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

by Gerald Posner

  Chapter 18: The Battle of Two Scorpions

  1 Raw, The Moneychangers, 177. Some of the companies that owed the IOR money, such as Zitropo with a $12 million loan, were essentially bankrupt. But Calvi kept shuffling money disguised as “dividends” to Zitropo so it could at least make its interest payments to the Vatican Bank. It is not clear if Marcinkus was aware of the dire state of Zitropo, although he agreed to a reduction of the loan’s interest rate from 11 percent to 2 percent at the close of 1975.

  2 Bafisud was the acronym for Banco Financiero Sudamericano. Not only did Calvi direct the Ambrosiano and the IOR to invest in Bafisud, but he also persuaded Italy’s then largest bank, the Banca Nazionale del Lavoro (BNL), to become an equity partner. The top five BNL executives were all P2 members. See Gurwin, The Calvi Affair, 56.

  3 Minutes of Cisalpine shareholders meeting of February 4, 1976, in Geneva, cited in Raw, The Moneychangers, 177.

  4 Ibid., 177–78.

  5 Law 159 is still on the books in Italy. See generally Cornwell, God’s Banker, 81.

  6 Raw, The Moneychangers, 178–79.

  7 Ibid., 183–94.

  8 Ibid., 197. Marcinkus and Calvi attended a Cisalpine board meeting at the Bristol Hotel in Paris on October 20, 1977, and in Zurich on March 2, 1978. At neither meeting did Marcinkus mention that Calvi was using Cisalpine’s cash—with the IOR’s assistance—to buy the nonpublic shares of United Trading, Cisalpine’s parent. Instead, Calvi showed the money as being on deposit at the IOR, something that he and Marcinkus knew to be false.

  9 Calvi to Marcinkus, letter, July 26, 1977, cited in Raw, The Moneychangers, 198.

  10 Colby, “Vatican Bank Played a Central Role in Fall of Banco Ambrosiano,” 1; Cornwell, A Thief in the Night, citing “Marcinkus Replies to the Wall Street Journal,” 354–58; Raw, The Moneychangers, 358–62, 373.

  11 Raw, The Moneychangers, 62, 126–29. And despite its management contracts with some of the offshore companies, the IOR later contended through its Italian attorneys that none of its “executives were aware of the existence and unethical nature of Calvi’s schemes.” Anything to the contrary, said the attorneys, was based on “conjectures and hypotheses that are not supported by any evidence.” “Memo prepared by IOR’s lawyers re Laura Colby’s article,” reproduced in its entirety in Cornwell, A Thief in the Night, 354–58.

  12 That November, Calvi put into writing a confirmation of the back-to-back arrangements that had existed for several years between Cisalpine, the Vatican Bank, and United Trading. A separate letter did the same for the Gottardo-IOR back-to-back deposits. It is not clear what prompted the duo to commit this part of their dealings to writing. See generally Raw, The Moneychangers, 132.

  13 Marcinkus interviewed in Cornwell, A Thief in the Night, 131.

  14 “Milan’s Prosecutor Visiting U.S. to Ask Sindona Extradition,” The New York Times, November 25, 1975; Parliamentary Commission of Inquiry into the Case of Sindona and Responsibilities and the Political and Administrative Connected To It, 122–32.

  15 “Sindona Is Sentenced to Prison in Italy,” The New York Times, June 26, 1976, 34.

  16 Although Sindona was disappointed by Carter’s election, that a former peanut farmer could become president reinforced for him the idea that in America anything is possible: Tosches, Power on Earth, 181. See generally Parliamentary Commission of Inquiry into the Case of Sindona and Responsibilities and the Political and Administrative Connected To It.

  17 “Sindona Bail $3m,” The Boston Globe, September 9, 1976, 27. In October 1976, the Italian government expanded its charges against Sindona with a detailed filing that compiled some of his efforts to evade the country’s currency laws; see Robert J. Cole, “Italians Amplify Looting Charges Against Sindona,” The New York Times, October 27, 1976, 72.

  18 Gelli convinced Spagnuolo that the case against Sindona was a leftist smear plot. Robert J. Cole, “Court Papers Filed by Sindona in Fight to Bar Extradition,” The New York Times, December 14, 1976, 66.

  19 Terry Robards, “Sindona to Face Charges in Italy After Surrender,” The New York Times, September 9, 1976, 57; “Ex-Franklin Aides File Guilty Pleas,” The New York Times, January 21, 1976, 76.

  20 Lubasch, “Ex-Franklin Bank Aide Pleads Guilty,” 43.

  21 Robards, “Sindona to Face Charges in Italy After Surrender,” 57; Raw, The Moneychangers, 205, puts the amount at $334 million, which it did eventually reach.

