The opportunity was an investigation already under way into presumed irregular Government subsidies to SIR. Nino Rovelli, who combined Clark Gable's looks with keen political antennae, had swiftly understood the chance of aggrandisement offered by the Government's well-intentioned, but misguided, strategy of the 1960s of developing new primary industries in the backward Italian South. He chose to expand in Sardinia, remote and poor even by the standards of the South. Rovelli borrowed very large sums from the Credito Industriale Sardo (CIS), a state-owned bank set up specially to help Sardinia. He bankrolled Cagliari's football team, local newspapers and national politicians. But the chemical plants Rovelli promised took a long while to materialize. Between 1973 and 1974 "oil prices quadrupled. SIR began to sink in an ocean of debt and Rovelli disappeared to Switzerland as magistrates began to examine just where the money had gone.
The Bank of Italy inspected CIS in 1977/78, but its internal committee decided that the report, whatever the injudicious lending to Rovelli, warranted no legal action. It was, therefore, put on file. Meanwhile, in 1978 the magistrates had questioned Baffi about CIS and SIR, but showed little interest in the report.
Their attitude changed abruptly in early 1979. Alibrandi and another magistrate on the SIR case, Luciano Infelisi, suddenly descended on the central bank, and seized documents on the affair, including its report on CIS. No matter that the offence in question was disputed (for whereas the penal code obliges a public official to disclose knowledge of a crime, Italy's banking law permits the governor and its vigilance department not to pass on findings to the judiciary if they deem that no offence has been committed). On March 24 Sarcinelli was arrested, on the charge that by failing to hand on the CIS report, he had served "a private interest" in the course of his official duties. But well before that, he had begun to suspect that something was afoot.
The first straws in the wind were vicious articles in a few right-wing papers, attacking Sarcinelli over Italcasse, and intimating that he and Baffi were Communist sympathizers. OP, a scandal sheet run by a journalist called Mino Pecorelli who on occasion worked closely with Gelli, described Sarcinelli as "the Red functionary". Pecorelli was to be shot dead in Rome a few days before the Bank of Italy affair began, in circumstances still a mystery today. Then in February, Sarcinelli was phoned by his lawyer during a skiing holiday, to be warned that some sort of attack was being prepared. Alibrandi and Infelisi, the two magistrates involved, were both of the political right. Afterwards one was even quoted as saying that he had wanted to teach Sarcinelli a lesson.
But if arrest was only a partial surprise to its victim, it astounded and outraged everyone else. Most Italian politicians, as well as bankers, economists and public figures were bewildered and indignant.
Were the circumstances not so serious, it would have been laughable to suppose that Baffi and Sarcinelli, of uncontested integrity, could have been party to a corrupt cover-up. But while the Bank of Italy's horrified staff proclaimed the first strike in their history, the Government was mindful of the possible damage to Italy's standing in the outside world, which held the central bank in such regard.
That Saturday evening Filippo Maria Pandolfi, the Treasury Minister, went on television to declare his confidence in the Bank, and its honesty and impartiality. As nearly as he could, Pandolfi stated that the magistrates had behaved recklessly and that the Bank of Italy was blameless. Central bank Governors from several European countries made exceptional public statements to the Italian press, expressing their own solidarity with Baffi and Sarcinelli, and their conviction that the charges were groundless.
There was one contrasting voice, however. The Corriere della Sera, funded by Ambrosiano's support for Rizzoli and conditioned by Gelli, was notably cool to Sarcinelli's plight.
Sarcinelli was to leave prison a fortnight later, hurt and confused, but already suspicious of the origin of the attack. In Milan the word was going around that Calvi in some way was connected with the attack on the central bank; while Sindona from New York was soon boasting that he had secured his revenge on the institution responsible for his persecution and downfall. Even after his release, the magistrates remained opposed to Sarcinelli's reinstatement. Giulio Andreotti, the caretaker Prime Minister until elections were held in June, stayed largely aloof from the controversy, an attitude which aroused some speculation over his own motives. Not for the first time Andreotti was being oddly ambiguous.
