In God's Name
Page 20
In Italy small savers appointed lawyers in an attempt to salvage some of their money from the Sindona wreckage and the Vatican declared a ‘serious budget deficit’. In the USA The Shark hired a public relations man and went on the University lecture circuit.
Whilst senior executives of the Franklin National Bank were arrested and charged with conspiring to misapply millions of dollars by speculating on the foreign exchange, Sindona was telling the students of Wharton Graduate School in Philadelphia;
The aim, perhaps an ambitious one, of this brief talk is to contribute to restoring the faith of the United States in its economic, financial and monetary sectors, and to remind it that the free world needs America.
Whilst he was being sentenced by a Milan court to three-and-a-half years’ imprisonment, having been found guilty on 23 counts of misappropriating 10 million pounds, he was moralizing to the students of Columbia University.
When payments are made with the intent of evading the law in order to obtain unfair benefits, a public reaction is clearly called for. Both the corrupted and the corrupter should be punished.
Whilst he planned the blackmail of his fellow P2 member and close friend Roberto Calvi, he painted a visionary image to students who yearned to emulate him.
I hope in the not too distant future, when we will have been in contact with other planets and new worlds in our myriad galaxies, the students of this University will be able to suggest to the companies they represent that they expand to the cosmos creating ‘cosmos-corporations’ which will bring the creative spirit of the private entrepreneur throughout the universe.
Sindona was clearly in earnest. He arranged a number of meetings of the American Mafia, Cosa Nostra and the Sicilian Mafia and attempted to persuade them and Licio Gelli that they should organize the secession of Sicily from Italy. He had previously, in 1972, been a conspirator in the so-called ‘White Coup’ – a plot to take over Italy. The Mafia were sceptical and Gelli contemptuous. He called the idea ‘mad’ and told Sindona that secession of Sicily could only take place with the support of the military and political members of P2, and that the members were biding their time. He advised Sindona: ‘Put the plan in the “Pending” File.’
In September 1976 the Italian authorities finally succeeded in having Sindona arrested in New York. It was the first significant breakthrough they had achieved in the long fight for his extradition. Sindona expressed surprise that ‘the United States chose now, some two years after the false charges were lodged against me in Italy, to begin these extradition proceedings. I want to emphasize that the charges were made in Italy on the basis of little or no investigation and, on their face, are false.’ He was subsequently released on 3 million dollars bail but by 1977 the net was finally beginning to close. A Federal Grand Jury began investigating alleged violations by Sindona involving the collapse of the Franklin Bank.
Sindona used all the weapons at his disposal. Important people went to court to speak for The Shark as he fought extradition. Carmelo Spagnuolo, President of a division of the Supreme Court in Rome, swore an affidavit testifying that the charges against Sindona were a Communist plot. He also swore that Sindona was a great protector of the working class, that the people investigating Sindona in Italy were at best incompetent and were controlled by political persecutors. For good measure he advised the United States Court that many members of the Italian judiciary were left-wing extremists and that if The Shark was returned to Italy he would be murdered. Carmelo Spagnuolo was a member of P2.
Licio Gelli also swore an affidavit on behalf of Sindona. He noted that he himself had been accused of being a ‘C.I.A. agent; the chief of the Argentine Death Squad; a representative of the Portuguese secret service; the co-ordinator of the Greek, Chilean and West German secret services; the chief of the international movement of underground Fascism, etc.’
He made no attempt to deny these various allegations, and offered no evidence that all of them or any of them were ill-founded. He attributed them to ‘the rise of Communist power in Italy’. On oath he then went on to make a few allegations of his own including: ‘Communist influence has already reached certain sectors of the Government, particularly the Justice Department, where during the last five years there has been a political shift from the centre towards the extreme left’. Again he offered no evidence. Gelli asserted that because of ‘left-wing infiltration’ Sindona would not receive a fair trial in Italy and would probably be murdered. He continued: ‘The Communists’ hatred of Michele Sindona is due to the fact that he is an anti-Communist and that he has always been favourable to the free enterprise system in a democratic Italy.’
