The Vatican Exposed: Money, Murder, and the Mafia (5 page)

The results of the audit couldn't have been more devastating.
The daily expenses of running the Vatican were in excess of $7,000.
Contributions to the Church had declined by 20 percent from the
previous year. Legacies were diminishing. Creditors, including the
Reichbank in Germany, were demanding immediate payments on the
delinquent loans.35 To make matters worse, the pope's financial advisors-including George William Cardinal Mundelein, archbishop of
Chicago-were predicting a prolonged international depression. The
financial end to the papacy, postponed for nearly fifty years, was imminent. Pius XI summoned Cardinal Gasparri and Archbishop
Eugenio Pacelli (the future Pius XII) to his chambers in order to
finalize the "concordat" with Mussolini.

Cardinal Gasparri was frail and feeble at seventy-eight. His hands
shook from palsy and his frame was so bent from a combination of
arthritis and osteoporosis that he faced the floor as he walked. The
appearance of Archbishop Pacelli, at fifty-two, was even more
remarkable. He was tall, slightly over six feet, and incredibly thin at
125 pounds. His eyes were large and black behind the gold-rimmed
spectacles that rested on his aquiline nose. Pacelli had long, tapering
fingers that were accentuated by meticulously manicured fingernails.
His voice was high and shrill, and he spoke with such painfully precise enunciation that he appeared to stammer. But the most striking
aspect of his appearance was the ashen pallor of his complexion. His
countenance was that of an invalid who had spent his life in a darkened bedroom.

Pius XI told his two advisors that the agreement with the Fascists
must be modified in accordance with the audit of the Apostolic
Camera. Archbishop Pacelli reminded the pope that Mussolini, in
preliminary conversations for an accord, had pledged $50 million in
government bonds, in addition to the other benefits, including the
recognition of the Vatican as a sovereign state, a country unto itself.
But the pope insisted, there must be significant cash contribution not
only into the papal treasury but also into his private purse.16 Pius XI
went on to express his concern for the source of Church revenue for
the next years, the next five years, the next ten. He mentioned that
Cardinal Mundelein of Chicago had raised a twenty-year loan of $1.5
million, using Church property as collateral and that the money
already had been spent.37

The pope next spoke of the predictions about the collapse of
Italy's economy that had been made by Bernardino Nogara, the Vatican financial advisor and chief administrator of the Inter-Allied Reparations Committee. The terms of the agreement, he said, must be
concluded immediately-before the start of the season of Lent. Once
the season of fasting and abstinence began, such negotiations would
be inappropriate.

Cardinal Gasparri and Archbishop Pacelli, upon gaining leave of
the pope, sent urgent messages to Mussolini. For the sake of both
parties, Church and State, the Vatican Question must be settled
before Ash Wednesday, they said.

Mussolini immediately agreed to the terms, and the signing ceremony was set for February 11, 1929, in the Lateran Palace, near the
room where Pope Leo III had crowned Charlemagne as Holy Roman
Emperor in 800 C.E.

Several days before the ceremony Pius XI granted Mussolini a private audience to bestow upon the dictator not a crown but a blessing.
Wearing the tiara and clutching his crosier, the pope remained on his
throne as Il Duce entered the room. He neglected to rise to meet his
guest, as popes customarily receive honored heads of state. But Mussolini seemed oblivious to this slight. The dictator rather fell to his
knees to kiss the pope's ring and his bared feet. Pius responded with
the mechanical blessing: "Benedicat to omnipotens Deus, Pater, et
Films, et Spiritus Sanctus." When Mussolini rose to his feet, the pope
was stunned by the dramatic change he saw in Il Duce's appearance.
On the bald head of the dictator, a huge cyst had emerged. For a
moment the Holy Father almost recoiled with horror. He thought of
the mark of the beast as foretold by the Book of Revelation. And
there were other changes. A large, dark mole had sprouted from
Mussolini's fleshy and thrusting chin. He also noticed for the first
time, that the teeth of the dictator were the color of old ivory and
widely separated, a sign of malevolence in his native Milan.38 Despite
Mussolini's attempt to radiate charm and good will, everything about
the Fascist seemed loathsome-including his eyes that seemed pale
and lifeless, the eyes (he would later say) "of a serpent."39

The rain was incessant on the day of the ceremony. Mussolini,
dressed in carefully tailored morning clothes, signed on behalf of
the government; Cardinal Gasparri, in the medieval splendor of his
purple robes, signed for the Vatican with Archbishop Pacelli at his
side. The ceremony, scheduled to last for several hours, lasted only
forty-five minutes.40 The Vatican text was enclosed in a red velvet
case with damasked edges. The cover of the case bore the papal
coat of arms.

When the news of the agreement broke, church bells rang
throughout Rome. People poured into St. Peter's for a mass of
thanksgiving. From all corners of the globe, messages of congratulations were sent to Pius XI and Mussolini. The Speaker of the House
of Commons in England proclaimed that he was delighted by "the
decent compromise Signor Mussolini has concluded with the
pope."41 Now Italy was truly united. The Church was in concordance
and, it appeared, compliance with the state. The new Rome, as envisioned by Mussolini and his condottieri ("Blackshirts"), was about to
become a reality.

