Authors: Philip Willan
‘In short he had convinced me that all political and financial power really depended on him and that no deal of any importance could go ahead without his consent,’ Calvi wrote. In joining P2 he had also been motivated by a need for protection from ‘the vile blackmails of Sindona’. He discovered to his cost, however, that Gelli and Ortolani had an ambiguous attitude to Sindona and that they had encouraged him (Calvi) to embark on a number of financial operations, notably the purchase of the
Corriere della Sera
newspaper, which turned out to be disastrous. ‘My acquaintance with the Gelli–Ortolani duo has procured me nothing but grave economic and moral harm, and even today they persist in threats and extortions of
every kind together with their worthy friend Michele Sindona,’ he complained.
The letter moved on to consider Calvi’s relations with the Vatican, which existed in the context of a single guiding principle: the struggle against communism. Calvi had been introduced to the Vatican by Sindona, the letter said, presented as a technically competent banker with vast international relations capable of guaranteeing ‘an effective politico-religious penetration’. In order to achieve results, it had been necessary to secure control over the necessary banking institutions. ‘The enormous importance of what I have just said induced me to incur debts, in foreign currency, in order to buy Banco Ambrosiano shares in sufficient quantity to guarantee us control over the institution.’ Calvi believed he had represented the interests of his own group and the Vatican in what he had done: that is, in the secret and illegal purchase of a controlling stake in the Ambrosiano through offshore companies.
Calvi had created ideological and financial bases on behalf of the Vatican in extremely dangerous and difficult areas. ‘On more than one occasion I believed that my life was at risk as I rushed from one Latin American state to another, seeking to oppose the growing ferment of anti-clerical ideologies,’ he wrote. ‘I did my utmost in every sense, even to the point of concerning myself with the supply of warships and other war materiel to support those capable of contrasting the advance of well-organized communist forces.’ Thanks to his efforts the church could boast an authoritative presence in countries such as Argentina, Colombia, Peru and Nicaragua.
Calvi went on to demand the return of money he had advanced to the anti-communist Polish trade union Solidarity and for the creation of centres of financial and political power in five South American countries. He had spent more than $175 million on these projects, he claimed.
The gist of the note was clear: if Calvi had been involved in illegal activities it had been on behalf of the Vatican and some
of the most sensitive things that he had done were part of the global war on communism. The Vatican owed him, in short, both in terms of money and of moral obligation.
The relationship between Roberto Calvi and Archbishop Paul Marcinkus and his Vatican bank was fundamental for the development of Calvi’s career and is the key to understanding how it finally unravelled. Based on secrecy, lies and deception, it remains largely opaque even to this day. Calvi was introduced to Marcinkus by Michele Sindona in the late 1960s and the three men went into business together. In 1971 they became partners in the Cisalpine Overseas Bank in Nassau, the Bahamas, which changed its name to Banco Ambrosiano Overseas Ltd (BAOL) in July 1980. The bank would be the fulcrum for Calvi’s offshore financial activities. Beyond the reach of Italian regulatory authorities, those activities would ultimately sink the Ambrosiano. And the three men were partners in Manic SA, a Luxembourg holding company that would also play an important role in the dissipation of the Ambrosiano’s resources. Another Luxembourg company, Banco Ambrosiano Holding (BAH), would also weigh heavily in the financial collapse; originally named Compendium, Calvi had bought the company from Sindona. As Sindona headed towards his own bankruptcy in 1974, his partners Marcinkus and Calvi would pull away from him, continuing the offshore financial juggling to which Sindona had originally introduced them.
The collaboration between Calvi and Marcinkus was of mutual benefit. The IOR connection offered Calvi respectability, discretion and a channel for the illegal export of currency from an offshore bank situated in the heart of Rome. For Marcinkus it was an opportunity to make money, by charging a healthy commission on the back-to-back deposits that enabled Calvi to funnel money to his offshore companies
under the noses of the Bank of Italy inspectors. A deposit with the IOR looked safe and respectable in the Banco Ambrosiano’s accounts; in reality the IOR had passed the money straight on to the BAOL or a Panamanian company, something Calvi was forbidden from doing directly himself under Italian law. The complex fiduciary relationship between the two institutions meant both sides were able to hide potential sources of embarrassment under a cloak of secrecy. Marcinkus may well have hoped that the money-making schemes of the enterprising Calvi would help to fill the hole left in both men’s accounts by the financial collapse of their friend Michele Sindona. Furthermore, Calvi was evidently determined to fill Sindona’s shoes in terms of the global struggle against communism, a matter of no little interest to Marcinkus and his masters.