With Sarcinelli's removal, the vigilanza lost many of its teeth and some of its nerve. In June he was allowed to resume his post at the Bank of Italy, but had been moved by then to the harmless—as far as the politicians were concerned—international monetary side. Only many months later was the slate rubbed clean, when the charges against both Baffi and himself were dismissed for the trumped-up nonsense they were. But by then the desired effect had long been achieved—and a new Governor had taken over from Baffi.
The annual meeting of the Bank of Italy, held every May 31, is by tradition the foremost financial occasion of the year, akin to Budget Day in Britain. But in 1979 it acquired an unusually emotional overtone. As was his custom, Baffi read aloud the bank report's key "final considerations," of his report in his clipped, staccato fashion. Normally that would have been all, but not in 1979. The audience of bankers, industrialists and economists interrupted the speech twice with loud applause, first when Baffi defended the Bank's right to discretion in discharging its task, and then when he emphasized his and Sarcinelli's respect for the law. And then, quite exceptionally, Baffi read out to a hushed audience a statement of his own.
He spoke for the first time in public of the trials of the bank. With Biblical dignity he declared his hope that its detractors "would find pardon in remorse for the ill they have done, fuelling a campaign based on a tissue of false and tendentious arguments, and motivated by who-knows-what obscure design". Baffi then announced that he would resign before the end of the year, as soon as a stable Government had been formed after the election.
Baffi insisted that at 67, and after 43 years at the Bank of Italy, he had never intended to stay in office beyond 1979. In fact, pain and disillusion at the concocted scandal by which he had been smeared were decisive factors. An attack in its way as destabilizing of Italy's financial structure as the Red Brigades' murder of Moro had been of the country's politics, had been carried through successfully.
Over the next three months soundings took place on the choice of Baffi's successor. Distinguished names were mooted, as the best guarantee of preserving the bank's independence; so were some less distinguished ones, a clear sign of a desire to bring the Bank of Italy politically to heel, once and for all. In the end the internal solution, as usual, prevailed. Baffi resigned in mid-September, to be replaced by his deputy, the general manager Carlo Ciampi. If his name was less familiar, Ciampi was highly respected. But the Bank's unknown assailants had succeeded in relegating Sarcinelli to the sidelines. The new general manager to replace Ciampi was to be Lamberto Dini, brought back to Rome after twenty years' service at the International Monetary Fund in Washington, the last three as Italy's executive director on the IMF's board. The Bank of Italy was to be sadder, perhaps wiser—and certainly badly shaken.
But in that ill-starred year of 1979, the Bank's tribulations were not finished. Slowly the vicissitudes of Baffi and Sarcinelli were pushed into the background by the election, and the increasingly desperate attempts in the weeks that followed to form a Government. First Andreotti tried, then the Socialist leader Bettino Craxi; and then Pandolfi himself. It was not until early August, two months after voting, that Francesco Cossiga, a Christian Democrat and Interior Minister during the harrowing period of the Moro kidnapping, succeeded in forming a Government, albeit dependent on Socialist abstention for survival. In the meantime the shadow of Sindona was lying more darkly than ever over Italy—and particularly over the city of Milan.
Ever since his exile began, the Sicilian had been trying to secure painless settlement of his Ita
lian problems by whatever means to hand: blandishment, bribery or threat. The most spectacular pressure, as we have seen, was exerted on Calvi. But another target was Sindona's particular bete noire, Enrico Cuccia of Mediobanca, in Sindona's eyes both at the origin of his problems, and possessor of the key to their solution.
Cuccia refused to treat with Sindona, only to find himself subjected to a crescendo of Mafia-style intimidation. He would receive periodic threatening phone calls, in what Cuccia described to magistrates as a "typical Italo-American Brooklyn accent"; his daughter would sometimes be followed by sinister individuals. Exasperated, Cuccia even went to New York in 1979 to meet Sindona, but found only the familiar impossible demands. Cuccia had to arrange for the Italian arrest warrant against Sindona to be withdrawn (despite Sindona's sentencing to a three-year jail term in absentia in 1976!); he had to find the money to bail out Banca Privata Italiana; even, as a fellow Sicilian, to provide money for Sindona's family. In October 1979, a bomb was exploded under the front door of Cuccia's flat in Milan.
