Robert Katz’s History of Modern Italy
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The Shady Deals of God's Banker
Unsolved Mysteries, Italian Style
n February 20 of this year , in a move that had no precedent, arrest warrants for three senior Vatican officials were issued by investigating magistrates in Milan. They were accused in a 1982 fraudulent-bankruptcy case, involving a loss far in excess of a billion dollars. One of them was American Archbishop Paul Marcinkus, then president of the Institute for Religious Works (IOR), the official name of the Vatican bank. Along with the other two men, his subordinates, he was facing the possibility of twenty years in prison.
The Vatican voiced "profound astonishment" on hearing the news, but the truth was that some of Pope John Paul II's closest advisers inside Vatican City believed Marcinkus guilty of one or another impropriety, and had long been urging his removal. Nevertheless the pope, without hesitation, threw the full weight of his earthly powers behind the archbishop, playing his sovereignty card. The Vatican, a state in its own right, would not hand over the wanted men. A power struggle, intra- and extramural, was on.
When I arrived in Rome in mid-July, a ravaging heat wave was blanketing the Mediterranean countries with temperatures well over a hundred degrees in some places and not much lower by the Tiber. A short walk to and from the open market in Campo de' Fiori could only be attempted between cold showers, and even when the sun went down the traditional attractions in Piazza Navona, Giolitti's ice cream palace near the Pantheon, as well as the latest "in" caffé, Bar della Pace, drew only the deep-tan crowd, mostly young Romans. Unlike last year, no one was complaining about a shortage of tourists but apparently many of them were doing their sightseeing this season from the windows of air-conditioned hotel rooms. As sluggish and lackadaisical as it was to the eye, however, the city was stirring with political excitement, adding heat of another kind. Much of it had to do with what news reports from the capital were calling a "crisis of sovereignty" – the clash between Italy and the Vatican, as well as the turmoil within. National elections had been held a few weeks earlier, and the principal activity now was a derby-like scramble to form a new government. This made heat of a third kind, and the threesome seemed connected.
On July 16, Prime Minister Bettino Craxi, coining a catchy phrase – the C-factor – dropped a bombshell. "C" stood for Church, and the "factor" was what he regarded as overt Vatican interference in the June election campaign. He took a swipe at the "hyperactive Jesuits" who he felt were behind a Church statement aimed at swaying Catholic voters to the Christian Democratic party. Craxi's formidable position in the political spectrum had nevertheless been bolstered by the vote, so when he declared that "the C-factor must no longer be," the monsignori in the walled city-state across the Tiber went into overtime, heat wave or not.
In what was viewed as record time, the normally rarefied Vatican newspaper, L'Osservatore Romano, came out the next day with a mordant editorial saying that the Church would not be "gagged"; nor would it buckle under "threats and intimidation."
The argument as a whole was wacky, shades of what James Reston would write about in what he called the silly season. By the time Craxi, a few days later, was being dubbed by the media as "Bettino, the antipope," its basic contradiction had escaped few people who were following the action closely. No government on the Italian side of the Tiber could ever fancy the idea of impinging on the Vatican's speech freedom, and while the Church would forever disclaim interfering, speaking freely meant little else than addressing and influencing Catholics.
What made this summer power play worth watching were the occasional glimpses into the wings at the more fundamental issues that would not depart with the change of seasons. On the very day the Osservatore was protesting perceived violations of its rights, the Italian Supreme Court handed down a decision that recognized the virtual boundlessness of papal sovereignty. It struck down a lower court ruling that the arrest warrants for Archbishop Marcinkus and the other two Vatican officials, all three of whom had been declared "socially dangerous" and if apprehended held without bail to prevent any flight from justice. In the eyes of the high court, however, guilty or innocent, they were immune to prosecution under the provisions of the Lateran Treaties, the 1929 Concordat between the Church and the State. In essence the Supreme Court now codified what every ten-year-old in Italy had already learned from his elders, that the Vatican was above the law.
