The Godfather Part II presents two parallel storylines. One involves Mafia chief Michael Corleone during the Cold War, following the events of the first movie; the other is a series of flashbacks following his father, Vito Corleone, from his youth in Sicily (1901) to his founding of the Corleone family in New York City while still a young man (1917-1925).

The film begins in 1901, in the town of Corleone in Sicily, at the funeral procession for young Vito's father, Antonio Andolini, who has been murdered for an insult to the local Mafia chieftain, Don Ciccio. During the procession, Vito's older brother Paolo is also murdered because he swore revenge on the Don. Vito's mother then goes to Ciccio to beg him to let young Vito live. Upon his refusal, she holds a knife to his throat, sacrificing herself so that her son can escape, while Ciccio's men gun her down. They immediately scour the town for the boy, shouting their assurances to the sleeping townsfolk that they will regret harboring the boy. With the aid of a few of the townspeople, Vito finds his way by ship to New York. Upon arriving at Ellis Island, an immigration agent uses Vito's hometown of Corleone as his surname, registering him as "Vito Corleone".

The film then moves into the late 1950s, to a scene similar to the opening of the first film, where Michael Corleone, Godfather of the Corleone family, deals with various business and family problems during an elaborate party at his Lake Tahoe, Nevada compound celebrating his son's First Communion. He meets with Nevada Senator Pat Geary, who despises the Corleones, but has shown up at the celebration with his wife under the auspices of accepting a large endowment to the university from Michael in his son's name. During a tense negotiation, Senator Geary demands a grossly exaggerated price for a new gaming license and a monthly payment of 5% of the gross profits from all of the Corleone's Nevada gaming interests, to which Michael boldly responds with a counter-offer of "nothing".

Michael also deals with his sister Connie, who, although recently divorced, is planning to marry a man with no obvious means of support and of whom Michael obviously disapproves. He also talks with Johnny Ola, the right hand man of Jewish gangster Hyman Roth, who is supporting Michael's move into the gambling industry. Belatedly, Michael deals with Frank "Five Angels" Pentangeli, who took over Corleone caporegime Peter Clemenza's territory after his death, and now has problems with the Rosato Brothers, who are backed by Roth. After Michael's refusal to allow Pentangeli to kill the Rosatos, owing to his desire to prevent interruption of his business with Roth, Pentangeli leaves abruptly, after telling Michael "your father did business with Hyman Roth, your father respected Hyman Roth, but your father never trusted Hyman Roth."

Later that night, an assassination attempt is made on Michael, which he survives when his wife Kay notices the bedroom window drapes are inexplicably open. Afterwards, Michael tells Tom Hagen that the hit was made with the help of someone close, and that he must leave, entrusting all his power to Hagen to protect the family.

The action then switches to 1917, where the 25-year-old Vito Corleone works in a New York grocery store with his friend Genco Abbandando. The neighborhood is controlled by a member of the "The Black Hand," Don Fanucci, who extorts protection payments from local businesses. One night, Vito's neighbor Clemenza asks him to hide a stash of guns for him, and later, to repay the favor, takes him to a fancy apartment where they commit their first felony together, stealing an elegant rug.

The film flash-forwards to Michael's time. Michael meets with Hyman Roth in Florida and tells him that he believes Frank Pentangeli was responsible for the assassination attempt, and that Pentangeli will pay for it. Traveling to Brooklyn, Michael lets Pentangeli know that Roth was actually behind it, and that Michael has a plan to deal with Roth, but he needs Frankie to cooperate with the Rosato Brothers in order to put Roth off guard. When Pentangeli goes to meet with the Rosatos, he is told "Michael Corleone says hello," as he is garrotted; but the attempted murder is accidentally interrupted by a policeman. Pentangeli is left for dead, and his bodyguard, Willie Cicci, is wounded by gunfire.

In Nevada, Tom Hagen is called to a brothel run by Michael's older brother Fredo, where Senator Geary is implicated in the death of a prostitute. Tom offers to take care of the problem in return for "friendship" between the Senator and the Corleone family.

