On December 14, 1947 the National Security Council issued its first top secret order to the successor CIA which was to counter Soviet and Soviet inspired activities by covert psychological operations. Given a mandate, the CIA set out to win its first foreign election, the Italian elections of 1948. The means would be money, not guns. The Rome station chief, James Jesus Angleton, estimated winning would cost $10 million. He could use the Italian secret service, which he had penetrated so deeply he could claim he actually ran it, as the organization to disburse the funds. There was only one problem. The CIA had no independent budget yet and no contingency fund for covert operations. There was however a little known fund, the Exchange Stabilization Fund, that had been set up during the Depression for short term currency trading. During the war it was converted to a depository for captured Axis loot. The money was earmarked for European reconstruction. John Snyder, Truman's Secretary of the Treasury, allowed the fund to be used as a conduit to wealthy Americans, many Italian-Americans, who sent the money on to new CIA political fronts. Millions were in turn delivered to Italian politicians of the right persuasion and priests of Catholic Action, the political action arm of the Vatican. Suitcases stuffed with cash literally changed hands in the foyer of Rome's Hassler Hotel. There was not time to be more sophisticated about the operation. Nevertheless it worked: the Christian Democrats won and formed a government that excluded the communists. Thus began a twenty-five year American covert program of buying right and center Italian politicians. By 1976 the operation had spent at least $65 million. [image: NATO Gladio insignia]In 1970 with Nixon White House approval, $25 million was distributed to both Christian
Democrats and neofascists. The action was the result of lobbying by a wealthy right-wing American who lived in Rome, Pier Talenti. Talenti went to see Alexander Haig, then Secretary of State Henry Kissenger's aide to warn of the socialists taking power in Italy. According to an American State Department official then in Rome some of the money also went to the far-right underground. The money helped elect the corrupt Giulio Andreotti, but also fueled a neofascist coup that failed. The money also financed right-wing covert operations by the so-called "stay behind" army created by the Allies after the war (Gladio)--including terror bombings--that Italian intelligence blamed on the Red Brigades. Subsequent parliamentary investigations revealed that General Vito Miceli, chief of Italian military intelligence took at least $800,000 of the CIA's cash [1]. He was jailed for attempting a forcible overthrow of the government. Another Italian intelligence chief, Gianadelio Maleti, testified in a terror bombing trial that "the CIA, following the directives of its government, wanted to create an Italian nationalism capable of halting what it saw as a slide to the left and, for this purpose, it may have made use of right-wing terrorism," Maletti also told the court: "Don't forget that Nixon was in charge and Nixon was a strange man, a very intelligent politician but a man of rather unorthodox initiatives." Prime Minister Andreotti revealed the existence of the secret paramilitary organization Operation Gladio to a parliamentary commission investigating the "years of lead" in 1990, but spent the last years of his long public career fighting corruption and criminal charges, including murder. A 2000 report by a left parliamentary coalition concluded that the "strategy of tension" used by Gladio had been supported by the United States to prevent communists and socialist parties from reaching executive power in Italy. [pictured l to r: Andreotti, Sinatra, Nixon]. The underground quasi-Masonic cell Propaganda Due (P2) was officially outlawed in 1981 following the Banco Ambrosiano scandal which also implicated the Vatican Bank. It was allegedly connected to the Gladio organization. Many prominent Italians of public affairs and business have been members or piduistas. A membership list of over 900 hundred names was found in the home of Worshipful Master Licio Gelli. It contained the names 38 deputies, four cabinet ministers, former prime ministers, 30 generals, newspaper editors, TV executives, all the heads of the Italian intelligence services, and businessmen. One of those was businessman Silvio Berlusconi who had been a member since 1978. Berlusconi is now a former Prime Minister of Italy, a billionaire media mogul, and founder of the right-wing Forza Italia party. The stated mission of the P2 lodge was to form a new political and economic elite that would move Italy away from socialism towards a more authoritarian anti-communist state. [continued]
[1]Legacy of Ashes, Tim Weiner 2007, p. 300