It is easy to understand Sindona's increasing desperation between 1976 and 1979. The likelihood that he would have to face trial, and almost certain imprisonment, in New York for the Franklin Bank collapse was growing by the month. In Italy meanwhile Giorgio Ambrosoli, the Banca Privata liquidator, was discovering more and more. It was essential that Sindona was able both to leave the US, and return, a free man, to Italy. But that in turn meant squaring Ambrosoli.
Ever since his appointment as BPI's liquidator in September 1974, Ambrosoli had nursed no illusions about the nature, and the dangers, of his task. Early in 1975, in a moving and prophetic letter to his wife, he wrote: "Whatever happens, I'll certainly pay a high price for taking on this job. But I knew that before taking it on and I'm not complaining, because it has been a unique chance for me to do something for the country . . . The job gives me an enormous power, but I've worked only in the country's interest, obviously making only enemies for myself." The principal enemy, plainly, was Sindona and the interests he represented. But even Ambrosoli cannot have imagined how high the price would be.
With the months and years of patient sifting, so the numbers on the coded accounts, the random telex messages, the transfers of funds between the various obscure corners of Sindona's empire began to make sense. And the threats increased. Sometimes callers wouid use Sarcinelli's or other names to get past his secretary to deliver unambiguous warnings. But Ambrosoli persevered. And as he dug steadily deeper into Sindona's affairs, new light was thrown on some of Calvi's contorted dealings with the Sicilian, in those halcyon years between 1971 and 1974.
At the beginning of July 1979, Ambrosoli reported that he had discovered a 6.5 million-dollar commission paid by Sindona in connection with the Zitropo/Pacchetti deal, which gave Calvi the key to acquiring the rich Banca Cattolica del Veneto from the IOR. The money, he stated, had been divided between "an American bishop and a Milanese banker"—an evident reference to Calvi and Marcink- us. The Cavallo wall posters in Milan appeared to have given fairly thorough documentation of Calvi's share—the $3.3 million paid into coded accounts in Zurich and Chiasso, but Marcinkus always denied taking such a commission. In any case, Ambrosoli was to have no time to elaborate upon his finding.
At around midnight on the night of July 11/12, he was dropped off by friends with whom he had shared a late supper, outside the building where he lived in Milan. "Are you Avvocato Ambrosoli?", asked a group of men who stepped out of the shadows. "Yes, what do you want?" The strangers shot Ambrosoli dead at point-blank range and vanished into the night. Sindona was later named as a prime suspect of having enlisted the American gangsters believed to have killed Ambrosoli "on contract", although in early 1983 formal charges had not yet been brought against him.
The state paid small tribute to the courageous lawyer who had given his life in its service, in the process probing its most embarrassing secrets. The funeral of Ambrosoli took place a few days later in the stifling mid-summer heat of Milan. It was a simple affair with just four wreaths and a handful of mourners, of little public note. Only Baffi was there, bespectacled and bowed, in silent acknowledgement of the loss.
The country, too, paid little attention. The attention of the media was fixed upon the almost simultaneous murder in Rome of a colonel of the paramilitary carabinieri together with his driver, at the hands of a commando of Red Brigades terrorists. For 1979 was a year in which terrorism seemed to be spinning out of control, when hardly a day went by when the early morning news bulletins were not punctuated by the first report of a new ambush, new deaths. Of what importance was the mysterious assassination of a little-known lawyer in Milan? For the central bank, however, it was another heavy blow after the "punishment" inflicted on Baffi and Sarcinelli. Its discomfort was made worse by a vague sense of guilt. Should not Ambrosoli have been better protected, and should he have been left alone to carry out so difficult and dangerous a task?
Milan's general atmosphere of menace stretched even further. Padalino, the chief inspector of Ambrosiano who was there frequently as the magistrates assessed the apparent currency offences committed by Calvi, fell victim himself. An initial evaluation by the Guardia di Finanza tax police had concluded that Calvi's explanation for the high prices paid on the suspect share deals, that they were necessary to ensure majority control of Varesino and Toro, was acceptable. Padalino that summer found himself being threatened and warned about his report, that it could even be construed as a libel of Ambrosiano. Calvi or his protectors seemed to be getting to the judiciary even in Milan, despite its reputation for independence and freedom from political control. The inspector even became physically afraid. At his hotel he would insist on having colleagues in the next room, with a connecting door.
