Before Sindona took control of its assets, the Vatican held major interests in the Rothschild Bank in France, the Chase Manhattan Bank with its fifty-seven branches in forty-four countries, the Credit Suisse in Zurich and also in London, the Morgan Bank, the Bankers Trust, General Motors, General Electric, Shell Oil, Gulf Oil, and Bethlehem Steel. Vatican officials sat on the board of Finsider, which, with its capital of 195 million lire spread through twenty-four companies, produced 90 percent of Italian steel. The Holy See controlled two shipping lines and the Alfa Romeo car manufacturing company. What's more, controlling shares of the Italian luxury hotels, including the Rome Hilton, were in the Vatican portfolio.55
But the Vatican's central holding was Società Generale Immobiliare, a construction company that had produced a fortune in earnings for the Holy See since it had been acquired in 1934. In 1969 Immobiliare shares were selling for 350 lire. Sindona purchased 143 million shares from the Vatican at double the market price—700 lire per share—with money that had been illegally converted to his account from deposits at Banca Privata Finanziaria.56 Sindona was willing to pay double the market value. The money, after all, would be spent, in part, to bring about significant changes in the political order.
In the same way, Sindona purchased the Vatican's majority ownership of Condotte d'Acqua, Italy's water company, and Ceramica Pozzi, a chemical and porcelain company. To spare the pope any embarrassment, he also bought Serono, the Vatican's pharmaceutical company that produced contraceptive pills.57
SUB SILENTIO
These transactions were conducted with extreme secrecy in order to escape the attention of Italy's tax collectors. The shares of Immobiliare were transferred first to Paribas Transcontinental of Luxembourg, a subsidiary of the Banque de Paris et des Pay-Bas, and next to Fasco AG in Liechtenstein. Paribas Transcontinental was closely linked with Nadhmi Auchi, an Iraqi businessman, who was later convicted of fraud in a $504 million corruption scandal that centered on the French oil company Elf Aquitaine.58 Auchi, like Sindona, possessed strong ties to the intelligence community and, for many years, served as the “bagman” for Saddam Hussein. In recent years, the Baghdad billionaire became a major contributor to the political campaign of Barack Obama.59 Along with Auchi, David Rockefeller, another financier and former US intelligence official, and members of Rockefeller's family, were shareholders in Paribas.60
Despite Sindona's diversionary tactics, the press got word of the sales of the Vatican companies and pressured the Holy See for a response. Through a spokesman, Pope Paul said: “Our policy is to avoid maintaining control of our companies as in the past. We want to improve investment performance, balanced, of course, against what must be a fundamentally conservative investment philosophy. It wouldn't do for the Church to lose its principal in speculation.”61 When Sindona was asked about the sales, he refused to comment, saying that he was obliged to maintain the confidentiality of his client, Holy Mother Church.62
LIQUIDATION SALE
Sindona proceeded to liquidate the Church's remaining holdings in Italian companies to buyers, including Hambros Bank, Continental Illinois, and the American conglomerate Gulf & Western.63 He invested much of the Vatican's revenue from these sales in American companies, such as Chase Manhattan, Standard Oil, Westinghouse, Colgate, Proctor and Gamble, and Dan River.64 Several of these firms remained under the control of David Rockefeller.65
The liquidation of the Vatican's holdings, as engineered by Sindona, produced a disastrous effect on the Italian economy. The shares of the Italian companies in which the Holy See had invested plummeted to record low levels. The lira dropped precipitously in value. Unemployment rose. The cost of living increased. The savings of millions of families were wiped out almost overnight.66
LIFE IMITATING ART
During this time, Sindona developed a close relationship with Charles Bluhdorn of Gulf & Western. The two men engaged in trading worthless stock back and forth at face value to create a false market. In 1972, the US Securities and Exchange Commission demanded a halt to the ceaseless exchange of securities between the two associates.
Also during this time Gulf & Western—through its motion picture company, Paramount Pictures—was filming The Godfather, a glamorous look at life in the Mafia. Immobiliare, the giant real estate and construction firm Sindona had purchased from the Vatican, owned Paramount Studios in Hollywood, where the film was shot. Through arrangements with Bluhdorn, profits from the Coppola epic flowed into Sindona's banks and holding companies, along with billions from the heroin trade.67 Life was imitating art.
