Operation Gladio

by Paul L. Williams

  NEW VATICAN FRIENDS

  Gelli, after making the gold deposit, became a frequent guest at dinner parties hosted for Vatican dignitaries at the palatial home of Count Umberto Ortolani, the former head of military intelligence in Italy and Rome's most powerful layman. At these affairs, he befriended Cardinal Giacomo Lercaro, who became one of the four moderators of the Second Vatican Council; Monsignor Agostino Casaroli, who would become the Vatican's secretary of state under John Paul II; Giulio Andreotti, the cofounder of the Catholic Democratic Party; Massimo Spada, the lay delegato of the IOR; and Michele Sindona, Spada's financial assistant.54 At this time, Sindona, as previously noted, was the principal bagman for the Sicilian Mafia and the CIA. His duties included not only depositing drug money for the Genovese and other crime families in the IOR and parochial banks throughout Italy, but also conveying satchels of cash to prominent Catholic clerics, including Archbishop Montini.55

  Through Sindona, Gelli strengthened his ties not only to the IOR but also the Sicilian Mafia (including Luciano Leggio of the Vizzini family and Salvatore Riina of the Corleonesi clan), the Camorra of Naples, and the ’Ndrangheta of Calabria. Gelli proved to be of inestimable value by introducing Italy's leading Men of Respect to his old friends in South America, including Klaus Barbie. The scenario was now set for the development of the cocaine trade, an undertaking in which the CIA took a keen interest.

  OPERATION DEMAGNETIZE

  In 1956, Gelli returned from Argentina to his native Italy, where he opened a mattress factory in Pistoria and became a director of Permindex, a CIA front organization that was set up in Basel. Permindex, managed by CIA operative Frank Wisner, represented a branch of Gladio that provided arms to Imre Nagy and his rebel forces in Communist Hungary. New Orleans businessman Clay Shaw, who was arrested and questioned in connection with the JFK assassination, was a member of the Permindex American board.56

  In Italy, Gelli served as the CIA's liaison to General Giovanni de Lorenzo, who, upon the recommendation of US Ambassador Claire Booth Luce, had become the head of the Servizio Informazioni Forze Armate (SIFAR), Italy's armed forced information service. SIFAR was the clandestine agency that coordinated the activities of Gladio units throughout the country. With the appointment of General de Lorenzo came a directive from William Harvey, chief of the CIA station in Rome, initiating Operation Demagnetize, and authorizing SIFAR to make use of all possible tactics—political, psychological, and paramilitary—to diminish the power of the Italian Communist Party. The directive represented an authorization of the “strategy of tension,” which would get underway on October 27, 1962, with the assassination of Enrico Mattei, the founder of Italy's largest oil concern ENI (Ente Nazionale Idrocarburi).57 Such attacks, Gelli later told BBC correspondent Allan Francovich, were conducted in accordance with US Army Field Manual 30–31B, which outlined the new tactics to be employed by the Gladio units.58

  PIANO SOLO

  On Election Day in April 1963, the CIA nightmare materialized. The Communists gained strength, amassing 25 percent of the vote, while all other parties lost seats, and Prime Minister Aldo Moro of the Christian Democratic Party, in an effort to assuage the growing number of leftists in his government, named Socialists to cabinet posts. But the Communists were not pacified by Moro's appointments. They too wanted key government positions. In May 1963, the large union of construction workers, under the influence of the PCI, held a demonstration in Rome. The CIA became alarmed and members of Gladio, disguised as police, smashed the rally, leaving more than two hundred demonstrators injured.59

  SIFAR now sought a means to install a government of “public safety” consisting of right-wing Christian Democrats, top political managers, and high-ranking military officials. General de Lorenzo, together with twenty other senior army officers, drafted the plan for a silent coup d’état in close cooperation with CIA secret warfare expert Vernon Walters, William Harvey, chief of the CIA station in Rome, and Colonel Renzo Rocca, director of the Gladio units within the military secret service.60 To implement the coup, SIFAR recruited four thousand agents provocateurs to work with Rocca and his Gladio army. The recruits came to include members of the Mafia, Italian street gangs, and neofascist organizations such as Movimento Sociale Italiano (MSI)—Italian Social Movement; Ordine Nuovo (ON)—New Order; and Avanguardia Nazionale (AV)—National Vanguard. They were trained at a Gladio base near Capo Marargiu, which was accessible only by helicopter. Upon completion of the training in terrorism and sabotage, they were provided with weapons and explosives.61