This was not greeted with jubilation by everyone in the Holy See. Marcinkus had spent five years stonewalling judicial inquiries and efforts to unseat him; further, his last 147 days were passed in around-the-clock self-confinement within the extraterritorial boundaries of tiny Vatican City to forestall his arrest on a Roman street, so it was hardly surprising that he, was reported as being euphoric. But no one gloated. Promised statements by Marcinkus never materialized. These were wise, high-level decisions, approved if not initiated by the pope. John Paul's unwavering support of Marcinkus had earned the American what amounted to a kind of Presidential pardon, but the affair was far from over. There was the evident risk of backlash on the other side of the Tiber and that was precisely what happened.
Highly respected political commentators and members of parliament began to call for abrogation of the Concordat, and even authoritative voices in the Christian Democratic party were conceding that the Vatican's apparently limitless immunity, particularly that of the Vatican bank, was at least arbitrary. The new government formed after the elections was of a mood for drastic reforms that would put an end to the fiscal haven it had become under Marcinkus. This was no longer the stuff of a silly season. By now the heat had been broken by invigorating thunderstorms. Gathering instead were the winds of change. An autumn parliament appeared ready to reexamine Church-State relations.
The central event that brought on and continues to bring on so much of John Paul's tribulations was the mysterious death five years earlier in London of an Italian named Roberto Calvi. A strange, forbidding soul with a passion for cabal and secret societies, Calvi was a man of the world of finance, where he was understood to be intimately associated with Marcinkus and the IOR and for that reason was known as "God's banker." How deeply and personally enmeshed he was began to emerge shortly after the discovery of his body early on the Friday morning of June 18, 1982.
Calvi had been missing from Italy for one week when a mail-room clerk of the Daily Express, walking to his job on Fleet Street, saw a man suspended from a scaffold under the Blackfriars Bridge. He was hanging by the neck, his feet dragging by the flow of the Thames. He had been dead for five or six hours. After the River Police got him down, a detective noted that the dead man's cuffs and pockets were bulging with chunks of bricks and stones. A body search turned up, among other things, the equivalent of $15,000 in cash and a clumsily altered Italian passport in the name of Gian Roberto Calvini, age sixty-two. These and many other details, but particularly the name of the bridge and the bricks and stones, would take on a sinister pall.
An inquest was held five weeks later. By that time enough of the story had come out to suspect that God's banker had been murdered by experienced criminals in the hire of one or more of his numerous enemies. Shortly before his death, he had publicly declared in a rare interview that he felt threatened and that "any barbarity" was possible. "A lot of people have a lot to answer for in this affair," he said, launching a counterthreat, "I'm not sure who, but sooner or later it will come out."
Disclosure was what it was all about, and the affair he was speaking of was a financial black hole in the Banco Ambrosiano, of which he was chief executive officer. The Ambrosiano was the largest private bank in Italy, and the amount in question was staggering: $1.4 billion in unsecured loans. Although it was then only a rumor, ninety percent of the debt had been incurred by all but worthless dummy corporations owned or controlled by the Vatican bank. What in the world the Holy See was doing with such a dizzying sum of money, was something Calvi knew better than anyone outside the city-state, and he had told his lawyers, "If the whole thing comes out, it'll be enough to start the Third World War."
Since Calvi frequented others whose style was far more consistent with the contracting of his demise than that of the Church, few people interested in the riddle of his death looked in that direction. In a desperate race against time to somehow refit the hulk he had made of the Banco Ambrosiano, he had spent the last week of his life traipsing around Europe in very questionable company. At least one man in his entourage had Mafia connections, and on the day he died an arrest warrant for Calvi himself was being drawn, implicating him in the attempted murder of his right-hand man at the bank.
But this was small-time peccadillo compared with his pivotal involvement in bankrolling the machinations of the secret and highly illegal Masonic lodge known as P2. The tentacular P2, which was then in the process of being exposed, had come within a leap at the jugular of overthrowing Italian democracy, and it was being linked to death squads in Latin America, international traffic in war-grade weapons, as well as neo-Fascist terrorism at home.