On November 13th, 1977, Sindona gave a demonstration of his version of the free enterprise system at work in democratic Italy. The planned blackmail of Calvi was activated and posters and pamphlets began to appear all over Milan. They accused Calvi of fraud, exporting currency, falsifying accounts, embezzlement, tax evasion. They quoted secret Swiss Bank Account numbers belonging to Calvi. They detailed illicit deals. They referred to his Mafia links. It became more interesting to read the walls of the city than Corriere della Sera. Sindona, who had orchestrated this public washing of Calvi’s dirty laundry, had come to the conclusion that his fellow P2 member and former protégé Roberto Calvi was not taking a sufficiently active interest in The Shark’s predicament. Sindona had appealed to Licio Gelli, who agreed that Calvi should make a ‘substantial contribution’ to Sindona’s war chest. Gelli offered himself as an intermediary between his two masonic friends. This ensured that they both paid Gelli a commission.
Roberto Calvi dipped into his pocket yet again, or more accurately dipped into the pockets of those who banked with him. Half-a-million dollars were paid by Calvi into Banca del Gottardo, Lugano in April 1978. It was placed in a Sindona account.
The man who had organized the poster and pamphlet campaign on behalf of Sindona, Luigi Cavallo, had gone about his task with enormous relish. Cavallo had operated for some time in Italy as a one-man smear campaign unit that, like all professional whores, sold itself to the highest bidder. The posters were followed on November 24th, 1977, with a letter to the Governor of the Bank of Italy, Paolo Baffi, listing all the accusations which had appeared on the walls of Milan. It also referred to an earlier communication which had given photocopies of Calvi’s Swiss Bank accounts. Cavallo concluded his letter to the Governor with the threat to sue the Bank of Italy for failure to carry out its legal duties unless they began to investigate the Banco Ambrosiano.
This letter shows the fundamental difference between a first-division criminal like Sindona and a third-division crook like Cavallo. The letter was Cavallo’s idea and was written without reference to Sindona, who would never have authorized such action. You may steal eggs from the golden goose but you do not kill it, at least not while it is still capable of laying.
The same week in April 1978 in which Sindona received his half-a-million-dollar pay-off, officials from the Bank of Italy who, for a number of years had retained the gravest reservations about Banco Ambrosiano and Roberto Calvi, moved into the bank in force. The twelve men had been carefully chosen by Paolo Baffi and his senior colleague Mario Sarcinelli. The man selected to head the inspection was Giulio Padalino. Unfortunately for Calvi, Padalino was incorruptible.
The poster and pamphlet attack by Sindona was a flea-bite compared with the problems now facing Calvi. News of the massive investigation leaked around Milan’s business world. The price of Ambrosiano shares plummeted further, forcing Calvi to divert even more money to prop up the price. By now the tangled empire he controlled had a branch in Nicaragua; another was planned for Peru. There were Calvi companies in Canada, Belgium and the USA.
The Achilles heel was Suprafin. If the bank inspectors discovered the truth about Suprafin then the collapse of Banco Ambrosiano and the arrest and imprisonment of Calvi were inevitable. Equally the long-desired extradition of Sindona would become a much simpler operation. Both men stood to lose everything, in
cluding their liberty, if the inspectors could crack the Suprafin puzzle. In Milan Calvi became agitated. In New York Sindona stopped gloating about the half-a-million dollars he had just extorted from The Knight. The one hope for both men was Bishop Paul Marcinkus. Marcinkus duly obliged. When the Bank of Italy inspectors asked Ambrosiano’s General Manager Carlo Olgiati who owned Suprafin, he told them it was owned by the Instituto per le Opere di Religione, the Vatican Bank.
