Authors: Rupert Cornwell
In January came another indication of the disfavour into which Ambrosiano had led him. His was the most conspicuous missing
name from a list of fifteen new cardinals appointed by the Pope. For traditionally, Marcinkus' position as pro-president, or Mayor, of the Vatican city would have entitled him to that rank. In the meantime Casaroli's lengthy explanation in November began to look less convincing, as the liquidators unearthed evidence of a decade of complicity between Calvi and the IOR. Yet again, the Vatican was paying the price of its failure to be frank.
The relationship between
the Vatican bank and Ambrosiano was the perfect illustration of the Italian illusionist's art. A carnival mask could be stripped away—to reveal another mask. In other words, was the IOR acting for its own interests? Or was Ambrosiano acting behind the fagade of the IOR; or was the IOR behind Ambrosiano behind the IOR—or even Ambrosiano behind the IOR behind Ambrosiano behind the IOR? Rarely has the technique of the fiduciary or the nominee in high finance been so dazzlingly employed. But then the two had been practising their skill a long time.
The relationship, after all, dated from August 1971, when Marcinkus joined the board of the newly formed Cisalpine Overseas (later to become Ambrosiano Overseas) in Nassau, and a vital part, as we have seen, of Calvi's scheme. He remained a director until June 14, 1982, three days before the end.
Thereafter one may list just a few salient episodes. From 1972 the IOR was involved in the Italian dealings of Calvi, including its sale to him of Banca Cattolica del Veneto and his acquisition of Credito Varesino. In 1974 the Vatican bank set up United Trading Corporation, the Panamanian company which would long remain the most impenetrable of all of them. In 1975 (or 1978), it lent its name to Suprafin, the company which carried out the huge initial purchases of shares in Banco Ambrosiano.
In 1976, Calvi wrote to the Vatican bank asking for money deposited with the IOR to be passed on to UTC. But was this ploy devised by Calvi himself, so that he could operate the company as he wished? Or was it devised by the Vatican, to pass on to Calvi responsibility for what it knew was being done on its behalf? Later Cisalpine in Nassau, on whose board sat Marcinkus, was doing its best to prevent Coopers and Lybrand, its increasingly uneasy accountants, from revealing the extent of the relationship with the IOR. Then 1981, and the Vatican bank's discovery of the size of the mess which it had helped create, the letters of comfort, the absolving letter from Calvi, and the climax in June 1982. Other evidence is in the hands of liquidators in Milan, Luxembourg and Nassau.
Certainly the IOR never administered the Panama and Liechtenstein companies; but is it really to be believed that it knew nothing of, or did not at least strongly suspect, their true activities before the summer of 1981? From that moment on, of course, the documents accompanying the letters of patronage show that the IOR was aware that the debts were secured by shares worth only a quarter of them. Quite understandably, it extracted the exonerating letter from Calvi.
Many, moreover, were unconvinced by the finding of the Vatican's lawyers, and relayed by Casaroli to the Cardinals, that the IOR had received nothing from Calvi or from Ambrosiano, and therefore had nothing to repay. The matter may be left aside of who was the final recipient of the dividends paid each year on the Ambrosiano shares, held through the Panamanian front companies owned by the IOR, and totalling nearly $2 million for the financial year of 1981. More indicative perhaps was the case of Vianini, the last Italian company in which the Vatican held a controlling shareholding after Sindona began the disposal of its Italian interests at the end of the 1960s.
In 1980, the IOR agreed to sell six million shares in Vianini to Laramie, one of the clutch of Panamanian front companies in three annual tranches of two million shares, each for a total of $20 million. The first payment went through, and indeed two million shares in Vianini appear in the letters of comfort as the asset securing the final debt of Laramie outstanding to Ambrosiano in Nicaragua. But since the IOR already owned Laramie,
it was in effect selling the shares to itself, in return for money provided by Calvi
(and rather more than they were really worth). No wonder the Vatican had little choice but to sign the letters of comfort.
There was, moreover, an interesting footnote to the Vianini affair. According to Francesco Pazienza, who claimed to have found an American buyer willing to pay $60 million for Vianini, the deal fell through at a "Kafkaesque" meeting between himself, Marcinkus and Calvi at the Vatican. Pazienza simply could not understand whether it was the IOR, or Ambrosiano, which controlled the company. On this occasion, one could sympathize with Pazienza.