The circumstances of Calvi's end – notably his suspension beneath the Blackfriars Bridge and the bricks and stones on his body – were being read in Italy as the signature of the P2, of which he was a card-carrying member. The bizarre rituals of the lodge included the wearing of black robes and the use of the word "friar" in addressing of one another. And what are bricks and stones if not the substance of masonry? In initiation ceremonies the new member was sometimes told that betrayal of the P2's secrets would mean death by hanging and the washing of his corpse by the tides. Calvi, under recent questioning by Italian magistrates, had already revealed some of his own P2 activities, and lately he had been threatening to strip the layers further.
All this may have appeared "very Italian" and certainly exotic to Her Majesty's Coroner for the City of London and the six men and three women who formed the jury summoned to decide whether or not the banker had died of foul play. In any case, by the end of the first day the jury had heard enough witnesses and a somewhat jaundiced summation by the coroner to conclude that the "deceased killed himself."
The verdict was not entirely outrageous, though it was so regarded in Italy. Calvi's reasons to despair had escalated sharply in the thirty-six hours before his death. The Vatican – Marcinkus personally – had refused to bail him out, the board of the Ambrosiano had removed him, and it had given the bank into receivership. Moreover, he had already attempted suicide eleven months earlier (though it was a far more conventional try and of dubious commitment) when faced with charges of less weighty financial crimes in a related case still under appeal. There was a chance now that he might have to spend much of the rest of his life in prison.
But there were serious flaws in the suicide scenario. The dead man's jacket was buttoned incorrectly. He had had enough barbiturates in his hotel room to take his life painlessly twice over. He was a portly, unathletic sexagenarian who, according to his family, suffered from vertigo – hardly the cat-burglar type on the scaffold. A briefcase believed to contain his secrets had vanished.
The suicide finding was overturned the following year. A second inquest, convened as a result of legal action by the Calvi family, chose an "open verdict," which meant that the new jury had not been convinced of either suicide or murder. Some months later, however, the jury foreman, who claimed to have consulted with his fellow jurors, told the London Times that if they had known then what they knew now "we would definitely have returned a verdict of murder." What had been disclosed in the meantime came from investigative reporting on Calvi's financial dealings and his role in the P2. But the muddled open verdict lingers on, keeping the case on burners.
Calvi was neither the first nor the last to die violently in this long and winding affair. Of the five or six others, at least two were victims of clear-cut premeditated murders. They were men who were conducting official investigations inside Calvi's domains. Both were shot dead in 1979 in Milan – one of them only days after he had reported finding proof of a secret payment of $6.5 million divided between "a Milanese banker and an American bishop." There has never been much doubt that this was a reference to Calvi and Marcinkus, but neither has there been any further evidence.
What has characterized the present investigation, however, has been the insistence of the Milanese magistrates on what they call the "frequency and the special character" of the relationship between Calvi and Marcinkus since as far back as 1972. In their five-year-long examination of the connections between the vaults of the bankrupt Banco Ambrosiano and its far-flung offshore subsidiaries, they appear to have focused on the closeness of this association in order to dismantle Marcinkus's and the Vatican's plea of having been not a partner in but a victim of Calvi's financial manipulations.
It is hard to imagine a tight friendship between the austere, buttoned-up Italian banker and the personable American priest, but business is business. Clara Calvi, the widow, offers an epiphany of the glad, early days. "I remember the first time Marcinkus visited us in the Bahamas. He threw his arms around me and sang, Arrivederci Roma." Marcinkus claims it was the only visit, but it must have been fun. It was 1971, the year both men were appointed to head their respective banks and perhaps the year they first met. The Calvis had flown to Nassau, where Roberto, determined to transform the Ambrosiano into a major financial institution, set up his first offshore bank. He called it the Cisalpine Overseas Bank and named a "Mr. Paul Marcinkus" to the board. Allowing the use of the name brought 2.5 percent of the stock into the portfolio of the Holy See. Such was the beginning of the hidden relationship between the Ambrosiano and the IOR. Inspired by Marcinkus's well traveled bon mot, "You can't run the Church on Hail Marys," it would flourish for ten years.
