God's Banker (21 page)

A later system for sending money to Banco Andino was not very different. Instead of the direct telex line from Monte Carlo, another Luxembourg subsidiary, called Ambrosiano Services was estab­lished. Its main "service" was to pass on similar instructions for loans by Banco Andino. The instructions were given by telephone from Milan to Luxembourg by senior officials like Botta.

The money spun from one front company to another with bewilder­ing speed. One memorable message from Botta to Siegenthaler on June 26, 1979 sent the same nine million dollars on a book-keeping world tour: from Nicaragua to Liechtenstein to Panama to Luxem­bourg, to Nassau and then back to Nicaragua where it started. The purpose, investigators presume, was to "generate an income" in Luxembourg. The example is extreme, but it conveys the conj uring to which Calvi had to resort for survival. The pace of the lending accelerated in 1980. Between February and October that year, Banco Andino approved sixteen separate loans for $348 million to the hungriest front company of all, Nordeurop in Liechtenstein, later to become Astolfine SA in Panama. The Andino board (in other words Leoni, Botta and Costa) assembled to give its formal blessing not in Lima, of course, but in nearby Zurich—and only after most of the money had been paid out. In this unorthodox fashion, 88 creditor banks of Ambrosiano Luxembourg were to be parted from $450 million.

The process continued, at ever more desperate speed, right up to the end. Money was shifted here and there, to plug a hole, to enable one company to show an accounting profit, to whisk a suspicious loan temporarily from under the nose of an auditor. The ploy was fiendish­ly complex, but brilliantly simple in its results. For although every­thing was directed from Milan, nothing showed up on the books of the parent bank itself. And if anyone were to find out, then the ultimate owner of the companies would emerge as the IOR in the Vatican, thanks to its ownership of the two companies Manic and United Trading Corporation, set up all those years before. The proof of this vital secret was stored in Switzerland, at the Banca del Gottardo.

But if Calvi's financial defence cost money, so did his political defence. One expensive favour was the purchase by La Centrale of a controlling interest in the Venice newspaper
II Gazzettino,
tradi­tionally the voice of the potent Christian Democrat establishment in the deeply Catholic Veneto region. The paper was losing money heavily—until Calvi's appearance on the scene in 1979. Thereafter, when La Centrale had taken over, money suddenly became available.
II Gazzettino
was safe for the Christian Democrats, at a cost for the Ambrosiano group of some 30 billion lire over the years. But Calvi did not forget the Communists, on the opposite end of the spectrum. As we have seen,
Paese Sera,
the Communist-backed daily in Rome, was lent 20 billion lire by Banco Ambrosiano between 1978 and 1982.

Calvi sought added protection from Catholic quarters. Carlo Pesenti, after himself and Sindona the third of the Vatican's allies in Italian finance, joined La Centrale's board, as did Luigi Lucchini, standard bearer of the dynamic small steelmakers in Brescia, whose fame was already reaching beyond Italy. The press wrote of a new "Lombard League".

In fact, however, the day-to-day administration of La Centrale was in the hands of Michel Leemans, a Belgian brought to Milan by Calvi long before. Leemans was never to hold any formal post at Banco Ambrosiano itself. But by a strange quirk, just as Calvi was always to conduct the most sensitive transactions of La Centrale himself, so Leemans was to be the last representative of Ambrosiano in 1982, when all was about to be lost.

And as 1979 gave way to 1980, the portents of disaster were becoming more visible. Most ominous, the judiciary seemed at last to have decided that the Bank of Italy was a less worthy object of their attentions than the financiers whose murky affairs the central bank had investigated.

The first victim was Italcasse, where the central bank's inspectors had in 1977 unearthed irregularities severe enough to warrant a judicial follow-up. That investigation had, of course, contributed to the political assault on the Bank of Italy two years later. But at dawn on March 4, 1980 the findings brought even more spectacular conse­quence, as no less than 38 senior bankers from the savings institutes under Italcasse's umbrella were arrested. They were charged with making irregular loans to various favoured borrowers, including the Caltagirone construction group from Rome, a big benefactor of certain local Christian Democrat politicians.

