In God's Name

by David Yallop

  In the autumn of 1974 Mario Tronconi was ‘suicided’ – his body was found on the Lugano–Chiasso railway line. In his pocket was a farewell letter to his wife. Before his death, doubtless for the sake of tranquillity, Pacelli, Mennini and the other Svirobank directors had obliged Tronconi to sign a confession in which he assumed full responsibility for the 35 million dollar hole. No one denounced Ambrosio, the man who had actually created the hole. Indeed, Ambrosio was given the task of recovering the loss. The truth came to light only two years later when Mario Barone, one of Banco di Roma’s joint chairmen of the board (Banco di Roma held the other 49 per cent of Svirobank), was arrested and questioned about Il Crack Sindona. Clearly Italian banking has many attendant risks. Mario Tronconi was only one member of the fraternity whose death was made to look like suicide. In the following decade the list would grow alarmingly. The Italian Solution would be applied to a growing number of problems.

  While Michele Sindona fought his extradition from New York and plotted revenge, Vatican Incorporated was already back speculating again through his successor, Roberto Calvi. Calvi was known in Milan business circles as ‘Il Cavaliere’, The Knight; a curious nickname for the man who was paymaster to P2. It originated in 1974 when Giovanni Leone, the then President of Italy, made him a Cavaliere del Lavoro (Knight of Labour) for his services to the economy. Calvi was to be Sindona’s replacement as laundryman for the Mafia, and the man who carried out the biggest theft in the history of banking.

  Roberto Calvi was born in Milan on April 13th, 1920, but his family roots are in the Valtellina, a long alpine valley near the Swiss border and near the home of Albino Luciani. They were both men of the mountains. After studying at the prestigious Bocconi University he fought for Mussolini on the Russian front in the Second World War. Then he followed his father into banking. In 1947 he went to work for Banco Ambrosiano in Milan. Deriving its name from St Ambrose, the bank exuded religiosity. Like Banca Cattolica del Veneto it was known as ‘The Priests’ Bank’. Baptismal certificates establishing the holder was Catholic were obligatory before a bank account could be opened. Prayers thanking God for the annual figures were offered at the end of board meetings. In the early 1960s there was a greater air of reverence inside the bank than in a number of the nearby churches. The Knight with the ice-cold eyes had other plans for this sleepy diocesan bank which included among its customers the Cardinal Archbishop of Milan, Giovanni Montini. By the time Montini became Pope Paul VI in 1963 Calvi had advanced within the bank to Central Manager. When Pope Paul decided to call Sindona into the Vatican to relieve the Church of its embarrassingly large Italian holdings, The Shark and The Knight were close friends. They were already plotting to gain control of Banco Ambrosiano and transform it into a very special kind of international banking institution. In 1971, Calvi became Managing Director of the Bank. At fifty-one years of age he had risen far above his father’s humble clerical position. The average man might have been content to rest on his laurels for a while and enjoy leading the prayers at the board meeting. The only thing that was average about Roberto Calvi was his height. His ability to dream up crooked schemes for laundering Mafia money, exporting lire illegally, evading tax, concealing the criminal acts of buying shares in his own bank, rigging the Milan Stock Market, for bribery, for corruption, for perverting the course of justice, arranging a wrongful arrest here, a murder there – his ability to do all of this and more puts The Knight in a very special criminal class. Calvi was prone to advise all and sundry that if they really wanted to understand the ways of the world then they should read Mario Puzo’s novel The Godfather. He carried a copy everywhere, rather like a priest with his Bible.

  Calvi was introduced to Bishop Marcinkus by Sindona in 1971 and instantly joined the very select Vatican clan of ‘uomo di fiducia’, men of trust: that small elite group of laymen who worked with and for Vatican Incorporated; men such as Sindona, Spada, Mennini and Bordoni; men chosen with the greatest possible care.

  In 1963 he formed a Luxembourg company called Compendium – the name was later changed to Banco Ambrosiano Holdings SA. This shell company was the keystone to Calvi’s schemes. Millions of borrowed eurodollars were destined to flow through the Luxembourg holding company. The number of banks world-wide which would be conned into lending money direct to this small shell company is in excess of 250. The amount of money is in excess of 450 million dollars.

