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

by Gerald Posner

  Wilson’s letter included an extraordinary eight-page attachment that purported to summarize the charges against Marcinkus. On the first page of his letter, Wilson wrote that the attachment “was handed to me in London last week.” On the next page he stated that Marcinkus “has given me the enclosed letter and its attachments.” If it were Marcinkus who gave him the attachment in London it would be noteworthy since Calvi had been found dead in the British capital only a few weeks earlier. (Wilson wrote to Smith, “More lately, you will recall, a Mr. Calvi was found hanging from the Black Friars [sic] Bridge in London.”)50

  Wilson assured the Attorney General that the accusations against Marcinkus were based on “innuendo and, possibly, even by association” since the IOR owns “1.5% of the common stock of Banco Ambrosiano” and Marcinkus served as a director of a Nassau-based subsidiary.

  “It is my personal opinion and certainly my sincere hope that Marcinkus will, again, survive this.”51

  Then Wilson got to the reason for his letter: a hope that the archbishop be allowed to “review the FBI files for any information they might contain concerning discussions between the FBI agents and Marcinkus.” Wilson asked the Attorney General to “supply him with a summary of what the files contain” and that “would be helpful to him and appreciated by both him and myself.” The ambassador suggested he “would prefer not to be involved in the matter.” It should be resolved between Marcinkus and the Justice Department.

  Wilson’s direct intervention with a sitting U.S. Attorney General over a possible target of a Justice Department criminal investigation was unprecedented. If made public, it put Wilson at the risk of an obstruction-of-justice charge. Attorney General Smith directed his special assistant, John Roberts, to respond to Wilson the following month. Roberts made it clear that Justice would not entertain any special accommodation for Marcinkus “in such a sensitive area.” If the archbishop hoped to see anything in the bureau’s files about himself, Roberts suggested that Marcinkus follow the same procedure as any other American citizen and submit a Freedom of Information request.52

  Wilson was not finished. He wrote to the IOR chief one day after receiving the Roberts brushoff, and tried to make light of the need for Marcinkus to make a FOIA request: “Thank heavens we still have some privacy privileges left in this country.” He went on to describe the three conversations he had with former New York mayor and Vatican envoy Robert Wagner. In each instance, Wilson pushed Wagner to use his influence to stop the publication of Hammer’s book. Wagner had sent a letter from his New York law firm—Finley, Kumble, Wagner—demanding that Marcinkus have an opportunity to review the manuscript prior to publication.53 He also spoke to Holt Rinehart’s president about possibly delaying the publication. Wagner was rebuffed in both instances.54 That had not dissuaded Wagner, who planned to meet with the Holt Rinehart president “to try to really get down to business to see what the implications would be for the publishing company if they went ahead with the book or what could be done to modify its contents.”55

  Wilson assured Marcinkus: “Bob’s desire is to try to settle this matter in a friendly fashion rather than to become involved in litigation, however, from the way he spoke I get the feeling he is ready to put on the gloves if need be.”

  After the next meeting Holt Rinehart accelerated the book’s debut by a month from October to September.56 As part of its publicity campaign it ran national newspaper ads describing The Vatican Connection as “The astonishing account of a billion-dollar counterfeit stock deal between the Mafia and the Church.” The Vatican Connection added to the perception that Marcinkus was up to no good in his Vatican post. Newsweek’s review: “If the charges that Archbishop Paul Marcinkus oversaw a decade-old scheme to obtain millions of dollars worth of counterfeit securities for the Vatican . . . are true, they can only add to the controversy surrounding the archbishop.”57 As far as Wilson was concerned, he remained convinced that Marcinkus would emerge from his problems “without any long-term bruises” but that “it may take a little longer.”58

  * * *

  I. “[Calvi] never talked to me about Solidarity,” Marcinkus later claimed. “I never sat down and talked specifics with him in any sense. He never mentioned Solidarity to me at all. If he gave something to Solidarity, okay, but I don’t know anything about it.”32