Probably the full truth about the Vatican bank's relations with Calvi would never be known—except maybe in the confessional box. Indeed it was possibly in too many people's interest that it would not be. Documents abounded to prove many things, but not the spirit in which they were written. Undoubtedly, Calvi tricked the Vatican; the question remained: where did negligence and naivety end, and collusion begin?
What the unfortunate outcome of its dealings with Calvi certainly did show, was how the concern of the Vatican with financial secrecy had been its own worst enemy. If the IOR's activities had been properly scrutinized by outside accountants, if it had dealt with banks less underhand than the Ambrosiano of Calvi, such an affair would never have happened.
In that respect at least the scandal might bring benefit. The pressures to reform the IOR had never been as great as after the Ambrosiano affair. They derived not only from the Italian Government, which would like to see the Vatican bank open a branch on Italian soil, and be treated exactly as are the Italian branches of Barclays Bank or Chase Manhattan bank. Many within the Catholic Church also decided that clarity, even at the price of truly "lay" management of the IOR, is preferable to the impenetrable methods of the past, with all their damaging consequences.
These questions would perhaps be resolved by the mixed commission established on the Christmas Eve of 1982. Less certain of complete solution was another of the mysteries at the heart of the Ambrosian scandal, the final destination of exactly $1,287 million.
"All I can say," Marcinkus would shrug to visitors who afterwards pressed him on the matter, "is that it's a heck of a lot of money." And so indeed it was. Almost $1,300 million—a sum, he may have estimated while ruing the day he first set eyes on Calvi all those years earlier, to match the entire proceeds of St Peter's Pence since the donations to the Pope began in 1860, and enough to cover the Vatican's total declared expenditure for a decade.
Close Italian observers of Ambrosiano, including the Bank of Italy, had a similar reaction. Certainly, they had suspected that
Calvi's secrecy was a sign that he had something unpleasant to hide behind the screen of Latin American affiliates. It was not the nature of his difficulties which surprised; rather the sheer extent of them. Where
did
so vast an amount of money disappear?
Nearly a year after the demise of Banco Ambrosiano and the gruesome climax in London, the answer had not been established with any certainty. But thanks to the endeavours of the magistrates, liquidators, and the police (by 1983 the
Guardia di Finanza
alone was conducting eight separate investigations into the affair), a picture was beginning to emerge.
By far the largest single culprit, as this book has made clear, was the purchase of shares in various companies of the group Calvi controlled. The process began with Zitropo and Pacchetti in 1972, but most important was the holding, between ten and fourteen per cent, built up in Banco Ambrosiano itself.
The shares were mostly bought at inflated prices in the first place, and then passed on with even higher theoretical value, from one tiny company to another. By this device the new loans required to finance their purchase and pay for interest could be justified, on paper, to the banks of Ambrosiano in Nassau, Managua, and then Lima which would provide the money. In this way Manic and Astolfine, the two companies which near the end were holding between them 5.8 million Banco Ambrosiano shares, booked them at a value of $509 million— compared with a historic maximum worth on the Milan stock market of only $207 million. That latter valuation, moreover, had only been achieved by massive illegal support buying by Ambrosiano itself.
The case of Astolfine was most instructive of all. The 2.1 million shares it had pledged were ascribed a book value of $200 apiece, compared with an actual price, at the moment of Ambrosiano's full quotation, of about $36. By the end Astolfine had borrowed no less than $486 million from Banco Andino in Lima, although its own capital was just $10,000.
Then there were the shares in Banca del Gottardo, Pacchetti, Credito Varesino, La Centrale, TV Sorrisi e Canzoni, Vianini and Rizzoli, Suprafin, Montreal Holding and Banco Ambrosiano Overseas, which featured either in the letters of patronage of autumn 1981, or at the moment of reckoning nine months later.
