God's Bankers: A History of Money and Power at the Vatican

by Gerald Posner

  Pius XII appointed three cardinals to investigate whether there was truth to the malicious whispers.46 While that probe was under way, the Pope canceled Nogara’s standing weekly meeting.47 The cardinals grilled Nogara as well as all the employees in his Special Administration. They pried into his private life, questioned his friends, and compiled a thick dossier about his personal habits.

  The new Pope wanted a fast resolution. Pius remembered all too well the bedlam caused by World War I and the debilitating economic fallout that followed the peace. If the cardinals uncovered evidence of malfeasance, there would be little time to find Nogara’s replacement.48

  All the fretting ended when the cardinals returned in two months with their report. It concluded that the Vatican was far better off under Nogara’s guidance than at any time in its history. Nogara had invested Mussolini’s $92 million and it had grown over a decade to nearly $1 billion.49 Nogara lived in a modest apartment and supported himself mostly from his private savings. Once a week he went to the movies, preferring American films. There was no evidence of anything disreputable in his personal life. He took only a nominal salary of less than $2,000 annually (about $27,000 in 2014 dollars).

  Pius marveled, asking the prelates how Nogara did it. “From point A to point B, we have understood it all,” one of the cardinals reportedly replied. “But, your Holiness, Nogara has gone through the entire alphabet. And we are just simple cardinals.”50

  The report flipped Pius from a Nogara skeptic to an avid supporter. The Pontiff now saw Nogara as a reflection of himself, a loyal servant of God who put service to church above personal and financial gain. He restarted his weekly meetings with Nogara. The only change was that Nogara no longer maintained his notes of those one-on-one briefings.51

  Having resolved any questions about Nogara, Pius turned his attention to the politics roiling Europe.52 In the months following his election, there had been a rush of new anti-Semitic decrees passed across the continent. In Italy, Jews were further banned from public employment. The Third Reich ordered them to carry special identity cards (a precursor to a later decree that would force them to wear a yellow star).53 Given his trademark cautious approach, Pius avoided any public comment.54

  But in some countries, the Pope unwittingly sent the wrong message about anti-Semitism.55 He lifted Pius XI’s ban that prevented French Catholics from joining the anticommunist Action Française party. But Action Française was fiercely anti-Semitic. Pius was willing to ignore its anti-Jewish hatred as an inevitable element of its commitment to fighting bolshevism. None outside his senior advisors knew what prompted his decision, and it was instead widely interpreted as a tacit approval of the party’s venomous platform.56

  In Hungary, the priests who served in parliament had voted for the country’s 1938 race laws. Some bishops and priests supported the Hungarian knockoff of the Nazi Party, the Arrow Cross.57 Not only did the Pope fail to urge restraint for any clerical support of the fiercely anti-Semitic party, but Pius again sent mixed signals by promoting József Grösz—a key Arrow Cross backer—as Hungary’s second ranking bishop.

  In Slovakia, a country that resulted from the Nazi appropriation of western Czechoslovakia, the Catholic clergy were at the forefront of a national effort to bar Jews from the country’s business and social life.58 Priests had founded the principal political party, the unflinchingly anti-Semitic Slovak People’s Party. Jozef Tiso, the President, and Vojtech Tuka, the Prime Minister, were both priests. Pius was Pope only a month when Monsignor Tiso introduced Slovakia’s first race law (eventually thirty-eight race decrees were passed). The Third Reich expressed its “undisguised gratification” that such harsh anti-Semitic statutes “had been enacted in a state headed by a member of the Catholic clergy.”59 In line with Nazi racial doctrines, blood triumphed over religion. Anyone who converted to Catholicism after October 30, 1918, was deemed Jewish. Tiso, a theology professor, noted support for the laws in the contemporaneous writings of a Slovakian Jesuit theologian who concluded, “The Church advocates the elimination of the Jews.”60 Pius’s reaction to the events in Slovakia was to send Tiso an Apostolic Blessing.61 He did not do so to ratify its race laws but rather because the Vatican was pleased to have a new Catholic-run country in Eastern Europe. But many Catholic Slovaks interpreted the special blessing as a Papal endorsement.II

  To his credit, Pius reached out to Britain, France, Italy, and Germany to gauge if they were interested in him mediating a peace. But no country took him up on it. Although they all liked Pacelli as a conclave front-runner, now that he was Pope they were uncertain of his loyalties. British intelligence speculated Pius might be an agent for Mussolini. The French Foreign Ministry went one step further, thinking it possible that his pick as Secretary of State, Cardinal Luigi Maglione, was a fascist spy.63 Any role Pius hoped to play as a mediator was crushed in August when the Third Reich and the Soviet Union announced a nonaggression pact. Pius had long tolerated the more thuggish aspects of the German Reich in part because he thought there was no better buffer to Stalin’s red menace. The new alliance seemed to many Vaticanisti a catastrophic development.

