According to The Sopranos, A Family History, Peter Paul Gualtieri, son of Gennaro Gualtieri (although Paulie's biological father goes by the name "Russ"), has been a troubled street kid from the age of nine. He has spent time in and out of juvenile correctional facilities during his early youth, until he became an enforcer for John "Johnny Boy" Soprano, Tony's father and captain in the DiMeo Crime Family, at seventeen. His mother, later discovered to be his aunt, worked at Krispy Kreme's for a period of time. Paulie's grandfather, who immigrated to the United States in 1910, is from Ariano Irpino, a municipality in the province of Avellino, in the Campania region of Italy. Paulie's grandfather and both of Tony's grandparents on his father's side were from the same province in Italy. He spent some time in the US Army, where he was eventually drummed out through Section 8 (discharged because of psychiatric reasons). Afterwards, he spent more time in and out of prison on various criminal charges. Eventually, he worked his way up through the DiMeo crime family, reaching the rank of Captain, and almost 6 years after Anthony "Tony" Soprano became Boss of all of New Jersey, Paulie retired as capo, and Christopher Moltisanti was put in charge of Paulie's crew, which earlier was Tony's crew. It is also revealed that Paulie got his nickname "Paulie Walnuts" due to a 1990s hijacking of a truck, which Paulie believed was filled with television-sets, although it only contained walnuts. His name is taken from real life DeCavalcante crime family mobster Frank Gualtieri, who served under Vincent Palermo. Paulie is one of the most colorful characters on the show. Often talked about as a reputed psychopath with no heart-feelings, Paulie is highly paranoid and often refers to the supernatural things he experiences, like déjà-vu, seeing the Virgin Mary, and especially his constant fear of death, either natural or probable. However, despite his seniority, Paulie is one of the more eccentric of Tony's associates and is arguably one of the most ruthless, as expressed by his paranoia, mysophobia, competitiveness, miserly nature, impulsive violence and often childlike dependence on Tony's approval. In the season one finale, "I Dream of Jeannie Cusamano", Tony told his crew that he had been in therapy for almost a year, when Paulie revealed that he too had seen a therapist, from whom he 'learned some coping skills'. Nevertheless, Paulie is recognized throughout the series as one of the top earners and one of Tony's most trustworthy friends in his "inner circle" of Paulie, Silvio Dante, and Christopher Moltisanti. Uniquely among his colleagues, Paulie remains single and has no children outside marriage. Unlike most of the other Mafiosi, he shuns the married life. Paulie's girlfriend is briefly seen in episode 2.9 ("From Where to Eternity"); she is played by Scrubs actress Judy Reyes. It remains unknown whether she is still his girlfriend, it's a strange moment as Paulie shows a rarely seen compassion for her two children, putting them back to bed, sadly citing he shouldn't keep everyone up,(as he is suffering from nightmares after hearing Christopher talk about his trip to Hell after being shot). She recommends a psychic, but the session ends with Paulie calling the group a bunch of "fuckin queers" after the psychic sees the spirit of the first guy Paulie ever whacked.
In Season One, Paulie was a central member of Tony's crew. He executed a Colombian drug dealer and stole a large quantity of drugs and cash from his hotel room. He suffers a major muscular injury to his groin when the Colombian druglord kicks him in the testicles and later reports that he has to wear a jock strap until the bruised and swollen testicles heal. When suspicions that Salvatore "Big Pussy" Bonpensiero was an informant first surfaced, it was Paulie who was assigned to investigate; his method of taking Pussy to a bath house and trying to get him to undress lacked subtlety and drove his friend into hiding. In Tony's brief and bloody war with the Corrado "Junior" Soprano crew, following Junior's attempt on Tony's life, Paulie was assigned the hit on Mikey Palmice, with assistance from Christopher Moltisanti.
In Season Two, when Tony became Boss of the family, he made Paulie capo of his old crew. This meant that Pussy, Christopher, and Furio Giunta amongst others, reported to him. To help set up the crew's stolen car distribution operation in the country, Paulie traveled with Tony and Christopher to Italy. Paulie also helped run the "executive game"; a high stakes poker game. Later in the season, when it was confirmed that Pussy was an FBI informant, Paulie accompanied Tony and Silvio Dante on their trip out on a boat to execute Pussy. Paulie said that Pussy was like a brother to him and that his sense of betrayal was huge. Eventually he claimed to have put the event behind him.