THE WORLD WITHOUT LIMITS
The rise of Sindona, the father of the “financial Mafia,” was made possible by the combination of the following factors:
The global economy had yet to emerge and there existed an almost complete lack of central control over “international banking activities…. The ‘Agreement of Basel,’ which established a number of rules (such as last instance lender's responsibility),”68 did not come into effect until May 1983.
“In spite of some exceptions, bank-secrecy [remained] a basic rule. Moreover, the…tendency to liberalize the service-supplies on the one hand, and the increasing privatization of financial activity on the other,…contribute[d] to a lack of clarity” regarding banking transactions.
“A complex of credit instruments and intermediaries (holding and trust companies, atypical stocks, etc.) complicated” accounting and made instances of money laundering particularly difficult to control.
“The presence of various tax havens allow[ed] the possibility of tax-evasion[-facilitated] financial juggling and sheltered interpenetrations between licit and illicit activities.” Such havens were “not mere byproducts of ‘financial conjuring;’…they play[ed] a basic role within the…financial world.”
“The combination of [national] economic interests with [international] politico-military ones” was a new development. Gladio thrived because few world leaders were aware of the scope of the operation and the threat that it posed to sovereignty and independence.
ANOTHER NEW FRIEND
In 1969, Sindona made another new friend—a mousey accountant with a dark moustache and brooding black eyes. Roberto Calvi, a fellow member of P2, served as the assistant manager of Banco Ambrosiano, a wealthy, parochial bank in Milan. Few banks were more prestigious. Established in 1894, Banco Ambrosiano operated “to provide credit without offending the ethical principles of Christian teaching,” an explicit rebuke to lay lending institutions.69 To ward off the interests of outsiders, the statutes of the bank required shareholders to produce a voucher of their good character from their parish priest. In addition, no shareholder could own more than 5 percent of the bank's wealth.70
Sindona realized that the “priests’ bank” would be an ideal complement to his growing financial empire. Nothing he controlled could match Ambrosiano for resources or its standing in Milan. Best of all it had no dominant shareholder, so that those who ran it had an unfettered hand. Sindona and his new friend quickly came up with a plan to gain control of Ambrosiano through the creation of a series of shell companies in Panama, the Bahamas, and Luxembourg. The scheme would require the participation of Archbishop Marcinkus, since the Catholic nature of the companies would have to be verified. The Archbishop, of course, was most pleased to cooperate and arranged for Calvi to be appointed as Ambrosiano's new direttore generale (general manager).71
TIME FOR ACTION
1969 was also a banner year for Operation Gladio. The radical left was on the rise throughout Italy and the Western World. The momentum was provided by the reaction against NATO's involvement in Vietnam, the breakdown of traditional Catholic doctrine in the wake of Vatican II and the implementation of aggiornamento (updating), and the rise of a counterculture that viewed Che Guevara and Chairman Mao as folk heroes. In the national election, Italy's Communist Party (PCI) gained 27 percent of the overall vote. To make matters worse, the country established regional elections, which enabled the Communists to gain control of Bolog
na, Florence, Tuscany, Umbria, Liguria, the Marches, Piedmont, and Emilia-Romagna and to form a coalition government with the Christian Democrats and the Italian Socialists in Rome, Milan, and Turin.72
The time was right for the CIA to unleash the full force of Gladio through a strategy of tension, which would cause the people of Italy to view the Communists as a threat to their lives and well-being. Such a strategy would serve as an antithesis to the prevailing Zeitgeist and the means of inaugurating a New World Order.
The official figures say that alone in the period between January 1, 1969 and December 31, 1987, there have been in Italy 14,591 acts of violence with a political motivation. It is maybe worth remembering that these “acts” have left behind 491 dead and 1,181 injured and maimed—figures of a war without parallel in any other European country.