  The news worsened the next month when the Nazi blitzkrieg into Poland marked the start of World War II. Ninety-eight percent of Poland’s thirty million residents were Catholic, making it one of the church’s largest congregations. Sixteen days after the Nazi invasion, the Soviets attacked from the East. Poland fell on October 6. The Nazis and communists split the country in half.64

  Pius mistakenly believed that a fast conquest of Poland satisfied Hitler. He assured Cardinal Tisserant—who had been a French army intelligence officer during World War I—that there would be a peace within days.65 It was quickly evident that the Pope had greatly underestimated the scope of Hitler’s ambition. The German-occupied half of the country became ground zero for the war on Europe’s Jews, and an Italian consul who had fled told church officials early on about “unbelievable atrocities.”66 The American envoy to the Vatican later reported that Pius feared that a “forthright denunciation of Nazi atrocities, at least in so far as Poland is concerned, would only result in the violent deaths of many more people.”67

  Pius knew there was particular reason to be vigilant about any upsurge in anti-Semitic violence in Poland. The country had a troubled and often violent history with its three million native Jews. When vicious pogroms swept the country in 1938 and 1939, the Catholic press said they were “understandable.”68 Top Polish prelates touted blood libel, the belief that Jews murdered Christian infants and used their blood either to make unleavened bread or Passover wine.69 The Vatican issued no reprimand a few years earlier when the country’s ranking cardinal, August Hlond, contended “that the Jews are fighting against the Catholic Church, persisting in free thinking, and are the vanguard of godlessness, Bolshevism and subversion.”70

  Some Polish bishops were alarmed not by German moves against Jews but rather by Nazi-ordered closings of dozens of churches and arrests of hundreds of priests. A few were so frustrated by Pius’s passivity that they even talked about severing their allegiance to Rome in protest.71 There was more anger among Polish clerics when on March 11, 1940—seven months after the Nazi invasion—Pius received German Foreign Minister Joachim von Ribbentrop for a state visit at the Vatican.72 When the Pope learned of the mutiny talk, he ordered his Nuncio to Germany to intercede with the Third Reich to ask for kinder treatment of Polish priests and lay Catholics.73 The Germans turned the Nuncio away.74,III

  Poland was only the first moral challenge Pius faced now that a war was under way. Starting in 1941, Monsignor Giuseppe Burzio, the Nuncio to Slovakia, sent Pius the first of several reports that Jews were being rounded up and executed.76 Nuncios in Hungary and Switzerland confirmed the grim account.77 When Pius responded the following year it was in two polite, private dissents about the deportations to Karol Sidor, the Slovak delegate to the Vatican. The protests seemed focused on baptized Jews and in any case were too genteel an intervention to give
the Slovakian perpetrators any pause.78 Since Prime Minister Tiso was still a priest, Slovakia presented Pius with unique leverage. Monsignor Domenico Tardini—one of the Pope’s closest aides—thought it was a mistake not to keep Tiso in check. “It is a great misfortune,” he wrote, “that the President of Slovakia is a priest. Everyone knows that the Holy See cannot bring Hitler to heel. But who will understand that we cannot even control a priest?”79 (The Vatican waited until after the war to condemn Tiso, when the Allies hanged him for war crimes.)

