Machiavelli: I would begin by creating a ministry of the police, which would be the most important of my ministries and which would centralize -- as much abroad as domestically -- the many services with which I would endow this part of my administration.

Montesquieu: But if you would do this, your subjects would immediately see that they were enveloped in a frightening net.

Machiavelli: If this ministry displeases, I would abolish it and I would, if you like, name it the Ministry of State. Furthermore, I would organize in the other ministries corresponding services, the great majority of which would be founded, quietly, in what today you call the Ministry of the Interior and the Ministry of Foreign Affairs. You will understand perfectly well that here I would not at all be concerned with diplomacy, but uniquely with the means capable of assuring my security against factions, as much abroad as domestically. So, you can believe that, in this connection, I would find the majority of the monarchs in practically the same situation as I was in, that is to say, very disposed to seconding my views, which would consist in creating international police services in the interests of reciprocal security. If I were to attain this result, which I do not doubt, here would be some of the forms in which my foreign police services would be produced: men of pleasure and good company in the foreign courts, who have their eyes on the intrigues of the princes and those of the so-called exiles, banished revolutionaries among whom -- for money -- I would not fail to find some to serve me as agents of transmission with respect to the schemes of shady demagogy; who would found political newspapers in the great capitals, printing houses and bookstores placed in the same conditions and secretly subsidized to follow closely the movements of thought through the press.[1]

Montesquieu: It would no longer be against the factions in your kingdom that you would end up conspiring, but against the very soul of humanity.

Machiavelli: As you know, I am not afraid of great words. I would want things so that any statesman who would like to form cabals abroad would be observed, noted from point to point, up to the moment of his return to my kingdom, where he would be incarcerated for good so that he could not be in the position to try again.[2] So as to have the thread of revolutionary intrigues better in my hand, I dream of [implementing] an arrangement that would be quite clever.

Montesquieu: Great God! What would this be?

Machiavelli: I would like to have a prince of my house, seated upon the steps of my throne, who would pretend to be dissatisfied.[3] His mission would consist in posing as a liberal, as a detractor of my government, and in rallying -- so as to observe them closely -- those who would like to perpetrate a little demagogy from the highest ranks of my kingdom. Insisting upon domestic and foreign intrigues, the prince to whom I would confide these missions would thus play a game of dupe with those who would not be in on the secret of the comedy.
snip...
Machiavelli: Perhaps there would be real conspiracies, I am not sure, but there would certainly be simulated ones.[7] At certain moments, when the prince's popularity has decreased, they could be an excellent means of exciting the sympathy of the people in favor of him. By intimidating the public spirit, one could thus obtain, if needed, the severe measures that one would want or one could maintain those that exist. False conspiracies, which of course could only be used with the greatest restraint, would have another advantage: they could permit me to discover real conspiracies, by giving rise to investigations that lead one to seek everywhere the traces of what one suspects.

Nothing is more precious than the life of the sovereign: it would be necessary that he is surrounded by innumerable guarantees, that is to say, innumerable agents, but it would be necessary that this secret militia[8] is quite dissimulated, so that the sovereign would not have the air of being afraid when he appears in public. One tells me that in Europe such precautions have been perfected to the point that a prince who walks the streets can have the appearance of a simple citizen who promenades amongst the throngs without being guarded, whereas he is actually surrounded by two or three thousand protectors.

Moreover, I would have my police officers sprinkled among all the ranks of society. There would be no meeting, no committee, no salon, no intimate foyer in which one could not find an ear to hear what is said everywhere, all the time. Alas, for those who wield power, the facility with which men are made into paid informers is a surprising phenomenon. What is even more surprising are the faculties of observation and analysis that develops among the political police; you have no idea of their ruses, disguises and instincts, of the passion they bring to their work, their impenetrability; there are men of all ranks who pursue this trade -- how can I describe it? -- due to a kind of love for the art.

The false version was likely written by Aimé Guillon. It was published in 1817. In the decades following Napoleon's defeat there was an enormous production of false works and paraphernalia attributed to Napoleon. The alleged original book and Guillon's copy have never been found.

The history of the Spanish version is interesting: the Napoleonic version was translated in the 1930's and apparently had enough success to continue to be republished. The controversy over its falsehood seems not to have touched Spain. In France Jean de Bonnot published the text in 1985 asserting that it was authentic. However, researchers now agree it is false, remarking that de Bonnot had "stacked the deck" by making a false claim about an inventory in the Bibliotheque Nationale dated 1827.

The Berlusconi version makes no secret that the annotations are false. The book is presently very difficult to find. The original was a limited edition (1000 copies) while the version put in commerce is long out of print.  

The forgery is considered to be very astute to the point it could have been written by Napoleon but I think we will have to call Borges on that.