  22 Robert Lenzner, “Mario Barone: Muscle at the Banco,” The Boston Globe, July 30, 1976, 33. Barone was a power in Italy’s banking industry, having run the Bank of Italy for decades. The following year he stepped down from his post after an internal review found that he refused to fully cooperate with prosecutors trying to find the names of up to five hundred Italian businessmen and politicians who had deposited money into Sindona-controlled Swiss bank accounts. Barone had been the chief official responsible for approving the Bank of Rome’s $200 million in loans shortly before Sindona’s empire collapsed.

  23 “Sindona Loses in Court in Banco di Roma Case,” The New York Times, July 7, 1976, 66.

  24 Raw, The Moneychangers, 205; Andreotti, who had resigned as Prime Minister—the fifty-ninth since World War I—was back as the country’s sixty-second Prime Minister in July 1976.

  25 Parliamentary Commission of Inquiry into the Case of Sindona and Responsibilities and the Political and Administrative Connected To It, 18–20.

  26 Raw, The Moneychangers, 205.

  27 Simoni and Turone, Il caffè di Sindona, 123–24.

  28 Raw, The Moneychangers, 207.

  29 See generally Parliamentary Commission of Inquiry into the Case of Sindona and Responsibilities and the Political and Administrative Connected To It, 151–59.

  30 Simoni and Turone, Il caffè di Sindona, 125–26.

  31 The names of the accounts were Ehrenkreuz and Rolrov. Gurwin, The Calvi Affair, 38–39; see also Simoni and Turone, Il caffè di Sindona, 125; and Raw, The Moneychangers, 205–6.

  32 Robert Hutchison, Their Kingdom Come: Inside the Secret World of Opus Dei (New York: Thomas Dunne Books/St. Martin’s Griffin, 1997), 246.

  33 Cornwell, God’s Banker, 83–84; see also Gurwin, The Calvi Affair, 37–38; Tosches, Power on Earth, 184; and DiFonzo, St. Peter’s Banker, 228.

  34 See Tosches, Power on Earth, 184, 193–93.

  35 Cavallo letter to Calvi, December 1977, quoted in part in Simoni and Turone, Il caffè di Sindona, 126–27; and Raw, The Moneychangers, 206. Sindona’s squeeze was a tremendous distraction for Calvi, who was in the middle of an ambitious expansion into Nicaragua. Bosco Matamoros, the Nicaraguan ambassador to the Vatican, had encouraged Calvi to buy property in the country, obtain Nicaraguan passports for himself and his wife, and open a new subsidiary, Ambrosiano Groupo Banco Comercial, in Managua. Calvi hit it off so well with Anastasio Somoza, the country’s right-wing strongman, that Somoza soon used him to suggest changes to the country’s offshore banking laws. And in return for the warm reception, Calvi arranged for several million dollars in loans on favorable terms to Somoza-affiliated companies (Calvi’s loans into Nicaragua totaled about $8 million, and half of that went to firms linked to Somoza). Marcinkus for once urged caution about the expansion into Nicaragua. He told Calvi that it seemed risky since left-wing guerrillas, the Sandinistas, were giving Somoza’s army a tough fight. Mexico, Marcinkus suggested, might be a better investment because of its proximity to America. But Calvi was not dissuaded. He also launched a Peruvian-based firm, Central American Service, which bought large tracts of land for oil and precious metals speculation and also acted as an agent in arranging Italian armaments sales to the Peruvian military.

  36 Galli, Finanza bianca, 83–84; Willan, The Last Supper, 54; Gurwin, The Calvi Affair, 38–39.

  37 Calvi met with Sindona’s attorney, Rodolfo Guzzi, at the popular Caffè Greco in central Rome. Guzzi passed him a scrap of paper with a handwritten notation of the bank and account number to which Calvi should wire t
he money. Calvi put that paper into his safe, and after his death prosecutors retrieved it and analyzed the handwriting. It belonged to Sindona. As for using United Trading, Calvi did not mention a word to Marcinkus. United Trading was already responsible for $15 million annually to the IOR just in interest payments servicing its loans. See generally The Sunday Times (London), February 13, 1983.

  38 Raw, The Moneychangers, 218–20.

  39 Cornwell, God’s Banker, 114–15; see also, Raw, The Moneychangers, 213, 308–9.

  40 Raw, The Moneychangers, 215.

  41 Raw, The Moneychangers, 362–66.

  42 The Bank of Italy had dispatched a remarkable quarter of all its inspectors for the Ambrosiano probe. See generally Cornwell, God’s Banker, 90.

  43 See generally Tosches, Power on Earth, 235.

  44 Raw, The Moneychangers, 207, 259.

  45 Sindona had hired Luigi Cavallo to send Bank of Italy inspectors about 30 pages of copies of some of Calvi’s Swiss bank accounts, see Willan, The Last Supper, 55; Cornwell, God’s Banker, 82.