The nearest we get to the inner sanctum of their secret world is heard in a curious set of fourteen tapes. They were made without Calvi's knowledge by a rather disagreeable man named Flavio Carboni, who had somehow wormed his way into his confidence in the last year of his life. In those waning days, the banker would take to rambling about the past, with Carboni's tiny microphone live behind his lapel. Scratchy and muffled, the conversations captured are nonetheless riveting. Here Calvi is listening to and quoting Marcinkus:
The deal they had between them was as sweet and as it was simple, which is why there is no reason to doubt Marcinkus when he says that he saw Calvi only a couple of times a year "to discuss ideas and arrangements." A witness who knew both parties intimately describes it in an interrogation by the Milanese magistrates:
On the one hand, when the Ambrosiano needed to carry out certain operations which had nothing to do with the IOR, Marcinkus placed its international facilities at Calvi's disposal to guarantee the outcome of these operations; on the other hand, whenever the IOR had needed to finance its own operations, Calvi and his banks were always ready to provide.
For each of Calvi's operations, according to the magistrates, he paid the IOR a five-eighths of one percent commission on the amount moved out of the country.
The witness continues:
As far as the Vatican bank was concerned, there was nothing technically illicit in such an arrangement. Calvi's operations were, of course, criminal by definition since they involved the felonious transfer of capital out of the country, but the IOR is simply not in Italy. This is called a "legal fiction," and it must have been comforting.
The deal ended with Calvi's death, but the friendship, such as it was, had dissolved a year earlier. In May 1981 Calvi was caught and arrested for illegally exporting $26.4 million from Italy. He got word to Marcinkus, pleading with him to waive his "bank secret." The American turned him down – told him to keep his mouth shut, says the widow.
Convicted and released pending appeal, Calvi, however, was welcomed once more at the IOR. Marcinkus, doing an old friend a favor, he says, at this point furnished Calvi with assurances by which he was able to stave off the final disaster for another nine months. These were the now well-known "letters of patronage" in which the Vatican vouched for the $1.2 billion indebtedness of its Panamanian shell companies. Calvi returned the "favor" by issuing Marcinkus a "liberating letter" releasing Marcinkus from his letters of patronage. The liberating letter was, of course, kept secret while the others were used to comfort creditors by the magic of the Vatican's good name. It was pulled out of a drawer only after the collapse of the Ambrosiano, when the Bank of Italy sought to hold the IOR to its word. The deception was so patent that the Holy See, while it would accept no responsibility for the billion-dollar-plus debt, agreed to a "financial contribution" of $244 million to the big losers – the 40,000 stockholders of the fallen bank.
The Vatican consistently denies or reinterprets any part of the story for which there is no smoking gun. But the basic facts of the matter have been known for years; long known too is
that much of the money being funneled through Marcinkus's pipeline was financing the P2's support-hardware for Latin American fascism. What is new about the current investigation, however, is the massive quantification of these operations, which, according to the Milanese magistrates, developed the link between Calvi and Marcinkus "far beyond any normal relationship between two financial institutions."
The Vatican bank, they contend, was not merely a passive conduit. By its ownership of the Panama and other shell companies, it not only knew that they were being used by Calvi to defraud the Ambrosiano but was actively engaged in the day-to-day deceits – “the screen of secrecy," they call it – that allowed him to cover his tracks.
What may prove far more damaging to the Vatican's image in Italy and around the world than the charges thus far is evidence uncovered by the magistrates connecting the IOR directly with the diversion of these funds. The tip of the iceberg concerns the political interference of the Vatican in the internal affairs of Italy and two other countries: financial support of the Somoza regime in Nicaragua until 1979, the clandestine funding of the Solidarity movement in Poland, and the attempted secret takeover by Calvi and the P2 of Italy's most i influential newspaper, Corrierre della Sera.
