Amato concludes, Parliament was right in applying , on purely legal and not on political grounds, a literal interpretation of the law. If main shareholders of concessionary companies were intended to be ineligible an amendment to that effect should have been approved beforehand; many such amendments were presented over the years but, for better or worse, were never approved. 

Amato explains that in his approach he is giving voice to his own "jurist's soul".  By the same token, let me voice my own "economist's soul" on this matter. 

A shareholder holding a 100% share in a company that is granted an economically significant State concession is literally undistinguishable to all intents and purposes from a person holding such a concession on his own account.  The application of inelegibility to a 100% shareholder in such a company would not violate either the spirit or the letter of the law.

At the other end of the range of conflicts of interest specified by the law, a legal representative of a company that enjoys the same state concession will have a significantly reduced interest in that concession, with respect to a 100% shareholder, and therefore a reduced conflict of interest.  In fact such a legal representative would benefit from the concession only if, and to the extent that, his compensation is enhanced by the company profitability contributed by the concession. This could happen, for instance, through bonuses related to company performance, or through the allocation of company shares and/or options on favourable terms.  Let us say that the legal representative has a conflict of interest with the State equivalent to that of a shareholder holding x% of company shares, where that x% can and normally does represent a minor shareholding fraction in the company in question.

The position of a major shareholder in a company that is granted a significant State concession is clearly intermediate between that of a concessionary on his own account (or of a 100% shareholder in a concessionary company) and that of a legal representative whose benefit is a small fraction of the concession profitability.  Therefore the ineligibility of a major shareholder in a concessionary company is not in any sense an "extensive interpretation" of a rule to a different category of subjects for which that rule was originally intended, violating the Constitution, but simply an "inclusive interpretation" that applies the same rule not only to the extreme cases contemplated by the law but also to cases intermediate between the extremes. As if the law punishing serial murder and maiming by shooting was also applied to serial murder by strangulation.

Some might regard my argument as casuistic, indeed jesuitical. Anybody who might think so should consider that the same contention could be raised against a literal interpretation of the rule that glosses over the macroscopic conflict of interest that Silvio Berlusconi has enjoyed for the last twenty years.


Alberto Chilosi said...

I perfectly agree, it is Amato and company who are casuistic and jesuitical. But politically speaking it is very awkward to deprive Berlusconi of his electoral seat. On the other hand it is inconsistent with the rule of law to maintain the 57 law and not apply it. In order to avoid this the 57 law should be abrogated and instead the conflict of interest should be dealt with by depriving Berlusconi and Mediaset of its concessionary status, by withdrawing the concessions. A democracy where a single political and economic actor has the control of the means of mass communications that Berlusconi enjoys is not a real democracy. The 57 law is certainly not capable, even if Berlusconi were declared ineligible, to bring a remedy to this substantial problem.

D. Mario Nuti said...

Thanks, Alberto. I suppose that losing his TV concessions would hurt Berlusconi economically enough to make him beg to leave the Senate.

Therefore your proposal is politically preferable to the application of the 1957 T.U. or the approval of an amendment openly supporting B.'s ineligibility.

Dana said...

Why, do economists have souls?

D. Mario Nuti said...

Of course they do, Dana, just like jurists. Though perhaps they have more than their their fair share of dead souls and lost souls.

travaglino said...

I agree that Alberto's solution is the best: neat and more transparent. Yet, how feasible is it to gather the necessary support to pass a law on conflict of interest? The 1957 legislation has the significant advantage that it is already on the books. It could be possible on a 'rainy day' to collect the votes necessary to trigger its application. BTW, it is sad to note that reference to the 1957 legislation has only recently emerged and as such it has been conveniently absent from the debate of the last two decades.

D. Mario Nuti said...

Thanks, Travaglino. Not a chance in the current Parliament, of course.

David said...

Cheer up, with luck at least one of the sets of magistrates who at present are prosecuting Mr B on four separate counts will put him away for a while, or at least bar him from holding public office for the rest of his life.

D. Mario Nuti said...

High office never involved total impunity in Italy, only procrastination. I don't see anything the matter with a judicial solution to Italian political ingovernability. But I won't believe it until I see it.

D. Mario Nuti said...

I received an e-mail from a reader asking whether an amendment extending conflict of interest to major shareholders in a concessionary company would require a constitutional change, in which case failure to introduce it might be due to lack of the necessary majority.

The answer is that an extensive interpretation without such an amendment would require a constitutional change; but the introduction of an amendment to the electoral law, making major shareholders ineligible if their company holds a State concession, would not. No such an excuse.