THE ALBANIAN MAFIA
The new drug network rectified this growing problem. The couriers who brought the raw opium to Italy in trucks by the Balkan route were members of the Albanian Mafia who did not flinch at committing random acts of violence. Within Italy, they began to perform much of the dirty work for the Camorra and the ’Ndrangheta along the coast of the Adriatic Sea.54 Eventually, the Italian Mafia no longer spoke of the Muslim Albanians as foreigners but “cari amici” (“close friends”).55 Throughout the 1980s, the Albanian thugs became the chief perpetuators of drug smuggling, counterfeiting, passport theft, forgery, trafficking in human body parts, sex slavery, abduction, and murder. The influence of the criminal group grew to such an extent that, in 1985, Cataldo Motta, Italy's top prosecutor, said that the Albanian Mafia posed a threat not only to the people of Italy but to all of Western civilization.56
NEW GAMBINO GOONS
The Albanians proved so useful that they were imported by the Gambinos to serve as their enforcers. Zef Mustafa became their chief “clipper” (assassin). Mustafa's capacity for violence was only equaled by his capacity for liquor. He drank from morning to night, often consuming two or three quarts of vodka a day.57 His skills were matched by those of Abedin “Dino” Kolbiba, who mastered the art of making bodies disappear.58 The ruthless indifference of the Balkan newcomers to murder was evidenced by Simon and Victor Deday, two Gambino assassins. They shot a waiter at the Scores restaurant in New York City to express their displeasure at the quality of the service. For good measure, they also shot the bouncer before he could utter a word of protest.59
The arrival of the so-called “Muslim Mafia” in Italy and the United States was an unexpected offshoot of the new network and the establishment of the Balkan route. By 2004, the FBI announced that the ethnic Albanians had replaced La Cosa Nostra as the “leading crime outfit in the United States.”60
He was a perfectly normal person, without vices. He lived for power. He was frighteningly introverted. He never looked you in the eye when he spoke. It used to drive me mad. I wanted to hit him over the head with a hammer.
Roberto Rosone on Roberto Calvi
(quoted in Philip Willan's The Vatican at War, 2003)
It began as a means of providing funding to Operation Gladio and its strategy of tension, along with to Operation Condor and its support of right-wing regimes in South and Central America. Pablo Escobar and other leading drug lords were encouraged—often by priests and bishops and by Roberto Calvi—to deposit their earnings in eight firms that had been set up by the Vatican as money laundries.1 Six of these firms—Astolfine SA, United Trading Corporation, Erin SA, Bellatrix SA, Belrose SA, and Starfield SA—were in Panama, a seventh—Manic SA—in Luxembourg, and the eighth—Nordeurop Establishment—in Liechtenstein. By 1978, when John Paul II ascended to the papal throne, the money coming in to these firms from the Medellin Cartel alone was enormous, since Escobar, at the height of his power, was smuggling fifteen tons of cocaine into the United States every day.2
The eight laundries were simply storefronts, manned by secretaries and street thugs. The money they received was wired or transported by courier, often a cleric, to the central headquarters of Banco Ambrosiano in Milan. From Milan, the money was re-routed to the IOR, which charged a processing fee of 15 to 20 percent. From Vatican City, the funds were transferred to numbered bank accounts at Banca del Gottardo or Union Bank of Switzerland.3 With the money flowing between tax-sheltered banks, the Guardia di Finanza (Italy's financial police) and other bank auditing agencies were hard-pressed to obtain the names of the depositors, let alone evidence of criminal malfeasance.
AIR SCRANTON
The CIA was an active participant in the arrangement since the Agency was deeply involved with Escobar and the drug cartels. As soon as the laundries were created, the CIA set up Air America North America, a fleet of Seneca cargo planes that operated out of the Wilkes-Barre/Scranton airport in Avoca, Pennsylvania. The planes made regular three thousand mile runs to Colombia to pick up the bundles of cocaine that were distributed to dealers throughout the east coast.4
Frederick “Rik” Luytjes, the head of the outfit, and his fellow pilots made up to $1.5 million per run. Luytjes, by his own admission, was a CIA operative and the funds were used to sponsor black operations in South and Central America.5 A substantial amount of this cash was funneled into the IOR's offshore shells.6
LIMITLESS LOANS
In addition to the cash from the cartels, money poured into the eight shell companies in the form of loans from Banco Ambrosiano in Milan. The loans were easy to obtain. Roberto Calvi, who remained Ambrosiano's CEO, convinced the bank's directors that the offshore firms were concerns of the Vatican for the exportation of “parochial goods.”