In Season Three, Christopher often chafed under Paulie's leadership, particularly after Chris became a made man in Paulie's crew. Paulie began to demand regular payments and subjected Chris to humiliating random strip searches for wires. The tension between them came to a head in the episode "Pine Barrens" when they botched a simple collection job and ended up severely beating a Russian named Valery. They took Valery out into the Pine Barrens to dispose of him, but found him still alive when they arrived. Valery (who was later revealed to be a former commando in the Soviet military) escaped and Paulie and Chris pursued him until they were hopelessly lost. They spent the night in a wrecked van and argued until they agreed that they had to depend on one another to survive. Paulie grew upset after Tony ruled against him in a sit down with Ralph Cifaretto. Paulie, who had provided Ralphie with the security codes he needed to execute a $100,000 robbery, demanded 50% of the take. Ralphie, who had purposefully not picked up Paulie's nephew, Little Paulie Germani, "leaving him waiting outside his house in 20 degree weather like an asshole" the night of robbery, countered by offering only $5,000, claiming Paulie had not done any of the leg work. Ultimately, Tony ruled that Paulie was entitled to $12,000. Paulie, who had just put his mother in the expensive "Green Grove" retirement community, was especially angered by the ruling, as he had been depending on the $50,000 to cover his expenses. Paulie also grew jealous of Ralphie's earning ability, which far outpaced Paulie's because of Ralphie's labour union ties, which helped bring in the highly lucrative Esplanade project, and Ralphie's consequently rising stock in Tony's eyes.
Between seasons 3 and 4, Paulie was arrested in Youngstown, Ohio on a gun possession charge. Though no blame was put on him, Paulie's separation from the family, combined with Ralphie's continued earning abilities, continued to bring a fall to his reputation in Tony's eyes. During his four months in jail, he communicated with John "Johnny Sack" Sacramoni, the Underboss of New York's Lupertazzi crime family, while under the false impression that he could earn a place with them. It was Paulie who told Johnny Sack that Ralph Cifaretto made a joke to the family about Ginny Sack having a "95 pound mole removed from her ass" which caused Johnny to almost kill Ralph. A party was thrown at the Bada Bing when he was released, but his wavering loyalty only served to accelerate his marginalization under Tony. Paulie however, by the middle of season four, realized he had been duped by Johnny Sack and that Carmine Lupertazzi had never even heard of him, much less offered him a place in his New York family. Following this development, Paulie once again devoted himself fully to Tony and the Soprano family, reclaiming his status as a top earner and his place within Tony's inner circle. Paulie has always been devoted to his mother, Marianucci "Nucci" Gualtieri, whom he has watched over constantly. She was delighted when he first placed her at "Green Grove" (in stark contrast to Livia Soprano's reaction), and Paulie also interceded in her social problems with the other residents, going so far as to attack their relatives to ensure civility for his mother. He later learned that one of the woman Nucci had trouble with, Minn Matrone, kept all her cash in her home. Paulie broke into Minn's home to try to steal this money but she disturbed him; when he failed to talk his way out, he suffocated her. He used the money to sweeten his sudden restoration in loyalty to Tony.
In Season Five, Christopher and Paulie's bad blood resurfaced when Christopher retells the story of the Pines Barren incident to Vito Spatafore, Patsy Parisi, and Benny Fazio. The story starts out friendly, but after Chris embarrass him in front of the guys, Paulie calls Chris "Tony's little favorite". This leads to Chris and Paulie almost starting a fight and later, Paulie tells the rest of the guys that it's over between the two of them. This is one of many fights in the weird relationship that Paulie and Christopher have. At comare night, Christopher refused to pay for the dinner, forcing Paulie to pay. At Satriale's the following morning, Paulie demanded the money back, else Christopher would begin paying points. At another dinner in Atlantic City, Paulie told everyone to choose whatever they want in order to inflate Christopher's bill. Tapped out, Chris left a small tip and argued with Paulie in the parking lot until the waiter came out to confront them. Chris responded violently and threw a brick at him. The waiter collapsed and went into convulsions. Panicked, Paulie shot the waiter and grabbed the $1200 tab before running away. Paulie later called Christopher and they agreed to "bury the hatchet", and split the $1200 bill. Paulie also got into a dispute with Michele "Feech" La Manna over their rival landscaping companies. Paulie and Feech both resorted to violently assaulting the other's gardeners. Paulie's competition with and antagonism of Feech served to highlight Feech's insubordinate tendencies, which caused Tony to "set up" Feech for a return to prison, making it easier for everyone.