In fact Ambrosoli had not died in vain. Had he lived, he would have been a key prosecution witness at Sindona's forthcoming trial. But in the months before he was murdered, he had transmitted vital evidence to the US authorities investigating the Franklin National Bank insolvency. As Sindona well knew, his days of liberty were numbered.
On August 2 he staged a final gambit by arranging to have himself "kidnapped" on leaving his apartment at the Pierre for an evening stroll. In keeping with Sindona's persecution mania, word was put about that left-wing terrorists were responsible. Few took that theory very seriously. In fact, armed with a false passport in the name of Joseph Bonamico, and disguised with moustache and beard, Sindona went on a tour of Europe, from Austria to Greece, and to Palermo in Sicily. His known aim was to drum up support for the trial which was now inevitable, and—in ransom demands purporting to come from his "kidnappers"—blackmail his former political accomplices into making a last effort to clear his name. Certainly there were other purposes too. On October 16 the charade ended when Sindona was discovered wounded in a New York telephone booth. His strategy had failed. The enigmatic "list of 500" capital exporters has still not been revealed, while the politicians he once knew still prosper.
At last, six years after his bankruptcy, Sindona was tried before the Manhattan Federal District court. He was convicted and sentenced to 25 years in jail for crimes including perjury and misappropriation of funds, plus a 30-month term for simulated kidnapping. The model prisoner Michele Sindona is unlikely to be leaving Otisville Penitentiary on parole before 1988 at the earliest. To while away the time he reads the works of Nietzsche, to find philosophical justification for his view of himself as a financial superman brought low by the jealousies of lesser men.
CHAPTER TWELVE New Ploys
Just as he had survived the crisis of 1974, so Calvi seemed to have beaten off both the vengeance of Sindona and the attentions of the Bank of Italy. But the spiteful "tazebao" campaign mounted by Luigi Cavallo had profoundly unnerved him. The wall posters had been followed by pamphlets, purporting to come from left-wing extremist groups calling themselves "Proletarian Autonomy" or "Banking autonomy" and threatening him physically. No matter that they were the likely
work of Cavallo and Sindona. They were all too plausible in a period when terrorist violence was an everyday occurrence.
Calvi became obsessed with his own safety. In the bank he was secure, inside his vast triangular office with its black vinyl walls and bright turquoise carpet, sealed off by the double-locking lift and bullet-proof windows. The office was as impersonal as its occupant. There was hardly a book to be seen, just his bare antique desk with a few papers upon it, and maybe a bottle of mineral water. At his left elbow was an enormous telephone console. In front of the door leading to a waiting room lay a valuable antique Persian carpet. Calvi would tell some visitors it was worth 250 million lire; even if they doubted that figure they would respectfully step around it. In the corner to his right was a wall safe, whose keys Calvi alone carried, attached by a chain to his belt. Inside the safe were his secrets.
But equivalent protection was now required outside. Back in October 1975 Calvi had taken on as his personal bodyguard one Federico Gualdani, a burly expert in the martial arts. By 1978 Gualdani was in charge of eight "gorillas"—a retinue of an unusual size even in Italy, where terrorism and kidnapping had turned personal security into a thriving industry.
This private army looked after Calvi 24 hours a day. They guarded his family, his Milan and Rome flats, his villa at Drezzo. They travelled with him everywhere, in a fleet of armour-plated Alfa Romeos with bullet-proof tyres. At the end, Calvi's personal safety was costing Ambrosiano over $1 million a year, three times his gross salary as chairman of the bank. In a curious footnote to the story of the bank, Gualdani in late 1982 was to enter a claim for over $400,000, as compensation for premature termination of his contract. Calvi's protection eclipsed that of Government ministers and fellow bankers, matching even those of the threatened Latin American dictators under whose regimes he sheltered.
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