Propaganda Due

An overview from a piece published in 1992 on the trial and conviction of one of Italy's most powerful businessmen, Carlo de Benedetti:

In a statement issued in March 1991, Mr. de Benedetti said he had been forced off the bank's board because he was alone in "openly and strongly" contesting the management methods of its then chairman, Roberto Calvi. Mr. Calvi's body was found hanging under Blackfriars Bridge in London on June 18, 1982, officially a suicide, although the belief that he was murdered is still widely held in Italy.

Other famous names convicted today as accessories to fraudulent bankruptcy included Licio Gelli, a leader of the outlawed Masonic lodge known as P-2, who was sentenced to 18 1/2 years in prison; and Giuseppe Ciarrapico, a Rome financier and close friend of Prime Minister Giulio Andreotti, who was sentenced to 6 years and 4 months.

The unraveling of the bank began in 1981 when the discovery of the P-2 Masonic lodge, with many prominent names among its nearly 1,000 members, brought down the Italian Government. Not only was P-2, for Propaganda Due, suspected of responsibility for some rightist bomb attacks, but Mr. Gelli was later found to have used Banco Ambrosiano for money laundering.

Under Mr. Calvi, who took over the bank's presidency in 1975 and was also a member of P-2, the bank expanded rapidly abroad, notably in South America and in offshore financial centers. Evidence that it laundered some Mafia money and provided credit for some Mafia operations later formed part of the prosecution's case.

The Roman Catholic Church's embarrassing involvement came through the friendship between Mr. Calvi and an American prelate, Archbishop Paul C. Marcinkus of Cicero, Ill., who was head of the Institute for Religious Works at the Vatican. 'God's Banker'

Known as the Vatican Bank, the institute owned 1.5 percent of the Banco Ambrosiano as well as 10 shell companies in Panama and Luxembourg to which the bank lent $1.3 billion. Mr. Calvi's well-known ties to the Vatican earned him the nickname of "God's banker," but it was when the Vatican's shell companies could not repay their loans that the bank finally went under.

After the Banco Ambrosiano's collapse in August 1982, the Vatican contended that it played no role in the bank's management. In 1984, insisting that it was a gesture of good will rather than an admission of guilt, the Vatican nonetheless paid $250 million to the bank's creditors.

In 1988, arguing that it was a sovereign state, it also persuaded the Italian Supreme Court that Archbishop Marcinkus was protected from prosecution by diplomatic immunity. The Archbishop stepped down as head of the Vatican Bank in 1989 and retired the following year.

An article available to subscribers only, though it looks like an early overview sort of piece. Probably worth reading. And Propaganda Due appears to have been only the tip of the iceberg of the total network of corruption in Italy:

What started a year ago as a modest bribe for a cleaning contract in Milan has grown into one of the most extraordinary scandals of postwar Europe, revealing the vast corruption that cements patronage and power among Italy's political barons. ...the recent revelations have exposed startling levels of bribery involving the power elite, once an untouchable network of dynasties, family money, state largesse and high-flying entrepreneurs. At a time of broadening economic and political discontent, the so-called Mani Pulite, or "clean hands" affair, has brought broad demands for an end at last to the way politicians run Italy as a jigsaw of fiefs.

There are Propaganda Due connections in the story:

The accusations against Mr. Martelli, the former Justice Minister, are even more opaque. In a seven-hour interview that he requested with Mr. Di Pietro last month, Mr. Martelli is said to have acknowledged that he knew of a bank account in Lugano, Switzerland, in the name of a Socialist party boss in Milan, Silvano Larini. But he has denied he was involved in corruption. According to his testimony, during a walk in 1980 with Mr. Craxi and Mr. Martelli, the Socialist party leader asked him if he knew of a Swiss account the party could use. Mr. Larini said his father had such an account. Mr. Martelli is said to have told Mr. Di Pietro that he wrote down the account number -- 63369 -- but never became involved in its operation. But investigators say the account was a conduit for illicit payments to the Socialist Party, most notably in 1981, when $7 million was deposited by Roberto Calvi, a financial adviser to the Vatican and head of Banco Ambrosiano. Mr. Calvi was found hanging from Blackfriars Bridge in London in 1982 in still mysterious circumstances. The money was a payoff to the Socialist Party, Mr. Larini testified, after its political appointees at ENI, the state oil company, organized a $50 million loan to Banco Ambrosiano in a vain effort to stave off its collapse. The Vatican held a large chunk of the bank's shares but denied involvement in the mismanagement and corruption allegations that accompanied its fall. The Vatican ended up paying $250 million to the bank's creditors as a "goodwill gesture"; the bank's bad debts totaled $1.3 billion.

Considering the apparent right-wing ties of Propaganda Due, here's an odd little tidbit of information:

Mr. Craxi himself has been accused of seven incidents in which unspecified millions of dollars were said to have been diverted to the Socialists. The party officials said to have acted on his behalf include two former mayors of Milan, one of whom, Paolo Pilliteri, is Mr. Craxi's brother-in-law.

Mr. Craxi has denied all criminal charges and has said he will answer accusations regarding illicit party funds but not those alleging corruption.

Still protected from prosecution by parliamentary immunity, he faces accusations involving kickbacks of $200,000 from a Fiat subsidiary, fraudulent bankruptcy in connection with the collapse of Banco Ambrosiano and efforts to extort $2.5 million for a power-plant contract and $20 million for contracts on the Milan subway... Bettino Craxi -- Socialist Party leader. He resigned on Feb. 11 after being served with a sixth formal notice that he was under investigation in connection with the scandal. He denies wrongdoing.

The more I look at this, the more fascinated I am. But where's the books on it? Where's the scholarly exposition of the networks and Byzantine plots?