It mattered little that such imprisonment before any trial was quite commonplace in Italy, and that the theatrically-tinged affair would blow over, like so many others, leaving scarcely a ripple behind it. For Calvi, the message was clear. For whatever reason, the balance had shifted, and not to his advantage. The fact that the magistrate who ordered the arrests was Antonio Alibrandi, who only twelve months before had made the accusations against Baffi and Sarcinelli at the Bank of Italy, must have made him uneasier still. For what guarantee was there that the Milan judiciary's investigation of his own alleged offences would not now land him in a similar predicament?

Gelli, too, was increasing his pressures on Calvi, mixing promises of help with half-spoken threats to let spill other of the banker's embarrassing secrets. Relations between them worsened to the ex­tent that in April 1980, when Calvi was in Zurich for Easter, he abruptly changed his hotel to avoid encountering Gelli, who, he discovered, had booked into the same one. Only Ambrosiano's small shareholders remained faithful, dismissing at the annual meeting all adverse gossip as "libel". Once again, a higher dividend would make them forget Calvi's reluctance to inform them of what his bank was really about. But the respite was short.

Within weeks, the overstretched construction group of Mario Genghini finally crumbled. On June 25, 1980 he was declared bank­rupt by a Rome court, leaving behind him total debts of 450 billion lire, a third of them to Ambrosiano itself. The magistrates did issue an arrest warrant for fraud, but by that time Genghini was safely in Latin America. For Calvi the episode must have been proof that not even the P-2, of which Genghini was a member, could ward off financial reality for ever. Any doubts on this score were removed by the events of a few days later in Milan.

At last the specialized
Guardia di Finanza
financial police were reaching the same conclusions as the Bank of Italy eighteen months before. The
Guardia di Finanza
were now sure that the shares in the Toro insurance company despatched abroad by La Centrale in 1973 were
exacrfy the same ones
as it bought back at such an inflated price in 1975. In other words, in one guise or another, Ambrosiano had controlled the shares all along, and the excessive sum paid for their return in large part constituted an illegal export of capital. Calvi should have reported this under the 1976 law, but he had not. Thus armed, Luca Mucci, the magistrate still handling the case, ordered him to surrender his passport and warned that criminal charges might be on their way. Calvi's long, losing battle with the Italian courts had begun.

The loss of his passport was unnerving, humiliating and hugely inconvenient. Without it he would be prevented from his annual visit to the IMF meeting, a place where the chairman of Italy's largest private banking group ought above all to be seen. In many respects worse, he would be prevented from those important personal inspec­tions of the foreign subsidiaries of Ambrosiano.

News of the sanction inevitably appeared quickly in the Italian press, and shares in Ambrosiano and its affiliates came under severe pressure on the Milan stock market. Under distinctly suspicious circumstances, Calvi did recover his passport, just in time to attend the Fund meeting that autumn. But other reminders followed, of just how thin was the ice upon which Catholic finance trod. The next eminent figure to be arrested that summer was Massimo Spada, once of the IOR and now chairman of Ambrosiano's own Banca Cattolica del Veneto, charged with involvement in Sindona's fraudulent bank­ruptcy in 1974. Worse still, the same fate would befall Luigi Mennini, the successor of Spada at the Vatican bank, on similar accusation.

For the Holy See, which had been trying with limited success to forget its imprudences in the Sindona affair, Mennini's arrest was a particular embarrassment. Despite his 71 years, his were the financial skills indispensable to the IOR. Calvi's discomfort was even greater. For he now began to doubt in earnest whether the Vatican's conceal­ment of his own dubious dealings could continue.

The moment had come to seek a new source of support, if not of escape from the predicament into which he had built himself. The support had to be substantial, and beyond the control of the Italian authorities. And who met these two conditions better than the Arabs?

