Caloia preached transparency and strict ethics. A handful of IOR officials, however, realized that no matter how pure his intentions, he faced great obstacles in reforming the Vatican Bank. His appointment marked a sea change in the personal relationship between the Pontiff and the head of the bank. Marcinkus had regular access to John Paul. It took Caloia two years before he met with the Pope. And that was only a quick greeting after a morning Mass, in which Caloia brought along his wife and children. That was a strike against him, especially since many in the Curia measured power and influence by easy and frequent access to the Pope. Caloia’s distance led some to believe he was only a temporary place holder for some other, yet undetermined, bank chief.
Monsignor Renato Dardozzi, who had convinced Caloia to take the job, thought he was a good pick. Dardozzi’s concern was that some long-serving IOR officials acted as though Caloia wielded no authority over them. Dardozzi was on the three-person panel that helped negotiate the $244 million payment to the Ambrosiano’s creditors. He had been a senior engineer at STET, the state-owned telecommunications company, before becoming a priest at fifty-one.4 Secretary of State Casaroli asked Dardozzi to keep an eye on the goings-on at the bank. Now, his frustration mounted as he watched everything from phantom charities to illicit political donations flourish despite Marcinkus’s departure.5
Dardozzi was particularly bothered by an account opened at the Vatican Bank on June 15, 1987. That was at the height of the debate over whether Italy’s arrest warrants could be executed against Marcinkus, Mennini, and de Strobel. It was the Fondazione Cardinale Francis Spellman (Cardinal Francis Spellman Foundation—no such entity existed outside of the Vatican Bank).6 The two signatories were Monsignor Donato De Bonis, the bank’s secretary, and Italy’s leading Christian Democrat politician, Giulio Andreotti (before Andreotti died in 2013, he was the nation’s most dominant postwar public figure, leading seven governments as prime minister and having served thirty-four times as a minister, eight times in charge of the Defense Department).7 The IOR required all account holders to maintain a copy of their wills on file so the bank would know what to do in case of death. De Bonis’s will provided that upon his death any funds went to “His Excellency Giulio Andreotti for charitable works and assistance according to his discretion.”8
In the six years that followed the opening of the Cardinal Francis Spellman Foundation account—during which Andreotti again became Italy’s prime minister—about $60 million passed through.9 Evidence that the church knew the account was sensitive is in internal correspondence in which senior officials referred to De Bonis by the pseudonym Roma and Andreotti as Omissis (other pseudonyms used, such as Ancona and Siena, have never been decoded).10 The reason for the subterfuge was the bank’s awareness that the disclosure of such an account—millions of dollars in a veritable slush fund run by the IOR’s top prelate together with the country’s most powerful Christian Democrat politician—would have sparked a great scandal.
While some of the money that passed through the Spellman Foundation found its way to religious orders, monasteries, and convents, much of it was scattered to Andreotti’s friends and associates, including one of his attorneys and a Florentine jewelry designer.11 And De Bonis sent millions more through untraceable wire transfers to Swiss and Luxembourg banks. Sometimes Dardozzi spotted De Bonis leaving the Vatican with suitcases of cash and later returning empty-handed.12
In 1992, a prominent socialist politician, Mario Chiesa, was charged with accepting a bribe in return for granting a political favor. Chiesa’s arrest kicked off a broad judicial investigation dubbed Mani Pulite (Clean Hands) that eventually toppled the coalition government. The Mani Pulite probe—dubbed by The New York Times as “one of the most extraordinary scandals of postwar Europe”—continued for three years, ensnaring five thousand defendants and leading to hundreds of convictions of politicians and businessmen, including a breathtaking half of parliament.13
Although Mani Pulite was then in its earliest stages, it nevertheless caused considerable concern in the Vatican. Just a month after Chiesa’s arrest, Caloia received a preliminary report raising questions about the Spellman Foundation account. That prompted the IOR’s Board of Superintendence, chaired by Caloia, to issue an April 1, 1992, edict that no one—“whether it be as an employee, active or retired, a manager, an auditor or accountant, [or] a prelate”—could trade or manage the accounts they did not personally own.14
