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?

Gladio According to the NY Times

Before we dive in--I discovered the existence of Gladio through researching Propaganda Due after reading Malachi Martin's Vatican. Vatican was published in the mid-80s. The Gladio scandals appear to have broken in the early 90s. Martin had some interesting sources of information. An overview from the New York Times:

A Western cold-war conspiracy to fight what seemed imminent danger is coming to light in Europe. It is already rocking the Italian Government and will touch many others. There was, it is revealed, an organized underground, provided with hidden arms depots, prepared to launch guerrilla wars and resistance in the event of invasion from the East or overthrow of democratic governments from within.

There were different epic names for the operations -- "Gladio" in Italy (manned by secret gladiators), "Rose in the Wind" in France, "Red Fleece" in Belgium. They were sometimes directed, but generally coordinated, by NATO with participation of the C.I.A. and British secret service.

Former C.I.A. Director William Colby has confirmed some of this in recent interviews with Italian journalists. They also reported that meetings of the clandestine groups were held as recently as a few weeks ago in Brussels, though several governments claim it all ended by the 80's.

The Italian Government has said there were 139 caches of clandestine arms, explosives and communications equipment of which 127 were recovered years ago. They haven't accounted for the rest.

There's some astounding stuff in this article from 1990, when the Gladio scandal broke in Italy:

New "gladiators" are still recruited, and two members of Parliament say they visited a military base on the island of Sardinia where guerrilla training exercises were held last spring. But Admiral Martini told the investigating commission that nearly three-fourths of the 622 members were over the age of 50, or were dead.

Nevertheless, the network continues, and several officials reported that a supervisory committee of European secret services met in Brussels only a month ago. Nourishing conspiracy theories are assertions from key European leaders that they knew nothing about the operation until recently. Joseph Luns, who was NATO secretary general from 1971 to 1984, said he had never heard of it.

The network extended throughout Western Europe, even beyond the NATO countries though it was a NATO operation:

The Prime Minister said last week that Gladio later evolved into a branch of an extensive network, operated within NATO and abetted by a 1956 agreement between the United States and Italian secret services. Over the years, he says, 622 Italians belonged to the operation -- civilians who were trained by intelligence operatives and who had fought in World War II or served in the peacetime forces.

Germany, France, Belgium, the Netherlands, Greece and Luxembourg have all acknowledged that they maintained Gladio-style networks to prepare guerrilla fighters to leap into action in the event of a Warsaw Pact invasion. Many worked under the code name Stay Behind. Greece called its operation Red Sheepskin.

News reports in recent days assert that similar programs have also existed in Britain, Norway, Portugal, Spain, Austria, Turkey and Denmark, and even in neutral countries like Switzerland and Sweden.

The network also had supplies. Caches of arms were planted across Europe. Some caches of arms and supplies were never recovered. The chief of Italian military intelligence, Adm. Fulvio Martini, claimed that Gladio had no connection to any plots or neo-fascist organizations. That claim seems to lack support:

The Grey Wolves group, with which he [Mehmet Ali Agca, attempted assassin of Pope John Paul II] was associated at the time of the shooting, was linked to an underground network known as Gladio.

This was set up with CIA support in a number of European countries during the Cold War to prepare resistance to a possible Soviet invasion.

In both Italy and Turkey, Gladio networks are believed to have been behind numerous bombings and assassinations.

In Italy, the networks have been exposed and dismantled; in Turkey, they are still widely believed to exist as a so-called "deep state", with support from elements of the military.

There are ongoing trials of dozens of people accused of involvement in illegal, deep-state activities.

Agca was certainly helped to escape from prison in 1979 by his guards and some well-known underground right-wing figures. He was given false passports and enough funds to enable him to travel around Europe for several months before the attempted assassination.

The Turkish connection to Gladio is almost present-day news, as shown by this 2008 piece:

One of the most sensational public trials in Turkish history began Monday, as a court started hearing a case against 86 people — among them retired army generals, journalists and a former university rector — charged with assassinations, bomb attacks and trying to topple the government...

