Authors: Rupert Cornwell
The meeting bore out his worst fears. In small groups, the thirteen other directors present filed into the room, each taking from a trolley by the door a thick envelope containing the complete recent correspondence between Calvi and the Bank of Italy. They listened in silence as the chairman hastily read out the text of the letter of May 31, identifying the $1,400 million risk concealed in the foreign affiliates. Only Pesenti, long in poor health, was missing.
Calvi made one last effort to buy time, proposing that full discussion be postponed and that in the meantime the documentation be kept within the bank building. But it was too late. Bagnasco, worried and impatient, suggested that each director be allowed to take his envelope away with him, to peruse at his leisure. "I'm not going to closet myself away here, going over papers line by line," he told Calvi. A vote was taken, and only Rosone and two other directors supported the chairman. Even Prisco, who less than four months before had criticized the Bank of Italy's hectoring as "offensive", now sided with Bagnasco.
The defeat outwardly seemed on a technicality, and Calvi bore it without expression. But at that moment his eleven years of undisputed rule at Banco Ambrosiano ended. For the first time he had found himself in a minority in his own boardroom, previously so subservient to his every suggestion. The real tragedy, of course, was that had Ambrosiano's directors ever dared such a display of independence earlier, the calamity about to engulf them all would never have happened. Now at a few seconds short of midnight, the long- kept secret was out.
Drained and depressed, Calvi returned home with the ever-present Carboni to eat a cold supper prepared by his daughter. Afterwards Carboni left, taking with him the two prepared suitcases. The next day the banker again urged Anna to leave Italy. He too was probably going abroad, "to continue the operation in hiding". But if the situation became worse he told his daughter, he would start to reveal everything he knew. The following afternoon, of Wednesday June 9, she left for a hotel in Switzerland, where she had already booked a room. A few hours later Calvi himself left Milan on a private plane for the last time, bound for Rome.
That evening, he stayed at Carboni's Rome flat until 2 a.m. reviewing with him the dwindling options still open. Almost certainly at this point the decision to spirit Calvi abroad was taken, the only remaining doubt was when. Almost incredibly, however, even at this hopeless juncture, Calvi could still maintain the fagade of normality.
On Thursday morning, after a wretched night's sleep, Calvi went to Ambrosiano's representative offices in the capital, in Via del Traforo. He gave no clues of his real intentions. Nor did he to Giorgio Gregori, the criminal lawyer who for eighteen months had been acting for Calvi in the multitude of legal proceedings in which he was embroiled. In the months before Calvi had spoken vaguely of leaving the country, if everything became too much. But during the two hours they talked that morning, Calvi intimated nothing to his lawyer. Gregori was pleased to have had a tricky interrogation put back a couple of days; if anything, the press attacks against him had abated somewhat lately.
At 1 p.m. he left, to see Carboni again, and then Emilio Pellicani, Carboni's "secretary", who would be responsible for the execution of the imminent flight. Finally, at nine in the evening, Calvi returned to his tiny flat in central Rome. He told his personal chauffeur of nine years, Tito Tesauri, to switch off the flat's elaborate alarm system, and dismissed him with the instruction to pick him up at 6.30 a.m. the following morning. But when Tesauri returned early the next morning, Calvi had vanished.
Just what was finalized during the discussions with Carboni and Pellicani, or whom else Calvi may have seen or called, is not known. But that evening he went home to wait for a summons, which seems to have come around 10 p.m. For when Tesauri came back the next day, he found Calvi's bed lightly crumpled but unslept in, the habitual bottle of mineral water untouched. Where Calvi spent that night is an equal mystery; for his odyssey only began in earnest the following afternoon when, accompanied by Pellicani, he left the capital for the last time bound for Trieste.
