New York Times
May 30, 1981 - p.6

Sindona Denies Financial
Link With Mason in Italy

Special to The New York Times

    ROME, May 29 — Michele Sindona, the Italian financier jailed in New York for his role in the collapse of the Franklin National Bank, has told an Italian parliamentary commission that he had good relations with Licio Gelli, the head of an illegally secret Masonic lodge, but that Mr. Gelli had nothing to do with his financial activities.
    In a long memorandum sent from the Metropolitan Correctional Center in Manhattan to the so-called Sindona Commission, the financier also said Mr. Gelli was not involved "in my disappearance," an allusion to Mr. Sindona's attempt to escape his fraud trial in New York by staging a false kidnapping and traveling to Europe.
    One of the charges made against Mr. Gelli by investigating magistrates in Milan is that he helped Mr. Sindona travel from Athens to Palermo and found a hiding place for him in the home of Vincenzo and Rosario Spatola, two brothers said to be prominent in the Sicilian Mafia.
    The alleged link between Mr. Sindona and Mr. Gelli led to a police search of Mr. Gelli's home and office in March, during which a list of members of the Masonic lodge was reportedly found. It included the names of leading generals, civil servants, judges, members of Parliament, journalists and powerful members of the financial world.

Sindona Commission Revived

    Parliament's Sindona Commission was formed in the summer of 1979 to look into the Italian side of Mr. Sindona's activities. It has been dormant since early 1980 but was revived in the wake of the revelations about Mr. Gelli, who is now in hiding and has been reported in Monte Carlo, Switzerland and Argentina.
    In the letter sent to the commission, Mr. Sindona also disclaimed having had any part in the killing of Giorgio Ambrosoli, the lawyer who was a court-appointed investigator in the Sindona case and who was shot in Milan on July 11, 1979. Four other investigators in the Sindona case in Italy were also killed.
    The scandal surrounding Mr. Gelli and the Masonic lodge led to the collapse of the Government of Prime Minister Arnaldo Forlani on Monday.
    Investigators have charged that Mr. Gelli had created "a state within a state," using blackmail, favors and promises of advancement and "combining business and politics with the intention of destroying the constitutional order of the country and transforming the parliamentary system into a presidential system."

'Secret Sect' Charged

    The magistrates also charged that the lodge was "a secret sect" that kept its membership deliberately secret, unlike other Masonic lodges, whose membership lists are available to the authorities. Belonging to a secret organization is illegal in Italy.
    The investigators also linked alleged members of the lodge to several financial scandals. Col. Antonio Viezzer, commander of SID, a now dissolved intelligence service, was arrested last week on suspicion of involvement in the murder about a year ago of Mino Pecorelli, the editor of a news letter specializing in intelligence matters. Colonel Viezzer is also accused of having helped with Mr. Sindona's fake kidnapping.
    Prime Minister Forlani first received a report on Mr. Gelli's lodge, including the list of members, immediately after the police raided Mr. Gelli's office and home in mid-March, but at first no action was taken by the Government. Sketchy reports about the affair started appearing in the Italian press soon after the raid.
    On May 8, Mr. Forlani appointed a three-member commission and gave it three months to determine whether the lodge was really a secret organization and thus illegal and whether sanctions against military officers and civil servants among its members should therefore be taken.
    Political pressure on Mr. Forlani built up quickly, particularly from the members of the Sindona Commission, headed by Francesco De Martino, a Socialist. The commission had obtained a copy of the documents seized at Mr. Gelli's premises, and most of its members demanded that they be published.
    The Prime Minister decided to make the document public, and a few days later his Cabinet fell.
    In keeping with the usual practice, President Sandro Pertini has asked Mr. Forlani, a Christian Democrat, to form a new cabinet. His chances of doing so were drastically reduced last night when Bettino Craxi, the Socialist leader, declared that his party would not take part in another coalition government under Mr. Forlani.
    The cabinet crises may well last several weeks, with President Pertini asking other Christian Democrats to try to form a government before turning either to Mr. Craxi or to a member of the small Republican Party.
    The Christian Democrats, through their party secretary, Flaminio Piccoli, today stated categorically that they were not ready to relinquish the prime minister's post to another party. If they and the Socialists cannot agree on a coalition, the President may have to dissolve Parliament and call a national election.