Meanwhile, Michael meets Roth in Havana, Cuba, in late 1958, at the time when dictator Fulgencio Batista is soliciting American investment, and communist guerrillas are trying to bring down the government. At a birthday party for Roth, Michael mentions that there is a possibility that the rebels might win, making their business dealings in Cuba problematic. The comment prompts Roth to remark, privately, that Michael has not delivered the two million dollars to firm their partnership.

Fredo, carrying the promised money, arrives in Havana and meets Michael. Michael mentions Hyman Roth and Johnny Ola to him, but Fredo says he has never met them. Michael confides to his brother that it was Roth who tried to kill him, and that he plans to try again. Michael assures Fredo that he has already made his move, and that "Hyman Roth will never see the New Year."

Instead of turning over the money to Roth, Michael asks him who gave the order to have Frank Pentangeli killed. Roth avoids the question, instead speaking angrily of the murder of his old friend, Moe Greene, which Michael had orchestrated (as depicted at the end of the first film), quipping, "I never asked who gave the order, because it had nothing to do with business!"

Michael has asked Fredo, who knows Havana well, to show Senator Geary and other important officials and businessmen a good time, during which Fredo pretends to not recognize Johnny Ola. Soon after, at a sex show, a drunk Fredo comments loudly that Johnny Ola told him about the place, contradicting what he told Michael twice earlier, that he didn't know Roth or Ola. Michael now realizes that the traitor is his own brother, and dispatches his bodyguard back to their hotel to deal with Roth.

There, Johnny Ola is strangled, but Roth, whose health is failing, is taken to a hospital, where Michael's bodyguard follows, but is shot by police while trying to smother Roth with a pillow. At Batista's New Year's Eve party, at the stroke of midnight, Michael grasps Fredo tightly by the head and kisses him: "I know it was you Fredo; you broke my heart." When guerrillas attack, the guests flee, and Fredo runs away from Michael, despite Michael's pleas that he is still his brother and that the only way out is with him.

Michael returns to Las Vegas, where Hagen tells him that Roth escaped Cuba after suffering a stroke and is recovering in Miami, that Michael's bodyguard is dead, and that Fredo is likely hiding in New York. Hagen also informs Michael that Kay had a miscarriage while he was away.

In 1917 New York, Don Fanucci of the Black Hand is now aware of the partnership between Vito, Clemenza and Sal Tessio, and wants a slice of the action in order to "wet his beak". Clemenza and Tessio agree to pay, but Vito is reluctant and asks his friends to leave everything in his hands to convince Fanucci to accept less money. Indeed, Vito manages to get Fanucci to take only one sixth of what he had demanded. Immediately afterwards, during the neighborhood festa, Vito murders Fanucci.

Don Michael returns to his compound in Lake Tahoe, where he wanders the house in silent comtemplation. He sees Kay (who he has prevented from leaving the compound for her own safety) in the bedroom, but does not approach her. In Washington, D.C., a Senate committee, of which Senator Geary is a member, is conducting an investigation into the Corleone family. They question disaffected "soldier" Willie Cicci, but he cannot implicate Michael, because he never received any direct orders from him.

With Fanucci dead, Vito earns the respect of the neighborhood and begins to intercede in local disputes, operating out of the storefront of his Genco Pura Olive Oil Company (named after his friend Genco Abbandando).

When Michael appears before the committee, Senator Geary makes a big show of supporting Italian-Americans and then excuses himself from the proceedings. Michael makes a statement challenging the committee to produce a witness to corroborate the charges against him. The hearing ends with the Chairman promising a witness who will do exactly that.

