Authors: David Yallop
For three such august institutions as Vatican Incorporated, Hambros and Continental to be involved so closely with Sindona must surely indicate that Sindona ran his banks in an exemplary manner. Or does it?
Carlo Bordoni discovered a different reality. Bordoni first met Sindona in the latter half of November 1964 at Studio Sindona, Via Turati 29, Milan. Previously Bordoni had worked as Manager of the Milan Branch of First National Citibank of New York. Shortly before his meeting with Sindona, Bordoni had been fired by Citibank for exceeding his limits on foreign exchange deals. Sindona could be counted on to look kindly at such a man. He offered Bordoni the opportunity of handling the foreign exchange of BPF. In view of the fact that the bank’s entire deposits were less than 15 billion lire (approximately 15 million dollars), Bordoni declined. Compared with the billion dollar turnover at Citibank this was small change. Further, at that stage, the bank was not even an agent bank and therefore was not authorized to deal in foreign currency. It was unknown internationally, with, in Bordoni’s view, ‘no possibility of inserting itself in the noble club of international banks’.
Bordoni had a better idea. Why not create an international brokerage company? With hard work and Bordoni’s excellent contacts, such a company could earn large commissions. It would, again in Bordoni’s words, ‘increase the lustre of the then modest Sindona Group and after a while there would be the near certainty of consistent foreign currency credits in favour of BPF and Finabank.’
As Bordoni recalled later in a sworn deposition to Milan magistrates, when he turned State evidence against his former boss, Sindona became visibly excited and gave his approval for the project without hesitation. It is easy to understand Sindona’s delight. The aptly named Moneyrex went into operation on February 5th, 1965. Initially run in an ethical manner, it made significant profits. By 1967 it was dealing in a volume of 40 billion dollars per year with net profits in excess of 2 million dollars – profits which in Sindona’s hands promptly disappeared before the tax authorities had time to blink. But Sindona wanted more than honest profit. He urged Bordoni to channel
the maximum possible amount of foreign currency towards his two banks. Bordoni pointed out that there were several very serious difficulties which made the idea impractical. The Shark began to get angry and shouted that Bordoni should remember his ‘force of conviction’ and his ‘power’. Bordoni shouted back that these were precisely the difficulties he had been talking about. In case Sindona was in any doubt, Bordoni elaborated: ‘Your “force” is the Mafia and your “power” is Freemasonry. I don’t intend to risk my good name and the success of Moneyrex just because a Mafioso asks me to.’
Eventually Bordoni’s discretion overcame his valour, and he agreed to look over the banking operations of BPF and Finabank. What he found tells as much about the Vatican, Hambros and Continental Illinois as it does about Sindona. Twelve years later, in his sworn affidavit from a prison hospital in Caracas to the Milan magistrates, he recalled his discoveries:
When I started to go to BPF during the summer of 1966, I was deeply affected by the chaos which reigned in the various sectors. It was a tiny bank which was able to survive only thanks to the margins that emanated, duly masked of course, from a myriad of ‘black operations’ which BPF effected on behalf of Credito Italiano, Banca Commerciale Italiana and other important national banks. These foreign currency black operations, a vast illegal export of capital, took place daily and large figures were involved. The technique was really the most coarse and criminal which can be imagined.
He found numerous overdrawn accounts without any real guarantees and for amounts far in excess of the legal limit of a fifth of capital and reserves. He also found massive theft. The staff were transferring large amounts of money from the accounts of depositors without their knowledge. These sums were then moved to the account held by the Vatican Bank. The Vatican Bank then transferred the amounts, less their 15 per cent commission, to Sindona’s account at Finabank in Geneva. The account name in Finabank was MANI. MA stood for Marco, NI for Nino: the names of Sindona’s sons. The amount of 15 per cent commission paid to the Vatican was a variable figure depending on the current exchange rate operating on the Black Money Market.
If a client of BPF Milan remonstrated that a cheque he had made out in good faith had bounced or that his account should contain more than
was shown he was initially told to take his business elsewhere. If he persisted, then the Manager would appear, and full of Milanese sincerity, apologize and offer the explanation, ‘it is all a big accounting error – you know – these modern computers’.