Turkey is a democracy with an elected government, but a powerful elite of military officers, judges and senior bureaucrats has helped steer the country since its inception in 1923, carrying out four coups. This trial is the first real attempt in Turkish history to prosecute the leaders of this country’s violent nationalist fringe, who prosecutors say have had links to the elite.

The case has riveted Turkish society because public criticism of the military, a vaunted institution in Turkey, is extremely rare. The military has denied any role in the plots; the officers identified in the indictment are all retired.

Prosecutors say the Ergenekon organization is the Turkish equivalent of the Italian Gladio network, a code name for operatives who infiltrated Italian society after World War II to counter Communism and who were responsible for a series of political assassinations and bombings in the 1970s. Turkey, according to the indictment, has allowed Ergenekon “to turn our country into a mafia and terror haven."

And more.

A Gladio Roundup

Most of these come from Time magazine archives. Nato's Secret Armies

The cold war was near absolute zero, the Korean War was raging, and the West could almost hear the Soviet tanks gunning their engines on the other side of the Iron Curtain. The U.S. and its European allies were determined not to be caught as unprepared as they had been when the Nazis invaded. So in the early 1950s they began training "stay behind" networks of volunteers. If the Soviet army rolled west, the groups were to gather intelligence, open escape routes and form resistance movements.

Originally advised and financed by the U.S. Central Intelligence Agency, many of the units and their clandestine arms caches were later taken over by the military intelligence organizations of West European countries and coordinated by a NATO committee. "It seemed like a pretty sensible business," recalls Harry Rositzke, a retired CIA officer who handled anti- Soviet operations in Munich in the mid-1950s. "But then, we were all hysterical at the time."

Nor has the emotion completely ebbed now that Europe is remaking itself. Last week in Italy and Belgium, investigators were looking into possible links between the clandestine networks and episodes of right-wing terrorism during the past 20 years. In Rome, Admiral Fulvio Martini, head of military intelligence, testified before a parliamentary committee. Italy's paramilitary group, dubbed Gladio (Sword), had 622 members and 139 stockpiles of arms and explosives hidden around the country, Martini said. When the caches were gathered up in 1972, he added, 10 were found empty. One of them had contained eight kilos of plastic explosive, leading left-wing politicians to voice suspicion that the plastic had been used for the neofascist terrorism that plagued Italy in the 1970s and '80s.

The Belgian government is investigating the possibility that its secret resistance members might have been responsible for a wave of terrorist raids on supermarkets near Brussels in which 27 people were killed between 1983 and 1985. As the accusations echoed across the Continent, France and Greece announced that their clandestine volunteer groups had been disbanded...

Italy: A Double-Edged Sword

The story seems straight from the pages of a political thriller. During the early days of the cold war, the Italian government, assisted by the CIA, sets up a clandestine paramilitary network designed to resist a communist invasion. Code name: Operation Gladio, as in a gladiator's double-edged sword. Skip ahead to last July, when a Venetian magistrate named Felice Casson, investigating a 1970s car bombing in Peteano, uncovers the network while searching through files at SISMI, the Italian intelligence service. When Prime Minister Giulio Andreotti admits Gladio did exist, a national scandal ensues. Most disturbing are suspicions that renegade Gladio agents may have been involved in right-wing terrorism in the 1960s and '70s. Last week, during an address to Parliament, Andreotti insisted Gladio was completely justified by the climate of the times and chided the opposition for "insinuating suspicions." He insisted that although Gladio had a military structure, "it had never been involved in terrorist activities." Meanwhile, Casson has summoned President Francesco Cossiga to testify on the Peteano attack.

