26 Richard Allen interviewed in Bernstein, “The Holy Alliance.”
27 Robert M. Gates, From the Shadows: The Ultimate Insider’s Story of Five Presidents and How They Won the Cold War (New York: Simon & Schuster, 1996), 237.
28 Bernstein, “The Holy Alliance.” According to Bernstein, “Lech Walesa and other leaders of Solidarity received strategic advice—often conveyed by priests or American and European labor experts working undercover in Poland—that reflected the thinking of the Vatican and the Reagan Administration.”
29 Koehler, Spies in the Vatican, 177–79, citing a document in the Archive of the former East Germany Ministry for State Security [Stasi], 1083/81 BSTU Nr. 00008, translated from the Russian.
30 Ibid., citing a document in the Archive of the former East Germany Ministry for State Security [Stasi], HA XX/4-233 BSTU Nr. 000058.
31 Ibid., citing a document in the Archive of the former East Germany Ministry for State Security [Stasi], HA XX/4-8751 BSTU Nr. 000197.
32 “The information from the Vatican was sometimes better than we obtained,” recalls the State Department’s Hornblow: author interview with Michael Hornblow, January 28, 2014.
33 A month after martial law was imposed, General Jaruzelski said that the “counterrevolution was crushed.” But Brezhnev felt the imposition of martial law would ultimately “only ruin things.” Koehler, Spies in the Vatican, 203.
34 See generally Bernstein, “The Holy Alliance;” William A. Wilson Papers, Georgetown University Library, Special Collections Research Center, Washington, D.C. Also Hutchison, Their Kingdom Come, 359.
35 Laura Colby, “Vatican Bank Played a Central Role in Fall of Banco Ambrosiano,” The Wall Street Journal, April 27, 1987, 1.
36 Galli, Finanza bianca, 84–85; see also Lernoux, In Banks We Trust, 212. Marcinkus denied any higher ambitions. “None, whatsoever. . . . I don’t see any reason why they should make me a cardinal. Nobody has a right to be made a cardinal.” Handwritten notes by Philip Willan of audiotaped interviews between John Cornwell and Marcinkus, February 8, 1988, 11a, provided to author courtesy of Willan.
37 Raw, The Moneychangers, 277–78.
38 Calvi quoted in Gurwin, The Calvi Affair, 103; handwritten notes by Philip Willan of audiotaped interviews between John Cornwell and Marcinkus, February 8, 1988, 8a, provided to author courtesy of Willan.
39 Author interview with Francesco Pazienza, September 18, 2013. According to Pazienza, $3.5 million of the money came from the Vatican while $500,000 came from the Ambrosiano.
40 See generally Hebblethwaite, Pope John Paul II and the Church, “Pope Repudiates Liberation Theology,” 113-19, 264-65; Willey, God’s Politician, “Salvation Politics,” 113–37.
41 In Guatemala in May 1981, General Vernon Walters visited the country as goodwill ambassador-at-large for the Reagan administration. Walters was also representing a Luxembourg-based company, Basic Resources International SA (BRISA). British tycoon Sir James Goldsmith owned BRISA, and Antonio Tonello was a director. In addition to having executive positions in Calvi’s La Centrale and Toro Assicuranzioni, Tonello was a close associate of P2’s Licio Gelli. And Tonello was also a director of Cisalpine, serving with Marcinkus on the board. During Walters’s visit, the Guatemalan military government signed a multiyear oil export deal with BRISA. Some of that revenue passed through the Ambrosiano subsidiaries in which the IOR owned stakes. See generally Gurwin, The Calvi Affair, 194; Lawrence Minard, “I Don’t Give a Damn What Anybody Says!,” Forbes, September 18, 1979, 41.
The money flow from the Vatican continued in 1980 despite the conviction of members of the right-wing Salvadoran army for murdering four Maryknoll sisters.
42 Francis Rooney, The Global Vatican: An Inside Look at the Catholic Church, World Politics, and the Extraordinary Relationship between the United States and the Holy See (New York: Rowman & Littlefield, 2013), 268–70; Willey, God’s Politician, 191; “Vatican Blasts U.S.: Calls It ‘Occupying Power’ and Urges Noriega to Leave,” Los Angeles Times, December 29, 1989, 1.
43 “Marcinkus—Pope Is Not Commission’s Formal President,” UPI, International News, Vatican City, P.M. cycle, September 29, 1981; “American in Key Vatican Job,” The New York Times, September 30, 1981, A12.
44 “Marcinkus—Pope Is Not Commission’s Formal President,” UPI, International News, Vatican City, P.M. cycle, September 29, 1981; “Pope Names American Bishop as Top Vatican Manager,” Associated Press, International News, Vatican City, P.M. cycle, September 29, 1981; “American in Key Vatican Job,” The New York Times.