Bordoni’s discoveries at Finabank, Geneva were as bad. The Managing Director, one Mario Olivero, knew nothing about banking. The General Manager spent all day playing the share, commodity and currency markets. If he lost, the loss was transferred to a client’s account. If he won the profit was his. The heads of the various divisions followed the example of the General Manager, as did the Vatican Bank.
The IOR, apart from being part owner of the bank, also had a number of accounts there. Bordoni discovered that these accounts ‘reflected exclusively, gigantic speculative operations which resulted in colossal losses’. These losses, like everyone else’s, were financed by a shell company called Liberfinco (Liberian Financial Company). At the time of Bordoni’s inspection, this shell company was showing a loss of 30 million dollars. When the Swiss bank inspectors hove into view in 1973, the loss this phantom company was showing had grown to 45 million dollars. The Swiss told Sindona, the Vatican, Continental Illinois and Hambros they had 48 hours to close Liberfinco or they would declare Finabank bankrupt. Another Sindona aide, Gian Luigi Clerici di Cavenago, then demonstrated he had as many bright ideas as names. By means of a counter account for 45 million dollars, a device that did not use any actual cash, he closed Liberfinco and opened another company, Aran Investment of Panama, with an immediate deficit of 45 million dollars.
When Sindona had asked Bordoni to look into Finabank, he had observed in one of the great understatements of all time: ‘Strange things are happening there’. When Bordoni told him just how strange these things were, Sindona insulted him and threw him out of his office. Business continued as usual at both banks. Bordoni tried to extricate himself, Sindona used one of his classic techniques: blackmail. Bordoni too had transgressed in his foreign speculations. His transgressions would be reported to the President of the Bank of Italy. Bordoni stayed.
Carlo Bordoni should have seen the writing on the wall before he put his hand in the till. During one of their initial confrontations, Sindona had shouted at him: ‘You will never be a real banker because not only are you unable to lie, you are also a man with principles. You would never know how to use the valid weapon of blackmail.’
Sindona’s respect for his colleague might have increased immeasurably if he had known that Bordoni had begun to siphon off money into secret accounts in Switzerland. Before the end, Bordoni would relieve Sindona of over 45 million dollars. It was hardly on a par with Sindona’s own criminal activities but then he lacked Sindona’s schooling.
Sindona was a master when it came to blackmail. Apart from an innate ability in this direction, he had his Mafia training and he also had available to him the talents of the most skilled blackmailer then practising the art in Italy, Licio Gelli. When Bordoni had contemptuously thrown Sindona’s Mafia and Masonic connections in his face, he was playing with double fire. Sindona was not a member of a Masonic Lodge that could claim to trace its origin back to the stonemasons of Solomon. His was no Lodge inspired by the Italian patriot Garibaldi. There was no Duke of Kent as the Grand Master. The Lodge was ‘Propaganda Due’ or P2 and its Grand Master was Licio Gelli.
Gelli was born in Pistoia, central Italy on April 21, 1919. His formal education ceased when he was expelled from school in his mid-teens. A story from Gelli’s school days indicates that a peculiar kind of cunning came early to him. There was a youth in one particular class attended by Gelli who was bigger and stronger than the rest. He was admired by many and feared by all. One day Gelli stole the youth’s lunch and during the ensuing uproar said to him, ‘I know who stole your food but I have no wish to get the boy into trouble. You’ll find it hidden under the third bench.’ The youth became Gelli’s friend and protector from that day and Gelli had learned the art of manipulation. By the age of 17 he had already acquired a hatred of Communism comparable to King Herod’s attitude towards the first born. As members of the Italian Black Shirt Division, Gelli and his brother fought alongside Franco’s army against the Communists in Spain. Of this period in his life Gelli observes: ‘Only I returned alive.’
During the early stages of the Second World War Gelli fought in Albania. Subsequently, he obtained the rank of Oberleutnant in the SS in Italy and worked for the Nazis as a ‘liaison officer’. His work involved spying on the partisans and betraying them to his German masters. Some of his early wealth was derived from his presence in the Italian town of Cattaro, where, during the war, the national treasures of Yugoslavia were hidden. A significant proportion of those treasures have never been returned to Yugoslavia but were stolen by Gelli. Gelli’s early devotion to a hatred of all things Communist lessened in direct proportion to the defeats suffered by the Axis powers as the war
progressed. He began to collaborate with the partisans, who were very largely Communists. Thus he would locate a partisan hideout, dutifully tell the Germans, then advise the partisans to move before the raid.