There may also have been more direct, personal advantages accruing from the relationship. According to Giorgio Ambrosoli, the liquidator of Sindona’s financial empire in Italy, the Sicilian banker paid a secret $6.5 million commission to Calvi probably in connection with Calvi’s purchase from the Vatican of the Banca Cattolica del Veneto in 1972. Sindona had helped to broker the deal and the commission, Ambrosoli said, had been shared by ‘an American bishop and a Milanese banker’. The bishop was Marcinkus, Ambrosoli confided to a journalist friend.
Such a claim would not surprise Giacomo Botta, a Banco Ambrosiano official who helped to manage the bank’s overseas network. ‘Marcinkus was definitely not a man of the church. He was a man without scruples,’ he told me, when I visited him in the Alpine village where he now lives. ‘The old guard of the Vatican had to put up with his presence because he had someone behind him who was supplying him with money.’
Botta, who was initially sentenced to 11 years’ imprisonment for his involvement in the Ambrosiano bankruptcy and whose wife became ill with cancer while he was in prison, said
both Marcinkus and Calvi had raked off money for themselves from some of their financial operations. ‘There were operations that brought personal enrichment for Calvi and Marcinkus. The money came out of the Nassau bank, where Marcinkus was on the board,’ he said. ‘I was invited to some of the board meetings in Nassau. I remember the great deference and attention that Calvi showed to Marcinkus, as if Marcinkus were the boss of the Nassau bank.’
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Who really ran their joint enterprise remains unclear. For Calvi’s family it was the IOR that owed the Ambrosiano money, rather than the other way round. Yet Calvi’s problem in 1982 was the repayment of $300 million to the IOR by the end of June, a problem that precipitated his flight from Italy and the Ambrosiano’s collapse. On 1 September 1981 the IOR provided Calvi with two ‘letters of patronage’ confirming its control over a total of ten offshore companies, eight of them domiciled in Panama. ‘We also confirm our awareness of their indebtedness towards yourselves as of June 10, 1981 as per attached statement of accounts,’ the letters said. At the same time Calvi provided the IOR with a letter freeing the Vatican bank of any responsibility for the indebted companies, which ‘belonged exclusively to this Banco Ambrosiano Overseas Ltd’ and which were being linked only ‘pro forma’ to the IOR. Written in his role as chairman of the BAOL, the letter pledged to hold the IOR harmless both financially and judicially in respect of the offshore companies, and Calvi promised that the IOR’s letters of patronage would be used only internally at the two banks to which they were directed: the heavily indebted Banco Ambrosiano Andino and the Ambrosiano Group Banco Comercial of Managua.
When the Ambrosiano collapsed the IOR agreed to make a ‘goodwill payment’ of $240 million to its creditors. It was a ‘voluntary contribution’, the Vatican said, and did not imply guilt. The alternative, however, was to be sued by more than a hundred international banks that had lent the Ambrosiano
money on the basis that the letters of patronage did indeed make the IOR liable. The threat of a deeply embarrassing legal action had been wielded by the International Steering Committee of the creditor banks, which was spearheaded by Britain’s Midland and National Westminster banks. The compensation was paid to the liquidators in 1984, cancelling approximately a third of the $650 million owed by Banco Ambrosiano Holding in Luxembourg, which had been the vehicle for most of the international bank loans. By the time the liquidation of BAH closed in 2001 liquidators had recovered around 87 per cent of the company’s debts.
Italian magistrates investigating the Banco Ambrosiano bankruptcy took the view that Archbishop Marcinkus and his closest aides at the IOR were indeed responsible for the bank’s collapse. On 20 February 1987 they issued a warrant for the arrest of Marcinkus and his lay deputies Luigi Mennini and Pellegrino De Strobel for complicity with Calvi in the bankruptcy. The warrant cited their contribution to the creation of the offshore companies and the issuing of the letters of patronage, which had enabled Calvi to continue his destruction of the bank’s resources. The men never found themselves in the dock to test the prosecution’s case because the Court of Cassation, Italy’s highest appeal court, ruled that Italian courts had no jurisdiction over officers of the pope’s bank.
