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P2 was sometimes referred to as a "state within a state" or a "shadow government". The lodge had among its members prominent journalists, members of parliament, industrialists, and military leaders—including Silvio Berlusconi, who later became Prime Minister of Italy; the Savoy pretender to the Italian throne Victor Emmanuel; and the heads of all three Italian intelligence services (at the time SISDE, SISMI and CESIS).
When searching Licio Gelli's villa, the police found a document called the "Plan for Democratic Rebirth", which called for a consolidation of the media, suppression of trade unions, and the rewriting of the Italian Constitution.
Outside Italy, P2 was also active in Uruguay, Brazil and in Argentina, with Raúl Alberto Lastiri, Argentina's interim president (between July 13, 1973 to October 12, 1973) during the height of the "Dirty War" among its members. Emilio Massera, who was part of the military junta led by Jorge Rafael Videla from 1976 to 1978, José López Rega, minister of Social Welfare in Perón's government and founder of the Argentine Anticommunist Alliance ("Triple A"), and General Guillermo Suárez Mason were also members.
Foundation"Propaganda" was originally founded in 1877, in Turin, as "Propaganda Massonica". This lodge was frequented by politicians and government officials from across Italy who were unable to attend their own lodges and included prominent members from the Piedmont nobility. The name was changed to "Propaganda Due" following World War II, when the Grand Orient of Italy numbered its lodges. By the 1960s, however, the lodge was all but moribund, holding few meetings. This original lodge, however, had little to do with the one Licio Gelli established in 1966, two years after becoming a freemason.
Masonry in Italy had been outlawed by the fascist regime of Benito Mussolini, but it was reborn after the Second World War under USA encouragement. However, its traditions of free thinking under the Risorgimento morphed into a fervent anti-communism. The increasing influence of the left at the end of the 1960s had the Masons of Italy deeply worried. In 1971, Grand Master Lino Salvini of the Grand Orient of Italy—one of Italy's largest Masonic lodges—assigned to Gelli the task of reorganizing the lodge.
Gelli took a list of "sleeping members"—members who were not invited to take part in masonic rituals anymore, as Italian freemasonry was under close scrutiny by the Christian Democrats in power. From these initial connections, Gelli was able to extend his network throughout the echelons of the Italian establishment.
ExpulsionThe Grand Orient of Italy officially expelled Gelli and the P2 Lodge in 1976. In 1974 it was proposed that P2 be erased from the list of lodges by the Grand Orient of Italy, and the motion carried overwhelmingly. The following year, however, a warrant was issued by the Grand Master for a new P2 lodge. It seems the Grand Orient in 1976 had only suspended, and not actually expelled, the lodge on Gelli's request. Gelli was found to be active in the Grand Orient's national affairs two years later, financing the election of a new Grand Master. In 1981 a Masonic tribunal decided that the 1974 vote did mean the lodge had factually ceased to exist and that Gelli's lodge had therefore been illegal since that time.
DiscoveryThe activities of the P2 lodge were discovered by prosecutors while investigating banker Michele Sindona, the collapse of his bank and his ties to the Mafia. In March 1981, police found a list of alleged members in Gelli's house in Arezzo. It contained 962 names, among which were important state officials, important politicians and a number of military officers, including the heads of the three Italian secret services. Future Italian prime minister Silvio Berlusconi was on the list, although he had not yet entered politics at the time. Another famous member was Victor Emmanuel, the son of the last Italian king.
Prime Minister Arnaldo Forlani (whose chef de cabinet was a P2 member as well) appointed a Parliamentary Commission of Inquiry, headed by the independent Christian Democrat Tina Anselmi. Nevertheless, in May 1981, Forlani was forced to resign due to the P2 scandal, causing the fall of the Italian government.
In July 1982, new documents were found hidden in the false bottom of a suitcase belonging to Gelli's daughter at Fiumicino airport in Rome. The documents were entitled "Memorandum sulla situazione italiana" (Memorandum on the Italian situation) "Piano di rinascita democratica" (Plan of Democratic Rebirth) and are seen as the political programme of P2. According to these documents, the main enemies of Italy were the Italian Communist Party (PCI) and the trade unions. These had to be isolated and cooperation with the communists (the second biggest party in Italy and the largest in Western Europe), which was proposed in the historic compromise by Aldo Moro needed to be disrupted.
Gelli's goal was to form a new political and economic elite to lead Italy towards a right-wing, authoritarian form of democracy, with an anti-communist pre-occupation. P2 advocated a programme of extensive political corruption: "political parties, newspapers and trade unions can be the objects of possible solicitations which could take the form of economic-financial manoeuvres. The availability of sums not exceeding 30 to 40 billion lire would seem sufficient to allow carefully chosen men, acting in good faith, to conquer key positions necessary for overall control."