He continued to play both ends against the middle throughout the remainder of the war and was one of the last of the Fascists to surrender in Northern Italy, close to where a young priest Albino Luciani had been hiding partisans in Belluno.
Gelli’s agreement to continue to spy for the Communists after the war was instrumental in saving his life when he faced an anti-Fascist Commission sitting in Florence. The evidence that he had tortured and murdered patriots was deemed, after discreet intervention by the Communists, to be insufficient.
Having been cleared of these charges he immediately organized a ‘rat line’ for Nazis wishing to flee to South America. His fee was 40 per cent of their money. Another organizing member of the ‘rat line’ was the Catholic priest from Croatia, Father Krujoslav Dragonovic. Among the men who escaped was the Gestapo Chief Klaus Barbie, usually referred to as The Butcher of Lyons. Barbie was not obliged to pay either Father Dragonovic or Gelli. The cost was borne by the US Counter Intelligence Corps which employed Barbie in espionage work until February 1951.
While continuing to assist Vatican officials and US Intelligence, Gelli also continued spying for the Communists until 1956. The termination of his espionage work for the Communists coincided with the commencement of his work for the Italian secret service. Part of his fee for spying for his own country was the closure of the file the secret service had on him. This also occurred in 1956. Two years earlier he had followed the same path on which he had sent so many members of the Third Reich to South America, aligning himself with extreme right-wing elements in Argentina, where he became a close friend and confidant of General Juan Peron. When Peron was excommunicated by the Catholic Church, Gelli experienced one of his few failures in attempting to intercede with the Vatican. Peron’s anticlerical campaign, which had led to his excommunication, weighed more heavily with the Church than Gelli’s assurances that the General was a greatly misunderstood genius. When Peron left the country after a military coup in 1956, Licio Gelli promptly set about befriending the incoming junta. Slowly and carefully Gelli set about building a power base that began to stretch through much of South America. It was always the rich and powerful, or the potentially rich and powerful
whom Gelli courted. In terms of political philosophies or ideals, Gelli was a whore. If you could afford him he would perform for you. While helping the right-wing junta of Argentina, he simultaneously recommenced spying on behalf of the Soviet Union, through his links with Rumania. He carried a recommendation from the Communists of Italy which had saved his life after the war, and the phone numbers of the CIA contacts to whom he also sold information. In addition he continued to work for SID, Italian Army Intelligence.
While Sindona was moving upwards through the financial jungles of post-war Milan, Gelli was ascending the complex power structure of South American politics. A general here, an admiral there, politicians, senior civil servants – while Sindona cultivated contacts in the belief that power lay in money, Gelli, through his new friends, aspired to the source of real power: knowledge. Information, the personal file on this banker, the secret dossier on that politician – his network spread from Argentina into Paraguay, into Brazil, Bolivia, Colombia, Venezuela, and Nicaragua. In Argentina he acquired dual nationality and became that country’s economic adviser to Italy in 1972. One of his principal tasks was to negotiate and arrange the purchase of quantities of arms for Argentina. These included tanks, planes, ships, radar installations, and ultimately the deadly Exocet missile. Before that he held less exalted positions. In Italy, they included the post of General Manager to Permaflex, a company making mattresses, and a spell as Manager of Remington Rand in Tuscany. Among the directors listed at that time on the board of Remington Rand was Michele Sindona.
Ever anxious to increase his circle of power and influence Gelli saw the rehabilitated Masonic movement as the perfect vehicle. Ironically it had been his beloved leader Mussolini who had banned the Freemasons. Mussolini had considered them ‘a state within a state’. It was equally ironic that the democratic Italian Government Gelli held in such total contempt restored the freedom of Masons, though they retained an aspect of the Fascist Law that made it a punishable offence to create a secret organization. Consequently the reformed Masons were obliged to deposit lists of their members with the Government.