The Vatican Exposed: Money, Murder, and the Mafia (17 page)

Do not be yoked together with unbelievers. For what do
righteousness and wickedness have in common? Or
what fellowship can light have with darkness? What
harmony is there between Christ and Belial? What does
a believer have in common with an unbeliever? What
agreement is there between the temple of God and
idols? For we are temples of the living God. As God has
said, "I will live with them and walk among them,
and I will be their God and they will be my people."

2 Cor. 6:14-16

fter graduating from the University of Messina in 1942 with
degree in tax law, Michele Sindona earned a lucrative living
by buying and selling on the black market. He bought food and supplies that had been stolen from the American post exchange (PX) in
Palermo and smuggled it to Messina where it was sold to the starving population for a huge profit. To gain permission to engage in this
business, Sindona turned to the archbishop of Messina who introduced him to Vito Genovese, who had returned to Sicily after being
accused of the gangland slaying of Ferdinand "the Shadow" Boccia,
a small-time crook in America.'

Genovese, who was known as "Don Vitone," was one of the
leading figures in Murder, Inc. As underboss to Lucky Luciano (Salvatore Luciana), he ran the narcotics racket and the white slavery trade in
Manhattan. Along with his boss, Genovese had planned and executed
the murder of Joe Masseria, the American Mafia's "boss of all bosses."2

The arrangement worked well. Sindona granted Genovese a percentage of his profits for protection, and Genovese granted the young
entrepreneur freedom to operate without interference from other
mafiosi. Sindona was not alone in this enterprise. Everybody in the
Sicilian Mafia from the capos to the lowest piciotto was making a
bundle. Almost everything that Italians ate, wore, smoked, and drove
during the Allied occupation came from American military bases.
"How did I accumulate my fortune?" Don Luciano Leggio explained
to his prosecutors in court many years later. "I did the black market
during and after the war. Just think! You could buy a quintal of grain
from the Farm Board for 2,000, 2,500 lire and sell it on the black
market for 15,000."3

Don Luciano Leggio was not only a Mafia capo but also the
leader of Anonima Sequestri, a quasi-Fascist political group in
Palermo. Leggio befriended Sindona and accepted him into his crime
family. Through the capo, Michele came to know Fr. Agostino Coppola, who later was accused of masterminding one murder and the
kidnapping of several Italian business and political leaders. Father
Coppola was not the only Catholic priest in the Sicilian Mafia.4 The
clergy regularly crossed the line of peaceful coexistence with the mob.
In 1962 four Franciscan monks were tried, convicted, and sentenced
to thirteen years imprisonment for conspiracy, extortion, and
manslaughter.5 In 1978 Fr. Fernando Taddei, prior of St. Angelo's
Cathedral in Rome, was arrested for buying ransom money-at 70
percent of face value-from his Mafia family and washing it through
Vatican financial institutions.6 Such laundering was necessary since ransom money was numbered and easily traced. Sindona, from the
start of his career, learned to look upon Catholic prelates not only as
spiritual pastors but also as potential partners in crime.

In 1946 Sindona moved to Milan where he set up shop as a tax
expert and business consultant. As American capital poured into
postwar Italy thanks to the "economic miracle" of De Gasperi and
the Christian Democrats, he came to specialize in guiding the investments through Italy's complex tax laws. He proved to be talented,
ambitious, and totally corruptible. He had learned, thanks to his
friendship with Vito Genovese, the importance of omerta.

What's more, thanks to his association with Don Luciano Leggio,
he had learned the importance of establishing ties to the Roman
Catholic Church. Through his associates in Milan, Sindona became
friends with Monsignor Amleto Tondini, an official of the Roman
Curia. The monsignor's sister, as it turned out, was married to one of
Sindona's cousins. Monsignor Tondini, as one of the "family," introduced Michele to Massimo Spada, a member of the "Black
Nobility"-the descendants of aristocratic families that had opposed
the seizure of the Papal States by Garibaldi. Spada served as a delegato or "delegate" of the Vatican Bank under Bernardino Nogara.7
Through Spada, Sindona came to know a progressive cardinal who
had been exiled to Milan by Pius XII. The cardinal's name was Giovanni Batista Montini.

Vito Genovese returned to America at the end of the war, when
all witnesses to the murder of Ferdinand "the Shadow" Boccia disappeared. With Lucky Luciano in exile (deported to his native Sicily
after being convicted of white slavery), Genovese initiated a campaign of murder to gain the title of "boss of bosses." He was responsible for the death of Willie Moretti in 1951, Steve Franse in 1953,
and Albert Anastasia-the head of Murder, Inc.-in 1957. To consolidate his power and to establish an international drug trade, Genovese formed an association with Carlo Gambino, the respected capo
of the Gambino family in New York. Throughout these years, Genovese remained in contact with Sindona, whom he dubbed "the
young shark."

Then came the invitation. Sindona was asked to attend a family dinner at the Grand Hotel des Palmes in Palermo on November 2,
1957. The dinner lasted twelve and a half hours in a closed-off section of the seafood restaurant overlooking the waterfront. In this setting, amid overstarched linen and tassled menus, chilled wine and
candles, pasta alle sarde and pesce arrosto, La Cosa Nostra-"our
thing," that is, the international Mafia-came into being.

