Archangels: Rise of the Jesuits
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The Vatican Bank set up dummy subsidiaries for Roberto Calvi’s Luxembourg holding company, and Marcinkus was on the board of some of them. These subsidiaries were located in several countries, including Switzerland, Liechtenstein, Panama and the Bahamas. Roberto Calvi was accused of embezzling money from Banco Ambrosiano’s depositors. These subsidiaries lent millions of the bank’s money to Panamanian special—very special—purpose corporations owned by the Vatican Bank.
Banco Ambrosiano collapsed in 1982, and $1.3 billion was missing. The Vatican Bank paid a $250 million settlement to the defrauded depositors of Banco Ambrosiano, but admitted nothing except a “recognition of moral involvement.” Though Archbishop Marcinkus had studied canon law in Rome and was head of the Vatican Bank for ten years, he claimed he never read or understood the documents he signed. He said he trusted Roberto Calvi, whom he blamed for taking advantage of his naïveté.
Roberto Calvi was subsequently imprisoned for illegal foreign money transfers. After being released on appeal, Calvi fled to London carrying a briefcase stuffed with incriminating documents. Flavio Carboni, another bank officer, joined him. Shortly after his arrival in London, Roberto Calvi’s corpse was found hanging under Blackfriars Bridge. His pockets were stuffed with rocks, and it was rumored his wrists looked as if they had been bound with rope that was later removed. At the time, it was officially deemed a suicide. Carboni and the documents were missing.
Carboni later resurfaced. Italian officials arrested him attempting to extort $900,000 from Vatican officials in exchange for Calvi’s stolen documents. Bishop Pavel Hnilica, a key member of Marcinkus’s inner circle, was also arrested as he tried to buy back the incriminating documents.
In 1998, Italian investigators performed a new post mortem examination of Calvi’s remains using modern forensic techniques. The examiners concluded that Calvi’s murder was staged to look like a suicide. He had been strangled and then strung up on the scaffolding under London’s Blackfriars Bridge.
Licio Gelli, a former “grand master” of the illegal P2 Masonic lodge, was indicted and acquitted. Gelli acknowledged Calvi was murdered, but claimed the “execution” was ordered in Poland for Calvi’s alleged financing of the Solidarity trade union at the behest of Pope John Paul II. Four others were also indicted in 2005: Flavio Carboni, who had fled with Calvi to London; Manuela Kleinszig, Carboni’s Austrian girlfriend; Ernesto Diotavelli, an underworld figure from Rome; and Pippo Calo, a boss of the Cosa Nostra, already in prison for other crimes. Prosecutors suspected Calvi knew too much about the laundering of Mafia money through the Vatican Bank and Banco Ambrosiano, but all suspects were subsequently acquitted.
Even for those innocent of any wrongdoing, the murder of someone they know and with whom they have transacted business imposes a moral obligation to come forward and tell what they know about what might have led to the crime. But this has not been the position of the leaders of the Catholic Church.
Archbishop Paul Marcinkus was indicted by Italian authorities during the investigation of Banco Ambrosiano’s collapse, but he was never arrested. He lived in the Vatican for six years during the papacy of John Paul II, never stepping foot in Italy, where he would have been apprehended. Eventually the Vatican came to an agreement with Italy to drop the charges. Marcinkus returned to the United States in 1990 and retired to Sun City, Arizona, where he died of undisclosed causes at the age of 84.
But murder and suspicious financial transactions are not the only crimes on which the Catholic Church has remained silent. Scores of priests and former priests in the United States are accused of pedophilia and of having sexually abused children over a period of decades. Catholics in the United States are outraged, and only 3,300 seminarians are currently studying to become priests. The number has dropped by two-thirds from what it was forty years ago.
In 2003, CBS News obtained a secret Vatican document written in 1962 by Cardinal Alfredo Ottaviani. It called for absolute secrecy about sexual abuse perpetrated by priests, although it referred to sexual assault or attempted assault of children of both sexes and of sex with animals. The document labeled this cover-up a secret of the Holy Office, and it warned that anyone who revealed these secrets would suffer excommunication. In the summer of 2002, the Church drafted new policies meant to address what had become a crisis in the Church.
On May 8, 2002, Cardinal Bernard Law of Boston became the first Cardinal in the history of the Catholic Church to be forced to testify in a sexual abuse case about his role in overseeing priests. Although forced to resign as Archbishop, he presided over Pope John Paul II’s requiem mass in 2005. Many U.S. Catholics viewed his presence at the ceremony in shocked disbelief.
In April 2005, German-born Joseph Alosius Ratzinger became Pope Benedict XVI, the 265th head of the Catholic Church. His teenage membership in the Hitler Youth was controversial even though the young Bavarian was required to join by law. He was later a draftee in the German army and a POW of Allied forces. As a cardinal, Ratzinger was part of investigations into sex scandals and seemed more eager than Pope John Paul II to impose sanctions. In his role as Pope Benedict XVI, he has expressed a firm resolve to clean up the sex abuse and “filth” in the Catholic Church, demonstrated by his forcing Maciel Degollado, a Mexican priest, out of the church. Father Maciel founded the Legion of Christ, and the Pope pressed an investigation into that order and its lay arm, the Regnum Christi. He also pressed other international investigations and imposed guidelines directing the Church to follow the new norms established by U.S. bishops as well as local civil laws.
Yet even the financial scandals continue. In July 2012, Der Spiegel reported that the Vatican Bank is allegedly engulfed in another scandal involving suspect money transfers and dodgy bank accounts. Gotti Tedeschi, former head of the Vatican Bank and Pope Benedict XVI’s confidant, was detained by Carabinieri, Italy’s military police, in a corruption investigation involving an Italian subsidiary of Spain’s Banco Santander. Among Tedeschi’s files was evidence allegedly suggesting Church complicity in circumventing European money-laundering rules. Details of the scope of this new financial scandal are still unfolding.
The Catholic Church’s global annual expenses amount to more than $100 billion. In the U.S., Catholics now donate less than half as much per household as their Protestant counterparts, giving only around $6 billion per year. The Boston Archdiocese still reels from sex abuse scandals, and contributions to it have dropped by 43 percent to only around $8 million. Some archdioceses have been hit even harder; three have been forced into bankruptcy in anticipation of future settlements of sex-abuse cases. In Los Angeles alone, there are 550 pending cases. By 2006, the church had paid out around $1 billion for sex abuse cases going back several decades, and ongoing bills involving hundreds of offenders amount to hundreds of millions per year.
Between accusations of moral bankruptcy and the financial bankruptcy of some of its dioceses, the Catholic Church is experiencing its worst crisis since the death of Christ more than 2000 years ago.
About the Author
Janet Tavakoli is a bestselling author of non-fiction professional finance books: Structured Finance & Collateralized Debt Obligations, and Credit Derivatives. In Dear Mr. Buffett: What An Investor Learns 1,269 Miles from Wall Street, a book for laymen, she reveals the culprits and cronies responsible for the global financial crisis. Archangels: Rise of the Jesuits, is her fiction debut.
Ms. Tavakoli is the founder and president of Tavakoli Structured Finance, Inc., a Chicago-based consulting firm. She is a world-renowned author and speaker on derivative products and securities. Ms. Tavakoli is frequently interviewed in The Wall Street Journal, The Financial Times, New York Times, The Economist, Business Week, and more.
Frequent television appearances include CBS’s 60 Minutes, CNN, C-Span, Bloomberg TV, ABC, and the BBC.
For more on Janet Tavakoli’s upcoming books, continue to the next page.
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