Chapter 24: “Tell Your Father to Be Quiet”
1 Gurwin, The Calvi Affair, 67. In April, while prosecutors assembled their case against Calvi, he tried rehabilitating his damaged reputation by making a successful bid to buy Rizzoli, one of Italy’s most prestigious publishing houses. Calvi managed to raise $200 million from investors because of Rizzoli’s sterling name, but he paid a significant premium for the shares, and an enormous commission. Investigators later concluded that the premium was in part a theft of funds from some of Calvi’s offshore banks. See generally Raw, The Moneychangers, 286–87, 290–91.
2 Cornwell, God’s Banker, 138; Gurwin, The Calvi Affair, 71.
3 “7 Arrested in Italy on Lire Outflow,” The New York Times, May 21, 1981, D14; “Italian Financiers Arrested over Alleged Illegal Funds Transfers,” Associated Press, Business News, Milan, A.M. cycle, May 20, 1981. As for currency regulation discussion, see generally Parliamentary Commission of Inquiry into the Case of Sindona and Responsibilities and the Political and Administrative Connected to It, 110–11.
4 United Press International, Milan, Financial, BC cycle, May 29, 1981; the sell-off culminated in a 20 percent dip in the indexes on July 8, when the Treasury Ministry suspended stock trading to restore order. “Financier Attempts Suicide,” Associated Press, International News, Milan, P.M. cycle, July 8, 1981.
5 Paul Lewis, “Italy’s Mysterious, Deepening Bank Scandal,” The New York Times, July 28, 1982, A1; “3 Named by Vatican to Study Bank Ties,” The New York Times, July 14, 1982, D1.
6 Author interviews with Carlo Calvi, September 27, 2005, and September 10, 2006.
7 Cornwell, God’s Banker, 123–24; see generally Benten E. Gup, Bank Failures in the Major Trading Countries of the World: Causes and Remedies (Westport, CT: Quorum, 1998), 31–33. In 1973, when Manic was founded in Luxembourg, the IOR subscribed to a $40 million bond issue from the new company (the money made available from a loan from the Ambrosiano to Manic). And the Vatican Bank bought control of Manic at the same time for a price listed in documents as only $5 million. In 1979, the IOR was repaid its $45 million, plus an agreed upon 10 percent interest. But it retained the physical shares of Manic, representing controlling ownership. After the entire web of companies collapsed, Marcinkus tried putting some distance between the IOR and the offshore subsidiaries. In a 1982 statement to an Italian parliamentary investigating committee, Marcinkus said that he only learned about the extent of the IOR’s ownership in Manic earlier that year, and proof of that was the failure of the IOR to receive a balance sheet after 1997. Few believed that to be true, since Manic had seven subsidiaries managed by the Nassau-based Cisalpine, of which Marcinkus was a director. One typewritten letter dated March 6, 1980, to Cisalpine, and signed simply “Manic S.A.,” is about “our various Panamanian subsidiaries which you are managing on our behalf.” That would not stop Marcinkus from later claiming, “These companies and stuff, I never even heard of them. . . . I say that with all honesty.” See generally Laura Colby, “Vatican Bank Played a Central Role in Fall of Banco Ambrosiano,” The Wall Street Journal, April 27, 1987, 1; “Memo prepared by IOR’s lawyers re Laura Colby’s article,” reproduced in its entirety in Cornwell, A Thief in the Night, 354–58; Raw, The Moneychangers, 347–49; see also Marcinkus interviewed in Cornwell, A Thief in the Night, 132.
8 Raw, The Moneychangers, 352.
9 Gurwin, The Calvi Affair, 72–73.
11 Clara Calvi account recounted in Lernoux, In Banks We Trust, 199; see also Cornwell, God’s Banker, 143; and Raw, The Moneychangers, 338.
12 Gurwin, The Calvi Affair, 69–70; see also Willan, The Last Supper, 147.
13 Cornwell, God’s Banker, 140; Tosches, Powers on Earth, 242–43; Raw, The Moneychangers, 322–23.
14 See generally, Lernoux, In Banks We Trust, 216–17.
15 Author interview with Francesco Pazienza, September 18, 2013.
16 Tosches, Power on Earth, 236.
17 Ralph Blumenthal, “Italian Ex-Agent Ordered Extradited from U.S.,” The New York Times, September 12, 1985, A12.
18 Author interviews with Francesco Pazienza, September 18, 20, and 21, 2013. See also Loren Jenkins, “Italian Judge Said to Drop Probe of Agca Being Coached,” The Washington Post, December 19, 1985, A31; “Rome Inquiry: Was Agca Coached?,” The New York Times, October 8, 1985, A3; Blumenthal, “Italian Ex-Agent Ordered Extradited from U.S.”