Mafia luminaries from two continents attended the glittering
affair. The list included Lucky Luciano, Joseph ("Joe Bananas")
Bonanno, Carmine Galante, Tommaso Busceto, Frank Costello (representing the Gambino family), along with representatives of the
New York Lucchese and Genovese families. Also in attendance from
the United States were Antonio, Giuseppe, and Gaspare Magadinowho ran Buffalo-and John Prizziola, who ran Detroit. Don
Giuseppe Genco Russo led the Sicilian contingency. With him at the
dinner table were a dozen of the island's mammasantissima ("most
sanctified mothers' sons"), including Salvatore "Cichieddu" ("Little
Bird") Greco, scion of the mighty Greco family; Calcedino Di Pisa
(Greco's underboss); and the La Barbera brothers.8

The purpose of the dinner was to organize the international drug
trade. The Sicilians would be responsible for the flow of heroin from
the Golden Triangle of Burma, Laos, and Thailand into processing
centers in Turkey and Bulgaria and to seaports in Poland, Portugal, and
Italy. The Americans would be responsible for the distribution in "territories" throughout the United States and the collection of "rent,"
that is, the mob's share of the profits from dealers and distributers.9

With the huge profits from this trade, the families needed a
banker who could move large quantities of cash in and out of Italy
without disturbing the tranquility of the country's taxation departments. They also needed someone who could invest their earnings in
respectable companies throughout the world: someone who would
enable them to "go legit." The banker would have to be a Sicilian
with established Mafia ties, a person who was trained in business and
law and who understood the intricacies of banking and finance.
Michele Sindona was the man of the hour.

Several weeks after the Mafia summit conference, Sindona created
with mob money a Liechtenstein holding company called Fasco AG. The new company purchased a bank in Milan, the Banca Privata
Finanziaria, known as BPF. It also acquired the Banca di Messina in
Sindona's native Sicily and the Banque de Financement in Geneva. Sindona sold blocks of shares in his banks to other banks, including Hambros Bank of London, Continental Illinois, and the Vatican Bank.10

Sindona's banking enterprise flourished as billions of dollars from
the international drug trade flowed from Sicily to Switzerland. At the
same time Sindona learned one of the cardinal rules of theft: the best
way to steal from a bank is to buy one. In 1966 Carlo Bordino, with
underworld connections and years of experience with multimilliondollar foreign-exchange deals, examined the activities at BPF and was
overwhelmed by his discoveries. Twelve years later Bordino related
these activities to Milan authorities from a prison hospital in Caracas.
In a sworn affidavit, he wrote: "When I started to go to BPF during
the summer of 1966, I was deeply affected by the chaos that reigned
in the various sectors. It was a tiny bank that was able to survive only
thanks to the margins that emanated, duly masked, of course, from a
myriad of `black operations' that BPF effected on behalf of Credito
Italiano, Banca Commerciale-Italiana, and other important national
banks. These foreign currency black operations, a vast illegal export of
capital, took place daily and large figures were involved. The technique was really the most coarse and criminal that can be imagined."11

Bordino found a vast number of overdrawn accounts without any
real guarantees and for amounts greatly in excess of the legal limit of
a fifth of the capital and reserves. He also found massive incidents of
theft. The staff at BPF was transferring large amounts of money from
the accounts of depositors without their awareness. These sums were
moved to an account held by the Vatican Bank. The Vatican Bank, in
turn, transferred the amounts-minus a 15 percent commission-to
Sindona's account at the Banca de Financement in Geneva. Sindona's
account in his Swiss bank was named for his sons: MANI, MA for
Marco and NI for Nino.12

If a client at BPF complained that a check had bounced or that
his account should contain more than was listed, he was told to take
his business elsewhere. If he continued to complain, a manager would
appear and say, "It's simply an accounting problem that we shall rec tify." If he threatened to contact the authorities, he would spend his
last moments "swimming with the fishes."

Bordoni's discoveries at the Banca de Financement in Geneva
were equally hair-raising. The managers spent all day playing the
stock, commodity, and currency markets for Sindona. When they
lost, the losses were transferred to a client's account. When they won,
the profit was placed in Sindona's account.

The Vatican Bank, in addition to owning 29 percent of the bank,
had several accounts at Banca de Financement. Bordoni was shocked to
discover that these accounts "reflected exclusively gigantic speculative
operations that resulted in colossal losses."13 A shell company called
Liberfinco (Liberian Financial Company) financed these losses, along
with the losses of other major speculative investors. At the time of Bordoni's inspection, Liberfinco was displaying a loss of $30 million. By
the time Swiss bank officials appeared on the scene in 1973, the losses
of this shell company had increased to $45 million. When the Swiss
informed Sindona that he had forty-eight hours to close Liberfinco or
they would declare Banque de Financement bankrupt, Sindona closed
Liberfinco and opened another shell company, Aran Investment of
Panama, which displayed an immediate deficit of $45 million.'4

After uncovering such shenanigans in Sindona's banks, Bordoni
tried to distance himself from his employer. Sindona responded by
using one of his classic techniques: blackmail. Bordoni had broken
the law in his foreign speculations. Sindona threatened to report
these transgressions to the Bank of Italy. Bordoni stayed and assisted
Sindona in the operation of a massive international brokerage company called Moneyrex.

Created by Sindona in 1964, Moneyrex established relations with
850 client banks throughout the world and conducted business in
excess of $200 billion a year.'' Through this brokerage firm, Italy's
richest and most powerful individuals could squirrel away enormous
fortunes illegally and safely in foreign banks. Sindona performed this
service for a commission that fluctuated between 15 and 20 percent.
He also kept a secret ledger that incriminated his "confidential
clients." The list would serve as his lifesaver when his bloated corporate vessel sank.