P2's influenceOpinions about the importance and reach of P2 differ. Some see the P2 as a reactionary, shadow government ready to take over power in case of an electoral victory of the Italian Communist Party. Others think it was nothing more than a sordid association of people eager to improve their careers by making powerful and important connections. Nevertheless, P2 was implicated in numerous Italian scandals and mysteries.
Corriere della Sera takeoverIn 1977 the P2 took control of the Corriere della Sera newspaper, a leading paper in Italy. At the time, the paper had run into financial trouble and was unable to raise bank loans because its then editor, Piero Ottone, was considered hostile to the ruling Christian Democrats. Corriere's owners, the publishing house Rizzoli, struck a deal with Gelli. He provided the money with funds from the Vatican Bank directed by Paul Marcinkus. Ottone was fired and the paper's editorial line shifted to the right.
The paper published a long interview with Gelli in 1980. The interview was carried out by the television talk show host Maurizio Costanzo, who would also be exposed as a member of P2. Gelli said he was in favour of rewriting the Italian constitution towards a Gaullist presidential system. When asked what he always wanted to be, he replied: "A puppet master".
Bologna massacreP2 members Gelli and the head of the secret service Pietro Musumeci were condemned for attempting to mislead the police investigation of the Bologna massacre on August 2, 1980, which killed 85 people and wounded more than 200.
Banco Ambrosiano scandalP2 became the target of considerable attention in the wake of the collapse of Banco Ambrosiano (one of Milan's principal banks, owned in part by the Vatican Bank), and the suspicious 1982 death of its president Roberto Calvi in London, initially ruled a suicide but later prosecuted as a murder. It was suspected by investigative journalists that some of the plundered funds went to P2 or to its members.
Protezione accountOne of the documents found in 1981 was about a numbered bank account, the so-called "Protezione account," at the Union Bank of Switzerland in Lugano (Switzerland). It detailed the payment of US$ 7 million by the president of ENI, Florio Fiorini through Roberto Calvi to the Italian Socialist Party (PSI) leader Claudio Martelli on behalf of Bettino Craxi, the socialist Prime Minister from 1983–1987.
The full extent of the payment only became clear twelve years later, in 1993, during the mani pulite (Italian for "clean hands") investigations into political corruption. The money was allegedly a kickback on a loan which the Socialist leaders had organised to help bail out the ailing Banco Ambrosiano. Rumours that the Minister of Justice, Martelli, was connected with the account had been circulating since investigations began into the P2 plot. He always flatly denied them. However, learning that formal investigations were opened, he resigned as minister.
Parliamentary Commission of InquiryThe Parliamentary Commission of Inquiry, headed by Anselmi, concluded that the P2 lodge was a secret criminal organization. Allegations of surreptitious international relationships, mainly with Argentina (Gelli repeatedly suggested that he was a close friend of Juan Perón) and with some people suspected of affiliation with the American Central Intelligence Agency were also partly confirmed; but soon a political debate overtook the legal level of the analysis. The majority report said that P2 action resulted in "… the pollution of the public life of a nation. It aimed to alter, often in decisive fashion, the correct functioning of the institutions of the country, according to a project which … intended to undermine our democracy." A minority report by Massimo Teodori concluded that P2 was not just an abnormal outgrowth from an essentially healthy system, as upheld by the majority report, but an inherent part of the system itself.
New Italian law prohibiting "secret lodges"Even though outlawed by Fascist dictator Benito Mussolini in 1925, Masonic institutions have been tolerated in Italy since the end of World War II and are quite open about their activities and membership. However, a special law was issued that prohibited secret lodges. The Grande Oriente d'Italia, after taking disciplinary action against members with P2 connections, distanced itself from Gelli's lodge. Other laws introduced a prohibition on membership in allegedly secret organizations for some categories of state officials (especially military officers). These laws have been recently questioned by the European Court of Human Rights. Following an action brought by a serving British naval officer, the European Court has established as precedent the illegality of any member nation attempting to ban Masonic membership for military officers, as a breach of their human rights.
Licio Gelli's list found in 1981On March 17, 1981, a list composed by Licio Gelli was found in his country house (Villa Wanda). The list should be contemplated with some caution, as it is considered to be a compilation of P2 members and the contents of Gelli's Rolodex. Many on the list were apparently never asked if they wanted to join P2, and it is not known to what extent the list includes members who were formally initiated into the lodge. Since 1981, some of those on the list have demonstrated their distance from P2 to the satisfaction of the Italian legal system.