The chauffeur swiftly informed Gregori and Costanzo Zugaro, Ambrosiano's Rome representative and an old friend of Calvi's from their cavalry days in the war, of the disappearance. Whatever had happened, it had been urgent enough to make Calvi miss an appointment arranged for 8.30 a.m. with Luigi Mennini at the IOR. Mennini called Zugaro asking what had happened to Calvi: "Where's your chairman, he was due here two hours ago?" After urgently consulting Zugaro, and then Rosone in Milan, Gregori reported to the Rome magistrates that Calvi had been missing for fourteen hours; as he had to, for his client was only free on provisional bail and was without a passport. But hardly had Gregori called the magistrates, than the vanished Calvi was back in contact—with Rosone.
The Ambrosiano vice-chairman told Calvi that his disappearance had already been reported to the judiciary and the police. Calvi replied that they must go back to the magistrates and tell them everything was all right. He couldn't say more, but was conducting "top secret" talks, crucial for the bank. He would be back in Milan on Saturday, and wanted Botta and Leoni from the foreign side to be put on standby.
Rosone was reassured enough to leave for a planned weekend's relaxation in Sardinia. It was much-needed convalescence, for the leg wounds of April 27 were still painful. It was the last time Rosone was to speak to Calvi. For instead of heading back to Milan, his chairman was leaving the country.
Upon his arrival with Calvi in Trieste, Pellicani transferred him to the keeping of Silvano Vittor, a petty border smuggler. Vittor's association with Carboni was reinforced by the fact that their girlfriends were sisters, two pretty Austrian girls called Manuela and Michaela Kleinszig, who lived in Klagenfurt. Vittor's usual clandestine trafficking from the frontier port of Muggia, seven miles from Trieste, involved coffee and blue jeans, commodities much sought after in Yugoslavia but rather cheaper in Italy.
On this occasion, however, Carboni entrusted him with the task of carrying out the illegal export from Italy of Calvi himself, whom Carboni described as a friend of his who needed to go to Austria. From Trieste, Calvi travelled northwards through the night to Klagenfurt. He crossed the frontier bearing a falsified passport which the Sardinian had arranged for him. The passport, bearing the number G116847, and issued in Rome on March 12, 1981, was genuine in all respects other than the name of its bearer. "Roberto Calvi" had been crudely but simply adjusted to "
Gian
Roberto Calvi
ni."
At dawn Calvi was delivered to the house of the Kleinszig sisters. Exhausted, but temporarily at least in safe refuge, he rang his daughter at her hotel in Morcote, just across the Italian border into the Ticino region of Switzerland. Calvi for once sounded relaxed and confident. He said he would have a bath and then get some sleep. "I think we can sort everything out, and I'll probably be back in Italy soon. You'll see, on Monday everyone will know that I've gone away."
There he was mistaken. By Saturday evening the news was on the television. Giovanni Spadolini, the Prime Minister, declared that the affair was "extremely serious". Police and customs posts were placed on full alert. But no-one was more alarmed by the disappearance of Calvi than the Bank of Italy. After the letter of May 31, everything was plain. Although the central bank indicated that it was not planning immediately to send a commissioner to take charge of Ambrosiano, a team of inspectors was alerted to move into the Milan head office of the bank, first thing on Monday morning. Both Ciampi and Dini knew that the edge of the abyss was close indeed.
But the Ambrosiano board, which by now had read the fateful letter, must have been at least half-expecting something of the kind. Bagnasco realized that Calvi's dramatic departure gave him the opportunity to assert his claim as the natural successor much sooner than he had expected. Rosone cut short his own break in Sardinia to rush back to Milan, where he had called a board meeting that Sunday afternoon.
But rapidly, what should have been a concerted effort for survival turned into a battle between the two deputy chairmen, each believing himself the heir apparent. The rivalry was as grim as it was grotesque, two captains wrestling for the wheel of a ship, whose keel was already out of the water, heading for the bottom. Instead of serious deliberation, that hot Sunday in a deserted Milan saw Bagnasco and his entourage encamped at the Principe e Savoia hotel (belonging to CIGA chain which Bagnasco owned), arguing at one remove with Rosone, up in the fourth-floor command centre of Ambrosiano itself. Ferrying messages between them was Giuseppe Ciarrapico, based in Bagnasco's quarters. That night Rosone won the Pyrrhic victory of being named the temporary chief executive of the bank, in Calvi's absence.