  Slovakia was no exception. Other countries with large Catholic populations were swept up into Hitler’s killing machine as the Nazi aggression expanded. The conservative Catholic majorities of the conquered nations could have been expected to pay heed to strong leadership from the Vatican. And none better than Croatia, a country that only came into being after Germany conquered and dismembered Yugoslavia in 1941. Members of the lay Croatian Catholic Movement and priests dominated the governing political party, the Ustaša (Rise Up). It was rabidly anti-Semitic, anti-Serb, and anticommunist.80 Zagreb’s Archbishop Alojzije Stepinac was head of the Croatian church and also the Supreme Apostolic Vicar General of the Ustašan Army.81 The Ustašan leader, Ante Pavelić, a devout Catholic, boasted he never missed daily Mass. Pavelić declared fascist Croatia as Europe’s first fundamentalist Catholic nation. The man called the Poglavnik (Führer) considered a good relationship with the Vatican as key as the one he had with the Third Reich.82

  Archbishop Stepinac had direct access to the Pope, meeting him in February 1941.83 He lobbied for a Papal audience for Pavelić. When the Yugoslavian government in exile learned that Pius might meet Pavelić, it protested.84 Pavelić had been convicted and sentenced to death in absentia by French and Yugoslavian courts for assassinating French Foreign Minister Louis Barthou and Yugoslavia’s King Alexander. Mussolini had provided Pavelić safe haven during the 1930s. He was now the leader of an occupied nation and an illegitimate government.85 The British Foreign Office also tried dissuading the Pope from meeting Pavelić, calling the Croat leader “a notorious terrorist and murderer.”86 The head of the Catholic Slovene People’s Party petitioned the Pope: “In this moment of urgent danger and necessity, we appeal to Your Holiness and most humbly beg for your intervention.”87

  Pius, however, considered Pavelić “a much maligned man.” The church had wanted a Catholic state in the Balkans since the Crusades, so it was difficult for the Vatican to turn him away.88 Monsignor Tardini told the Ustašan envoy to the Vatican, “Croatia is a young state. . . . Youngsters often err because of their age. It is therefore not surprising that Croatia has also erred.”89 The Pontiff agreed to see Pavelić, but in a nod to his critics did not mark it as a state visit.90

  The Pope and Croatian leader met at the Vatican on May 18, 1941, the same day the Ustaša passed copycat versions of the Nazi’s Nuremberg Laws (Croats were exempt since they claimed to have Nordic origins that somehow tangentially related them to Aryans, the racial subgroup of Caucasians that the Nazis had proclaimed the superior race).91 The Vatican maintains that no notes or journal entries were kept of that meeting. Whatever the conversation, Pavelić returned home and soon unleashed a bloodbath against the country’s Jews and Orthodox Christian Serbs.

  The massacres in Croatia did not begin until the German army withdrew to the east in June to join in Operation Barbarossa, Hitler’s surprise invasion of the Soviet Union. Inside the Vatican, the German offensive into Russia reaffirmed for Pius that he was right for placing his faith in National Socialism as a bulwark against communism. Pius now concluded that Hitler’s 1939 nonaggression pact with Stalin had been only a ploy to buy the Germans time to find the right moment to take on the Russians. A successful German offensive would alter the political face of Europe, removing the most powerful and antagonistic philosophy the Vatican had faced in centuries.

  That the Third Reich was now involved in what some clerics considered a holy war against godless bolsheviks meant there was little chance Pius would say anything that might inflame the Germans.92 Both the church and the Nazis shared a common goal, the complete destruction of the Stalinist state.93 Just three months after the start of the Russian campaign, Dr. Fritz Menshausen, the diplomatic counselor at the German embassy in Rome, told the Foreign Ministry in Berlin that well-informed officials in the Vatican had repeatedly assured him the Pope privately stood with the Axis forces.94

  Even if Pius had decided to give the Germans leeway because of their fight against Stalin, there was no reason why he could not intervene to stop the bloodletting when it involved only Catholic Croatians. Pavelić started the first widescale killings in July, only two months after meeting with the Pope.95 In Croatia, there was no bureaucracy of mass murder as with the Germans, no systematic march of trainloads of emaciated prisoners to the gas chambers. There was instead brutal and chaotic ethnic cleansing. Many Jews, Serbs, Gypsies, and communists were burned alive. Roving fascist gangs went on mutilation frenzies, cutting off the breasts of women and the genitals of men, and in some cases collecting the eyes of victims as gruesome trophies. The killers put thousands of others onto hanging meat hooks or chopped them up with butcher knives and axes. Pavelić created an exemption to his own race laws to protect his half-Jewish wife.96

  In contrast to the Nazis who tried to keep victims from learning about their deadly fate until they arrived at a concentration camp, the Croats let word of the terror spread across the tiny country.97 Pavelić figured that if he murdered half of all the Serbs, the survivors would either flee or convert to Catholicism.98 He intended to kill all of the Jews.