Calvi had long been fascinated by the thought of linking Ambrosiano with the oil wealth of the Middle East. In the mid-1970s he had vainly tried to set up an "Arab Mediterranean Bank", only to be deceived by a spurious Saudi Arabian intermediary who left Milan without even paying his hotel bill. But Calvi, with his love of the complicated and contorted, was not dismayed, nor his faith in Arab promise much damaged. As Leemans put it long afterwards: "If you offered him something straightforward, he'd dismiss it. But he'd be fascinated by something really far-fetched; like a child believing in a fairy story." Exactly what fairy stories he was told by the brash British financier Peter de Savary, we do not know. But by late 1980 Calvi was deep in plans for Banco Ambrosiano Overseas (as Cisalpine was now called) to buy twenty per cent of de Savary's Artoc Bank and Trust, also based in Nassau.

That winter Calvi went to Lyford Cay for what was to be the last time in his life. There was much to attend to in the Bahamas: not least progress in the construction of a new headquarters for Ambrosiano Overseas, a garish four-storey edifice far on East Bay Street, beyond the bridge to Paradise Island and the Nassau Casino. It was gran­diosely called Ambrosiano House, and at a cost of $8 million was the biggest ever fixed investment by a bank in the Bahamas. On the top there would be a penthouse apartment, where the Calvis would stay on future visits. But most important was Artoc.

Coopers and Lybrand, the accountants which audited both Artoc and Ambrosiano Overseas, were the first to moot the idea of a link. De Savary had set up Artoc to cap his success as an oil trader in the Middle East. At the time it was equally owned by Arab and European interests. There were incentives for both sides. A deal with Ambro­siano might redress the previous financial dominance of the Arabs in Artoc; at the same time it could help open banking doors for Calvi in the Middle East, where Ambrosiano was still weak.

But the main attraction for Calvi was the prospect of rich new contacts in the Arab financial world. For an outlay of just $4 million, he gained not only twenty per cent of Artoc but also two seats on the board, alongside such figures as Abdullah Saudi, formerly Libya's representative on the board of Fiat (in which Colonel Gaddafi had bought ten per cent in 1976) and later to run the Bahrain-based Arab Banking Corporation. And there were others, Kuwaitis and Saudi Arabians, who could conceivably organize the sum—maybe $700 million by then—required to get Calvi off his foreign hook.

The agreement with Artoc was signed in February. Calvi was in London for the occasion with his wife and a retinue of officials from Ambrosiano's foreign side. They stayed at the private St James' Club which de Savary owned, in relaxed good humour. There was a dinner one night at an Artoc director's home in a Chelsea square. It was a friendly occasion; the deal had been concluded, and in his own way Calvi opened up a little. Small talk, of course, was never for him. But Calvi expounded with conviction on the need for freedom, and to contain the Communists. It all sounded rather like Gelli and Sindona. As usual his subordinates around the table listened respectfully, acknowledging the Tightness of the chairman's views.

The visit to London coincided with other reassurance that what­ever his difficulties in Italy, the suspicions had not spread too far abroad, among potential lenders. Licia's and Angelica's furtive missions were still a secret of Avenue des Citronniers.

In what was to prove the last big loan arranged by Ambrosiano Holding of Luxembourg, National Westminster, the second biggest bank in Britain, raised $75 million on its behalf. The five year credit's original amount was $50 million, but the enthusiasm of the market was such that the figure was increased to $75 million. Nor was the interest rate on the loan so high as to indicate an undue degree of risk. Quite clearly in February 1981 Ambrosiano did not appear a danger­ous proposition. Ambrosiano accepted the terms of the proposal on February 6, and on April 8 formal agreement was signed. The storm was then a month away.

Calvi must have
had his forbodings as he returned to Italy in early 1981. The reason was not just replacement of the sub-tropical Baha­mas by Milan's foggy winter chill. In his heart he surely knew that even the Artoc venture then taking shape was unlikely to be a match for the difficulties which were piling up at home. From every side old foes and new were pressing in.