De Bonis ignored that directive. And Caloia was frustrated he had few tools by which to force De Bonis to comply. “All [IOR] controls were internal,” Caloia later recalled. “It was not monitored. The cardinals knew little and the Holy Father was kept in the dark.”15
Although Caloia was De Bonis’s superior, it seemed that inside the Vatican a cleric had more standing and respect than a layman.16 A sign of De Bonis’s continuing power was that he retained the IOR’s “most beautiful office” and was in contact “with everyone in Rome who mattered, politically and otherwise. Francesco Cossiga [a former Italian president] called him by the affectionate nickname ‘Donatino,’ and Giulio Andreotti held him in high esteem, as did prominent aristocrats, financiers, and artists, like Sophia Loren.”17
It did not take long before Caloia discovered that the Spellman Foundation was not his only problem. He began compiling a list of questionable accounts ostensibly opened for everything from Catholic community associations to Trappist monks to Carmelite nuns. What appeared suspicious in each was outsized financial activity. Some—such as Assisi for the Amazon, Adorers of the Eucharist, Holy House of Loreto, and St. Seraphim Fund—were seemingly for nonexistent groups.18
On July 7 Caloia distributed to his fellow lay commissioners a report stamped Classified. It concluded that the situation inside the IOR was “very serious” and that the Vatican Bank was possibly on the verge of a new Marcinkus-styled scandal.19 Caloia wanted to better control the so-called numbered foundation accounts. Veterans like De Bonis were naturally resistant to anything that might limit their broad discretion.
Instead De Bonis did his best to undermine Caloia. In back halls, he ridiculed Caloia’s inexperience and warned that as a layman he would never understand the reasons why the IOR had to sometimes operate as it did. Caloia had a British wife and he had lived and studied for several years in London. That was evidence, contended De Bonis, that Caloia was not fully Italian, not in a way by which he could be trusted. Was Caloia truly loyal to the Pope or was he instead serving his own private career?20
Caloia was so concerned that he decided to appeal directly to John Paul. But the Pope had just been operated on for a malignant intestinal tumor and his doctors had ordered a lighter schedule. Caloia thought the matter too important to wait. He was worried that De Bonis and others were running the equivalent of a “laundry in the center of Rome,” protected by the Vatican’s sovereignty.21 So on August 5 he sent a memo to John Paul’s secretary, Stanislaw Dziwisz. Caloia included details about several foundations De Bonis managed. Also included were seventeen other dubious accounts on which De Bonis was the signatory. [They were pledged to never-heard-of congregations, religious shrines, and purported charities.22] One held the estate bequeathed to the IOR by Cardinal Alberto di Jorio, the bank’s former chief prelate. Di Jorio had left a villa, bonds, and cash, naming the bank as the sole beneficiary. But he also appointed De Bonis as his executor. De Bonis had never transferred any money to the IOR but instead managed the account as his own.23
One foundation accepted contributions from the faithful for Masses to be offered for the dead; ten thousand Masses had been paid for but there was no evidence that a single one was performed.24 Another account hid over $30 million belonging to a senior police commander and a bishop, both of whom were directors at Italy’s largest psychiatric hospital in Bari, an eight-hundred-bed facility that had been built on the site of property that previously belonged to the Ancelle della divina Provvidenza-Bisceglie (Sisters of Divine Providence-Bisceglie).25
Although
Caloia did not yet know the full extent of the IOR’s secret network, he delivered a blunt recommendation: the Pope must act to extinguish the parallel bank flourishing inside the Vatican.26
Caloia thought it unlikely that all the money passing through the foundations was donations and inheritances. He was right. When the psychiatric hospital in Bari later became embroiled in scandal—a case of inflated public contracts and stolen funds from the Ministry of Health, resulting in multiple embezzlement and money laundering indictments—a nun from a nearby convent told prosecutors she had seen the police commander cram shoeboxes of cash into his car and drive off to the Vatican.27 Worse yet, in a related case the prosecutors wanted to indict Cardinal Fiorenzo Angelini, the head of the Vatican’s Pontifical Council for the Pastoral Care of Health Care Workers, on charges he extorted money from a pharmaceutical company.28 But the same defense of absolute sovereignty that had protected Marcinkus prevented any move against Angelini.