Calmly the Bank inspectors continued probing, working their way through the maze of share purchases, transfers, cross transfers, buy backs, parking. They were severely limited by Italian law. The information they could insist upon with regard to the foreign associates left much to be desired. If for example they had been able to obtain detailed information on Calvi’s Luxembourg holding company and had realized that millions of dollars borrowed on the European market had been funnelled to Nassau where Marcinkus sat on the Board with Calvi and Managua and that these two Ambrosiano-owned banks had then loaned millions to small Panamanian shell companies without security, the game would have been up there and then. But full information on the Luxembourg holding company was denied to the inspectors. Calvi stalled; he grew evasive. ‘It was so difficult, you know what these foreigners are like? I cannot breach their rules on “confidentiality”’. The Bank inspectors continued to dig. They discovered that on May 6th, 1975 Luigi Landra, a former chief executive of Banco Ambrosiano, and Livio Godeluppi, brother of Ambrosiano’s chief accountant, had been made directors of Suprafin. Had these two men clearly in the trust of Ambrosiano also joined the elite ranks of the Vatican’s ‘uomini di fiducia’ – men of trust?
The inspectors established that Suprafin had been created in Milan in November, 1971 by two of Calvi’s closest associates, Vahan Pasargiklian, who by the time of the 1978 investigation had become Managing Director of Banca Cattolica, and Gennaro Zanfagna. Perhaps they too had become men of trust for the Vatican? Suprafin had ‘owned by Calvi’ written all over it.
The probe continued. Careful analysis of the current accounts held by Suprafin convinced the inspectors that the company was indeed owned by Banco Ambrosiano and not the Vatican. Why would the Bank buy La Centrale shares from Suprafin at 13,864 lire as against a market price of 9,650 and then sell the shares back to Suprafin at 9,340? To obtain a letter of thanks from Pope Paul? A pat on the back from Marcinkus?
In July 1978 they tackled Calvi’s executive colleague, Carlo Olgiati, again. Olgiati consulted Calvi. He returned bearing a letter. With great Milanese charm Olgiati gave the letter to Padalino to read. It was from the Vatican Bank to Roberto Calvi. It was dated January 20th, 1975.
It read:
This is to refer to the portfolio of shares as per December 31st 1974, held by the company Suprafin SA. A company pertaining to our Institute. You are herewith requested to manage and administer the said portfolio in the most appropriate form and to arrange for all suitable and divestment operations. Will you please keep us periodically up to date as regards the position of the above named portfolio and related transactions.
The letter was signed by Luigi Mennini and the Vatican Bank’s Chief Accountant, Pellegrino De Strobel. It might well be dated January 1975 but the bank inspectors strongly suspected that it had been written after their investigation had begun in April 1978, and was written with the full approval of Bishop Marcinkus.
If Marcinkus and his colleagues at the Vatican Bank were to be believed then the Holy See had given a new definition to the phrase ‘Christian charity’. It now embraced entering the Milan stock market and spending millions merely to defend the price of Banco Ambrosiano shares. It seemed unlikely to the Bank of Italy officials that the offerings of the poor in churches around the world had been given with quite this course of action in mind. Nevertheless, Calvi, by courtesy of Bishop Marcinkus, was off the hook, at least temporarily. Here was the apparent proof that Suprafin was indeed owned by the Vatican Bank. The normally cold and aloof Calvi became almost affable in the eyes of some of his more senior colleagues at the Milan headquarters. Confident that he had blocked the bank investigation in what was potentially his most vulnerable area, he finalized the arrangements for a trip to South America with his wife Clara. The trip was planned to be part business, part pleasure. There was to be some sightseeing of potential sites for branches on the South American continent plus the inevitable business meetings associated with such a development, then sightseeing of a more plebeian nature.
Once in South America Calvi began to relax. Then Pope Paul VI died. The lines between Calvi’s hotel suite in Buenos Aires and various parts of Italy became busy. When he heard the name of the new Pope, Albino Luciani, Calvi was shocked. Virtually any of the other 110 Cardinals would have been preferable.
Calvi was fully aware of the anger his takeover of the Banca Cattolica Veneto had generated in Venice; aware that Luciani had gone to Rome in an attempt to regain diocesan control over the bank. He was equally aware that Luciani was a man with a formidable reputation for personal poverty and intransigence towards clerical wheeler dealing. The episode of the two priests and the speculating salesman in Vittorio Veneto was legendary in northern Italy. From Buenos Aires Calvi phoned instructions to sell some of the shares in the bank that Suprafin held. With bank inspectors looking over their shoulders his staff had to move cautiously. Nevertheless in the first three weeks of September, 1978, they unloaded 350,000 shares. Then Calvi heard the news he had been dreading. Bishop Paul Marcinkus’s days were numbered. If Marcinkus went, total exposure of the entire fraud was inevitable. He recalled what Marcinkus had said to him by telephone within days of Luciani’s election: ‘Things are going to be very different from now on. This Pope is quite a different man.’
