Authors: Rupert Cornwell
Even the alert, ambitious Calvi can hardly have been aware of
these transatlantic exchanges. But quite clearly Sindona was someone worth knowing. And most fortunately a means of access was to
hand, in the person of Giuliano Magnoni, whom Calvi knew from his
university days at the Bocconi, and whose son in the meantime had
married Sindona's daughter. Magnoni duly arranged a meeting, in
1967 or 1968.
Calvi can only have been enthralled by Sindona. The two had some
characteristics in common. Their backgrounds were similarly modest. In the status-conscious Milan of the day, both had a fierce desire
to overcome such limitations; and both had designs which stretched
well beyond Italy. Already the Sicilian was weaving the tapestry of
shell companies, foreign front operations and trusteeships which
would further his attempt to build an unchallengeable conglomerate
of finance. To the task he brought formidable talents which Calvi
shared: a memory of steel, a swift imagination and the capacity to
keep a secret—or
omerta,
to use the word the Sicilian Mafia has given
to the world.
But Sindona combined these qualities with others that the introverted man from Ambrosiano knew he lacked: a gift for communicating, an electrical ability to charm and persuade people, a quicksilver
sparkle and humour which even now survives the dull routine of an
American prison. In those respects Calvi and Sindona were opposites; the closed man of the North and the hypnotically fluent
Southerner. Only with the utmost difficulty would Sindona lure Calvi
out of the fastness of Banco Ambrosiano for those plush lunches
where Milanese bankers and financiers would exchange gossip and
sketch their plans.
For both, however, the advantages of alliance were plain. Calvi
would gain expert guidance in the use of the opportunities offered by
the system, and a host of precious introductions. Truly, Sindona
appeared ten years ahead. But he also took a liking to Calvi,
recognizing a kindred spirit and a financier of undoubted skill.
Nothing he controlled could match Ambrosiano for resources, nor its
standing in Milan. The "priests' bank", moreover, was a natural
complement to the relationship he was developing with the Vatican.
Best of all it had no dominant shareholder, so that those who ran it
had an unfettered hand. Thus far these unusual advantages had not
been put to proper use, Sindona reasoned, but Calvi might be the
man to do so. So why not give him a nudge towards the top?
For the next four years Sindona displayed to Calvi the repertoire of
his skills. He lured potent foreign allies to his banner
—
Hambro's, the
London merchant bank with ties to Italy dating back to Queen
Victoria's reign, and Continental Illinois, one of the biggest US
banks, whose chairman, David Kennedy, was later to serve as
Treasury Secretary under President Richard Nixon. Ever more frequently, his practice was midwife to many of the dealings which were
then transforming the face of Italian finance. Some of the established
families which had hitherto dominated Italian industry were unable
to put up the new capital required to keep pace with changing times,
and were selling off their holdings. In their place, a new breed of
entrepreneur was emerging. Technically its members represented
State enterprise and the public sector; but in practice they moved like
financial barracuda, acting sometimes on their own behalf, sometimes for their political patrons, but unfailingly with money from the
public purse. Sindona, to his fingertips a political animal, fitted easily
into this process.
The fiercest of the barracuda was Eugenio Cefis, chairman of ENI
the state oil group. And his hand was behind the most dramatic
example of this "politicization" of industry in 1968, when ENI
secretly built up a controlling shareholding in Montedison, Italy's
biggest, and hitherto privately owned, chemicals concern. But among
those with goods for sale the most distinguished of all, by far, was the
Vatican.
Pope Paul VI and his advisors had good reason for wanting to
withdraw from Italian industry. Too visible an involvement with
capitalism discomforted the Church, while the Rome Government's
decision in 1968 to remove the Holy See's exemption from withholding tax on dividends made international investments look more
attractive. Not least, its investments in Italy, even the huge international property group Societa Generale Immobiliare of which the
Vatican owned 33 per cent, was not faring well. Later SGI was to
earn a tiny niche in history by putting up the Watergate building in
Washington, the starting point of America's most notorious political
scandal. But SGI had above all grown fat on the Roman postwar
property boom, during which it had endowed the capital, to the
dismay of the environmentalists, with a brand new Hilton Hotel on a
wooded hill overlooking the old city centre. But those days were now
gone.
The holding in SGI, and those in other Vatican companies, were in
the portfolio of the APS A, the institution set up under the Lateran
Pacts of 1929 to administer the compensation at last paid over by Italy
for its annexation of the Papal territories. And if APSA wanted to
dispose of SGI, whom more natural for it to approach for help than
the keen-eyed Sindona, by now firmly in the Vatican's trust? Among
those to have recommended him, moreover, was an energetic American bishop in the Curia called Paul Marcinkus, whose managerial
talents had already caught the attention of the Pope. Indeed Paul VI
would soon name him first secretary, and then chairman of the IOR.