Giovanni Pellegrino, president of Italy's
parliamentary commission investigating Gladio
(quoted in Daniele Ganser's NATO's Secret Armies)
The strategy of tension gained increased impetus after US president Richard Nixon took office in 1969. Henry Kissinger, Nixon's National Security Advisor, issued orders to Licio Gelli through his deputy, General Alexander Haig, for the implementation of terror attacks and coup attempts. Kissinger was deeply concerned about the monumental gains made by the Italian Communist Party in national and regional elections. The financial spigots were opened without concern of leakage. In addition to the millions being channeled to P2 by CIA officials, millions more were funneled to Sindona for the implementation of the strategy through US ambassador Graham Martin. In 1970 alone, Sindona received more than $10 million from the Ambassador.1
The first major attack occurred on December 12, 1969, when a bomb exploded in the crowded lobby of the Banca Nazionale dell'Agricoltura in Milan's Piazza Fontana. Seventeen people were killed and eighty-eight injured. The victims, for the most part, were farmers who had deposited their meager earnings in the bank. Within an hour, three bombs exploded in Rome, one in a pedestrian underpass, which injured fourteen people, and two on Victor Emmanuel's monument, which houses Italy's Unknown Soldier.2
ARRESTING ANACHISTS
The acts of terrorism were attributed to left-wing radicals, and eighty suspects were rounded up, including Giuseppe Pinelli, an anarchist railway worker. In the course of the interrogation, Pinelli died, falling from the fourth floor window of the police station. Despite serious discrepancies in the official police account, an Italian court ruled that Pinelli's fall had been caused by a sudden loss of consciousness (malore).3
Pietro Valpreda, another anarchist, was also taken into custody for the Piazza Fontana bombing, after a taxi driver identified him as a passenger he had transported to Banca Nazionale that day. After his alibi was judged insufficient, the anarchist was held for three years in preventive detention before being sentenced for the crime. Sixteen years later, Valpreda was exonerated, after evidence established that the attack had been conducted in accordance with Operation Gladio.4
DAMNING EVIDENCE
But the Italian police investigators were neither completely corrupt nor totally incompetent. Months after the Piazza Fontana bombing, Ordine Nuovo (ON—the New Order), a neo-fascist organization founded by Pino Rauti, came under suspicion. On March 3, 1972, Giovanni Ventura, Franco Freda, and Rauti were arrested and charged with planning the terrorist attack. The evidence against them was compelling. The composition of the bombs used in Piazza Fontana was identical to the explosives that Ventura hid in a friend's home a few days after the incident. The bags in which the bombs were concealed had been purchased a couple of days before the attacks in a shop in Padua, Freda's hometown.5 Despite such findings, the three men were acquitted.
During the trial, alarming claims were made. Ventura told the court that he was an agent of the CIA. In support of the claim, he directed court officials to a safety deposit box he had opened at Banca Popolare in the names of his mother and aunt. Within the box were confidential CIA files. One document, dated May 4, 1969, listed a number of detailed steps to be taken, including “a possible wave of terror attacks to convince public opinion of the dangers of maintaining the [government's] alliance with the left.”6
When asked if he had been manipulated by the CIA or an outside intelligence agency, Franco Freda said: “The life of everyone is manipulated by those with more power. In my case, I accept that I have been a puppet in the hands of an idea, but not the hands of men in the secret services here [in Italy] or abroad. That is to say that I have voluntarily fought my own war, following the strategic design from my ideas. That is all.”7
SWORN TESTIMONY
Thirty years after the Piazza Fontana massacre, during the trial of three other ON operatives, General Giandelio Maletti, former head of Italian counterintelligence, said that the massacre had been carried out by the Italian stay-behind army and right-wing terrorists on the orders of the CIA. In his sworn testimony, Maletti told the court, “The CIA, following the directives of its government, wanted to create an Italian nationalism capable of holding what it saw as a slide to the left, and, for this purpose, it may have made use of right-wing terrorism.”8 He added, “Don't forget that Nixon was in charge and Nixon was a strange man, a very intelligent politician, but a man of rather unorthodox initiatives.”