Frank Pentangeli, who did not die in the attack by the Rosato Brothers, has made a deal with the FBI to testify against Michael. Tom Hagen and Michael discuss the problem, observing that Roth's strategy to destroy Michael is well planned. Michael's brother Fredo has been found and persuaded to return to Nevada, and in a private meeting he explains to Michael his betrayal: upset about being passed over to head the family in favor of Michael, he wants respect and his due. He helped Roth thinking there would be something in it for him, but he swears he didn't know they wanted to kill Michael. He also tells Michael that the Senate Committee's chief counsel belongs to Roth. Michael then tells Fredo: "You're nothing to me now. Not a brother, not a friend, nothing", and privately instructs Al Neri that nothing is to happen to Fredo while their mother is still alive, with the understanding that Fredo will be killed after her death

At the hearing in which Pentangeli is to testify, Michael arrives accompanied by Pentangeli's brother Vincenzo (brought in from Italy), whose surprise presence causes Frank to recant his previous statements about Michael. When Pentangeli is pressed, he claims that he just told the FBI what they wanted to hear. With no witness to testify against Michael the committee adjourns, with Hagen, acting as Michael's lawyer, loudly demanding an apology.

At a hotel room afterwards, Kay tries to leave Michael and take their children with her. Michael at first tries to mollify her, but loses his temper and hits her violently when she reveals to him that her recent "miscarriage" was actually an abortion to avoid bringing another child into Michael's criminal family.

While visiting Sicily, Vito is introduced to the elderly Don Ciccio as the man who imports their olive oil to America, and who wants his blessing. When Ciccio asks Vito who his father was, Vito says, "His name was Antonio Andolini, and this is for you!", cutting the old man's stomach open with a knife, avenging the deaths of his father, mother, and brother.

When Carmella Corleone, Vito's widow and the mother of his children, dies, the whole Corleone family is reunited. Michael is still shunning Fredo, who is miserable, but relents when Connie implores him to. Michael and Fredo embrace, but at the same time Michael signals to his capo Al Neri that Fredo's protection from harm, in effect while their mother lived, has now expired.

Michael, Tom Hagen, Al Neri, and Rocco Lampone discuss their final dealings with Hyman Roth, who has been unsuccessfully seeking asylum from various countries, and was even refused entry to Israel as a returning Jew. Michael rejects Hagen's advice that the Corleone family's position is secure, and killing Roth and the Rosato brothers for revenge is an unnecessary risk. Later, Hagen pays a visit to Frank Pentangeli on a military base and suggests that he take his own life, in the manner of unsuccesful ancient Roman conspirators who, in return, were promised that their families would be taken care of after their suicide.

With the connivance of Connie, Kay visits her children, but cannot bear to leave them and stays too long. When Michael arrives, he coldly closes the door in her face.

The Godfather Part II reaches its climax in a montage of assassinations and death, reminiscent of the end of The Godfather. As he arrives at a U.S. airport to be taken into custody, Hyman Roth is killed by Rocco Lampone, disguised as a journalist, who is immediately shot dead in turn. On the military base, Frank Pentangeli is found dead in one of their bathtubs, having followed Hagen's instructions and committed suicide. Finally, Fredo is murdered by Al Neri while they are fishing on Lake Tahoe - just as Fredo finishes saying a Hail Mary to help catch a fish.

The penultimate scene takes place in 1941, as the Corleone family is preparing a surprise birthday party for Vito. Sonny introduces Carlo Rizzi, Connie's future husband and eventual betrayer of Sonny, to his family. They all talk about the recent attack on Pearl Harbor by the Japanese, and Michael shocks everybody by announcing that he has just enlisted in the United States Marines. Sonny angrily ridicules Michael's choice, while Tom Hagen mentions how his father has great expectations for Michael, and had made specific arrangements for his future. Fredo is the only one who supports his brother's decision. Sal Tessio comes in with the cake for the party, and when Vito arrives, all but Michael leave to greet him.

The final scene in the film is Michael sitting by himself at Lake Tahoe, in silent contemplation. He realizes that not only did he not succeed at avoiding becoming like his father, he has in fact become an even more cold-hearted monster than his father ever was.


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