Nor did Sindona let the Vatican down. Not only did he arrange to
sell the interest in SGI, he actually bought it from the Vatican
himself; and at double the going market price. Just why, only became
clear long afterwards. Sindona had also secured the option to buy
from the Vatican its choicest bank holding, the Banca Cattolica del
Veneto. Later, in 1972, Sindona was to sell on this option at a usurer's
price
to
Roberto Calvi.
Hardly had Sindona acquired the SGI holding in late 1968 than he
embarked on a still more audacious project. He would attempt to
capture the empire of Carlo Pesenti, a Catholic financier whose
connections with the Vatican pre-dated even his own. On the face of
it the venture seemed preposterous; for Pesenti's master company,
Italcementi, could, after all, draw on the resources of three banks and
two insurance companies.
In the event, however, Sindona's ambush came within an ace of
success, and was thwarted only by the opposition of the Bank of Italy.
As for Pesenti, he never entirely recovered from the experience.
Obliged to borrow money from his own banks in order to buy Sindona
out, Pesenti was in subsequent years to be forced to sell off those
banks, one by one, to settle his debts. Truly, at the end of the 1960s,
Sindona's pyrotechnics were the virtuosity of the master, from whom
the pupil Calvi could only learn. And Calvi, ever the assiduous
student, realized two things.
In the first place, Sindona appeared to have found the perfect
means of getting round Italian legislation, framed to prevent a
repetition of the financial disasters of the late 1930s, which forbade
banks buying non-banking interests. The answer, Sindona was showing, lay in establishing foreign front companies
—
preferably in tax
havens where local scrutiny was lax—to make those investments for
him. Secondly, ownership of a bank offered the perfect means of
doing this. For Sindona's basic ploy was to use the money of his banks
to further his own ambitions. Through the technique of "fiduciary" or
trustee accounts, he spirited huge sums out of Italy into foreign shell
companies, owned either by himself or compliant associates. In turn,
these might pass the money on to offshore "investment" companies,
again either owned by himself or for which Sindona held the proxy of
another. This money would then be used to carry out the purchase of
the day back in Italy, or elsewhere. For the Italian authorities, the
initial deposits from Italy to abroad were unexceptionable. If there
were suspicions, who was to prove that, far from being employed for
the declared purpose of, say, financing exports, the funds were being
channelled back for speculation at home?
An asset, once bought, might then be shunted around Sindona's
companies at ever higher prices, liberating still more "profits" for
further speculation. If the price seemed excessive, then Sindona's
banks would step in again, pushing up the value of the shares in
question, by buying on the tiny Milan market. And this would in turn
bring further advantage. The public would be convinced that Sindona
did indeed have the Midas touch; and the financier would be more
easily able to pass on shares to ingenuous third parties at yet more
outrageous prices. He himself would always retain majority control,
usually concealed in an offshore labyrinth. On such fragile foundations was Sindona's pyramid erected. By these methods, he, Calvi,
and a few others would rule the Milan market of that time.
The Pesenti setback seemed barely to trouble Sindona. By now he
was bent on even greater things. His goal was no less than to create
the largest financial group, not just in Italy, but in all Europe.
Sindona planned to secure first La Centrale, a dormant but cash-rich
holding company; to La Centrale would then be added Bastogi, the
so-called "drawing room" of Italian finance, another holding company with strategic interests throughout the country's industry and a
point of encounter for the Agnellis, the Pirellis and the rest of Italy's
traditional industrial elite. And, finally, from this springboard he
intended to launch an assault on Banca Nazionale dell'Agricoltura,
Italy's largest privately owned bank. It was, with hindsight, a hopeless venture. But Sindona thought he had the weapons to succeed.
With the Vatican's assistance, he had already acquired a second bank
in Milan, Banca Unione, to set alongside Banca Privata Finanziaria.
Then there was Hambro's, a partner by now in Banca Privata
Finanziaria and which had been involved in the SGI deal. There was
the Continental Illinois, and, of course, the Banco Ambrosiano of
Roberto Calvi.
Early in 1971, Hambro's made the offer for a controlling block of
La Centrale shares, then in the hands of Pirelli and other leading
industrial groups. The price was pitched temptingly, and it was a
period when industry at large was finding the going hard. No longer
could it easily afford the luxury of resources tied unprofitably up in
ventures like La Centrale. The deal went through, and on August 5,
1971 the 51-year-old Calvi joined the board of the holding company,
alongside such eminent names as Evelyn de Rothschild and Jocelyn
Hambro. The first phase of Sindona's scheme had been carried out.