  II. The secret relationship between Marcinkus and the ambassador’s office was revealed as part of this author’s Freedom of Information request to the State Department, in which forty-two documents constituting 160 pages were released on August 15, 2007. Among those documents, for instance, is an October 1, 1980, cable from Ambassador Wilson’s assistant, the embassy’s Deputy Chief, Michael Hornblow, to State Department headquarters, in which Marcinkus provided private details about the Pope’s upcoming East Asia trip. Near the top of the document, marked “Secret,” Hornblow wrote, “He [Marcinkus] revealed the following information to me in strict confidence and it is of the utmost importance that Marcinkus as the source of the information be strictly protected.” The State Department never had a higher-ranking confidential source of information inside the Vatican than the American-born bishop.

  III. The special relationship between the American embassy and Marcinkus was not always limited to matters of politics and national security. The diplomat who replaced Hornblow, Peter Murphy, got a call once from pop star Michael Jackson, who wanted a private audience with the Pope when he visited Rome as part of a European concert tour. “If I had asked one of the Italians, they would have just said no. So I went to Marcinkus.” The IOR chief did not think it a good idea to have the Pope meet with Jackson, but he did arrange for an early morning private tour of the Sistine Chapel. Marcinkus accompanied Jackson and his entourage around Vatican City. When he left the city-state, Jackson gave Marcinkus a sealed envelope. It contained a check for $1 million for Ospedale Pediatrico Bambino Gesù, Rome’s best known church-affiliated children’s hospital.46

  26

  “A Heck of a Lot of Money”

  The bad news kept coming the rest of 1982. Eight days after the notice that the lay IOR officials were under criminal investigation, Flavio Carboni was arrested in Switzerland. There was an outstanding warrant for him because of his role in aiding Calvi’s flight to London. When the Swiss police searched his car they found documents in his briefcase revealing that the Ambrosiano had paid Carboni some $20 million in less than a year. Most of that had ended up in Swiss bank accounts controlled by Carboni and a few business associates.1

  On Monday, September 13, Licio Gelli was arrested at the main Geneva branch of Union Bank. He was trying to transfer $55 million.2 It was such a large amount that the bank had insisted he come in person. Two policemen were waiting. He presented them with an Argentine passport in a different name. By now, the fugitive Gelli had dyed his silver hair brown, grown a bushy mustache, and abandoned his trademark glasses. But once the police began questioning him at the local station, he admitted his identity.3 When the Swiss announced his capture that evening, the Italian news was captivated with a new round of speculation about P2, Calvi’s corpse, and the Vatican’s silence.

  As 1982 closed, Pope John Paul told a gathering of the Sacred College of Cardinals that the church’s trust had been abused. He pledged that the Vatican would do whatever was necessary to bring the entire truth about the Ambrosiano to light.4 What no one then knew was that the prestigious panel of four financiers already had a preliminary report. They concluded that the IOR had owned or controlled ten of Calvi’s ghost companies, but absolved Marcinkus of any blame and instead put the responsibility on Calvi, determining that he had exploited his less sophisticated Vatican Bank colleagues.5 It was because of Calvi’s chicanery, they contended, that the IOR did not realize it had become the owner of the ghost companies now at the crux of the scandal.6 Marcinkus himself would have been hard pressed to write a better report. (Soon he had a new stock answer to deflect questions about the $1.2 billion in loans listed in the patronage letters: “All
I can say is that it’s a heck of a lot of money.”)7

  The Vatican Bank chief seemed unbowed when questioned by the panel of fifteen cardinals appointed by John Paul. The IOR was only an intermediary, not a real owner of anything, he insisted. Some of the cardinals criticized him for running the Vatican Bank without adequate checks and balances. And there were heated discussions about what to recommend to the Pope. Ultimately the clerics backed the IOR’s beleaguered chief and deputies.8 They did urge that the Vatican Bank curtail its financial speculation, and that it also introduce balance sheets that could be distributed to other Curial divisions.9