Turkey Busts Alleged Murder Network

Turkey's Nobel Prize-winning novelist Orhan Pamuk might sleep a little easier tonight — or not. A series of dramatic arrests over the weekend has laid bare what is alleged to be a shadowy network of ultra-nationalist killers with connections in high places. Their hit list allegedly included the famous writer, targeted for speaking out about Turkey's patchy treatment of its minorities. The allegations, widely reported by Turkish newspapers, are certainly as dark as anything Pamuk ever wrote. Istanbul prosecutors have arrested 13 people, including a former general and a high-profile lawyer, on charges of "provoking armed rebellion against the government." They are suspected of involvement in last year's string of nationalist-motivated murders, which cost the lives of prominent ethnic Armenian journalist Hrant Dink and three Christian missionaries, according to newspapers...

Of those, Veli Kucuk, a retired major general, was allegedly plotting to kill Pamuk, Turkish newspapers reported. Kucuk is suspected of running a secret unit within police forces that carried out bombings and killings for which other groups were widely blamed. Also arrested was Kemal Kerincsiz, a nationalist lawyer responsible for numerous cases against Pamuk, Dink and other intellectuals. None of the suspects have spoken about the charges.

"If they are true, it suggests there are two parallel universes in Turkey," says Hakan Altinay, director of the Open Society Institute, a think tank. "There are people who wake up every morning and plan murders of political opponents, plot coups and how to destabilize the country," he said.

Most Turks have long suspected the existence of a covert web of elements within the security forces and bureaucracy who act outside the law to uphold their own political ends. There is even a household name for it: the "deep state," referring to a state within the state.

Newspapers have suggested that this network is the Turkish remnant of Gladio, a Cold War-era program, orchestrated by the U.S. in several NATO countries, to create a covert paramilitary force to counter Communist activities.

Gladio in Italy appears to have had some rather highly placed friends with close ties to the finances of Vatican City State. Italy: Bank Error

His passport identified him as an Argentine citizen named Bruno Rizzi. He turned up one day last week at a Geneva branch of the prestigious Bank of Switzerland to withdraw money — as much as $60 million, according to some reports — from numbered accounts. But Swiss police swiftly arrested him. His real identity: Licio Gelli, 63, an Italian businessman sought for 16 months for his part in two of the biggest scandals to rock Italy in years.

Gelli, who held dual Italian-Argentine citizenship, had been on the run since last year after a police raid on his luxurious villa in Arezzo, 130 miles north of Rome. There, they discovered, the financier also served as "venerable master" of a bizarre Masonic lodge known as Propaganda Due, or P2. Its membership of nearly 1,000 included powerful Italian politicians, military men and police. The fact that Gelli was apparently using the lodge to achieve political power in Italy unleashed such a furor that high military and security officials whose names were found on the rolls were forced to resign; so was Prime Minister Arnaldo Forlani, though he was not a P2 member. Gelli's name was also linked to the collapse of Milan's Banco Ambrosiano, whose president, Roberto Calvi, was not only a member of P2, but was believed to be the lodge's paymaser, allegedly funding right-wing Latin leaders who were friends of Gelli's.

With an Italian prison term awaiting him, Calvi fled to London. There he apparently hanged himself last June, although many Italians believe he was murdered. An attorney general of a Swiss canton has since discovered that close to $100 million of Banco Ambrosiano's money had been stashed in numbered Geneva accounts. And Licio Gelli knew the numbers...

Staggering charges await Gelli in Italy if, as expected, he is extradited. They will probably include political and military espionage, illegal possession of state secrets and fraud. Magistrates investigating yet another incident that rocked Italy have reason to suspect that Gelli played a behind-the-scenes role in the explosion of a terrorist bomb in the Bologna railroad station on Aug. 2, 1980. The bomb killed 85 people and injured another 182.

