The Vatican Exposed: Money, Murder, and the Mafia (26 page)

Do not be deceived: God cannot be mocked. A man
reaps what he sows. The one who sows, to please his
sinful nature, from that nature will reap destruction;
the one who sows to please the Spirit, from the Spirit
will reap eternal life.

Gal. 6:7-8

hen the news was announced of Karol Wojtyla's election as
the new supreme pontiff of the Roman Catholic Church,
the teeming crowd that had gathered in St. Peter's Square was caught
by surprise. The people had expected the election of some established
member of the Vatican bureaucracy, such as the progressive Cardinal
Benelli or the conservative Cardinal Siri. They were stunned to hear
the name of Wojtyla. Even members of the press turned to one
another to ask: "Who is Wojtyla?" "E u Polacci" ("He is a Pole"), was
the only answer that was forthcoming.

It was one thing to elect a Pole-such as the famous anti-Commu nist Cardinal Wyszynski-as pope. It was quite another to elect a Pole
about whom so little was known. Who was Wojtyla? How had a junior
cardinal ascended to the papal throne in less than two days of balloting?

Not only was the result of the election unexpected, but the new
pope also looked unusual for a pope. He lacked the delicate features
of John Paul I, Paul VI, and Pius XII. His hulking physical frame and
his nonintellectual mannerisms seemed to some observers antithetical
to the Roman grace and refinement of previous pontiffs.' This "lack
of refinement," according to detractors, came to the fore during his
first public appearance. Wojtyla, as John Paul II, approached a group
of American reporters and beseeched them with the folded hands of
a penitent to be "good" to him. A second later, in a further effort at
ingratiation with onlookers from the press, the newly elected pope
cupped his hands like a megaphone and shouted his blessing to the
milling crowd like a cheerleader at a football game. The image of
John Paul II as a "bumpkin" who lacked tact and sophistication was
enhanced when photos of the new Holy Father sunning in the nude
appeared in Italian tabloids. Licio Gelli showed the photos to
Socialist Party leader Vanni Nisitico and remarked: "Look at these
problems the secret service must have. If it is possible to take these
pictures of the pope, imagine how easy it is to shoot him."Z

Gradually, the public came to learn that Wojtyla, as a young man,
had sought not to become a priest but an actor.3 They further learned
that he had worked in a chemical factory under Nazi control during
World War II; that he had associated himself with Marxist guerillas;
and that he had developed close friendships with many women. A
rumor persisted that he had been married. This rumor had its basis in
the so-called great gap in John Paul II's career-the span of time
between 1939 to 1944.4

But certain things about Wojtyla's ascendancy to the Holy Office
eventually came to light. Cardinal Villot with several "Masonic Cardinals" had engineered the campaign and celebrated his victory not
with traditional Te Deums (hymns of praise) and official prayers but
rather a gala champagne party in which the new pope filled the empty
glasses of the nearest cardinals and nuns, while warbling his favorite
song, a Polish number called "The Mountaineer."s

After his coronation John Paul II scrapped all the proposals for
change that had been set forth by his predecessor. Business as usual
continued within Vatican, Inc. Cardinal Villot was reappointed as secretary of state; Bishop Marcinkus returned to his position at the Vatican Bank; and the Holy See's ties to Roberto Calvi and Licio Gelli
were renewed and strengthened. The stage was set for one of the
most notorious schemes in the history of international finance, a
scheme that became known as "the Ambrosiano affair."

Throughout the 1970s the Vatican Bank had established close
ties with Banco Ambrosiano in Milan, where Calvi remained as the
chief executive officer. Bishop Marcinkus sat on the board of one of
Ambrosiano's subsidiary branches in the Bahamas.' Banco
Ambrosiano was a Catholic bank, a financial firm for Catholic families and Catholic charities, where no one could own more than 5 percent of the stock. For this reason it represented a perfect laundry for
P-2 and the Mafia. But two problems remained to be solved. First
was the problem of gaining control of the bank without arousing
unnecessary suspicion among the directors. Second was the challenge
of getting vast amounts of money out of the Milan bank without
arousing the attention of criminal investigators.

Calvi solved both problems with the help of his friend Bishop Paul
Marcinkus and the Vatican Bank. He began to "loan" huge sums of
Ambrosiano's money to eight "dummy" corporations. To give these corporations an aura of legitimacy, the loans were diverted to the Vatican
Bank (causing Ambrosiano bank directors to believe that the corporations were concerns of Holy Mother Church).? Six of these corporations
were in Panama: Astolfine S. A., United Trading Corporation, Erin S. A.,
Bellatrix S. A., Belrose, S. A., and Starfield S. A. The seventh firmManic S. A.-was located in Luxembourg; the eighth-Nordeurop
Establishment-in Liechtenstein. These corporations used the borrowed
millions to accomplish the following objectives: (1) to increase the personal wealth of Calvi and his Mafia cohorts; (2) to fund the nefarious
operations of Licio Gelli; and (3) to purchase shares of Ambrosiano
stock. When asked for collateral for the loans, the Panamanian companies
simply posted the Ambrosiano stock they had purchased along with
statements of inflated assets and projections of huge profits from exports.

To increase the value of the shares, Calvi declared huge stock dividends and rights offerings along with optimistic announcements
about the future of Banco Ambrosiano and its plans for expansion into
Latin America. The shares began to split and split again. The dummy
companies used their increased stock holdings to borrow more money
with which they purchased more stock and, with the additional stock,
they obtained additional loans. The companies never paid interest on
their borrowings. They simply added the accrued interest to their loan
balances and backed their new obligation for collateral with more
Ambrosiano stock. With these companies gaining more and more
stock, Calvi began to obtain greater and greater control of the bank.