In the case of aiding Solidarity, said to have been John Paul II's pet project, Marcinkus may turn out looking like a papal Oliver North, and to some, even a hero. The archbishop denies any role with vehemence; when Calvi spoke to his lawyers of $50 million diverted to the banned Polish trade union, he said there was more to come. "I told Marcinkus right to his face," Calvi confides in one of the Carboni tapes, "I said, 'Listen, if somebody happens to find out from one of those accountants in New York that you're sending money for Wojtyla to Solidarity, before you know it there won't be one stone standing upright here in the Vatican.'" Wojtyla, of course, is John Paul's Polish name.
he highest ranking American in the Vatican hierarchy, Marcinkus has served and gotten a bad press under the last three popes. Few biographical sketches are above trying to make hay of his street-kid origins. The worst offender by a long way is in David Yallop's bestseller In God's Name, where Marcinkus is turned into a suspect in the "murder" of John Paul II's predecessor ("Why was Bishop Paul Marcinkus wandering in the Vatican at such an early hour...?"). A sample of Yallop on the young Marcinkus:
The Vatican Connection, Richard Hammer's bestseller, makes a less frenzied case for Marcinkus's involvement in an alleged early Seventies conspiracy with the American Mafia. Here the head of the Vatican bank is one of three "prime movers" plotting to manipulate $950 million in counterfeit securities on the international money market. The charge was investigated by the FBI and never proved, but it, too, rarely fails to make it into print.
The closest thing to a friendly profile that I find is in a 1982 Time cover story on "The Great Vatican Bank Mystery." Here we see the archbishop at sixty, looking positively striking in full ecclesiastical regalia and in living cover-color. We have no way of telling that he stands six-foot-three and is well over 200 pounds, but his blue eyes say he knows much ("serving both God and mammon can be a difficult task"). This Marcinkus, we are told, was known to his fellow seminarians as a "'gentle giant' who could run the table at billiards or play a mean game of basketball" and to his contemporaries as a man without a "devious bone in his body." In what was one of the last times he spoke to the press, he told Time's Rome bureau chief, "The old archbishop is tranquil. His conscience is clear." But even this piece depicts him as being "under a cloud" in the Vatican and an embarrassment to John Paul II.
Around Rome, in better days, Marcinkus was a kind of man about town. If you traveled in the right circles, you'd run into him on the golf course at Olgiata, at private dinner parties in patrician palazzi, or in the company of other gregarious prelates – like Wojtyla himself as a cardinal – eating the Creole dishes or tiny shrimp from the Ivory Coast served by the missionary nuns of the smart L'Eau Vive. But even social occasions would get him into trouble. A 1982 breakfast in Rome with the U.S. ambassador to the Holy See, William A. Wilson, earned the envoy a public rebuke by both the State and Justice Departments. After breakfast talk of "only tennis and golf," Wilson had a written a letter to the attorney general and had telephoned the head of the FBI expressing his faith in the archbishop.
Yet, there is little in Marcinkus's known past that goes very far in explaining his chronic bad judgment. Wisdom would have dictated his displacement in 1974 when his involvement with that other great Italian swindler, Michele Sindona, cost the IOR untold millions (Marcinkus says thirty, others a hundred) and an indelible blot on the Holy See. Sindona, of Mafia, P2 and banking shenanigans – dead too in mystery – was Calvi's mentor and brought the two men together.