Similarly, Paolo Emilio Taviani, the Christian Democrat in Italy, told investigators that the Italian military intelligence service was about to send a senior officer from Rome to Milan to prevent the bombing, but decided to send a different officer from Padua in order to put the blame on left-wing anarchists. In an August 2000 interview for Il Secolo XIX newspaper, Taviani said: “It seems to me certain, however, that agents of the CIA were among those who supplied the materials and who muddied the waters of the investigation.”9
THE AMERICAN COMMANDER
In the course of the thirty-year investigation, Italian officials were able to put into place the key planners of the Piazza Fontana bombing. Hung Fendwich, a leading engineer for Selenia, oversaw the proliferation of attacks and coup preparations. Selenia, with offices in Rome, specialized in electronic security and defense. The company was owned by Finmeccanica, a conglomerate with a long history of ties to the CIA. Fendwich was a typical éminence grise. He studied and refined plans, drew up analyses of the political situation, and left the dirty work of execution to the ON and other neo-fascists groups in service to the Agency.10
The bombing was allegedly commandeered by Navy Captain David Carrett, a CIA operative attached to the NATO command in Verona.11 Carrett worked in tandem with Gladio commander Sergio Minetto and Carlo Digilio, the CIA mole within Ordine Nuovo. Preparations for the bombing had been made at an isolated house near Treviso.12
THE GOLPE BORGHESE
On December 7, 1970—the feast of the Immaculate Conception—the Gladio unit launched the Golpe Borghese (the “Borghese Coup”), an attempt to topple the Italian government. Named after Junio Valerio Borghese, the Black Prince, the coup attempt involved hundreds of Gladiators (including Gelli and Sindona), along with members of the Corpo Forestale della Stato (Italy's state forest police). The planners intended to kidnap Italian President Giuseppe Saragat and to murder Angelo Vicari, the head of the national police department. At the last minute, the plans were cancelled. News arrived that Saragat's Christian Democratic government knew of the plan and stood ready to declare martial law.13
Borghese had been busy during the Cold War. He continued to recruit former members of Decima Mas and right-wing activists, including Stefano Delle Chiaie, for Gladio, and helped to establish Fronte Nazionale (FN), an organization designed (in the words of Borghese) “to subvert the institutions of the state by means of a coup.”14 He set up his military headquarters for the coup in Rome at a shipyard owned by Remo Orlandini, one of the country's leading industrialists. According to newspaper accounts, Jesus James Angleton arrived at the shipyard before the coup attempt and left as soon as the planned attack was cancelled.15
BORGHESE'S F
AREWELL
When Borghese died in Spain in 1974, Delle Chiaie said the Black Prince had been poisoned because investigations into the 1970 coup had begun in Italy and too many people wanted him dead.16
Thirty years after the Golpe Borghese, French investigative journalist René Monzat uncovered evidence that the military attaché at the U S Embassy in Rome was intricately involved in the plot. Monzat also discovered that President Nixon had carefully monitored the preparations and remained constantly informed of the developments by CIA officials. These findings were confirmed through a Freedom of Information request from La Repubblica in December 2004.17
THE PETEANO ATTACK
On May 31, 1971, a car bomb exploded in a forest near the Italian village of Peteano. The explosion gravely wounded one and killed three members of the carabinieri, Italy's paramilitary police force. The carabinieri had been summoned to the site by an anonymous phone call. Inspecting an abandoned Fiat 500, one of the policemen opened the hood and triggered the bomb. Two days later, another anonymous call implicated the Red Brigades, the far-left Communist group that had engaged in assassinations and kidnappings. Two hundred Communists with an affiliation to the group were rounded up and held in custody.18
THE ARMS DUMP
The case against the Brigades was eventually weakened by a discovery made near Trieste by the carabinieri on February 24, 1972. The Italian officers stumbled upon an underground arms dump containing automatic rifles, grenades, and Composition C-4, the most powerful plastic explosive in the world at that time.19 The officers initially thought that the cache must belong to a criminal group such as the Camorra or the ’Ndrangheta if it did not belong to the Brigades. But the C-4 baffled the investigators. The Mafias and the Brigades relied on explosives made of gelignite; C-4 was an explosive that was used almost exclusively by NATO and US forces.20
A week later, more arms were found in a nearby cave. This second discovery prompted General Gerardo Serravalle, the commander of Gladio and Italian military intelligence, to order the dismantling of all the arms dumps in forests, meadows, church basements , and cemeteries throughout Italy. In addition to explosives, the dumps contained portable arms, ammunition, hand grenades, knives and daggers, 60 mm mortars, several 57 mm recoilless rifles, sniper rifles, radio transmitters, binoculars, and various tools.21 The weapons were removed from the 137 burial sites and transported by the secret service plane (Argo 16) to the Gladio base in Sardinia. The aircraft exploded in flight on November 23, 1973, and may have been sabotaged by aggrieved Gladiators. This suspicion gained credence by the fact that Serravalle was supposed to have been a passenger on the plane.22 In 1990, Serravalle told the press that he had been shocked to discover the extremist views of those in his command. “I found myself an officer in the service of the Italian Republic at the head of an armed band,” he said.23
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