In the next few days, Bagnasco would try to portray himself as the trusted contact of the Bank of Italy at Ambrosiano. Unfortunately, an aide unwisely put it about that Bagnasco had personally discussed the problem with the Governor of the Bank of Italy. The embarrassed denial he was forced to issue did little to enhance the credibility and reputation of Bagnasco. But his discomfort was but a footnote to the most dramatic week in the recent experience of Italian high finance.
Even before financial
Milan had rubbed the sleep out of its eyes that Monday morning, Calvi's disappearance was creating a stir in time zones ahead of Italy. A big Far Eastern bank was rung up by its subsidiary in Bahrain: should the latter try to wriggle out of delivering $5 million it had already promised to Ambrosiano's foreign department? The bank's representative in Milan was rung up at home in the small hours for advice. His view was that if Ambrosiano opened its doors for business, then they had to go ahead.
And Ambrosiano did open its doors, in an atmosphere of electric expectancy. The dimensions of the bank's foreign problem was still a secret, but the feeling was widespread that the key to Calvi's flight lay not in Italy, but abroad. And there were enough other uncertainties. Would Calvi return? If he did not, who would replace him at the head of the country's largest private banking group? What would the Bank of Italy do—and what about the appeal, due in seven days' time? But the most immediate question was the stock market. A year before, Calvi's arrest for those currency offences, against which he was to appeal now, had been the boulder which started the landslide of prices that culminated in the three-day market closure. What would happen now?
As trading began at 10 a.m., there was no doubt about the answer. A new landslide had started, against which it was pointless for even the practised traders in Ambrosiano's securities department to attempt to erect barriers. That day, shares in Banco Ambrosiano fell by over fifteen per cent, nor were its various subsidiaries like La Centrale spared.
But for the next 48 hours an uneasy respite prevailed, favoured by the absence of any news, good or bad, about the missing Calvi. Police
swiftly discarded the idea that he had been seized by the Red Brigades or some other terrorist group. They were suspicious, if not yet sure, that he had left the country; at his exact motives they could only guess. And, as a little timid support buying protected Banco Ambrosiano itself, the pressure turned towards the companies controlled by Carlo Pesenti, Ambrosiano's biggest shareholder, and whose problems at first glance still seemed rather greater than those of Calvi.
But on Thursday, June 17, came the
coup de grace.
The usually cautious
II Sole 24 Ore,
Italy's leading financial newspaper, published virtually the complete text of the Bank of Italy's decisive letter of May 31 to Calvi. The paper presented its huge scoop with circumspection, on an inside page; but however guarded, the very mention of a $1,400 million risk was sufficient to explain why he had departed.
On what was to prove the last day in the life of both Calvi's Ambrosiano and Calvi himself, its shares tumbled another eighteen per cent. For a while no market could be made, but finally a few intrepid bargain hunters stepped gingerly in. The closing price was 25,950 lire, just half the level of a month and a half before, when Rossi had won his battle to have them quoted on the full market.
The shares were never traded officially again. That evening Consob ordered their suspension after a wretched 43-day Odyssey, which had been the worst possible advertisement for the Milan stock exchange, and for the judgement of Italy's financial authorities. And within a few days even that closing price of 25,950 lire was to look ludicrously over-generous. For Ambrosiano's directors, barricaded in almost permanent board meeting on the fourth floor in Via Clerici, were discovering that the true worth of the bank was less than nothing.
"Banks deal in confidence," Rosone would remark long after the tempest had blown itself out, "and we just ran out." In a sense, that is a succinctly exact description of the apocalyptic events of that third week of June 1982. No bank in the world—Barclays, Rothschilds, or Chase Manhattan—could survive on its own if every depositor decided simultaneously to withdraw his money. In the year since Calvi's arrest, Ambrosiano had retained, somehow, enough confidence to survive such a threat, in the vague general belief that whatever the shadows abroad, its substance in Italy and its prosperous subsidiaries there would cover any eventuality. Now that fragile confidence ran out. As Aneurin Bevan would have put it, the organ-grinder had fled and only the monkeys remained. Ambrosiano was to reap the bitter consequences of Calvi's lifelong habit of divide and rule, of surrounding himself with people who asked no questions and obeyed his every word. When the crisis at last broke, no-one was equipped to deal with it.