19 Author interviews with Francesco Pazienza, September 18, 20, 21, 2013; Ralph Blumenthal, “Italian Ex-Agent Ordered Extradited From U.S.,” The New York Times, September 12, 1985, A12; Lernoux, In Banks We Trust, 216–17; Tosches; Power on Earth, 242–43, 260–61.
20 Author interview with Carlo Calvi, September 10, 2006. Even the State Department, in some 350 pages of documents released pursuant to a Freedom of Information request, referred in contemporaneous documents to Pazienza as a “fixer.” Author interview with Francesco Pazienza, September 18, 2013.
21 Author interview with Francesco Pazienza, September 18, 2013.
22 One of those Pazienza puts at the center of his efforts to sell the Ambrosiano was Roberto Armao, the president of a private Vatican lay foundation that raised donations from the faithful. Armao had worked for the Shah of Iran, and was close to David Rockefeller and senior executives at Chase Manhattan. Armao’s connections later fueled conspiracy theories tying the Ambrosiano to a much broader and more complicated global intelligence and business scheme. Author interviews with Francesco Pazienza, September 18 and 19, 2013. See generally Lernoux, In Banks We Trust, 216. Also see Cornwell, God’s Banker, 170–73; and Raw, The Moneychangers, 323–25, 377–78, 382–84, 413.
23 Carlo Calvi recalled the bank as a branch of the elite private British bank Coutts. But documents in subsequent government investigations reveal that the senior Calvi kept about 1,500 pages of documents and journal entries at Roywest.
24 Author interview with Carlo Calvi, September 10, 2006.
25 Ibid.
26 Author interview with Francesco Pazienza, September 18, 2013.
27 Author interview with Francesco Pazienza, September 20, 2013; Raw, The Moneychangers, 339.
28 Raw, The Moneychangers, 352.
29 Gurwin, The Calvi Affair, 70. Cheli was himself somewhat controversial, having sent more than $100,000 of church money in donations to Palestine. It was Cheli who made the Pontifical Mission for Palestine a diplomatic priority for the Vatican, and behind the scenes at the United Nations he was known for his often biting criticism of Israel. See generally “Vatican Gives $10,000 to Refugees,” Associated Press, International News, Vatican City, A.M. cycle, November 27, 1981.
30 “Report Archbishop Marcinkus Has Resigned,” United Press International, International News, Vatican City, A.M. cycle, July 7, 1982.
31 Raw, The Moneychangers, 58.
32 Author interview with Father Lorenzo Zorza, September 6, 2013. See “Association Between the Families of Victims, the Massacre at the Station of Bologna,” August 2, 1980, 5th Assize Court, Rome, http://www.uonna.it/bologna-strage-1980-sentenza.htm; author interview with Francesco Pazienza, September 19, 2013.
33 Zorza was “in residence” at St. Agnes, a situation in which a priest is on special assignment—as Zorza was with UN staff—and allowed to reside in a local parish without any pastoral duties. Author interview with Father Lorenzo Zorza, September 6, 2013; William G. Blair, “Priest Arrested in Smuggling of Art Is Suspended from his U.N. Duties,” The New York Times, March 3, 1982, B3.
34 Author interviews with Carlo Calvi, September 27, 2005, and September 10, 2006.
35 Prior published accounts have reported that Zorza, Pazienza, and another Italian businessman had offered $4.5 million for a small island near Antigua, in the hope of creating their own state with an independent currency, a central bank, and liberal tax laws. But according to those reports, the deal fell through when Antigua refused to cede sovereignty over the island. See generally Rick Hampson and Larry McShane, “Accusations of Drug, Art Smuggling; Odyssey Takes Priest Outside Law, the Church,” Los Angeles Times, August 13, 1988, Part 2, 7. However, Father Zorza told this author that he was not involved with Pazienza’s deal for a sovereign state. Zorza claims that the Knights of Malta were behind Pazienza’s attempt to create a tiny nation from an island belonging to Belize, not Antigua. The price, several million dollars’ worth of construction equipment required by Belize to build roads, was never delivered and the deal was not completed. Author interview with Father Zorza, September 6, 2013. As for Zorza’s claim about his Ambrosiano application for a $5 million loan, and the required 50 percent kickback of the principal, it is from a ten-page undated document titled, “Subject: My Life: Some explanations . . .” written by Father Zorza, and provided to the author on September 6, 2013.