  Piano Solo was to have concluded with the assassination of Prime Minister Aldo Moro and the installation of Christian Democrat Cesare Merzagora as Italy's new president. But the coup was called off at the final moment when a compromise was reached between the socialists and right wing Christian Democrats.62

  MYSTERIOUS DEATHS

  When news of the formation of a terrorist squad emerged in 1968, Colonel Rocca was found dead within his office in Rome of a gunshot wound to the head. His death was ruled a suicide despite the fact that Rocca's hands bore no trace that he had fired a weapon and the bloodstains indicated that he must have been lying flat on the floor while pulling the trigger. Such findings prompted General Carlo Ciglieri, the former head of the carabinieri, to commission an investigation into SIFAR.

  On April 27, 1969, General Ciglieri was found dead on a dirt road outside Padua—the victim of a mysterious car accident. General Giorgio Manis, who was to provide evidence to the commission, dropped dead on the streets of Rome on June 25, 1969. His assistant, Colonel Remo D'Ottario shot himself in the heart a month later.63

  THE THIRTY-THIRD DEGREE

  The compromise with the socialists was a setback and pointed to the necessity of creating a “state within the state”—an organization that could control the Italian government by money, murder, and mayhem. To accomplish this objective, Gelli, at the bidding of Vernon Walters and other CIA officials, underwent the initiation rite of Freemasonry and joined the Romagnosi lodge in 1963. Almost overnight, he rose to the thirty-third degree of membership, which permitted him to serve as the leader of a lodge.

  At the start of 1964, Gelli was appointed secretary of P2 under Giordano Gamberini, another CIA contractor; Vatican insider Count Ortolani (mentioned above); and Giulio Andreotti (the leader of the Christian Democratic Party who would become Italy's Prime Minister). 64 By the end of the year, Michele Sindona was inducted into the lodge in an elaborate ceremony held within a villa in Tuscany.65

  THE GRAND MASTER

  By 1970, Gelli had emerged as P2's new Worshipful Master and became known by the code name Filippo66 The lodge now received massive infusions of cash—estimated at $10 million per month—from the CIA's black funds. This money was used to purchase the weaponry and material necessary to mount terrorist attacks throughout Italy, Greece, Turkey, and South America.

  By 1969, Gelli's lodge could boast of such members as Italy's Armed Forces Commander Giovanni Torrisi; Secret Service chiefs Giuseppe Santovito and Giulio Grassini; Orazio Giannini, the head of Italy's financial police; Italy's Chief Surgeon Dr. Joseph Miceli Crimi; General Vito Miceli of the SID; General Raffaele Giudice of the Financial Guard; Supreme Council Magistrate Ugo Zilletti; and Vatican banker Michele Sindona. In addition, the membership list contained the names of leading cabinet ministers, along with thirty generals, eight admirals, and numerous newspaper editors, television executives, and top business executives.67

  Gelli took special pride in the induction of Carmelo Spagnuolo to his secret society. Spagnuolo was the chief public defender in Milan and, later, the president of the Italian Supreme Court. This ensured that P2, despite its acts of terrorism, would have justice on its side.68

  Within ten years of Gelli's emergence as Worshipful Master, P2 had branches in Argentina, Venezuela, Paraguay, Bolivia, France, Portugal, Nicaragua, West Germany, and England. Within the United States, its members and associates included not only leading figures from the Gambino, Genovese, an
d Lucchese crime families, but also such notable political figures as General Alexander Haig, President Nixon's Chief of Staff, and Henry Kissinger, President Nixon's Secretary of State. 69

  INSIDE THE LODGE

  The lodge, as members of Italy's P2 Commission later described, was a pyramid with Gelli at the apex. But joined to the apex of this pyramid was another, inverted, one, containing the people responsible for the overall strategy. These people passed their orders down to the lower pyramid through Gelli, whose sole function was to follow orders. Antonio Bellochio, a P2 commissioner, said in 1984, “It is a sad reflection on Italian political life that a man of Gelli's modest intellectual abilities, for all his shrewdness and cunning, should have wielded such influence.”70

  During the week, Gelli conducted court in rooms 127, 128, and 129 of the Excelsior Hotel in Rome. The rooms were interconnected so that dignitaries, petitioners and lackeys could enter room 127, where sentries stood guard. Once cleared, they could proceed to room 128, where Gelli, flanked by P2 officials, sat behind a massive mahogany desk. Upon completion of their business, they exited past more guards in room 129.71