  The Vatican needed to demonstrate it was serious about addressing whatever shortfalls had led to the Ambrosiano mess. The idea had taken hold in some of Italy’s leftist press that Marcinkus was merely the chief of “an offshore bank in the center of Rome.”10 A nine-member parliamentary panel investigating P2, directed by Senator Tina Anselmi, had expanded into the Calvi and Sindona affairs because both financiers were Masons. They had questions for the IOR. So did separate parallel parliamentary investigations into Calvi and Sindona that were under way.11,I

  On Christmas Eve, a joint Italian-Vatican commission composed of lawyers and bankers was established. To most outsiders, it appeared to be yet another in a growing number of competing probes to find out what had happened. But Marcinkus and other insiders knew its real purpose was to start negotiations over how much the Vatican might have to pay to settle the mess.13

  On December 29, the Los Angeles–based center named after famed Nazi hunter Simon Wiesenthal charged that Hermann Abs, the Deutsche Bank chairman appointed to the special advisory panel, had been a high-level Nazi collaborator. Rabbi Marvin Heir, head of the Wiesenthal Center, issued a press release in which he asked the Vatican to remove Abs from the committee.14

  The charge hit the church unawares. No one inside the city-state had done a background check on someone with such solidly Catholic credentials and respected standing inside Germany’s business sector.

  Abs told the Vatican that he had not been a Nazi Party member. In 1972, he claimed, a Stuttgart court awarded him $8,400 from an East German author and a Cologne publisher who charged he had seized Jewish property during World War II and given it to the Nazis. A spokesman for Deutsche Bank also dismissed the charges, saying “Hermann Abs does not respond to slander.”15 But Heir was not dissuaded. He released to the press, and mailed to the Vatican, a 360-page, 1946 U.S. Military Government report that listed Abs on the board of “26 important industrial companies and 14 banking institutions” during the war.16

  It was evident that despite being on the defensive for a year over the Sindona, P2, and Calvi scandals, the Vatican had learned little about crisis management and handling the media. It took the church more than a week to respond, and then it was only a telephone call from Monsignor Jorge Mejía, the secretary of the poorly named Secretariat of Relations with Jews. He asked the Wiesenthal Center to produce more evidence. The press-savvy Heir on the other hand had barely gotten off the phone with Monsignor Mejía before calling reporters and complaining about the Vatican delay.17

  The Wiesenthal Center had by now leveled more charges, including that Abs had personally benefited from expropriation of Polish and Jewish property and that he had attended I. G. Farben director’s meetings at which both slave labor and Auschwitz were discussed. Father John Pawlikowski, a prominent American theologian, urged the Vatican to “fully investigate” the “accusations against Mr. Abs.”18 As with the major financial probes under way in Italy, the Vatican was hesitant to provide any fresh information, engage its critics, or address issues as they became public.

  The church did not like playing by the Wiesenthal Center rules that everything that went on between them also went to the press. After Monsignor Mejía’s request for more evidence was leaked to reporters, the Vatican stayed silent. That also did not work well. On January 11, almost two weeks after the story broke, the Wiesenthal Center announced that a research group had pieced together testimony before a 1945 Senate subcommittee, as well as information from a 1979 biography of Pope John Paul II, to conclude that Abs had been an executive at the company that ran the stone quarry where the Nazis had forced Polish prisoners, including the future Pope, to work breaking rocks during the war.19

  As with Marcinkus, the worse the news, the more the church seemingly rallied around Abs. That outsiders wanted him out was more reason for the Vatican to resist. Reporters were not certain whether Pope John Paul was referring to Marcinkus, Abs, or both, when he told them in February that “Your faith must be stronger than what you read in the newspapers, especially in this difficult age. . . . I too read the newspapers. You can read many incredible things in newspapers that have no truth in them.”20 That April, John Paul visited Los Angeles as part of his North American tour. He met with Rabbi Heir and twenty-nine other members of the Wiesenthal Center.