Other money was spent for undeclared shareholdings, most notably the 30 per cent of Banco Ambrosiano Holding in Luxembourg which the Milan parent did not own, but which it undoubtedly controlled. Some of these shares, with a face value of $50 million, were held by the United Trading Corporation of the IOR, others by Banco de la Nacion, Calvi's ally in Lima. By the end, moreover, Banco Andino there had a capital of $75 million, subscribed almost entirely by Ambrosiano in Luxembourg.
All in all, the Italian authorities reckoned that $800 or $900 million might have been used for these purposes, in other words about two thirds of the total debt. But that still left $400 million or more to be accounted for—one of the largest puzzles outstanding after the collapse of Banco Ambrosiano.
A broad subsidiary category of losses may have been money provided to companies and individuals which had earlier been doing business with Ambrosiano at home. In 1978 the central bank had identified a potentially dangerous concentration of loans within Italy to customers such as Rizzoli, the Genghini construction company, and Voxson, the electronics company owned in part by Umberto Ortolani, all of them of course in one way or another within the orbit of the P-2. If inspection by the Bank of Italy had prompted Calvi to increase concealment of the true ownership of his bank, what more natural than that he should also seek to hide the extent of his lending to such favoured but suspect customers?
One piece of evidence suggesting financial links between Ortolani and Calvi abroad was the $37 million loan provided by Erin, one of the Panamanian companies, which in turn had received the money in 1980 from Banco Andino in Lima. It was made over to an emanation of Bafisud, the bank in Uruguay owned by Ortolani. Then there was the puzzle of the two transfers in spring 1981, of $95 million and $48 million from Bellatrix, one of Erin's Panamanian sisters, to those peculiar Zirka and Recioto accounts held at Rothschild Bank, Zurich. That the operations were in some way connected with Rizzoli seemed beyond doubt; Tassan Din, the former managing director of Rizzoli, as well as Leoni, Botta and Costa, the senior Ambrosiano executives on the board of Banco Andino at the time, would later be arrested and charged over the financings. Possibly they were to pay for a subsequent transfer, into Panama or elsewhere, of the 40 per cent of Rizzoli acquired by La Centrale, Ambrosiano's holding company in Italy, shortly beforehand. But as we have seen, that transfer never took place—probably because of Calvi's sudden imprisonment in May 1981. So what did happen to the money? Did part of it at least go to Gelli, to Ortolani, or somewhere else within the labyrinth of the P-2? Some $30 million, it was later discovered, was held in a proxy account at a bank in Dublin—of all places—on behalf of Bruno Tassan Din.
Indeed, Gelli and Ortolani were surely prominent among the next group of likely recipients of the money of Ambrosiano: those whom Calvi paid, willingly or less willingly, for the protection from which he believed he might benefit, or without which he might be endangered. Some $55 million, which Gelli tried to retrieve in person from a Swiss bank account, probably originated at Ambrosiano. And how much more did he receive? Pazienza was another whose services did not come cheaply; nor did those of Carboni. As we have seen, more than $20 million was found in Swiss accounts of Carboni, including those $14 million despatched from Ambrosiano Overseas in Nassau in February 1982. Nor was it hard to imagine that political parties within Italy were also among the beneficiaries; if not directly, then indirectly through intermediaries like Rizzoli.
In Latin America too, where the P-2 was active, Calvi must have been generous; both locally, and for the benefit of favoured associates back in Italy. How much money oiled the wheels in Peru and elsewhere in Latin America (or indeed if any was employed, as frequently rumoured, to finance the purchase of arms) had not been established with certainty. But Calvi would always take precautions against any eventuality. Anastasio Somoza, the late dictator of Nicaragua, was said to have received money from Ambrosiano in Managua. Calvi himself would claim to have provided later much financial assistance to the left-wing Sandinistas who overthrew Somoza in 1979.
Then there were a host of smaller outlays. They included the $8 million spent on those unnecessary new headquarters in the Bahamas, the $10 million or so which may have disappeared with the collapse of Banco Occidental in Spain in 1981, as well as $16 million lost through a company called Capitalfin which burnt its hands badly after the shipping collapse of the mid-1970s. The Ambrosiano group held 25 per cent of Capitalfin. Nor could the personal use of funds be ruled out entirely. It was not known what money Calvi had accumulated for himself abroad; but the precedents established by other Italian financiers of little scruple suggest it would be strange if he had accumulated none.