Obituary: Licio Gelli
Grandmaster of the P2 masonic lodge and lifelong fascist was implicated in Italian political and financial scandal
Licio Gelli, who has died aged 96, was a one-time fascist blackshirt and grandmaster of a secret masonic lodge at the centre of Italy's biggest post-war political scandal. It centred around the collapse, in 1982, of the Banco Ambrosiano, and followed the death of the bank's former president, Roberto Calvi, who was found in June 1982 hanging from Blackfriars Bridge in London.
Calvi had risen to the top of Italy's largest private bank in the 1970s, during which time he worked hand in glove with Michele 'The Shark' Sindona, a Sicilian banker who was well connected with both the Mafia and the Christian Democrat political establishment.
Both were members of the P2 (Propaganda Due) lodge, of which Gelli was the head and which had operated illegally after it was dissolved by the Grand Orient of Italy (the official Freemasons) in 1976.
With Sindona (who was subsequently killed in jail by a poisoned cup of coffee in 1986), Calvi was thought to have set up a complicated web of banking and insurance interests, including laundering drug money for the Mafia and forging a close partnership with Cardinal Paul Marcinkus, head of the Vatican's bank, the Istituto per le Opere Religiose (IOR). Many paths were allegedly smoothed by Gelli.
An investigation into Calvi's dealings began in 1978 and in 1981 he was sentenced to four years in jail on charges relating to the illegal export of capital. Freed pending appeal, on June 10, 1982 he fled to London on a false passport with a briefcase full of incriminating documents, some showing that he was attempting to blackmail the Vatican. His body was discovered a week later by a postal clerk crossing Blackfriars Bridge.
In August 1982, Ambrosiano finally collapsed and it became clear that over $1bn had disappeared. The fact that Calvi was a member of Gelli's lodge, whose members called themselves the 'frati neri' ('black friars') and was found hanging under Blackfriar's Bridge, his pockets weighted down with bricks, raised suspicions that P2 was somehow involved in his death.
But a coroner's inquest returned a verdict of suicide.
In 2003, however, City of London Police reopened their investigation as a murder inquiry after British and German forensic experts concluded that Calvi could not have killed himself. In 2005, Gelli and five others, including the Mafia boss Giuseppe 'Pippo' Calo, were formally placed under investigation in Italy on charges of ordering his murder. But Gelli's name was not in the final indictment at the trial and the case against the other suspects was dismissed for lack of evidence.
The Calvi and Banco Ambrosiano affair, however, was not the darkest page in the Gelli story. In 1981, the year before the bank collapse, Gelli had made headlines when a police raid on his office found a secret list of 1,000 prominent politicians, magistrates, journalists, businessmen (among them Silvio Berlusconi), policemen, the heads of all three of Italy's secret services and some 40 senior military commanders, who were all members of P2. The discovery helped bring down the Christian Democrat government of Arnaldo Forlani.
When searching Gelli's villa, police found a document headed 'Plan for Democratic Rebirth', which called for a consolidation of the media, suppression of trade unions, and the rewriting of the Italian Constitution.
"The availability of sums not exceeding 30 to 40 billion lira would seem sufficient to allow carefully chosen men, acting in good faith, to conquer key positions necessary for overall control," it read.
A subsequent parliamentary commission said the aim of P2 had been "to exert anonymous and surreptitious control" of the political system.
As the scandal slowly unravelled, Gelli was also implicated in a series of other crimes, including funding neo-fascist terrorist groups, and frustrating efforts to save the former prime minister Aldo Moro, who was murdered by the Red Brigades leftist guerrilla group in 1978 after a 55-day kidnapping.
Most seriously, he was accused of being one of the masterminds behind the bombing of Bologna railway station in 1980, in which 85 people lost their lives, in an attempt to destabilise the state and pave the way for a right-wing coup.
Gelli was first arrested in Geneva in September 1982 after he tried to withdraw funds from his numbered Swiss bank account, which held $150m that had been deposited by South American affiliates of Banco Ambrosiano. The Swiss arrested him for entering the country on a false passport. The following year, however, he escaped from jail and spent the next four years on the run, probably in Chile.
In 1987, he returned to Switzerland, where he surrendered and was sentenced to two months in prison for bribery, while an Italian court sentenced him in absentia to eight years on charges of financing right-wing terrorist activity in the 1970s.
The following year the Swiss agreed to extradite him to Italy to face trial. In July 1988, Gelli was absolved of charges of subversive association but was given a five-year prison term for 'slandering' (ie obstructing) the investigation into the Bologna bombings, although terms of his extradition meant that he did not serve time for his crime.
In 1992, he was sentenced to 18 and-a-half years for his part in the Banco Ambrosiano scandal, later reduced to 12 years on appeal. The same year he was one of 16 former P2 members put on trial, most of whom were accused of political conspiracy, spying, revealing state secrets and threatening the constitution. Due to the terms of his extradition, however, Gelli faced only charges of slander and false representation. He was found guilty in 1994 and received a 17-year sentence.
In 1996, Gelli's lawyers claimed that he was in bad health. He was released and kept under 24-hour surveillance in his luxury villa. Two years later he disappeared from house arrest and when police raided his villa, they found 160kg of gold bars hidden in vases. There was speculation that it was part of a 55-ton fascist haul that Gelli had supposedly "escorted" out of Yugoslavia on a Red Cross-marked train in 1942.
Rearrested in Cannes, Gelli returned to Italy, where he remained under house arrest.
Licio Gelli was born in Pistoia, north of Florence, on April 21, 1919. Expelled from school aged 17, during the 1930s he volunteered for the Blackshirts' expeditionary forces sent by Mussolini in support of Franco's fascists in the Spanish Civil War, and subsequently became a liaison officer between the Italian government and Nazi Germany. After the war, accused of torturing anti-fascist partisans, he fled to Argentina, where he built up links that brought him friendship with its dictator Juan Peron. Returning to Italy, he worked at a mattress spring company and became its managing director and the director of several other businesses.
In 1966 Gelli joined P2, rising to become its grandmaster in 1973. After its dissolution it became a 'black', or 'covert' lodge, operating in contravention of the Italian constitution banning secret associations, until 1981.
It was later described as "a state within a state" and Gelli became known as 'The Grand Puppet Master'. In the 1970s when the Italian Communist Party was a major force, there was fear among Nato countries that Italy could be vulnerable to a Soviet-backed leftist takeover.
Gelli is said to have established contacts with US intelligence during the Allied occupation of Italy and there were claims that P2 had been bankrolled by the CIA.
New charges of tax fraud were filed against him two years ago and the state took ownership of his villa, though he continued to live there until his death. "I am a fascist and will die a fascist, " he declared in 1999.
Gelli, who died on December 15, is survived by his second wife, Gabriella, and by a daughter and two sons.