Rosone, general manager and now acting chief executive, knew full well that the only means of satisfying creditors and depositors who wanted their money back would be to recover over $1,200 million by now lent out by the foreign affiliates. From Calvi's references earlier, he had quickly understood that the IOR was involved. Leoni, more than anyone in Calvi's confidence and aware of the nature of the foreign problem, confirmed that indeed most of the money had gone to companies controlled by the Vatican bank. But, he added, everything was guaranteed.
With honest acknowledgement of his own limitations, Rosone realized that he desperately needed expert outside help to cope. The only person he could think of who qualified was Leemans at La Centrale. Leemans rushed round to the bank, where Leoni explained that the guarantees were in Luxembourg, in the form of letters of comfort.
The next day, Angelo De Bernardi, deputy chairman of Banco Andino and head of Ambrosiano Services, the company managing Andino's accounts, arrived in Milan carrying the fateful documents. Leemans took one look and realized they were virtually worthless. The two letters, he saw, merely confirmed that the IOR controlled the eleven companies, and "was aware" of their indebtedness. As an enforceable guarantee they might not have existed. The only possibility lay in a direct appeal to the Vatican bank, that it face up to a moral, if not a legal, obligation.
As desperation gripped Ambrosiano, besieged by creditors and its share price crumbling, Leemans effectively assumed command. Through Alessandro Mennini, he fixed an appointment at the IOR for 8 a.m. the next morning, June 16, with Alessandro's father Luigi. Only with difficulty did he convince Rosone that he should go to Rome as well, but finally that evening the two, together with De Bernardi, flew down to the capital on a private plane. They stayed the night at the Grand Hotel. First thing the next morning, Rosone was once more protesting nervously that his place was in Milan.
But Leemans overcame his doubts, and at 7.40 a.m. they left for the Vatican in a car driven by Alessandro Mennini. When they arrived at the IOR's offices in Sixtus V courtyard, Leemans and De Bernardi were told to wait. Rosone went in to see Mennini and De Stroebel alone.
With customary forthrightness, Rosone demanded that the companies owned by the IOR start paying back the money. Ambrosiano in Milan could not borrow any more, and the Luxembourg company needed urgently the small sum of $7 million. Otherwise it would show a loss for its financial year to June 30, in just a fortnight's time. In that case, it would be forced to speed up repayment of its borrowings, and probably go into default.
Mennini and De Stroebel listened impassively. Then they produced their trump card—the original letter from Calvi asking for the letters of patronage, discharging the IOR from any responsibility. Rosone was dumbstruck. "That was the moment the world fell in," he said afterwards. What he had obstinately refused to believe was true: Ambrosiano was bankrupt.
Leemans was summoned, to see if some device might be elaborated to stave off disaster. He jotted down on a scrap of paper the assets held in Panama. There were the 5.2 million shares in Banco Ambrosiano, 10.4 per cent of its capital. Then there was 5.5 per cent of La Centrale (held in the name of a couple of Liechtenstein
anstalts
called Zwillfin and Chatoser), six per cent of Banca del Gottardo, 5,500 shares in Suprafin (the Milan company which began the buying of Ambrosiano shares back in 1974), the two million shares in Vianini, 189,000 shares in Rizzoli, and 300 shares in Ambrosiano Overseas of Nassau. Last but not least, Leemans noted down 520 shares, equivalent to 52 per cent, of
Sorrisi e Canzoni TV.
That this was a frothy Italian counterpart of the
TV Times
had not prevented its employment to secure $40 million lent by Ambrosiano Nicaragua to World Wide Trading Corporation of Panama. In all these sundry shareholdings secured exactly $1,287 million worth of debts.