  The Vatican faced a unique challenge in Croatia since priests partly ran the murder machinery. Sarajevo’s Bishop Ivan Sarić—later dubbed the “Hangman of the Serbs”—told the faithful that the elimination of Jews was a “renewal of human dignity.”99 Catholic priests served in Pavelić’s private bodyguard.100 A Franciscan monk, Miroslav Filipović-Majstorović, earned the moniker the “Devil of Jasenovac,” a concentration camp where forty thousand Jews and Serbs were slaughtered.101 Three Franciscan monks—also Ustašan officers—served as the Devil’s deputies.102 Father Bozidas Bralo, Sarajevo’s chief of security, was responsible for enforcing the country’s anti-Semitic legislation. And a popular priest, Father Dyonisy Juricev, wrote in a leading newspaper that it was no longer a sin to kill Serbs or Jews so long as they were at least seven years old.103 The role played by clerics in the killings helped absolve ordinary Catholics from being afflicted by a troubled conscience.104

  Branko Bokun was a young ex–Foreign Office worker who had joined the International Red Cross at the start of the war. At twenty-one, the Red Cross gave him a file packed with blood-curdling details about the Croatian massacres. His mission was to get to Rome and to petition the Pope to intervene. Before Bokun left Zagreb, the local head of the Red Cross—and a former chief of Yugoslav counterintelligence—explained why a public condemnation by the Vatican was critical. Bokun recorded it in his diary entry for June 26, 1941, only a month after Pius welcomed Pavelić to the Vatican: “These Catholics are killing Serbs and Jews, because in their primitive minds they are convinced that it will please the Vatican. If the Vatican does not intervene immediately, the fight between Serbs and Croats will reach such proportions it will take centuries to die down.”105

  The Pope and his advisors were probably better informed about what was happening in Croatia than any other country.106 Every Ustašan military unit had a priest as a field chaplain. The Pontiff’s Undersecretary of State, Monsignor Giovanni Battista Montini—later Pope Paul VI—was in charge of collecting reports from both Croatia and Poland. Aggrieved clerics sent Montini chilling accounts of the atrocities. Every day he briefed Pius, who had a reputation as a Pope who wanted the details.107 In December 1941, on a state visit to Venice, Pavelić boasted to the Italian Foreign Minister as well as Nogara’s good friend, Giuseppe Volpi, that Croatia’s Jewish population had been reduced by a third.108

  Hitler gave his s
eminal speech on the fate of European Jewry on February 9, 1942. That was just twenty days after the Wannsee Conference, named for the Berlin suburb where Nazi leaders met and approved the Final Solution, a plan to exterminate the continent’s Jews. In his talk, Hitler promised: “The Jews will be liquidated at least for a thousand years!” The most inflammatory passages were reprinted in Roman newspapers and the Vatican Secretary of State discussed it with Western diplomats. Pius ignored all entreaties that the church publicly distance itself from Hitler’s hateful rhetoric.

  The frustrated British Minister to the Vatican, D’Arcy Osborne, told his colleagues that Pius was hedging his bets on a Nazi victory.109 The Allies sensed that the turning point had been the Nazi invasion of Russia the previous summer.110 Now in the wake of Hitler’s promise to “liquidate” Europe’s Jews, the judgment that the Pope was partisan was reinforced when the Vatican opened diplomatic relations with Japan, the third Axis partner. The United States and Britain had pressed Pius not to formalize ties with Japan, but the church claimed it did not have “sufficient elements of proof” about Japanese atrocities. In any case, the Vatican argued it had a duty to the eighteen million Catholics in the Far East.111 Further evidence of the Vatican’s skewed allegiance came in a classified report by Viscount Oliver Lyttelton, Winston Churchill’s Minister of State in the Middle East. Issued the same month as Hitler’s speech, it was passed around a handful of senior British ministers with “to be kept under lock and key” stamped across the top. Based on extensive British intelligence data, Lyttelton concluded that throughout a dozen Middle Eastern countries, “the Roman Catholic Church has developed Fascist and pro-Axis tendencies, which dominate its spiritual functions.” The report revealed that the church helped distribute fascist “political propaganda, and since the war it has lent encouragement to espionage, sabotage and the escape of prisoners of war.” Lyttelton recommended replacing partisan Italian clerics with “non-enemy nationals.” That never happened. When the British reached out to the Vatican, the church shelved the findings.112