A huge crowd of well-wishers improvised a demonstration of jubilation outside the pope's windows, hoping the Holy Father would
bless them. But they were disappointed. All the windows of the Vatican remained shut and locked, while Pius XI remained in seclusion.

In Berlin, Adolf Hitler was delighted with the news of the treaty.
He wrote an article for Volkischer Beobachter that appeared on February 22, 1929: "The fact that the Curia is now making its peace with
Fascism shows that the Vatican trusts the new political realities far
more than it did the former liberal democracy with which it could not
come to terms." Turning to the German situation, he wrote: "By
trying to preach that democracy is still in the best interests of German
Catholics, the Center Party is placing itself in sharp contradiction to
the spirit of the treaty signed today by the Holy See." Hitler concluded his rant by saying: "The fact that the Catholic Church has
come to an agreement with Fascist Italy proves beyond doubt that
the Fascist world of ideas is closer to Christianity than those of Jewish
liberalism or even atheistic Marxism, to which the so-called Catholic
Center Party sees itself so closely bound, to the detriment of Christianity today and our German people."42

In the annals of Roman Catholicism, few documents would prove
to be of greater importance than the agreement with Mussolini that
came to be known as "the Lateran Treaty." The first section of the
treaty-labeled "the Concordat"-provided the Vatican with complete jurisdiction over all Catholic organizations in Italy. These
organizations-called "ecclesiastical corporations" in the document-were declared exempt from taxation and state audit. More over, the Vatican was at liberty to create as many organizations as it
pleased, all of which would be tax exempt in perpetuity.

This section also declared that Catholicism was "the official religion of Italy" and outlawed propaganda in favor of Protestantism.
Catechetical classes that prepared students for the sacrament of confirmation and full membership in Holy Mother Church were to be
held in all public and private schools.

The second section-entitled "the Lateran Pact"-established
Vatican City (Stato della Citta del Vaticano) as a sovereign state. The
new papal state consisted of the 108.7 acres on Vatican Hill that
housed St. Peter's Cathedral, the Lateran Palace, and a cluster of
other buildings. It contained thirty squares and streets, four military
barracks for the Swiss Guards, two churches (in addition to St.
Peter's), and a population of 973 residents-most of whom were celibate priests. As a separate nation, Vatican City also possessed several
"extraterritorial holdings" in Italy: three basilicas in Rome (St. Mary
Major, St. John Lateran, and St. Paul's), several office buildings, the
papal summer palace at Castel Gandolfo (thirteen miles from Rome),
and a score of estates from Milan in the north to Reggio in the south.

In return for sovereignty, the Vatican relinquished all claims to
the lands that were seized by the national government in 1870 and
agreed to establish diplomatic relations with the Italian government.

The final section of the agreement-called "the Financial Convention"-provided a payment of $90 million in cash and government bonds and an undisclosed sum for the pope's "privy purse" as
restitution for the former papal principalities.43 The Italian government also agreed to pay the salaries of all parish priests in the country.

With one stroke of the pen, the Vatican went from rags to riches
and gained a privileged position at the tables of international money
markets where the future direction of the twentieth century would be
charted. Ten years later, in 1939, when Hitler invaded Poland, the
Roman Catholic Church would become, once again, the richest and,
in many ways, the most powerful institution on earth.

Give to everyone who asks you, and if anyone takes
what belongs to you, do not demand it back. Do to
others as you would have them do to you. If you love
those who love you, what credit is that to you? Even
"sinners" love those who love them. And if you dogood
to those who aregood to you, what credit is that to you?
Even "sinners" do that. And if you lend to those from
whom you expect repayment, what credit is that to
you? Even "sinners" lend to "sinners," expecting to be
repaid in full.

Luke 6:30-34

n the day of the ratification of the Lateran Treaty, Pius XI
made two moves that would alter forever the future of
Roman Catholicism. First, he created a new financial agency called
the Special Administration of the Holy See. The sole function of this agency was to safeguard the "donation of Mussolini" so that the
Church's newly found wealth would not be channeled into the
pockets of friends and associates of Vatican officials or dissipated on
social causes, such as feeding the starving masses or providing shelter
for the dispossessed.

Second, the pope appointed Bernardino Nogara, the financial
wizard who reorganized the Reichsbank, as the manager and director
of the new agency with complete control over investments. At
Nogara's insistence, no clerics were assigned to the agency for fear
that parochial interest might interfere with financial gain. The sole
purpose of the Special Administration of the Holy See was to generate income and to restore the Church to a position of wealth and
power.1

For his personal assistants, Nogara chose the Marquis Enrico de
Maillardoz and four accountants from leading Italian financial companies. In accordance with Vatican protocol, the pope appointed an
ad hoc committee of three cardinals-Pietro Gasparri, Donato Sharrette, and Rafael Merry del Val-to supervise the proceedings of the
agency. But the committee served as ecclesiastical window dressing
with no authority to override the decisions of Nogara.