Of all the directors of all the banks in all the world, the directors of Banco Ambrosiano were the least likely to question the integrity of the undertakings of Holy Mother Church. The bank had been established in 1896 by Giuseppe Tovini to provide financial service to Roman Catholic institutions and families. Named after St. Ambrose, the firm's expressly Catholic character was protected by a statute that required shareholders and directors to submit a baptismal certificate and statement of good conduct from their parish priest before they could vote.7 Ambrosiano's independence from secular interest was protected by a statute that barred any individual from obtaining more than 5 percent of its shares. The bank's purpose was to serve “moral organizations, pious works, and religious bodies set up for charitable aims.”8 Any objection that the directors might have to the strange, new offshore companies were offset by the fact that the loans were sent not to Liechtenstein or Luxembourg but directly to the Vatican Bank.9
THE FIRST PURPOSE
Almost overnight, the eight phony firms became multimillion dollar businesses that had been established without capital expenditure. It was a mind-boggling accomplishment. The Ponzi scam served a threefold purpose. The first was to provide a new source of arms revenue for “gladiators” involved in the strategy of tension and right-wing regimes, even the regimes at war with America's closest allies. Bellatrix, for example, used $200 million of its assets to purchase French-made Exocet AM-39 missiles for Argentina's military junta in its struggle with England over the Falkland Islands.10 Other offshore companies engaged in obtaining Libyan arms supplies for the Argentine troops and for Nicaragua's Anastasio Somoza Debayle, whose regime was threatened by left-wing Sandinista National Liberation Front.11 Since the Vatican owned the companies, Holy Mother Church was becoming a principal source of murder and violence throughout Italy and Latin America.
Licio Gelli was a pivotal figure in the plan. Along with fellow P2 members Umberto Ortolani (who had received the title Gentleman of His Holiness from Pope Paul VI) and Bruno Tassan Din, the managing director of the huge Rizzoli publishing firm, Gelli had created many of the offshore corporations, including Bellatrix.12 He was also charged with overseeing the distribution of arms in Italy and South America through P2, which had established lodges in Argentina, Brazil, Uruguay, and Paraguay.13 Gelli was the perfect man for the job. He retained dual citizenship in Italy and Argentina and was well-known and respected by the leading Latino strongmen, including Argentina's Jorge Videla, Chile's Agostino Pinochet, Bolivia's Hugo Banzer Suárez, and Paraguay's General Alfredo Stroessner.14
THE SECOND PURPOSE
The second purpose of the scam was for the Vatican Bank to obtain financial control of the wealthy Milan bank. The shell companies used a portion of the loans to purchase Ambrosiano stock. Since the bank's charter prohibited any institution or person gaining more than 5 percent of the shares, the stock was purchased by a multitude of phony corporations that were spin-offs of the eight phony firms. The United Trading Corporation, for example, spawned a host of nominal subsidiaries, including Ulricor, La Fidele, Finproggram, Ordeo, Lantana, Casadilla, Marbella, Imparfin, and Teclefin. By 1982, Ulricor ranked as the eighth-largest shareholder of Ambrosiano stock with 1.2 percent.15
To conceal the fraud, Calvi opened Ambrosiano Group Banco Comercial in Managua. Its official function was “conducting international commercial transactions.” But its real function was to serve as a repository beyond the purview of the Guardia di Finanza, where all evidence concerning the fraudulent and criminal devices used to acquire majority interest in the Milan parent bank could be concealed.16 For this convenience, of course, there was a price to be paid. Calvi traveled with Gelli to Nicaragua and dropped several million into Somoza's pocket. The dictator was so pleased that he not only pronounced his blessing upon the new branch but also granted Calvi a Nicaraguan diplomatic passport, which he retained for the rest of his life.17
To increase the value of the shares, Calvi announced huge stock dividends and rights offerings, along with optimistic pronouncements about the future of Banco Ambrosiano and its new Latin branches. The shares began to split and split again. The shells used their increased stock holdings to borrow more money, with which they purchased more stock in the name of more and more new spin-off firms. They never paid interest on their borrowings. They simply added the accrued interest to their loan balances and backed their obligation for collateral with more of their bank stock.18 It worked like a charm. By the start of 1981, the Vatican had succeeded in gaining ownership of 16 percent of Ambrosiano's shares.19
THE POPE'S PURPOSE
The third purpose of the scam was to provide funding for Solidarity in Poland. As soon as he was crowned with the tiara, John Paul II met in private with Calvi to demand that an ample share of the money from the Ponzi scheme be channeled to Lech Wałęsa , who had been “sent by God, by Providence.”20 Such payments met with the approval of Zbigniew Brzezinski, President Carter's national security advisor, and General Vernon Walters, the US ambassador-at-large.21 By 1981, over $100 million in funds from the drug cartels and the illegal bank loans flowed into the coffers of the struggling Polish labor movement, making the new pope a great hero in his native country.22 Few, including Wałęsa , opted to look the gift horse in the mouth to discern that the true source of the manna from heaven was the drug trade.