Leemans argued that Ambrosiano had to have at least some of the money there and then, but the two IOR officials again refused, insisting that the debts were not theirs. "But what about the Ambrosiano shares?" Leemans asked. "
Sono vostre
," "they're yours," came the cold answer, "take them back." But Leemans still retained a fraction of hope and came up with what was to prove the final scheme to save Banco Ambrosiano.
Whether it liked it or not, he insisted, the IOR had to co-operate, or else find itself involved in a colossal scandal. Probably Ambrosiano's valuable Swiss subsidiary, Banca del Gottardo, together with other odds and ends, could be sold for, say, $250 million. That left roughly $1,000 million to be found. Leemans suggested that the IOR raise this sum through an international loan, with a life of six or seven years. This would be used to settle the debts to Ambrosiano's Latin American banks. The IOR would find the money to repay the loan when it fell due by selling the 5.2 million Banco Ambrosiano shares. This meant that Leemans had to find someone to buy ten per cent of Ambrosiano in six or seven years' time at a price of almost $200 per share. True, this was five times more than their highest ever level on the Milan Stock Exchange, but conceivably, with share splits and capital issues, the trick could be pulled off. But the IOR, which after all
was
involved, had to pay the interest on the $1,000 million loan, and accept the exchange risk.
The meeting broke up. Rosone at last could return to Milan, while Leemans threw himself into the hopeless task. He could think of only one possible buyer for the Ambrosiano shares—Carlo De Benedetti. In the next few hours he went back and forth to De Benedetti at Olivetti's head office, in Ivrea, near Turin. But De Benedetti would only consider taking an option to buy the shares, without committing himself further.
Leemans made a new appointment in the Vatican for 8 am the following morning, June 17. His deadline was noon that day, when Ambrosiano's board was due to meet again in Milan. In all likelihood it would throw in the towel and place the bank in the hands of the Bank of Italy. This time Marcinkus was there, along with Mennini and De Stroebel. His terms were impossible.
The IOR, said Marcinkus, had to have a firm
promise
to buy the shares; nor could the Vatican bank meet either the interest payments (around $100 to $150 million a year) on the loan, or the exchange risk. "We just don't have that kind of money."
Well then, Leemans replied, "I'll just have to call Milan and tell them to ask for a Bank of Italy commissioner. Everything's going to collapse, and there'll be an almighty scandal."
"I know," said Marcinkus wearily. "I did all this to help a friend, and look where we are." Leemans made one last bitter joke: "When there's that much money involved, it's hard to have any friends." He left the lOR, and phoned Rosone with the grim news. The Bank of Italy would have to be called in.
In Milan, on the fourth floor of Banco Ambrosiano's headquarters, turmoil reigned. Apart from Calvi himself, four other directors did not attend what was to prove the final board meeting of the 86-year life of Ambrosiano. But the panic of those who were there more than made up for any absences; as they argued, exchanged accusations, and frantically called their lawyers for advice. At noon proceedings were finally under way.
First Calvi was by unanimous vote stripped of all his powers at the Bank. Then Rosone proposed that the board be dissolved, and the bank placed in the hands of a commissioner from the central bank, whose inspectors were already in the building anyway.
Then it was the turn of Leoni. He explained to the dumbfounded directors how the Panamanian and Luxembourg companies controlled by the IOR owed the foreign subsidiaries, above all Banco Andino, almost $1,100 million, while the Vatican bank directly owed them $200 million. But the IOR was refusing to help. Ambrosiano in Milan was being pressed to repay loans. It had already directly transferred $380 million to the beleaguered foreign subsidiaries, quite apart from the indirect "back-to-back" operations through intermediaries. But no more money could be provided. Rosone then disclosed how the bank had (illegally) spent over 60 billion lire buying up its own shares in the final months, to support their price before and during the brief quotation on the main Milan market.
But even at this hopeless juncture, the struggle for power between Rosone and Bagnasco continued. The acting chairman should resign, Bagnasco accused Rosone in fury. He had known the truth and lied about it, saying nothing at board meeting after board meeting. Rosone equally angrily rejected the charges. At 2.30 p.m. the meeting was suspended for half an hour, to permit tempers to cool and yet more calls to lawyers.