Albino Luciani represented a very serious threat to both Michele Sindona and Roberto Calvi. Subsequently events were to demonstrate powerfully what happened to people who represented serious threats to these two.
The new Pope also clearly represented a major threat to Bishop Paul Marcinkus, President of the Vatican Bank. If Luciani dug into the Bank there were likely to be quite a number of vacancies. Mennini and De Strobel who had put their names to the Suprafin letter were also on borrowed time. Both had been involved over the years with the criminal activities of Sindona and Calvi. If Marcinkus was in any doubt whatsoever about the capacity of Luciani to take vigorous effective action he had but to confer with De Strobel, a lawyer from near Venice who was fully conversant with the affair of the embezzling priests in Vittorio Veneto.
Bernardino Nogara may well have had a purely capitalistic mentality but compared with what came after him in Vatican Incorporated, the man was a saint. The company had come a long way since Mussolini gave it its modern impetus in 1929.
By September, 1978 the Pope sat at the head of massive multinational corporation. As Albino Luciani looked out of the windows of his third-floor nineteen-room apartment this man who was dedicated to a poor Church for the poor had a task that was as supreme as his position.
If his dream to be the last ‘rich Father’ was to become a reality then Vatican Incorporated would have to be dismantled. The Papal States might have been lost for ever but in their place was an extraordinary money-making machine.
There was the Administration of the Patrimony of the Holy See (APSA), with its President Cardinal Villot, secretary Monsignor Antonetti, and its ordinary and extraordinary sections. The ordinary section administered all the wealth of the various congregations, tribunals and offices. It specifically administered a great deal of the real estate of the Papacy. In Rome alone this amounted to over 5,000 rented apartments. In 1979, its gross assets were in excess of 1 billion dollars.
The extraordinary section, the Vatican’s other bank was as active in its daily stock speculations as the IOR controlled by Marcinkus. It specialized in the currency market and worked closely with Crédit Suisse and the Société des Banques Suisses. Its gross assets in September 1978 were in excess of 1.2 billion dollars.
The V
atican Bank, which Marcinkus was running, had gross assets of over 1 billion dollars. Its annual profits by 1978 were over 120 million dollars; 85 per cent of this went directly to the Pope to use as he saw fit. Its number of current accounts were over 11,000. Under the terms by which the Bank was created by Pius XII during the Second World War these accounts should have belonged very largely to religious orders and religious institutes. When Albino Luciani became Pope only 1,047 belonged to religious orders and institutes, 312 to parishes and 290 to dioceses. The remaining 9,351 were the property of diplomats, prelates and ‘privileged citizens’; a significant number of this last category were not even Italian citizens. There were four who were: Sindona, Calvi, Gelli and Ortolani. Other accounts were held by leading politicians of every shade and major industrialists. Many of the account holders used the facility as a conduit through which to export currency out of Italy illegally. Any deposits made were not subjected to any taxation.
The two departments of APSA and the Vatican Bank were Albino Luciani’s major problems which had to be overcome before the Church could revert to its early Christian origins. There were many others, not least the wealth that had been acquired over many centuries. This took many forms, including a multitude of art treasures.
Vatican Incorporated, like all multi-nationals which aspire to respectability, was not negligent in matters of art. Vatican patronage is there for all to see, opening times permitting: the Caravaggios, the Raphael tapestries, the Farnese gold altar cross and candlesticks by Gentile da Fabriano, the Belvedere Apollo, the Belvedere Torso, the paintings of Leonardo da Vinci, Bernini’s sculptures. Would the words of Jesus Christ be heard less clearly in somewhere more modest than the Sistine Chapel with its majestic Last Judgment by Michelangelo? The Vatican classifies all of these as non-productive assets. What the founder of Christianity would classify them as can be gauged from his own comments about wealth and property.