Two of the accounts he tagged for their frenetic money transfers were for the Santa Casa di Loreto (Holy House of Loreto), a charity based in the popular eponymously named pilgrimage town. In 1988, John Paul had appointed Monsignor Pasquale Macchi, Pope Paul VI’s closest personal aide, as Loreto’s bishop. It was Macchi, a trusted Marcinkus ally, who now helped De Bonis administer two off-shelf accounts.29 Caloia was learning a sobering lesson: “Even in priests’ robes there lurk human weaknesses,” he later said.30
Most of the troublesome accounts had opened under Marcinkus. It was not much of a secret that for decades Italy’s elite had used the IOR to hide their money. In 1981, not long after Marcinkus had taken charge, one internal review estimated there were approximately 9,300 accounts belonging to “privileged citizens of Italy” compared to only 2,500 that met the bank’s strict rules. Some accounts were rumored to be proxies for the Spatola and Inzerillo crime families. Marcinkus’s departure had not slowed the flow of untracked cash. And it was not difficult to understand why the accounts were so valued—the IOR not only paid on average about 9 percent interest on the deposits but it was tax free.31
“They really had no effective internal controls in place,” Peter Murphy, the U.S. Deputy Chief of Mission at the U.S. embassy at the Vatican, said. “There were accounts that remained active long after they should have been closed.” (After Murphy left in 1989 as an accredited diplomat appointed to the Holy See, he was no longer entitled to the IOR account that had been opened as a courtesy during his posting; it took twenty-two years before the bank closed it.)
Caloia would ultimately discover that upward of $400 million moved through seventeen in nero (in black) accounts during the first four years after Marcinkus’s departure (1989–93).32 Although that cash came almost entirely from undetermined sources, it was invariably listed on the IOR ledgers as contributions from the faithful. Much of it disappeared in a flurry of transfers to Switzerland and Luxembourg, jurisdictions where banking secrecy stopped any inquiries cold.
The Vatican bureaucracy, much to Caloia’s frustration, moved at a glacial pace.33 So it was not surprising he had not heard from the Pope. But he did not even know if Dziwisz had shown the memo to John Paul, or whether the Pontiff had not been persuaded it was urgent.
While waiting for the Pope, something unexpected added to Caloia’s sense of unease about the IOR accounts. In 1992 prosecutors indicted Pavel Hnilica, a Slovak bishop living in Rome, together with Calvi’s former colleague, Sardinian developer Flavio Carboni, over a convoluted shakedown of the Vatican concerning the contents of Calvi’s long-missing attaché case.34 Also charged was a convicted forger and reputed mobster, Giulio Lena.35 Police had raided Lena’s house in a separate counterfeiting investigation, and had stumbled across unsigned checks from Hnilica’s Vatican Bank account.36 Investigators believed the seventy-two-year-old bishop had written Carboni $2.8 million in checks from his IOR account, hoping to buy Calvi’s briefcase.37 Rome’s Public Prosecutor, Francesco De Leo, said that Lena and Carboni hoped to get upwards of $40 million from the Vatican for Calvi’s case.38
Bishop Hnilica, who became an instant paparazzi favorite with his 24/7 dark glasses and thick gold neck chain around his priest’s collar, initially insisted that someone had forged his signature on the checks. In any case, he did not want the attaché case, but thought he was simply helping Carboni launch a publicity campaign to bolster the Vatican Bank’s battered image.39 Later he changed his story to say he wanted Calvi’s documents because Carboni assured him they would clear the IOR of any wrongdoing in the Ambrosiano collapse.40 Hnilica maintained he was “inexperienced, foolish and ignorant of Italian law” but was nevertheless ready “to give my life for the Holy Father and the Church.”41
The involvement of Hnilica, a Rome-based bishop who worked with Eastern European refugees, raised more questions than it answered. It turned out that Hnilica had met Calvi shortly before the banker died. They had discussed the covert transfer of money to Poland to help the incipient pro-democracy movement. The church made no public response about the flurry of charges and countercharges, sticking instead to a policy of silence.42 The Hnilica episode further concerned Caloia, who feared that what he did not know about the inner workings of the IOR might come to haunt him.
In the spring of 1993, Caloia thought he had prevailed. De Bonis was transferred from the IOR. But it was a short-lived victory. Instead of rebuking De Bonis, the Pope elevated him from monsignor to bishop and appointed him the chaplain of the Sovereign Military Order of Malta, a position with diplomatic immunity.43 De Bonis no longer worked inside the IOR; he continued exercising influence at the bank through a handful of friends and colleagues.44 The Cardinal Spellman account and others were frozen but not closed.