  The Knight’s empire grew rapidly. Already in the early 1960s Banco Ambrosiano had acquired Banca del Gottardo in Lugano, Switzerland. This became the main conduit for washing Mafia money after the collapse of Sindona’s Amincor in Zürich. Other foreign assets were to follow. One of these was Banco Ambrosiano Overseas Ltd, Nassau. This branch in the Bahamas tax haven was founded in 1971 and had from its inception on its board of directors Bishop Paul Marcinkus. It was originally called Cisalpine Overseas Bank to deflect further any inquiring members of Italy’s Finance Police.

  The profits being channelled into the coffers of the Vatican Bank grew proportionately with Calvi’s empire. To understand many of the very complicated and often deliberately over-complicated financial convolutions in which Calvi indulged throughout the 1970s, one fact has to be grasped: essentially, Banco Ambrosiano of Milan and the Vatican Bank were interlocked. Many of the crucial operations were joint operations. The reason that Calvi was able to break the law again and again was because of the ready assistance given to him by the Vatican Bank. Thus when on November 19th, 1976 Calvi wished to acquire 53.3 per cent of Banco Mercantile SA of Florence, the purchase appeared to be on behalf of the Vatican Bank. The shares found their convoluted way on December 17th to Milan stockbrokers Giammei and Company, who frequently acted on behalf of the Vatican. By dexterous paperwork the shares were ‘parked’ on the same day at the Vatican Bank. The fact that the Vatican did not have adequate funds in a particular account to pay for the shares was overcome by crediting on December 17th to the Vatican Bank, in a newly opened account, number 42801, 8 billion lire. The following summer, on June 29th 1977, Giammei bought the shares back from the Vatican Bank through Credito Commerciale of Milan. As the shares followed this snake-like path they were undergoing, at least on paper, a dramatic price increase. The original purchase had been made at 14,000 lire per share. By the time the shares found their way back to Giammei they were deemed to be worth 26,000 lire per share. On June 30th 1977 the shares were then sold by Credito Commerciale to Immobiliare XX Settembre SA, which was controlled by Calvi. On paper the Vatican Bank had made a profit of 7,724,378,100 lire as the price of the shares was hiked. The reality was that Calvi paid the Vatican Bank 800 million lire for the privilege of using their name and facilities. The Vatican Bank, situated in the independent State of Vatican City, was beyond the reach of the Italian Bank Inspectors. By selling himself shares he already owned at twice the original purchase price Calvi vastly increased the worth, on paper, of Banco Mercantile and stole 7,724,378,100 lire, less, of course, the kick-back he gave to the Vatican Bank. Subsequently Calvi sold his shares to Milan business rival Anna Bonomi for 33 billion lire.

  With the close and continuous co-operation of the Vatican Bank, Calvi was able to dance an illegal and criminal path through the Italian laws again and again. Operations such as that described above could not take place without the full knowledge and approval of Marcinkus.

  With regard to the Sindona/Calvi/Marcinkus scheme concerning Banca Cattolica del Veneto all the available evidence suggests a criminal conspiracy involving all three men.

  Marcinkus wanted to keep the operation secret, even from Pope Paul VI. Some years afterwards Calvi recalled the deal to friend and business associate Flavio Carboni:*

  Mercinkus, who is a rough type, born in a suburb of Chicago of poor parents, wanted to carry out the operation without even telling the boss. That is the Pope. I had three meetings with Marcinkus regarding Banca Cattolica del Veneto. He wanted to sell it to me. I asked him: ‘Are you sure? Is it available to you? Is the boss in agreement with
it?’ It was I who insisted and told him, ‘Go to the boss, tell him’. Marcinkus took my advice. Later Marcinkus told me, yes, he had spoken with Paul VI and had his assent. Some time later Marcinkus got me an audience with Paul VI, who thanked me because in the meantime I had sorted out some problems of the Ambrosiano Library. In reality I understood he was thanking me for buying Banca Cattolica del Veneto.