  “I made a direct appeal to him, both to remove Abs,” Heir recalled, “as well as to issue an unequivocal message condemning anti-Semitism. It was long overdue, and this was the right time.”21 John Paul had spoken out about anti-Semitism during a 1979 visit to Auschwitz and again after the terrorist bombing of a Rome synagogue in 1982.22 But both fell short of what many Jews thought was necessary to make up for centuries of abusive treatment at the hands of Roman Catholics.

  The Pope declined to remove Abs.

  “That is a moral travesty,” said Heir. And Heir was “disappointed” that while the Pope said Jews and Christians should work together “to deepen their bonds of friendship,” he did not issue a clear denunciation of anti-Semitism.23

  All of the missed opportunities merely amplified that—as one journalist later called it—the Vatican’s “public relations operation [was in] the dark ages.”24

  Marcinkus and the IOR, desperate for a top-grade crisis manager, unfortunately knew that better than most.

  * * *

  I. In early December, Italian newspapers ran front-page stories about Clara Calvi’s charge that her husband’s “murder” was “to hide the fact” that the IOR “was bankrupt.” A few months earlier she had said the motive was to hide the “risky operation” her husband had undertaken to arrange “the assumption of the IOR debts by Opus Dei.”12

  27

  “I’ve Been Poisoned!”

  Whether the scandal swirling around the IOR would kill a red hat for Marcinkus was answered that January (1983). John Paul appointed eighteen cardinals from six continents, including five from Communist-controlled countries.1 Among the high-profile selections were Chicago’s well-liked Archbishop Joseph Bernardin; the Patriarch of Lebanon’s Maronite Christians; and a Parisian bishop who was born a Polish Jew but raised a Catholic after the Nazis killed his mother at Auschwitz.2 The Chicago Tribune said of Marcinkus that “a year ago [he was] to be almost sure of promotion” and that as “the governor of Vatican City . . . [his] job virtually assures cardinal rank.”3 “Archbishop Marcinkus may have been passed over because of his administration of the Vatican Bank,” noted The New York Times, “which has been a subject of controversy.”4

  John Paul had not passed over Marcinkus because of all the bad ink. He believed the IOR chief had made mistakes only from good intentions and that the press had unfairly mauled him. But he could not give Marcinkus a red hat since the run of bad news about the Vatican Bank was not over. Only a handful of insiders knew that the Vatican was a few weeks into intense negotiations with Italian officials and a consortium of international banks about possibly settling its liability in the Ambrosiano debacle. The church had appointed three men that past Christmas Eve—Agostino Gambino, a prominent lawyer who had represented Sindona; Pellegrino Capaldo, a university professor; and Father Renato Dardozzi, a cleric who worked in the Secretariat of State—to represent the Vatican.5 The trio hashed out the broad outlines of a palatable settlement.6 It was clear that the church would have to write a large check to make its problems go away. Worse, the Vatican had just clocked a
$30 million budget deficit.7 To raise cash, John Paul declared that an extraordinary Holy Year Jubilee would start on Ash Wednesday (February 16) and run for fourteen months. Millions of the faithful would flock to Rome hoping for special indulgences and the chance of an audience with the Pope.8 The Jubilee also meant that tens of millions of dollars would flow into Vatican coffers, donations for everything from the sale of souvenirs to “pilgrim’s packets” complete with maps and walking tours. The Pontiff’s designation of a Holy Year caught many by surprise. The last one had been only eight years earlier. For more than six centuries, the church held them only every twenty-five or fifty years.9 But John Paul followed the precedent set by some early Pontiffs who called Jubilees out of sequence whenever the church was in dire financial straits.10

  Not even the excitement over the Holy Year, however, could obscure the continuing bad news about the IOR. Only a few days before the Jubilee’s opening ceremonies, prosecutors in Turin announced that Monsignor Donato De Bonis, the IOR’s secretary and second-ranking prelate, was under investigation in a multimillion-dollar gasoline tax-avoidance scheme. By the time De Bonis’s name entered the scandal, dozens of Italian businessmen and government tax officials had pled guilty.11 A judge took the unprecedented step of blocking the cleric from using his Vatican passport at any Italian airport or seaport.12