36 William G. Blair, “Priest Arrested in Smuggling of Art Is Suspended from his U.N. Duties,” The New York Times, March 3, 1982, B3; “Priest Held in Theft,” The New York Times, August 21, 1987, A8; Ralph Blumenthal, “U.S. and Italy Join in Breaking a Vast Drug Ring,” The New York Times, April 1, 1988, A1; “Priest Arrested in Italy On U.S. Drug Charges,” The New York Times, April 7, 1998; Hutchison, Their Kingdom Come, 324; Assorted author email and interviews with Father Zorza, 2013 and 2014.
37 Author interviews with Carlo Calvi, September 10, 2006; and Lorenzo Zorza, September 6, 2013.
38 Author interviews with Carlo Calvi, September 27, 2005, and September 10, 2006.
39 Author interview with Carlo Calvi, September 10, 2006.
40 “Financier on Trial Dies,” Associated Press, International News, Milan, A.M. cycle, June 15, 1981; Cornwell, God’s Banker, 143–44.
41 Raw, The Moneychangers, 345–46.
42 “Financier Attempts Suicide,” Associated Press, International News, Milan, P.M. cycle, July 8, 1981; Cornwell, God’s Banker, 145.
43 “Financier Attempts Suicide,” Associated Press; as for the warden, see Gurwin, The Calvi Affair, 75.
44 Author interview with Carlo Calvi, September 10, 2006.
45 Raw, The Moneychangers, 349–50.
46 Ibid., 355.
47 Cornwell, God’s Banker, 145.
48 Gurwin, The Calvi Affair, 76.
49 Willan, The Last Supper, 58–59.
50 Cornwell, God’s Banker, 148–49; Raw, The Moneychangers, 353.
51 Marcinkus interviewed in Cornwell, A Thief in the Night, 134.
52 Gurwin, The Calvi Affair, 79.
53 Raw, The Moneychangers, 353.
54 Viviane Hewitt, “Lawmen: Mobster May Help Destroy Mafia for First Time Since Middle Ages, Italians Speak of Ending Mob Rule,” The Miami Herald, October 7, 1984, 1. Gurwin, The Calvi Affair, 80.
55 Raw, The Moneychangers, 264, 266.
56 Ibid., 197–98. The IOR at this point had $205 million at stake, all with no collateral other than Calvi’s promise to make good on the debt.
57 Simoni and Turone, Il caffè di Sindona, 133.
58 Calvi was with Pazienza, meeting and entertaining potential investors for the Ambrosiano. Raw, The Moneychangers, 355, 358.
59 The companies were those at the heart of the Ambrosiano-Vatican business relationship. They were from Panama (Astolfine, Bellatrix, Belrosa, Erin, Laramie, Starfield, United Trading, and Worldwide Trading), Liechtenstein (Nordeurop), and Luxembourg (Manic). Money was shuffled between them at sometim
es dizzying speeds. In the spring of 1980, for instance, Nordeurop owed nothing to the Ambrosiano. By September Nordeurop’s debts to the Ambrosiano were $400 million. Colby, “Vatican Bank Played a Central Role in Fall of Banco Ambrosiano,” 1.
The companies later proved a mystery to most reporters, who were unfamiliar with them. The New York Times said of the companies: “Most of this money was then lent to a series of Panamanian companies with names such as Bellatrix Inc., Manic Inc., and Astrolfine Inc., most of which are thought to have no more than mail addresses.” Paul Lewis, “Italy’s Mysterious, Deepening Bank Scandal,” The New York Times, July 28, 1982, A1. The stationery on which the letters of patronage were written was headed Istituto per le Opere di Religione, Città del Vaticano. See also Gurwin, The Calvi Affair, 83.
60 Cornwell, God’s Banker, 151; Raw, The Moneychangers, 358.
61 As for Alessandro Mennini’s influence at the Ambrosiano, see generally Gurwin, The Calvi Affair, 69; see also author interview with Father Lorenzo Zorza, September 6, 2013.
62 Colby, “Vatican Bank Played a Central Role in Fall of Banco Ambrosiano,” 1; Raw, The Moneychangers, 358.
63 De Strobel had also reviewed the Gottardo numbers on July 3 in Lugano, so he knew the numbers on the attachment to the patronage letters were wrong. When de Strobel and Mennini signed the patronage letters, they also initialed each of the eight pages of the balance sheet attachments. Raw, The Moneychangers, 358, 361, 367; also Willan, The Last Supper, 191.
64 Gurwin, The Calvi Affair, 83.
65 The IOR had the contractual right to call its loans due at any time on fifteen days’ notice. But Marcinkus knew Calvi did not have the money to repay the church, so it would only cause a creditors’ crisis. Raw, The Moneychangers, 363–65.
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