Early in 1982, Calvi discussed the pope's involvement in laundering money for Solidarity with Flavio Carboni, an emissary to Ambrosiano from the CIA. In one of their secretly taped conversations, Calvi can be heard saying:
Marcinkus must watch out for Casaroli, who is the head of the group that opposes him. If Casaroli should meet one of those financiers in New York who are working with Marcinkus, sending money to Solidarity, the Vatican would collapse. Or even if Casaroli should find one of those papers that I know of—goodbye Marcinkus, goodbye Wojtyła, goodbye Solidarity. The last operation would be enough, the one for twenty million dollars. I've also told [Prime Minister] Andreotti but it's not clear which side he is on. If things in Italy go a certain way, the Vatican will have to rent a building in Washington, behind the Pentagon. A far cry from St. Peter's.23
PRIMARY EMPLOYMENT
In addition to the shell game, Calvi remained Sindona's successor as the principal banker for the heroin trade. Insight into Calvi's position as the mob's consigliere (advisor) was provided on November 4, 1996, when Francesco Marino Mannoia, the leading pentito (collaborator working with the authorities) from the Sicilian Mafia, testified in the Andreotti trial. He told the court that Calvi became the key figure in laundering heroin revenue for the American Mafia after the arrest warrant for Sindona had been issued by the Italian financial police in 1976. The heroin, according to Mannoia, continued to be sent to the Gambino family of Cherry Hill, New Jersey. The Gambinos deposited large sums of their earnings in the banks controlled by Calvi for cleansing by the IOR. Eventually, the money was used by the American mob to purchase hotels, land, and financial companies in Florida and the island of Aruba.24
Gelli, Mannoia said, remained the principal figure for the Sicilian Mafia. This fact, he said, was evidenced by the case of Stefano Bontade, who regularly oversaw the refinement of one thousand kilograms of heroin that flowed into his laboratory from the Balkan route. Bontade's share of the profits for each shipment was $150 million.25 This money, according to Mannoia, was delivered to Gelli, who used a string of Sicilian banks and Banco Ambrosiano to funnel the cash to the central laundry (that is, the Vatican).26
The day after Mannoia spilled his guts, his mother, sister, aunt, and two uncles were murdered within their homes in Bagheria, Sicily.27 Mannoia's testimony concerning Calvi was confirmed by other Mafia informants, including Antonio Giuffrè, who had enjoyed a close relationship with Sicilian capo di tutti capi (boss of all bosses) Pippo Calò.28
STIBAM SIDEBAR
Thanks to the new heroin network, all of the profits of Stibam International were recycled through Banco Ambrosiano. Calvi also handled all of the foreign currency exchanges for the company.29 Stibam began to receive strange guests, including Thomas Angioletti, an agent with the US Drug Enforcement Administration (DEA). It also entered into major business transactions with a mysterious American named Garth Reynolds, who maintained an office in London. Reynolds gained access to an incredible array of weapons that he supplied to Stibam, including Cobra helicopters fully loaded with rockets, antitank guns, incendiary rockets, and RPG-7 rocket launchers.30 He was arrested in Los Angeles in 1980, and, like a true spook, disappeared forever from the United States criminal justice system.31
AN UNTIMELY AUDIT
So much money pouring out of the country into mysterious offshore companies with weird sounding names didn't go unnoticed. In June 1978, a twelve-man team from the Bank of Italy launched a probe of Banco Ambrosiano, only to discover that they had wandered into a bewildering labyrinth of shady financial transactions. Calvi refused to provide the team with requested information concerning the eight companies that had received hundreds of millions in loans or about the branches of the bank in Luxembourg, Nassau, and Managua. He claimed that such disclosures would breach the banking regulations of other countries. Eventually, the team asked for more investigators to unravel the puzzle. But even twenty auditors pouring over the books day after day for six months could not discern the true nature of the subsidiaries and shell companies, let alone the ground plan of the financial scheme.32