  If anyone seeks confirmation that by the early 1970s the Pope had acquired the new title of Chairman of the Board it can be found in Calvi’s description. The Holy Father and Vicar of Christ is reduced to ‘the boss’. Equally illuminating are Roberto Calvi’s anxious questions to Bishop Marcinkus. ‘Are you sure? Is it available to you?’ The Milanese banker was obviously fully aware of the close ties that bound the bank to the Vicenza clergy. The fact that Marcinkus wished to keep the Pope ignorant of the transaction is a further indication of just how dubious the sale to Calvi was. Cardinal Benelli’s advice to Albino Luciani that the Pope would not intercede on behalf of the Patriarch, his bishops and his priests, is demonstrated as being wise. There was not much point in complaining about the sale to the man who had given it his personal blessing. What Pope Paul VI, with the aid of Calvi, Marcinkus and Sindona, had created was a time bomb which would continue to tick until September 1978.

  Fearful of a hostile reaction from Venice, all news of the sale of the bank was suppressed by Marcinkus and Calvi. On March 30th, 1972 Calvi’s group announced that they had acquired 37.4 per cent of Banca Cattolica, but the documentary evidence I have acquired tells another story.

  On July 27th, 1971 Calvi wrote to Marcinkus:

  With this letter we wish to inform you of our firm offer to buy up to 50 per cent of the shares of the Banca Cattolica del Veneto, Vicenza, at a price of 1,600 lire each share with normal usufruct to take place through the following steps:

  1 For 45 per cent of the shares making up the aforesaid company, that is 16,254,000 shares with the application depending on your acceptance of our firm offer and against a payment by us of $42 million.

  2 For the remaining shares, that is up to a further 5 per cent of the capital, 1,806,000 shares, to take effect from the date of the ‘declaration of intent’ concerning the aforementioned Banca Cattolica del Veneto, to take place before October 31, 1971, and against a payment of $4,500,000 on 29.10.1971.

  The Vatican Bank received 46.5 million dollars, at the 1971 value. A comparable figure today would be 115,000.00 million dollars.

  Calvi, who was aware that, at his insistence, this offer would be shown to the Pope, continued in his letter:

  We inform you that we formally assume the responsibility of maintaining unchanged from the point of view of the high social, moral and Catholic religious purposes the conduct of Banca Cattolica del Veneto’s activities.

  The Vatican copy of this letter is officially stamped and signed by Marcinkus. Thus the secret sale of 1971 became known to Venice nearly one year later.

  The ‘high social, moral and Catholic religious purposes’ were so rapidly dispensed with by Calvi at the Banca Cattolica that the entire clergy of the region had been up in arms and besieging Luciani’s residence in Venice by mid-1972. Luciani had hurried to Rome, but 1972 was clearly not the time for remedial action, with Paul VI blessing the transaction. The time for action was to be September 1978.

  During the intervening years a curious situation pertained. The shares never left the Vatican Bank. On October 29th, 1971, the date on which the final 5 per cent was sold to Calvi, the shares – which were still held in their entirety by the Vatican Bank – were re-assigned to Zitropo, a company owned at that time by Sindona. Later Zitropo became firstly a Calvi-owned asset and subsequently a Vatican Bank asset. And the shares of Banca Cattolica continued to remain in the Vatican safe. It is little wonder that as late as March 1982 the then Archbishop Paul Marcinkus would talk of ‘our investments in Banca Cattolica, which are going very well.’

  When the Milan Stock Exchange began to fall in 1974, among those to be hurt was Banco Ambrosiano. Calvi was particularly vulnerable. The main ingredient in international banking is confidence. It was known that he was a close associate of Sindona. When Il Crack occurred, the banking world began to take a more cautious view of The Knight. Credit limits to Ambrosiano were cut back. Loans on the international market became difficult to obtain and, most ominous of all, the demand by small investors for the Bank’s shares began to diminish, with a consequent drop in the price. Magically, at what was fast becoming the eleventh hour for Ambrosiano, a company called Suprafin SA with a registered office in Milan, entered the market. This finance house began to display supreme confidence in Signor Calvi. It bought shares in his bank daily and before there was time for the name Suprafin to be written on the list of shareholders, the shares were resold to companies in Liechtenstein and Panama. Confidence in Calvi began to return and Suprafin kept on buying. In 1975, 1976, 1977 and 1978, throughout all of these years Suprafin continued to display massive faith in the future of Calvi’s bank – 50 million dollars’ worth of faith.

