The Vatican Exposed: Money, Murder, and the Mafia (20 page)

In the same way, Sindona purchased the Vatican's majority ownership of Condotte d'Acqua, Italy's water company, and Cermica
Pozzi, a chemical and porcelain company.2 To spare the pope from
any embarrassment, he also bought Sereno, the Vatican's pharmaceutical company that produced oral contraceptive pills.

These transactions were conducted with extreme secrecy to escape
the attention of Italy's tax collectors. The shares of Immobilaire were
transferred first to Paribas Transcontinential of Luxembourg, a subsidiary of the Banque de Paris et des Pay Bas. The shares were then
transferred to Sindona's holding company, Fasco AG in Liechtenstein.

Despite these diversionary techniques, the press got word of the
sales and pressured the Holy See for a response. Through a
spokesman, Pope Paul VI said: "Our policy is to avoid maintaining
control of our companies as in the past. We want to improve investment performance, balanced, of course, against what must be a fundamentally conservative investment philosophy. It wouldn't do for
the Church to lose its principal in speculation."3

When Italian journalists questioned Sindona about the sales, he
refused to comment, saying that he was obliged to maintain the confidentiality of his client, Holy Mother Church.

Next the pope's banker began to unload the Church's remaining
shares in Italian companies to buyers such as the Hambros Bank of
London, Continental Illinois, and the American conglomerate Gulf
& Western.4 Sindona invested the Vatican's profits from these transactions in American companies, such as General Foods, Chase Manhattan, Colgate, Standard Oil, Westinghouse, General Motors,
Proctor and Gamble, and Dan River.5

The liquidation of the massive Vatican holdings, as engineered by
Sindona, had a disastrous effect on Italy's economy. The lire dropped
precipitously in value. Unemployment rose. The cost of living increased.
The savings of millions of families were wiped out, almost overnight.

During this time Sindona developed a close working relationship
with Charles Bludhorn of Gulf & Western. The new friends engaged
in trading worthless stocks back and forth at face value to create a
false market. In 1972 the U.S. Securities and Exchange Commission
demanded a halt to the two men's ceaseless exchange of securities.6

Also during this time, Gulf & Western-through its motion picture
company, Paramount Pictures-was filming The Godfather, a glamorous look at life in the Mafia. Immobilaire, the giant real estate and
construction firm Sindona had purchased from the Vatican, owned
Paramount Studios in Hollywood, where the film was shot.7 Through
arrangements with Bludhorn, profits from the Coppola epic flowed
into Sindona's banks and companies along with millions from the
Mafia's international narcotics trade. Life, indeed, was imitating art.

Sindona made other important friends, including Roberto Calvi,
a fellow member of P-2 and president of Banco Ambrosiano in Milan,
and David Kennedy, President Nixon's first secretary of the treasury
and chairman of the Continental Illinois National Bank and Trust
Company. Sindona managed to have the bulk of the Vatican's investment in U.S. stocks funneled through Continental Illinois. Similarly,
Kennedy arranged for Continental Illinois to purchase 20 percent of
Sindona's Banca Privata Finanziaria in Milan.8 Kennedy became a
director of Fasco International, one of Sindona's holding companies,
and was later sued for $54 million by the Italian government for illegally conspiring with Sindona to sell Talcott Corporation, an asset of
Banca Privata Finanziaria, to a group of Utah businessmen.9

Sindona also became friendly with Richard Nixon. The two
lunched together on several occasions. Nixon, in fact, had recommended to many of his clients and associates that they should avail
themselves of Sindona's expert investment and banking services. 10

In addition to such influential friends, Sindona collected a series
of young women as mistresses, including a honey-eyed Hollywood
starlet known as Lana Turner. Turner later told reporters that Sin dona was the only man she was never bored with. "Michele had
tremendous courage," she said. "He was a great champion, a wonderful lover, and a kind person to his friends. But at the same time,
he was driven to be godlike. He did what he wanted. He did not live
by the laws and morals of others. How could he? He was above all of
us. He was a fantasy that lived. He was like the Godfather."II

By 1970 Michele Sindona, by his own admission, controlled the
Milan stock market. It was a control that he exploited for criminal
gain again and again. On any given day he could cause shares in various companies to rise and fall like yo-yos, since he owned directly or
managed for his banking clients 40 percent of all the stocks traded.12
The manner in which he manipulated the market to his sole advantage is evidenced in his acquisition of a small, insignificant, leathertanning company called Pacchetti.

Sindona decided to transform Pacchetti into a conglomerate like
Gulf & Western. But instead of purchasing interests in movie studios,
publishing firms, and airlines like his American model, Sindona's firm
busied itself buying unprofitable steelworks and companies that made
commercially unsuccessful household products. Pacchetti, in fact,
became a commercial garbage can. But it did contain one asset of
considerable value-the option to buy the Banca Cattolica del
Veneto, a prestigious Catholic bank. Sindona managed to acquire the
option from Bishop Marcinkus, who was a participant in the
scheme.I" Banca Cattolica del Veneto was flush with the savings of
the faithful from the most prosperous region of northern Italy. Its
real estate holdings, including the beautiful medieval buildings that
housed its many branches, were enormous.

Roberto Calvi, Sindona's third partner in crime, agreed on a
specified date to purchase from Sindona an investment company
called Zitropo Holding. This agreement paved the way for one of
Sindona's illegal manipulations of the Milan stock exchange.

The book value of Pacchetti in 1971 was 250 lire per share. Sindona ordered the stock exchange department of the Banca Unione,
under the management of P-2 lodge member Ugo De Luca, to purchase all available Pachetti shares.14 The shares were then sold to several Sindona-owned financial institutions at a greatly inflated rate. The price of the shares skyrocketed, reaching 1,600 lire on the stock
exchange within a matter of months.