Between seasons 5 and 6, Christopher Moltisanti was made Capo of Paulie's crew, with Paulie being elevated to underboss of the family. Paulie's reputation for withholding money from his payments "up the ladder" were observed in the episode "Mayham". While Tony was in a coma, Paulie took part in a heist with associate Cary De Bartolo that led to a huge score. Paulie murdered two Colombian drug dealers in the process, but was himself left with a groin injury that required a trip to a urologist. The heist resulted from a tip by Vito Spatafore. They had agreed to split the haul, but Paulie later tried to withhold some of Vito's share; Silvio had to mediate as acting boss. Carmela received a package from Paulie and Vito but she noticed their displeasure at handing it over and later told Tony she believed they were withholding, but Tony shrugged it off. When Vito's homosexuality was later revealed, Paulie was outspoken in his condemnation of homosexuality and desire to see Vito killed. When Vito returned after months in hiding, Tony considered letting his proposal of setting up business in Atlantic City with Silvio in front of Paulie; Paulie left the room in protest. Tony largely decided to have Vito killed because Paulie's attitude mirrored the lack of respect his underlings would feel for him letting Vito live free, although Phil Leotardo made it a moot point when he had Vito whacked. In the episode "The Fleshy Part of the Thigh", it was revealed to Paulie that his dying Aunt Dotty, a nun, was actually his mother. She had become pregnant with him by a soldier identified only as "Russ". Nucci, the woman Paulie had thought of as his mother, was really his aunt, who took him in to hide the scandal. This revelation sent Paulie into an emotional tailspin, in the grips of which he severed his ties to his Nucci and threw the wide screen TV he had given her out of the window. The episode ended with Paulie extorting $4000 per month (the exact sum of Nucci's retirement home costs) from the son of the late owner of the Barone Sanitation company, unbeknownst to Tony Soprano. Earlier, Paulie had witnessed Helen Barone meet with Tony to intercede on her son's behalf and Tony promised that he would not be harmed; hearing this conversation led Paulie to break down emotionally. This means that Paulie Germani is not his nephew, but his first cousin once removed. Even after his secret as an adopted son was revealed to him, he still referred to him as his nephew. In "The Ride" Paulie was responsible for organizing the annual festivities at the Feast of St. Elzear. Paulie had taken over running the festival from Johnny Boy Soprano upon his death, and continued to try to run it for profit. In 2006, it proved a burden—the replacement priest, Father José, tried to renegotiate the payment the church would receive from the proceeds of the feast. Paulie refused to pay and Father José retaliated by refusing to allow St. Elzear's gold hat to be used in the festival. The hat's absence was noticed and complained about by elder residents. Ride maintenance was another area where Paulie decided to save money, which resulted in a malfunction while Bobby Baccala's family was on a ride. This resulted in hard feelings between Paulie and Bobby. Paulie got into trouble with Tony for his mismanagement of the festival, particularly about letting Little Paulie Germani handle the police. He was ordered to resolve things with Bobby. Nucci visited the festival and took the opportunity to chastise Paulie for his sins, both in organizing the festival and not attending his biological mother's funeral, as she had raised him to know better. However, Paulie continued in his baleful rejection of Nucci. During the festival, Paulie was tested for prostate cancer because of an elevated PSA; given the revelation about his parentage, there was no way of knowing if he was genetically predisposed to the disease. During a restless night awaiting his biopsy results Paulie awoke at 3 a.m. and went to the Bada Bing club. There he had a striking vision of the Virgin Mary hovering above the stage. Paulie later visited Nucci at Green Grove and they had a silent reconciliation in front of a much smaller television. In the episode "Moe N' Joe", Paulie told Tony that he has been diagnosed with prostate cancer. The disease