Bellatrix, a dummy firm in Panama, had been created by Calvi
and Marcinkus along with a trinity of P-2 members-Licio Gelli,
Umberto Ortolani (who had received the Vatican title of "Gentleman
of His Holiness" from Pope Paul VI), and Bruno Tassan Din, managing director of the huge Rizzoli publishing firm.8 Bellatrix used a
portion of the $184 million it milked from the Ambrosiano cash cow
to purchase Exocet missiles for Argentina in its struggle with England
over the Falkland Islands. The dummy corporation had received this
loan, secured on paper with Ambrosiano stock, with cash capital of
less than $10,000. Similarly, Astrolfine, another Panamanian company, obtained $478 million from Banco Ambrosiano with capital of
$10,000.9 The pattern remained the same with the other dummy
corporations: none had capital assets in excess of $10,000 and all
received millions in loans. The effect of this scheme within Banco
Ambrosiano was the creation of a gigantic balloon-a swelling of the
value of Ambrosiano stock based on loans to worthless corporations
and false financial announcements-that was bound to burst.

But the scheme bore a semblance of propriety to Bank of Italy
inspectors. When asked about the nature of the dummy corporations,
bank inspectors were told that the Vatican Bank had established the
firms for the purpose of exporting parochial goods. For proof of this
assertion, Calvi pointed to a picture of Bishop Marcinkus among the
directors of Banco Ambrosiano Overseas in Nassau. This seemed to satisfy the inspectors. After all, who were they-as mere government officials-to question the charitable concerns of Holy Mother Church?

And so the scheme continued. More than a $1.3 billion flowed
from the Milan bank to the Vatican Bank, which charged exorbitant
fees for currency conversions. From the Vatican Bank, the money
went to the Panamanian firms and the firms in Liechtenstein and
Luxembourg. Few even noted that the Vatican fees were unnecessary
since Banco Ambrosiano could have made the required conversions
without the aid of another banking institution.

In 1979 Calvi's maneuverings began to go awry. The
Ambrosiano Bank was obliged to pay interest on the increasing
deposits to make the loans. As the interest rates soared in banks
throughout the world, Calvi found himself in an expensive bind. In
1981 Ambrosiano officials demanded definite proof from Calvi that
the Vatican Bank maintained control over the shares of Ambrosiano
stock that had accumulated in the eight dummy corporations. At the
same time, the Guardia di Finanza, the financial police of Italy,
launched an investigation into the massive shell game. In an attempt
to spare Holy Mother Church from the wrath to come, Beniamino
Andreatta, Italy's treasury minister, met with Cardinal Casoroli, the
Vatican's foreign minister, to urge the severance of all ties between
Calvi and the Vatican.10 Casoroli presented these concerns to the
Holy Father. But money was pouring into the Vatican's coffers, so
the pope opted to ignore the warning.

As the dollar rose sharply against the lira, the noose continued to
tighten around Roberto Calvi. In July 1980 the Guardia di Finanza
discovered a host of improprieties regarding the massive flow of
money from Banca Ambrosiano to the dummy companies. The
improprieties were reported to Judge Luca Mucci, who ordered Calvi
to surrender his passport so that a full-scale investigation could get
underway." Several weeks later Dailo Abbruciati, a Mafia hit man,
gunned down Roberto Orson, a board member of Banco
Ambrosiano, in Milan. Orson, it was later learned, had called for
Calvi's resignation.

To ensure that the shell game would continue, Calvi hired Flavio
Carboni, a "fixer," to ward off the investigation. Carboni relied on
his usual tactics-money and threats-to deal with public officials
and bank examiners who questioned Calvi's operations. In 1984, after the sordid affair came to an end, Italy's financial police inspectors discovered that more than $30 million had been funneled from
an Ambrosiano branch in Peru to one of Carboni's numbered
accounts in Switzerland.12

Despite Carboni's best efforts, the investigation continued. This
forced Calvi with hat in hand to approach Bishop Marcinkus for help.
The investigation, Calvi told his coconspirator, would come to an
end with a statement of proof that the dummy corporations were
holdings of Holy Roman Mother Church. Marcinkus complied by
committing one of the greatest acts of fraud in ecclesiastical history.
He issued a "letter of patronage" stating that the dummy corporations were responsible financial firms whose purposes were known
and approved by the Holy See. The letter, dated September 1 and
written on Vatican letterhead, reads as follows:

Gentlemen:

This is to confirm that we directly or indirectly control the following entries:

Manic S. A., Luxembourg

Astrolfine S. A., Panama

Nordeurop Establishment, Liechtenstein

United Trading Corporation, Panama

Erin S. A., Panama

Bellatrix S. A., Panama

Belrose S. A., Panama

Starfield S. A., Panama

We also confirm our awareness of their indebtedness toward
yourselves as of June 10, 1981, as per the attached statement of
accounts.

The attached accounts showed "indebtedness" to the Lima
branch of Banco Ambrosiano alone for $907 million. Bishop
Marcinkus signed the letter, along with his administrative assistants,
Luigi Mennini and Pellegrino de Strobel.13 To compound the fraud,
Calvi presented Marcinkus with a letter of his own-this one stating
that the Vatican Bank "would entail no liabilities" or "suffer no
future damage or loss" from its involvement with the eight compa nies.14 Commenting about the "letter of patronage," Michele Sindona told journalist and author Nick Tosches that Calvi paid the Vatican $20 million for the document."