  GATHERING DIRT

  In preparation of Piano Solo, the CIA conducted massive surveillance of Italian political, religious, and business leaders in order to single out the Communist sympathizers. Once the new military order was established, these sympathizers were to be rounded up and shipped off to concentration camps on the island of Sardinia.72 As a result of this surveillance, Gelli and General de Lorenzo compiled files on more than 157,000 people of prominence, including tapes and photographs that could be used for blackmail or simple coercion.73 Copies of these files, some of which were as thick as dictionaries, were sent to the Vatican and to CIA headquarters in Langley, Virginia.74

  NUDE PHOTOS OF JOHN PAUL II

  As the new leader of P2, Gelli continued to amass telling documents not only on leftist officials but also members of his lodge. When a recruit joined the order, he was obliged to demonstrate his loyalty by conveying to Gelli documents that would compromise not only himself and his family but also other possible candidates. When these potential candidates were confronted with the evidence of their misdeeds, they generally caved in and submitted to the initiation rite without a word of protest. This proved to be the case with Giorgio Mazzanti, the new president of ENI. Faced with incriminating evidence showing he had accepted huge bribes and payoffs from a pending Saudi oil deal, Mazzanti took the vow of secrecy, joined the elite Masonic lodge, and handed over to Gelli even more compromising information.75

  Eventually, Gelli's files came to contain not only embarrassing material on nearly every prominent Italian government official, but also nude photos of John Paul II next to a swimming pool. While displaying the photos of the naked pontiff, the P2 Grand Master reportedly quipped: “If it's possible to take these photos of the pope, imagine how easy it is to shoot him.”76

  So long as the bank invests those [drug] deposits in overnight money and is able to cover when the deposits are withdrawn, there is no financial threat to the bank other than the peripheral one of perhaps affecting the confidence that people have in it because of known associations with criminals…. The fact that a bank does business with criminals, or is even owned by them, is of minor importance to the overseers of the nation's banks.

  Paul Homan, deputy controller of the

  Office of the Comptroller of the Currency

  (quoted in Penny Lernoux's In Banks We Trust)

  In 1957, Michele Sindona attended a mob gathering at the Grand Hotel des Palmes in Palermo with such criminal luminaries as Lucky Luciano, Joseph (“Joe Bananas”) Bonanno, Carmine Galante, Frank Costello, Don Giuseppe Genco Russo (the head boss of the Sicilian families), Salvatore Ciaschiteddu (“Little Bird”) Greco, and the La Barbera brothers. The three-day event, which was held from October 3–5, resulted in the organization of a Sicilian Commission that would oversee all aspects of the multibillion dollar heroin trade. “The Sicilians,” according to FBN agent Martin F. Pera, “gave the Americans an ultimatum at Palermo. They knew there were a number of rebellious young hoods in America, so they told their bosses, ‘If you don't deal with us, we'll deal with them.’ Not having control over narcotics would have put all their other rackets at risk, so the Americans had no choice but to go along.”1

  Little Bird Greco emerged from the conference as primus inter pares (“first among equals”).2 The elevation of Greco was prompted by his pivotal role in the narcotics trade. He owned a fleet of ships that sailed under the Honduran flag and, through Frank Coppola, moved heroin to Santo Trafficante Jr., in Cuba via food shipments.3 But no one benefited from the gathering more than Sindona, who gained complete control of the flow of cash from the mean streets of America's inner cities to the Vatican Bank.4

  THE APALACHIN CONFERENCE

  But the unification of the American mob, which had been brought about by Luciano in 1931, was crumbling. In October 1957, Vito Genovese, still serving as Lucky's underboss, forged an alliance with Carlo Gambino for the execution of Albert Anastasia, the head of the Mangano crime family. Anastasia had ruffled the feathers of Meyer Lansky and Santo Trafficante Jr. by attempting to gain control of the lucrative flow of heroin from Havana. One month after Anastasia's murder, Genovese presided over the Apalachin Conference, a follow-up American Mafia summit to the event in Palermo, in which he anointed himself “boss of all bosses” (capo de tutti capi); appointed Carlo Gambino the new head of the Mangano clan; and ruled that the mob should not be involved in trafficking in narcotics outside of Harlem and other black neighborhoods.5 In the midst of the conference, the Pennsylvania State Police staged a raid that resulted in the arrest of Carlo Gambino, Paul Castellano (a Gambino caporegime—boss), Joseph Bonanno, and Santo Trafficante Jr., the head of the South Florida family and the pivotal mob figure in Cuba. Others in attendance were Stefano Magaddino of Buffalo, Nick Civella of Kansas City, Sam Giancana of Chicago, and representatives from families in Milwaukee, Dallas, Pittsburgh, Philadelphia, San Francisco, and Los Angeles.6