was apparently caught in an early stage and Paulie underwent a course of radiotherapy. Paulie suggested that his luck at having been diagnosed early was a reward for good deeds in his life and Tony agreed with him. Paulie asked Tony to keep the news to himself; he was later seen playing pool at the Bada Bing and appeared to be dealing well with the illness. He stated in the episode "Stage 5", that he beat the cancer, after learning of Johnny Sack's death, which ironically was of lung cancer. In the episode, "Remember When", Paulie and Tony went to Miami to lay low when the FBI investigated an old murder case, which happened to be Tony's first hit. On the trip and in Miami, Tony grew weary of Paulie's mannerisms and tendencies to blab information to other people, and Tony questioned him several times about the joke Ralph Cifaretto made about Ginny Sacrimoni's weight. Eventually, the murder was blamed on the deceased Jackie Aprile, Sr., so Tony took Paulie on a fishing trip to celebrate. Paulie had serious misgivings about going to sea with Tony, remembering the boat trip used to lure informant Pussy Bonpensiero to his death, but saw no alternative. While Tony seriously considered murdering Paulie, he ultimately decided to spare his life. Seemingly out of gratitude, Paulie sent Carmela a $2000 espresso machine to replace her broken one. The overly expensive gift gave an impression of Paulie to Carmela that "there is something seriously wrong with that man", but Tony snapped at her that it was people like Paulie who allowed Tony and Carmela to live the way they did. In the episode "Walk like a Man", Paulie's nephew, Little Paulie, was beaten by Christopher over a dispute and thrown out a window, suffering six broken vertebrae. A furious Paulie tore up Christopher's lawn with his car, leaving Chris's wife shaken and Chris balancing between fury and determination to not take any actions that would lead to bloodshed between him and Paulie (the latter instinct won out). Later in the episode, they seemed to have made up, and drank together at the Bada Bing. However, Paulie made off-color remarks about Christopher's daughter, which caused Chris to storm out of the Bing to his AA sponsor, J.T. Dolan's home, where he shot Dolan in the head, and left. In the episode, "Kennedy and Heidi" Paulie was left upstaged when his aunt Nucci's wake was under-attended because his friends were at Christopher Moltisanti's wake instead. In the final episode "Made in America", Tony asked Paulie to step in as captain of the old Aprile crew. Paulie was at first hesitant because all the previous capos of that crew had either disappeared or were murdered, but accepted the promotion after clever persuasion on Tony's part.
When given control of the Soprano crew Paulie over saw all of Tony’s old business dealing, which included amongst others, the Paving Union, extorting drug dealers, the pump and dump scams, charging HMOs for fake MRI expenditures, fencing stolen cars, a phone card scam, loan sharking and the crew’s front businesses: Barone Sanitation and Massarone Construction. Throughout the shows run other aspects of the crew's criminal activities developed or were revealed. These include control of the Joint Fitters Union, credit card hijacking (ran by Benny Fazio), betting shop, cigarette smuggling (both ran by Christopher), and protection racketing (ran by Pasty). Legit businesses include Pussy’s old auto body shop (now run by his wife Angie), silent partner in a lawn care business, and the Feast of St. Elisario. Paulie soon became Tony's biggest earner. However, by season four Paulie's business hit a low point, especially in comparison to the Cifaretto and Barese crew. By season 5 Paulie's crew regained it's position as one of the best earners in the family. When Paulie was promoted to Underboss between seasons 5 and 6, Christopher took over as Capo of his old crew. After Christopher's death, Patsy most likely took over the crew, since he had seniority. Paulie was later put in charge of Carlo Gervasi's old crew in the final episode, which previously merged with the Aprile/Cifaretto/Spatafore crew. The crew has had the biggest interests in construction, via illicit control of unions and projects in co-operation with the Lupertazzi crime family, specifically the Esplanade Project.