  Suprafin clearly knew something no one else did. Between 1974 and 1978 Ambrosiano shares continued to fall, yet Suprafin acquired over 15 per cent of the bank. Suprafin was officially owned by two Liechtenstein companies, Teclefin and Imparfin. In theory these were technically owned by the Vatican Bank. That was the technical theory. In practice Suprafin was owned by Calvi. Consequently, with the complete knowledge of the Vatican Bank, he was supporting the market value of Ambrosiano shares by massive purchases – a totally illegal activity. The money to finance the fraud came from international loans made to the Luxembourg subsidiary and from the parent bank in Milan.

  The Vatican Bank received huge annual payments for providing the facilities for The Knight to operate a gigantic international fraud. This money was paid in a variety of ways. All Vatican deposits with Ambrosiano banks received interest payments of at least 1 per cent higher than other depositors. Another method was for Ambrosiano to ‘buy’ shares from the Vatican. On paper the Vatican Bank would sell a block of shares to a Panamanian company at a price approaching 50 per cent more than the shares were actually worth. The shares would never leave the Vatican portfolio and the bank that Marcinkus controlled would be millions of dollars better off. The Panamanian company, usually with a capital of only a few thousand dollars, would borrow the millions from Banco Ambrosiano Overseas in Nassau where Marcinkus was a director. The Nassau branch would have been loaned the money initially by the Luxembourg company, who in turn had borrowed the money from international banks.

  Calvi was obviously hoping against hope that the price of Banco Ambrosiano shares would eventually pick up so that he could offload them. By 1978 he was walking on a knife-edge. As if this entire operation was not enough to keep the banker awake at nights, he was also contending with the problems of laundering Mafia money. Allied to that were the constant demands being made by P2 for funds. This involved further embezzlement. He was also suffering from the aftereffects of a blackmail campaign by Michele Sindona.

  While The Knight was busy embezzling millions of dollars to maintain fraudulently the share price of Ambrosiano, The Shark had been far from inactive. Sindona reminds one forcibly of a character from a Pirandello play where all expectations may prove to be illusion. The man exudes theatre. A fiction writer would baulk at such a creation. Only real life could create Michele Sindona.

  Licio Gelli continued to repay Sindona’s commitment to P2. When the Milan public prosecutor’s office applied for The Shark’s extradition in January 1975, the American judicial authorities asked for more information, including a photograph of Sindona. They also demanded that the extradition papers be translated into English. The Milan office completed a new request running to 200 pages and sent it to the Ministry of Justice in Rome, for translation and dispatch to Washington. It was eventually returned with the observation that the Justice Department in Rome could not manage the translation. This despite the fact that they have one of the lar
gest translation departments in Italy. The American Embassy in Rome declared that it had no knowledge of the extradition request. Licio Gelli had friends in many places.

  Sindona meanwhile was living in his luxurious Hotel Pierre apartment in New York. He retained the Richard Nixon/John Mitchell law firm to help him fight extradition. He dismissed his Italian problems when questioned by reporters:

  The Governor of the Bank of Italy and other members of the Italian establishment are plotting against me. I have never done a single foreign exchange contract in my life. My enemies in Italy have swindled me and I hope that one day justice will be done.

  In September 1975, when photographs of the dinner-jacketed Shark shaking hands with New York’s Mayor Abraham Beame appeared in the Italian Press, there was outrage from at least some quarters in Italy. Corriere della Sera observed:

  Sindona continues to release statements and interviews and continues, in his American exile-refuge, to frequent the jet set. The laws and mechanisms of extradition are not equal for all. Someone who steals apples can languish in prison for months, perhaps years. An emigrant working abroad who does not reply to his call-up papers is forced to come back and face the rigours of the military tribunal. For them, the twists and turns of the bureaucracy do not exist.