  The Apalachin Conference was a milestone in the annals of organized crime in America, wiping out previous myths and misunderstandings about La Cosa Nostra, including the statements of J. Edgar Hoover that the Mafia, in fact, did not exist. The raid that caused the breakup of the mob meeting captured national headlines for weeks, infuriating the Mafiosi and embarrassing US government officials. The public now knew for the first time that an organized syndicate of mob families controlled the flow of illicit drugs throughout the country.7

  VITO'S COMEUPPANCE

  Luciano, outraged by the presumption of his underboss and the outcome of the conference, recruited Carlo Gambino to take part in a scheme to clip the wings of Vito Genovese, the self-proclaimed capo of the American Commission. Gambino, at Lucky's insistence, sought out Nelson Cantellops, a small-time crook serving a stint in Sing Sing, and persuaded him by a gift of $100,000 to offer testimony that he had witnessed Genovese making massive drug buys. Cantellops complied. In 1958, Genovese and twenty-four members of his gang were collared for violating the new Narcotics Control Act. At the trial, Cantellops testified that he not only had witnessed the buys but had acted as a courier for Genovese by transporting heroin from Harlem to black communities throughout the country. The jury was reportedly rigged and, based almost entirely on the testimony of Cantellops, Genovese and his soldiers were sentenced to fifteen years in prison.8

  With Genovese tucked away in the Atlanta federal penitentiary, Santo Trafficante Jr., upon the occasion of Luciano's death in 1962, became by default the head capo of the international heroin trade. At fifty-seven, he was one of the most effective mob leaders. Avoiding the ostentatious lifestyle of Cadillacs and diamond rings that characterized many of the Mafiosi, Trafficante cultivated the austerity of the old Sicilian dons and manifested a self-effacing attitude that contributed to his considerable influence over the Sicilian and American families. Despite his prestige among the Men of Respect, his goo
d sense prevented him from campaigning for a leading position on the mob's national and international commissions. He stayed, for the most part, in the shadows, thereby becoming “the least known and most underestimated leaders of organized crime.”9

  MICHELE'S RISE

  The fall of Vito Genovese propelled the rise of Michele Sindona. The aspiring mob lawyer, with the blessing of his dons Giuseppe Genco Russo (Don Calo's successor) and Lucky Luciano, now developed close ties to the Gambino crime family, which, by marriage, included the Inzerillo and Spatola clans in Sicily. Aware of Sindona's pivotal position with the CIA and IOR, the Gambinos did not hesitate to take him under their protective wing. “Don Michele,” they would say, “you are the greatest of all Sicilians. Let us help you with your problems. Tell us whom you want killed. Tell us who the bastards are.”10

  Several weeks after the conference in Palermo, Sindona used mob money and CIA funds to create Fasco AG, a Liechtenstein holding company that became the cornerstone of his financial empire.11 Through Fasco, he purchased his first bank—the Banca Privata Finanziaria (BPF) in Milan. Founded in 1930 by a Fascist ideologist, the BPF served as a conduit for the illegal transfer of funds from Italy for a favored few.12

  The BPF now served as a principal means of transferring drug money from the IOR for the purpose of Gladio. William Harvey, the new CIA station chief in Rome, arranged for the financial firms of Sir Jocelyn Hambro, the owner of the Hambros Bank, and David M. Kennedy, chairman of the Continental Illinois Bank in Chicago, to become minority shareholders, with each firm purchasing 22 percent of the bank's stock.13

  STRANGE BEDFELLOWS

  Sir Jocelyn Hambro and Sindona, by all appearances, were strange bedfellows. The son and heir of one of England's most prestigious merchant banking families, Hambro spent his days hobnobbing with the world's elite. Surely, the peasant from Patti would have been a most unwelcome guest at the Hambro family estate in Kidbrooke Park, Sussex, let alone at the Jockey Club in Newmarket, which was one of Sir Jocelyn's favorite haunts. The mystery of the relationship was compounded by the fact that Sindona was neither an established figure nor a member of the international banking community. Indeed, his major asset, at the time of their meeting, was a newly created shell company.