That the IOR bore more than a merely moral responsibility for the Banco Ambrosiano’s collapse emerges from the testimony of Giacomo Botta to Milan magistrates investigating the bankruptcy and at the bankruptcy trial itself. The trial eventually began in Milan in May 1990 and concluded 23 months later in April 1992. At the time of the bank’s collapse the IOR owned a modest 1.6 per cent stake in the Ambrosiano. But according to Botta, this official shareholding was supplemented by a further 5.2 million shares, equivalent to around 30 per cent of the total, held in an offshore company as security for its loans to the Ambrosiano. ‘This
block of shares was very large and could give it control over the Banco Ambrosiano, given the bank’s share structure, which was divided between many small shareholders,’ he told prosecutors on 6 July 1982.
There were other reasons why Botta felt the IOR was the senior partner, if not the owner of the Banco Ambrosiano. The remarkable career of Alessandro Mennini, son of IOR managing director Luigi Mennini, was one. He had joined the Ambrosiano unexpectedly as a deputy director despite an almost total lack of banking experience, Botta told the bankruptcy investigation in April 1983. Another telltale sign was the purchase of the Banca Cattolica del Veneto from the IOR: no changes were made to the management following the change in ownership, Botta said. He cited the IOR’s provision of $150 million as startup money for the Cisalpine Overseas Bank and Marcinkus’s presence on the bank’s board. Offshore companies Ulricor and Rekofinanz, which held shares in the Banco Ambrosiano, belonged to the IOR, as did United Trading Corporation (UTC), a key player in Calvi’s offshore financial conjuring, he claimed.
‘Already in 1977/78, when I became a director of the Managua bank, Calvi and [the general manager for international business, Filippo] Leoni told me that the Ambrosiano group was controlled by the IOR, which held a significant overseas shareholding in the bank,’ Botta told the court. ‘I learned from them that the companies that Managua was financing at the time belonged to the Vatican. Calvi probably wanted to apprise me of these secrets, which he guarded jealously, and also wanted to justify the loans by saying that they were imposed by the Vatican, which was in substance the owner of the Banco Ambrosiano.’
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Botta told me that he had been assured by Fernando Garzoni, the chairman of the Banca del Gottardo and a man he considered utterly reliable, that both Manic and UTC belonged to the IOR. Garzoni was in a good position to know, since his
Swiss bank had created and administered many of the companies in Calvi’s offshore network. ‘He told me Manic and UTC belonged to the IOR. He was absolutely sure of that, so we felt reassured,’ Botta told me. Banco Ambrosiano employees may have had good reason to want to shuffle responsibility for their actions on to the IOR but much more hinged on the veracity of their assertions than their own individual positions in the face of Italian justice. If the IOR controlled the Banco Ambrosiano then it was perhaps not the Milan bank that was bankrupt after all, but rather – heaven forbid! – the Vatican itself. The issue remains controversial precisely because of the secrecy and obfuscation with which Calvi and the burly American archbishop surrounded their activities. Calvi would not allow any of his staff to have direct dealings with the IOR, Botta explained. ‘Marcinkus was his exclusive contact.’
Botta’s analysis has received support from the chief liquidator of Banco Ambrosiano Holding. The Luxembourg lawyer Paul Mousel highlighted the anomalies in the IOR–Ambrosiano relationship in evidence to the Calvi murder trial in April 2006, when called as a prosecution witness. The IOR was a direct shareholder in BAH, he told the court, although it had not been possible for the liquidators to determine its precise shareholding. ‘The Banco Ambrosiano SpA [Calvi’s Milan headquarters] had a majority holding of 60 per cent. The IOR had a minority holding, we think about 20 per cent,’ Mousel told the court.
Mousel said it had been extremely difficult to trace the money funnelled via the IOR to Panamanian companies. ‘In some cases the money was paid into bank accounts and withdrawn as cash,’ he said. ‘I can’t exclude that money was used for Vatican purposes. One possibility is that the IOR wanted to finance certain activities it didn’t want publicized and so it used Calvi’s network. Another possibility is
that the IOR wanted to take a stake in Banco Ambrosiano SpA.’ Untraceable money flows could account for half of the total of missing money, Mousel said. He had found no concrete examples of money laundering, which in any case was not a crime under Luxembourg law at the time of the liquidation, but he could not rule out the possibility that the complex financial transactions organized by Calvi and Marcinkus had served to conceal that activity. ‘The mechanism set up by the Banco Ambrosiano with the connivance of the IOR is typical of money laundering,’ he said. ‘I can’t prove it was done.’