  46 Gurwin, The Calvi Affair, 53.

  47 “Sidona’s [sic] Extradition Tentatively Approved,” The New York Times, November 12, 1977, F32; Arnold H. Lubasch, “Sindona’s Extradition to Italy Is Granted by Court,” The New York Times, May 19, 1978, D11.

  48 Arnold H. Lubasch, “3 Franklin Indictments,” The New York Times, July 14, 1978, D3.

  Chapter 19: “A Psychopathic Paranoid”

  1 Hoffman, Anatomy of the Vatican, 148.

  2 Paul Hoffman, “Speculation on Pope: Will He Resign at 80?,” The New York Times, August 29, 1977, 6.

  3 Henry Tanner, “Election to Be Held,” The New York Times, August 7, 978, A1.

  4 Hoffman, “Speculation on Pope: Will He Resign at 80?,” 6; Paul had told some colleagues that he “saw the end of my life approaching.” William Claiborne, “Thousands Mourn Pope’s Death; Cardinals Gather for Rites, Election,” The Washington Post, August 8, 1978, A1.

  5 Hoffman, “Speculation on Pope: Will He Resign at 80?,” 6.

  6 For a few Vaticanologists, the question of whether Paul VI would be the first modern Pope to resign arose first in 1967, only four years into his Papacy. That was when he made an unscripted visit to Fumone Castle, an isolated mountaintop retreat between Rome and Naples. There he spoke about feeling resigned to life. His words were interpreted to be a cloaked allusion to his own desire to step down from the Papacy. Fumone Castle was famous as the place where the so-called hermit Pope, Celestine V, spent the last five months of his life after resigning from the Papacy in 1296. Hoffman, “Speculation on Pope: Will He Resign at 80?,” 6; Thomas and Morgan-Witts, Pontiff, 37; “Rumors Pope May Retire Laid to Vatican Rifts,” The New York Times, September 1, 1977, 5; “Pontiff Turns 80; He Shows No Sign of Wanting to Quit,” The New York Times, September 27, 1977, 13.

  7 Martin, The Final Conclave, 86.

  8 Hoffman, Anatomy of the Vatican, 32.

  9 John Deedy, “The Clergy’s Revolution in Sexual Mores,” The New York Times, February 6, 1977, E16.

  10 Martin, The Final Conclave, 49. Martin, a former Jesuit, wrote several nonfiction books about the Vatican. The Final Conclave is an unusual hybrid because the first 112 pages are nonfiction, and Martin writes that in the account of the conclave that took place upon the death of Paul VI, beginning on page 113, “the participants are fictional.” In an “Author’s Note” he claims that the fictional portion is based on “accurate knowledge of the issues and factions at work in the choice of Pope Paul’s successor.” Still, the author has restricted any information and citation of The Final Conclave to only the first 112 pages, the nonfiction portion.

  11 “Pope Paul Distressed over Defection of Priests,” The Boston Globe, February 11, 1978, 7.

  12 “Murdered Congo Cardinal Is Buried in Brazzaville,” The New York Times, March 28, 1977, 5.

  13 This offer was especially risky since the Pope was on a Red Brigades short list for assassination. Tanner, “Election to Be Held,” A1.

  14 A coincidental footnote to the Moro assassination is that the priest who had heard Moro’s final confession was Father Antonio Mennini, one of the sons of Luigi Mennini, the Vatican Bank director. Peter Hebblethwaite, Pope John Paul II and the Church (Kansas City: Sheed & Ward, 1995), 108.

  15 There were unconfirmed reports that the Pope refused to forgive the sin of the killers, something that would have gone against Catholic teaching that every sin, no matter how grievous, can be forgiven through confession and penance. See generally Thomas and Morgan-Witts, Pontiff, 25.

  16 Tanner, “Election to Be Held,” A1.

  17 “Bitter Family Buries Moro Privately,” The Boston Globe, May 11, 1978, 1.

  18 “General and Aide Are Killed in Spain,” The New York Times, July 22, 1978, 3.

  19 Michael T. Kaufman, “12 White Teachers and Children Killed by Guerillas in Rhodesia,” The New York Times, June 25, 1978, 1.

  20 Jonathan Kandell, “2 Slain at Terrorist Siege in Paris Embassy,” The New York Times, August 1, 1978, A1.

  21 “Bomb Kills Five on Jerusalem Bus,” The Boston Globe, June 3, 1978, 24.

  22 See generally about fighting in the Curia, Thomas and Morgan-Witts, Pontiff, 93.

  23 James L. Franklin, “Catholic Scholar Says Vatican Is Tilting to the Left,” The Boston Globe, March 2, 1978, 1. In a 1975 decree that modified the conclave, Paul VI had expressly rejected expanding the voting for a new Pontiff to patriarchs of the Eastern Rite, or any other non-Catholic clerics. Conservatives, however, did not trust him. They believed he had adopted that position because he did not yet have broad-based enough support to push a more liberal agenda.