Calvi was also known as "God's Banker." Italy: The Great Vatican Bank Mystery

A tale of two deaths, twelve investigations and missing millions

Two suicides, both of which could conceivably be murder. As much as $1.2 billion in unsecured loans. The failure of Italy's huge Banco Ambrosiano, which has left more than 200 international financial institutions holding the bag for millions in loans. A scandal that has threatened the stability of the entire international banking system and has begun to bring about subtle changes in the way the world's major banks do business. A secret plot to undermine the government of Italy and to change the shape of politics in several Latin American countries.

Even if these were the only ingredients, the story would still be intriguing enough for a Robert Ludlum thriller. But an added element is making the scandal that has rocked the world of international finance one of the most compelling real-life mysteries of the century: the involvement of the Istituto per le Opere di Religione (I.O.R.), better known as the Vatican bank.

Founded in 1942 to invest and increase the funds given to the Holy See for religious works, the I.O.R. is much like any other international commercial bank. It accepts savings and checking accounts, transfers funds in and out of the Vatican and makes investments. There are, however, some interesting differences in the bank, which is tucked away in the medieval tower of Sixtus V. Depositors must be connected with the Vatican. The list of those eligible includes members of the Curia (the Pope has a personal account, No. 16/16), the 729 permanent residents of Vatican City, and a small group of clergymen and laymen who have regular business dealings with the Vatican. No others need apply. The bank's assets are thought to be modest by international standards. For that reason, the scandal is especially threatening to the I.O.R.: Italian authorities say the bank may be liable for much of the millions the Banco Ambrosiano Group owed to international banks.

The scandal has also brought a wave of unwelcome attention to the Vatican bank's American-born president, Archbishop Paul Marcinkus. So far no one has openly accused Marcinkus of any illegal acts. But he is one of three Vatican officials under investigation by Italian authorities, who have indicated that Marcinkus could ultimately be charged. Serious questions are also being raised about his judgment and competence, specifically about his willingness to let the Vatican bank and its good name be used by international wheeler-dealers. At least eleven other official inquiries into Banco Ambrosiano's affairs are under way, in Italy, Britain, Switzerland, Luxembourg, the Bahamas and Peru. As those investigations stumble forward, the archbishop's once promising career is endangered, and the affair threatens to become an embarrassment for Pope John Paul II...

There's much more in this last article, well worth reading the whole thing. What does this add up to? The Church is a divinely established institution run by human beings and sustained by the Holy Spirit or else we'd have been gone a long time ago. Both sides of the Cold War utilized some rather nasty infiltration techniques and probably still have operations and influence in place that we've all kind of forgotten. There's probably a connection in a lot of modern jihadist activity to the Cold War, by means of old alliances used for new things, money and training that were meant for an older war now being used in the current war, and resources and organizations around the world that may be reactivated, if the need is perceived.

Operation Gladio

This BBC article on the release of Mehmet Ali Agca, attempted murderer of Pope John Paul II, connects him to a fascinating bit of Cold War history with which I was, up until recently, unfamiliar:

The Grey Wolves group, with which he was associated at the time of the shooting, was linked to an underground network known as Gladio.

This was set up with CIA support in a number of European countries during the Cold War to prepare resistance to a possible Soviet invasion.

In both Italy and Turkey, Gladio networks are believed to have been behind numerous bombings and assassinations.

In Italy, the networks have been exposed and dismantled; in Turkey, they are still widely believed to exist as a so-called "deep state", with support from elements of the military.

There are ongoing trials of dozens of people accused of involvement in illegal, deep-state activities.

Agca was certainly helped to escape from prison in 1979 by his guards and some well-known underground right-wing figures. He was given false passports and enough funds to enable him to travel around Europe for several months before the attempted assassination.

Gladio came to my attention in connection with the Propaganda Due Masonic Lodge scandal in Italy, a massive affair implicating most of the upper levels of Italian public life, and entangling any number of other people in the tendrils of its reach. Anyone interested in one possible account of both these affairs from the perspective of Catholic internal politics should check out this novel--the sort of book Dan Brown dreams of being able to write. I should caution you, though--the author's a liar.