In March 1972, when the day for Calvi's purchase of Zitropo
Holding finally arrived, the Sindona companies suddenly unloaded
their Pacchetti shares and began purchasing massive shares of
Zitropo, a company that had come to possess the option to buy
Banca Cattolica del Veneto. This buying frenzy immediately inflated
the value of Zitropo, a company wholly owned by Calvi. Sindona,
having funded the entire operation with fictitious guarantees and no
cash transactions, made a neat profit in excess of $40 million. From
this he provided a kickback of $6.5 million: $3.25 million to Calvi
and $3.25 million to Bishop Marcinkus.ls

Cardinal Albino Luciani, the patriarch of Venice, smelled a rat in
the sale of the Catholic bank to Calvi. The bank had served to fund
Catholic charities and to support Catholic building projects. Now the
assets of this parochial institution would be used to fatten the purse
of a greedy Milanese businessman. Cardinal Luciani approached
Bishop Marcinkus at the Vatican Bank. Marcinkus heard him out and
said: "Your Eminence, have you nothing better to do today? You do
your job and I'll do mine." Upon saying this, Marcinkus ushered
Luciani to the door.16 It was a movement that the president of the
Vatican Bank later would come to regret. In 1978 Luciani would
become John Paul I and the meeting with Marcinkus would remain
deeply etched in his memory.

The money used to balloon the value of Pachetti, whose value
suddenly fell to seventy-five lire per share, came from hapless clients in
Sindona's banks, many of whom had never authorized the transactions. Several of these clients-including a customer named Jacometti,
who lost more than $500,000 in the transaction-initiated lawsuits.
But the suits were squashed through Licio Gelli's "contacts within the
judicial system" and several "talks" with the injured clients.'7

By 1976 Calvi, through his association with Sindona, had
amassed more than $50 million, which he kept in four secret
accounts at the Union de Banques Suisses and the Credit Bank of
Zurich: account number 618934, account number 619112, account
number Ralrov/G21, and account Ehrenkranz.18

Wanting Holy Mother Church to prosper, Sindona encouraged
Marcinkus to invest a sizeable portion of the Vatican assets (acquired
by the sale of its Italian holdings) in his Swiss Bank-Banque de
Financement in Geneva. The Vatican with Sindona and several of his
associates now owned the central laundry for Mafia drug money.

This investment also allowed the Catholic Church to benefit from
Sindona's use of the Swiss bank for "double invoicing." Concerning
this practice, Carlo Bordoni later told authorities: "It was less succulent than the kickbacks earned through the illegal exportation of
black money but it still reached a high figure." 19

The practice of "double invoicing," as practiced by Sindona, was
simple. Exports were invoiced at costs that were much lower than the
real amounts. The doctored invoices were paid through the Bank of
Italy. Records of these payments were immediately conveyed to
Italy's Taxation Department. This meant that the exporter would be
taxed at the low figure. The balance would be paid by the receivers
of the exported goods directly to the Banque de Financement. In
many cases Sindona's exporting companies would display a loss so
that the illegal transactions would result in a harvest of tax credits
from the Italian government.20

For years Sindona greased the palms of various politicians and
elected officials so that the double invoicing would continue without
official interference. He was accustomed to making such pay-offs.
Sindona even attempted to "show his faith in America" by delivering
a suitcase with $1 million in cash to Maurice Starts, Nixon's chief
fund-raiser in the 1972 presidential campaign. When Sindona insisted
that the gift must remain a secret, Starts declined to accept the suitcase because new federal regulations outlawed such anonymous election gifts.21

Sindona's star burned high and bright in the heavens. In 1972,
when he moved from Milan to Geneva, Sindona was one of the
wealthiest men in the world. He could buy or do anything that
tickled his fancy. He had a loyal wife and a string of beautiful mistresses. He had powerful friends and associates waiting and willing to
do his bidding. On February 17, 1972, the Wall Street journal
described him as "Italy's Howard Hughes," who was one of the world's "most respected financiers." In January 1974 John Volpe,
the U.S. Ambassador to Italy, named Sindona "the Man of the Year"
at a ceremony in Rome's Grand Hotel. Giulio Andreotti, Italy's
prime minister, kissed Sindona's hand and hailed him as "the Savior
of the Lira." But the star would soon fade and fall from on high. By
October of that same year Sindona would be a fugitive and the Vatican would become enmeshed in a devastating scandal regarding
counterfeit securities.

Do not give dogs what is sacred; do not throw your
pearls to pigs. If you do, they may trample them under
their feet, and then turn and tear you to pieces.

Matt. 7:6

June 29, 1971, Vincent Rizzo, an underboss of the Genovese crime family, traveled to the Churchill Hotel in
London for a meeting with Leopold Ledl, an Austrian con man. It
concerned a matter that captured the interest of Matteo de Lorenzo
("Uncle Marty"), who had succeeded Charles "Lucky" Luciano and
Vito Genovese as capo of the crime family.' At sixty-two, Uncle Marty
was a short, stout man with a round, open face and a ready smile. He
looked like a harmless, congenial guy who might be at home behind
the counter of a neighborhood grocery store. But, in truth, Uncle
Marty was neither harmless nor congenial. He had climbed from the
slums of the lower East Side to serve as a soldier during the
internecine gang wars of the 1930s, 1940s, and 1950s. He had grad uated from bootlegging to loan sharking, and from loan sharking to
counterfeiting. He was not the type of man anyone would want to
cross. Uncle Marty could order an execution with a smile on his face.