Caloia soon appealed to Cardinal Rosalio José Castillo Lara, president of APSA and the chairman of the IOR’s cardinal oversight committee. Cardinal Castillo Lara was a powerhouse in the church’s money departments and a personal favorite of John Paul.45 Maybe, Caloia thought, Castillo Lara might make headway with the Pontiff. But the Venezuelan-born cardinal, who had a well-deserved Curial reputation as a masterful political infighter, was allied with De Bonis.46
Next Caloia went to the new Secretary of State, Angelo Sodano, who had replaced Cardinal Casaroli in 1990. Sodano was different from his predecessor.II He was loud, confrontational, and often struck newcomers as brash. Combined with a well-deserved reputation as a Machiavellian Curialist who had an appetite for power and a habit of doling out favors to friends, the lifelong diplomat was in the style of princes of the church from a bygone era.48 Caloia knew that one of Sodano’s brothers, Alessandro, had been arrested and charged with fraud in the sweeping Mani Pulite probe.49
Caloia wrote Sodano a six-page handwritten letter that July. He did not mince words. “It is increasingly clear that criminal activity is being conducted deliberately by those who, according to their chosen way of life and the role they fulfill, should instead have provided a strict critical conscience. It is becoming more and more difficult to understand the continuation of a situation such that the person in question [De Bonis] continues, from a no less privileged position, to manage indirectly the activities of the IOR.”50
The IOR chief soon learned that Sodano’s view of damage control was keeping any news that might be embarrassing sealed inside the Vatican. The Secretary of State once told a Papal aide that bad information could only harm the church if it became public.51
In October, Caloia’s worst fears were realized. Once again some of Italy’s top industrialists were under indictment in the so-called Enimont scandal, for having paid outsized bribes to dozens of leading politicians. The difference this time was the amount of money, a staggering $100 million in illegal payoffs resulting from a multibillion-dollar joint venture between ENI, a state-owned oil company, and Montedison, a privately owned chemical firm.52 On October 4, Milan’s chief prosecutor, Francesco Saverio Borelli, telephoned Caloia.
“Hello, nice to hear from you,” Caloia said. “What do I owe the p
leasure of this call?”
Borelli was not in the mood for small talk. “Dear Professor. There are problems concerning the IOR, contacts with Enimont . . .”
Just the word Enimont chilled Caloia. “We are in the middle of the Tangentopoli scandal, and it is defined by Enimont, the ‘mother of all bribes,’ ” Caloia later recounted to author Giancarlo Galli. “The President of ENI, Gabriele Cagliari, had taken his own life in jail a few months before [Cagliari had suffocated himself in prison while awaiting trial by tying a plastic bag around his head]. The exuberant Raul Gardini, owner of the Ferruzzi Group, fearing for his arrest, had shot himself in the head on a summer morning.”53
Borelli invited Caloia to visit with his investigative unit “so that we could clarify some things, without the press or TV.” When Caloia arrived the next day he learned some sobering details. About $4 million in the tainted Enimont cash had landed in De Bonis’s Spellman Foundation.54 And worse, more than half of all the bribes ($75 million) had passed through an IOR account held for Luigi Bisignani, a former P2 member and chief publicist for Montedison as well as a novelist and editor-in-chief of the Italian news wire service ANSA (De Bonis had performed Bisignani’s 1990 wedding Mass).55 The most active Bisignani account was titled the Louis Augustus Jonas Foundation (USA), supposedly organized to collect money to “help poor children.” There was in fact such an organization with headquarters in New York City, but Caloia could not determine if the eponymously named IOR account had anything to do with it.56,III
The Milanese prosecutors asked Caloia to take some interrogatories back to the Vatican. He declined. He was savvy enough to know that if he took the questions with him it would have spared the prosecutors the difficult task of trying to serve legal papers on the Vatican. But he assured them that he would do all he could to ensure that the IOR cooperated.58 (The prosecutors submitted their interrogatories through official diplomatic channels).59
God's Bankers: A History of Money and Power at the Vatican Page 49