On May 21, 1981, the Italian government released the list. The Parliamentary Commission of Inquiry headed by Tina Anselmi considered the list reliable and genuine. It decided to publish the list in its concluding report, Relazione della Commissione parlamentare d’inchiesta sulla Loggia massonica P2.
The list contains 962 names (including Gelli's). It has been claimed that at least a thousand names may still be secret, as the membership numbers begin with number 1,600, which suggests that the complete list has not yet been found. The list included all of the heads of the secret services, 195 officers of the different armed forces (12 generals of the Carabinieri, 5 of the financial police Guardia di Finanza, 22 of the army, 4 of the air force and 8 admirals), as well as 44 members of parliament, 3 ministers and a secretary of a political party, leading magistrates, a few prefects and heads of police, bankers and businessmen, civil servants, journalists and broadcasters. Also included were a top official of the Banca di Roma, Italy's third largest bank at the time, and a former director-general of the Banca Nazionale del Lavoro (BNL), the country's largest.
Notable people on Gelli's list
- Silvio Berlusconi, businessman, future founder of the Forza Italia political party and Prime Minister of Italy.
- Michele Sindona, banker linked to the Mafia.
- Roberto Calvi, so-called "banker of God", allegedly killed by the Mafia.
- Umberto Ortolani, leading P2-member.
- Franco Di Bella, director of Corriere della Sera. Di Bella had commissioned a long interview with Gelli, who openly talked of his plans for a "democratic renaissance" in Italy—including control over the media. The interview was carried out by the television talk show host Maurizio Costanzo, who would also be exposed as a member of P2.
- Angelo Rizzoli Jr., owner of Corriere della Sera, today cinema producer.
- Bruno Tassan Din, general director of Corriere della Sera.
- General Vito Miceli, chief of the SIOS (Servizio Informazioni), Italian Army Intelligence's Service from 1969 and SID's head from October 18, 1970 to 1974. Arrested in 1975 on charges of "conspiracy against the state" concerning investigations about Rosa dei venti, a state-infiltrated group involved in the strategy of tension, he later became an Italian Social Movement (MSI) member.
- Federico Umberto D'Amato, leader of an intelligence cell (Ufficio affari riservati) in the Italian Minister of Interior.
- General Giuseppe Santovito, head of the military intelligence service SISMI (1978–1981).
- Admiral Giovanni Torrisi, Chief of the General Staff of the Army.
- General Giulio Grassini, head of the intelligence service SISDE (1977–1981).
- General Pietro Musumeci, deputy director of Italy's military intelligence service, SISMI.
- General Franco Picchiotti.
- General Giovambattista Palumbo.
- General Raffaele Giudice, commander of the Guardia di Finanza (1974–1978). Appointed by Giulio Andreotti, Giudice conspired with oil magnate Bruno Musselli and others in a lucrative tax fraud of as much as $2.2 billion.
- General Orazio Giannini, commander of the Guardia di Finanza (1980–1981). On the day the list was discovered Giannini phoned the official in charge of the operation, and told him (according the official's testimony to the parliamentary commission): "You better know that you've found some lists. I'm in those lists – be careful, because so too are all the highest echelons (I understood 'of the state') ... Watch out, the Force will be overwhelmed by this."
- Carmine Pecorelli, a controversial journalist assassinated on March 20, 1979. He had drawn connections in a May 1978 article between the kidnapping of Aldo Moro and Operation Gladio.
- Maurizio Costanzo, popular television talk show host of Mediaset programmes (Mediaset is Berlusconi's commercial television network).
- Pietro Longo, secretary of the Italian Democratic Socialist Party (PSDI).
- Fabrizio Cicchitto, member of the Italian Socialist Party, who later joined Berlusconi's centre-right party Forza Italia.
- Federico Carlos Barttfeld (Argentina), ambassador to Yugoslavia from 1991 to 1995, under-secretary of state in Néstor Kirchner's government, relieved of his functions in 2003 following allegations of involvement in the Dirty War.
- Emilio Massera (Argentina), a member of the military junta led by Jorge Rafael Videla in Buenos Aires from 1976 to 1978.
- José López Rega (Argentina), Argentinian minister of Social Welfare in Perón's government, founder of the Argentine Anticommunist Alliance ("Triple A").
- Aldo Alasia, (Argentina) 
- Cesar De la Vega, (Argentina) 
- Raúl Alberto Lastiri, (Argentina) President from 13 July 1973 until 12 October 1973
- Alberto Vignes, (Argentina) minister of Argentina
- Carlos Alberto Corti, (Argentina) admiral from Argentina
See alsoStrategy of tension