If, as Marcinkus claims, he is a victim, he has been victimized by an extraordinary bad run of good luck. He went to Rome as a young priest in the fifties. He had high recommendations, a flair for management, and his sheer physical presence was no handicap. He caught the attention of Archbishop Montini and when Montini became Pope Paul VI in 1963, Marcinkus was soon in the inner circle. Serving as an unofficial bodyguard, he is credited with twice saving the pontiff from at least injury, once when someone in a crowd came at him with a knife. Connections being what they are, by 1969, Pope Paul in a flurry of reorganization thought him suitable to head the Vatican bank. When Paul VI was succeeded in 1978 by John Paul I, Marcinkus, who had not yet recovered from the Sindona scandal, was quite certain that he would be sent packing. He told Calvi it was all over for both of them, and he was undoubtedly correct, but luck, if it can be so called, intervened once more. It was John Paul I who went first, departing in his sleep after only thirty-three days on Saint Peter's throne. Luck of all luck, the new pope was Polish, and we have it on reliable authority that Marcinkus, the son of Lithuanian immigrants, struck Karol Wojtyla as a kindred soul. An American cousin.
This is emblematic of what lies at the heart of Marcinkus's improbable tenure, dividing the Vatican. In Rome the split is seen as two clear factions: italiani and polacchi, the Italians and those who side with them versus the "Poles," meaning the pope's own men. In the nine years of his pontificate, John Paul has sought in an unprecedented number of appointments (more than a thousand) to reshape the Catholic hierarchy in this way. The Italian side of the equation has not looked on idly. There are men in the Vatican, which had been in the hands of Italians and Italian popes for the previous 455 years, trying to undermine the trend, and the removal of Marcinkus is one of their aims.
The American's most powerful adversary is an Italian in the Vatican second only to the pope, seventy-three-year-old Cardinal Agostino Casaroli, secretary of state. Casaroli has worked assiduously for Marcinkus's dismissal since at least 1980. The Milanese magistrates have testimony indicating that the cardinal was behind an extremely sensitive covert investigation conducted by the Italian secret service into Marcinkus's activities. This produced a pile of documents – referred to as "the loot" – which is said to have revealed earlier banking mischief between Marcinkus and Sindona.
In 1981, when John Paul was hospitalized with gunshot wounds received in an assassination attempt, Casaroli suddenly was the man in charge and he attempted to neutralize Marcinkus's powers. This in fact helps explain the American's cold-shouldering of Calvi that same year. But Marcinkus's phenomenal roll didn't fail him. John Paul survived, reassumed full control, and that was that until now.
"Marcinkus must watch out for Casaroli," Calvi is heard to say on the secret tapes. "...If Casaroli should find just one of those pieces of paper that I know of – goodbye Marcinkus. Goodbye Wojtyla. Goodbye Solidarity."
Postscriptum: Before long it was goodbye to all of the above, except the indomitable John Paul II. Calvi, in death, endures as well, taking his place among Italy’s unsolved and usually unsolvable mysteries. Where professional investigators no longer tread, writers almost always rush in, and for reasons this space on TheBoot is committed to later explore, they often find gems on the beaten path. The Calvi Affair, by Larry Gurwin, (rev. ed., London, 1984) and Rupert Cornwall’s, God's Banker (London, 1983), are excellent examples, the works of two British journalists working independently, published shortly after the official inquests. Closer to Italian culture, and thus more nuanced, is La Storia di Roberto Calvi (Milan, 1983), by Gianfranco Piazzesi and Sandra Bonsanti.
But, given the dates of their appearance, all of these reports have been eclipsed by film director Giuseppe Ferrara’s I Banchieri di Dio, released in 2002. Ferrara is one the last of the great practitioners Italy’s cinema impegnato, a proud but endangered tradition of muckraking film-makers. His Calvi movie depicts the beleaguered banker (played by Omero Antenutti, with Rutger Hauer as Marcinkus) as falling victim to a conspiracy drawn from elements of the dark side of planet Italy. It is an unidentified cabal personified by the ambiguous, real-life entrepreneur Flavio Carboni (played by Giancarlo Giannini). A man who moves concentric circles that range from the world of the Mafia to political underbelly of Rome and the financial shell games of Marcinkus’s Vatican bank, Carboni filed a libel suit against the film as soon as it appeared. A court order forced the film’s shutdown, though Ferrara, presenting the evidence for his assertions, won the case on appeal. The film returned briefly to the theaters and can be seen now only in video format.
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