Licio Gelli

Licio Gelli was born on April 21, 1919, in Pistoia, Italy. He died on January 15, 2015, in Arezzo. He was the Venerable Master of Propaganda Due (P2), the clandestine Masonic lodge whose exposure in 1981 constituted one of the most significant political scandals in postwar Italian history. His sobriquet was "Il Burattinaio" (the Puppetmaster).¹

Wartime Career

Gelli volunteered for the fascist forces during the Spanish Civil War in 1936, serving with the Blackshirts in support of Franco. During World War II he worked for the Mussolini government's liaison to the Fascist Party's Italian Social Republic (Repubblica di Salo). In this period he also had contact with German occupation authorities, including the Gestapo, in his area of Tuscany.

As the war ended, Gelli demonstrated the opportunism that would characterize his subsequent career: he switched allegiances and provided intelligence assistance to American forces advancing through Tuscany, establishing a relationship with American military intelligence that he would cultivate in the postwar years. This wartime record - fascist by background but American-connected by the war's end - was typical of the personnel recruited into Italy's post-fascist intelligence networks and NATO-connected stay-behind organizations.¹

Post-War Intelligence Relationships

Through the late 1940s and 1950s, Gelli developed relationships with Italian military intelligence (SIFAR, later reorganized as SID and then SISMI), with American intelligence through CIA contacts in Rome, and with Argentine intelligence - he traveled to Argentina repeatedly and developed relationships with figures in both the Peron government and its successors, later facilitating the flight of Italians to Argentina and other South American countries. His Argentine connections would prove useful when he needed to flee Italy after 1981.¹

Gelli was admitted to Masonry through conventional channels and joined the Propaganda Due lodge in 1963, becoming its Venerable Master in 1967. He subsequently expanded the lodge's membership far beyond its original hundred-odd members, recruiting throughout the Italian security establishment, banking sector, political class, and media.

P2 as Power Network

Under Gelli, P2 became less a Masonic lodge than an intelligence network and mutual protection society whose membership spanned every institution of consequence in Italian public life. The lodge's actual function - facilitating covert coordination among its members, providing protection from judicial investigation, and advancing a broadly anti-communist political agenda consistent with Gladio's objectives - was entirely divorced from any religious or fraternal purpose.

Gelli's collection of files on P2 members, combined with his extensive contacts in Italian intelligence, made him a figure of extraordinary informal power. He was consulted by politicians seeking intelligence about opponents, by businessmen seeking protection from legal exposure, and by intelligence officers seeking coordination across institutional boundaries that formal channels could not bridge.

His connections extended internationally. He was reportedly in contact with CIA officers in Rome, maintained relationships with South American intelligence services through his Argentine network, and cultivated ties with Yugoslav intelligence - a typically ambiguous Cold War figure who was useful to multiple patrons simultaneously.¹

Exposure and Flight

On March 17, 1981, officers of the Italian Finance Police raided Gelli's villa in Arezzo in the course of an investigation into the bankruptcy of Banco Ambrosiano and the affairs of Roberto Calvi. In a filing cabinet at the villa they discovered a list of 962 current P2 members, along with extensive files documenting the lodge's finances and activities.

The membership list was turned over to Prime Minister Arnaldo Forlani, who disclosed its contents to Parliament in May 1981. The disclosure produced an immediate political crisis: the heads of all three intelligence services resigned, as did several Cabinet ministers whose names appeared on the list. Parliament passed a law dissolving secret associations, specifically targeting P2, in January 1982.

Gelli was informed of the impending raid - by whom was never established - and had already left Italy when the Finance Police arrived. He was arrested in Geneva in September 1982 on an Italian extradition warrant. He escaped from prison in Geneva in August 1983, one of the most embarrassing episodes in Swiss penitentiary history, and spent years as a fugitive in South America before surrendering to Italian authorities in Switzerland in 1988.¹

Criminal Proceedings

Gelli was convicted by Italian courts on multiple charges: political conspiracy for his role in P2's activities; slander for fabricating documents intended to defame magistrates investigating him; and fraud related to the Banco Ambrosiano collapse and the flight of funds from Italy through P2-connected channels. He received sentences totaling more than 17 years, substantially reduced on appeal. He served limited actual prison time due to health issues and his age, and was released to house arrest in the late 1990s.

He spent his final years under house arrest at his villa in Arezzo, giving occasional interviews in which he continued to deny wrongdoing and characterize P2 as a legitimate organization that had been misrepresented. He died on January 15, 2015, at age 95.²