On November 17, 1978, the examiners produced a five-hundred-page report that was painfully abstruse. But the overall verdict that the bank was “not at all satisfactory” in its operations sent shivers throughout Italy's financial community. The auditors added this recommendation: “There is a clear need to cut back the network of subsidiaries which Ambrosiano has created abroad. They [the bank officials] must also be forced to provide more information and figures about their real assets, to avoid the risk that a possible liquidity crisis on their part might also affect the Italian banks, with all the unfavorable consequences that might entail.”33
The report devoted more than twenty-five pages to the torturous relationship between Banco Ambrosiano and the Vatican Bank. It stated: “Independently of its position as stockholder, the IOR is bound by strong interest connections to the Ambrosiano group, as is demonstrated by its [the Vatican's] constant presence in some of Ambrosiano's most meaningful and delicate operations.”34
A WARNING TO THE POPE
When the news of the report was leaked to the public, shares of Ambrosiano fell 30 percent on the Milan exchange and a horde of panicked depositors descended on the once-staid bank to withdraw their savings.35 The findings garnered the attention of the financial police, who opted to take a closer look at the books of Banco Ambrosiano and the dealings of Roberti Calvi. The new investigation, headed by Judge Luca Mucci, prompted Calvi to move the base of his international operations even deeper within the heart of Latin America. In 1980, he opened Banco Ambrosiano de America del Sud in Buenos Aires.36
As soon as the new investigation got underway, Beniamino Andreatta, Italy's treasury minister, met with Cardinal Agostino Casaroli, the Vatican's secretary of state, to urge the severance of all ties between the Holy See and Calvi. Casaroli presented these
concerns to the Holy Father. But so much money was pouring into the IOR and Solidarity that John Paul II opted to ignore the warning.37
SETBACKS
Matters beyond the control of Calvi, the CIA, and the Vatican also served to undermine the shell game. Throughout 1979, interest rates throughout the world soared to astronomical heights, making it more expensive for Banco Ambrosiano to obtain money for the loans. The Ambrosiano officials, prompted by the nagging concerns of board member Roberto Orson and deputy chairman Roberto Rosone, began to demand definite proof from Calvi that the Vatican maintained control over the eight ghost companies. The situation worsened as the dollar rose sharply against the lira, diminishing the worth of the lira-denominated bank shares.38
In July 1980, after the Guardia di Finanza uncovered evidence of “illegal capital exportation, bank documentation forgery, and fraud,” Judge Mucci ordered Calvi to surrender his passport and warned him that criminal charges would be on the way.39 The banker was not amused. He needed his passport. He intended to meet with the oil-rich Arabs to secure a bailout.40
Thanks to the intervention of Gelli and leading members of P2 who provided bribes to Ugo Zilletti and other members of the Superior Court of the Magistrature,41 Calvi managed to recover his passport, just in time to travel to Nassau, where he forged a link between Ambrosiano Overseas and Artoc, a leading financial institution of the Arab world. A temporary agreement between the two firms was signed in London. Calvi now believed that his hope for salvation would come from the Muslim world. His faith was misplaced. The millions never materialized.42
THE UNANSWERED LETTER
On January 21, 1981, a group of Milanese shareholders in Banco Ambrosiano, fearing that the balloon would burst and their shares would be worthless, wrote a long letter to John Paul II, urging him to investigate the unholy ties between Marcinkus, Calvi, Umberto Ortolani, Gelli, and the huge flow of cash into the corporations under the “patronage” of the Vatican. The letter, which was written in Polish so that the pope could easily understand it, stated the following: “The IOR is not only a shareholder in Banco Ambrosiano, but also an associate and partner of Roberto Calvi. It is revealed by a growing number of court cases that Calvi stands today astride one of the main crossroads of the most degenerate Freemasonry (P2) and of Mafia circles, as a result of inheriting Sindona's mantle. This has been done once again with the involvement of people generously nurtured and cared for by the Vatican, such as Ortolani, who move between the Vatican and powerful groups in the international underworld.”43
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