  24 Robert D. McFadden, “Cardinals to Meet to Elect Successor,” The New York Times, August 7, 1978, A14; see Martin, The Final Conclave, 57, 73.

  25 Franklin, “Catholic Scholar Says Vatican Is Tilting to the Left,” Boston Globe, 1. Martin gave his Boston Globe interview to promote his just published book, The Final Conclave.

  26 Thomas and Morgan-Witts, Pontiff, 140. An unidentified Monsignor interviewed in Cornwell, A Thief in the Night, 90. The gossip intended to undermine clerics with power such as Marcinkus and Macchi often centered on secret sex lives. Much dismissed stories of a too-close relationship between Macchi and the Pope continued making the rounds. As for Marcinkus, the tales were instead that he was having an affair with a former Miss France, who was married to a Marcinkus friend, Steve Barclay, a former B-grade Hollywood actor who had become a star in Italian cinema. Over a stretch of several years in the mid-1970s, Marcinkus was at the couple’s house a few times a week. That set off the Curia rumor mill. Evidence, as was the case with most innuendos and aspersions inside the Vatican, was not necessary. See Biamonte interviewed in Cornwell, A Thief in the Night, 173–74.

  Ex–Italian intelligence agent Francesco Pazienza, who later investigated Marcinkus in order to turn up dirt at the request of the Secretary of State, did not believe the IOR chief had any sexual weaknesses. “He was in love with power and la dolce vita, not women or men,” Pazienza told the author. Marcinkus himself had commented about it once. “You don’t play with fire if you don’t want to get burned. If you want to take on the priesthood you have to know it’s a celibate life.” Handwritten notes by Philip Willan of audiotaped interviews between John Cornwell and Marcinkus, February 8, 1988, 2a, provided to author courtesy of Willan.

  27 Galli, Finanza bianca, 64.

  28 Peter Steinfels, “Andrew M. Greeley, Priest, Scholar and Scold, Is Dead at 85,” The New York Times, May 30, 2013.

  29 Greeley had founded the U.S.-based group the Committee for the Responsible Election of the Pope (CREP) in which he urged that all priests worldwide vote for successor Pontiffs.

  30 Andrew M. Greeley, Furthermore! Memories of a Parish Priest (New York: Tom Doherty Associates, 2000), Google ebook edition 2011: 88–89.

  31 Ibid., 88.

  32 Kenneth A. Briggs, “Center of Strife Under Cody: All Charges D
enied,” The New York Times, September 20, 1981, 20.

  33 Clements, Mustain & Larson, “Federal Grand Jury probes Cardinal Cody’s Use of Church Funds,” Chicago Sun-Times, September 10, 1981, 1; D. Winston, “Chicago Archbishop Under US Inquiry on Funds,” The New York Times, September 11, 1981, 16. See also Andrew M. Greeley, Furthermore! Memories of a Parish Priest (New York: Tom Doherty Associates, 2000), Google ebook edition 2011, 88–89; Hoffman, Anatomy of the Vatican, 64; Alexander L. Taylor III, “God and Mammon in Chicago,” Time, September 21, 1981; Linda Witt and John McGuire, “A Deepening Scandal Over Church Funds Rocks a Cardinal and His Controversial Cousin,” People, September 28, 1981.

  34 Ibid.; Barry W. Taylor, “Diversion of Church Funds to Personal Use: State, Federal and Private Sanctions,” Journal of Criminal Law and Criminology 73, no. 3, Article 16, 1205–06. See also Thomas and Morgan-Witts, Pontiff, 28–29, 71, 109.

  35 Greeley, recounting his talk with Cardinal Baggio, May 11, 2007. Marcinkus heard the rumors, but did not give his opinion. He hoped Cody would not have to leave his post since he thought his friend had “been maligned, very much so. . . . The picture they paint of him in Chicago is, I think, unreal, too brutal.” Handwritten notes by Philip Willan of audiotaped interviews between John Cornwell and Marcinkus, February 8, 1988, 9b, 10a, provided to author courtesy of Willan.

  36 Greeley, Furthermore! Memories of a Parish Priest, 88–89. Thomas and Morgan-Witts, Pontiff, 71–72; see generally Peter Hebblethwaite, “Obituary: Cardinal Sebastiano Baggio,” The Independent (London), March 23, 1993.

  37 Thomas and Morgan-Witts, Pontiff, 71. Greeley, Furthermore! Memories of a Parish Priest, 544–45.

  38 Thomas and Morgan-Witts, Pontiff, 67–68.

  39 Moshe Brilliant, “Israeli Jets Strike Lebanon to Avenge Bombing in Tel Aviv,” The New York Times, August 4, 1978, 1.

  40 Thomas and Morgan-Witts, Pontiff, 67.