Authors: David Yallop
The purpose of this series of appalling attacks was to direct public outrage towards Italian Communists by making it appear that they were responsible.
In July 1976 Italian magistrate Vittorio Occorsio was in the middle of an investigation into the links between a neo-Fascist movement called National Vanguard and P2. On July 10th the magistrate was murdered by an extended burst of machine-gun fire. The neo-Nazi group New Order subsequently claimed responsibility. New Order, National Vanguard – the names become academic. What mattered was that Vittorio Occorsio, a man who could not be bought, lay dead and the investigation into P2 had been halted.
By the late 1960s Michele Sindona was a member of P2 and also a close friend of Licio Gelli. He had much in common with Gelli, not least the close attention they were both paid by the CIA and Interpol. The functions of these two organizations do not always run in tandem. Interpol’s investigation of Sindona is a perfect illustration of this. In November 1967 Interpol, Washington, telexed the following message to the Rome Police Headquarters:
Recently we have received unverified information that the following individuals are involved in the illicit movement of depressant, stimulant and hallucinogenic drugs between Italy, the United States and possibly other European countries.
Top of the list of four names was Michele Sindona. The Italian Police replied that they had no evidence to link Sindona with the drug trade. A copy of the Interpol request and the response were in Sindona’s hands the same week. A similar request by Interpol, Washington to the CIA operating out of the Rome Embassy and the Milan Legation, if answered honestly, would have produced confirmation that the information Interpol had was entirely correct.
The CIA file on Sindona was by this time extensive. It details Sindona’s link with the New York Mafia family Gambino, with its 253 members and its 1,147 ‘associates’. It tells how the five New York Mafia families, Colombo, Bonanno, Gambino, Lucchese and Genovese were interlocked in a range of crimes that included drug refining, smuggling and dealing, the drugs in question being heroin, cocaine and marijuana. Further criminal activities of these Mafia families which are annotated on the CIA files include prostitution, gambling, pornography, usury, protection, racketeering, fraud, and large-scale thefts from banks and pension funds.
The files are full of details of how the Sicilian Mafia families Inzerillo and Spatola moved the refined heroin from Sicily to their colleagues in New York; of their infiltration of the Italian airline Alitalia, and of how 50,000 dollar contracts were awarded by the New York families to ‘associates’ to collect unaccompanied baggage from Palermo – baggage that contained heroin which had been refined at one of the five Inzerillo narcotics laboratories in Sicily. By the late 1960s the profits from heroin sales to these two Sicilian families were in excess of 500 million dollars per year.
The files detail the journeys of nearly thirty ships per year which until very recently left Lebanese ports with cargoes of both unrefined and refined heroin, destined for a variety of ports in Southern Italy.
The most serious question this information raises is why did such incriminating evidence lie dormant and unused throughout the 1960s and the 1970s? The CIA never initiates policy, it merely implements or attempts to implement Presidential instructions. Did a succession of Presidents take the view that the Mafia’s activities were to be tolerated if they helped to ensure that NATO member Italy did not fall to the Communists through the polling booths?
The Mafia families themselves desperately needed men like Michele Sindona. The extraordinary growth of bank deposits and the array of new banks and branches in Sicily, one of the poorest regions in the country, is mute testimony to the size of the Mafia’s problem. Enter Michele Sindona. On one occasion Sindona was asked where he
obtained the money for his grandiose schemes. He replied: Ninety-five per cent of it is other people’s money.’ It was a response that was 95 per cent true.
Michele Sindona was the man chosen by Pope Paul VI to act as financial adviser to the Vatican; the man chosen, after a long friendship with the Pope, to relieve the Church of its high-profile business position in Italy. The plan was to sell Sindona some of the major assets acquired under Nogara. Vatican Incorporated was about to distance itself from the unacceptable face of capitalism. Theoretically it was going to embrace the philosophy contained in the message Pope Paul VI gave the world in his 1967 encyclical
Populorum Progressio:
God has destined the earth and all it contains for the use of all men and of all peoples, so that the goods of creation must flow in just proportion into the hands of everybody, according to the rule of justice which is inseparable from charity. All other rights, of whatever kind, including those of private property and of free trade, must be subordinated to it: they must not obstruct, but on the contrary foster its achievement, and it is a grave and urgent social duty to restore them to their original aims.
Pope Paul in the same encyclical quoted St Ambrose, ‘You never give to the poor what is yours; you merely return to them what belongs to them. For what you have appropriated was given for the common use of everybody. The land is given to everybody, and not only to the rich.’
When that statement was uttered the Vatican was the biggest owner of private real estate in the world.
Populorum Progressio
also contained the memorable observation that even when entire populations are suffering massive injustice revolutionary insurrection is not the answer. ‘One cannot fight a real evil at the cost of a greater evil.’
Confronted with the problem of the evil of a wealthy Roman Catholic Church when he apparently desired a poor Church for the poor, the Pope and his advisers decided to liquidate a sizeable proportion of their Italian assets and re-invest in other countries. Thus they would avoid heavy taxation, and the yield on the investment would be better. When Pope Paul proclaimed the magnificent aspirations of
Populorum Progressio
in 1967, Vatican Incorporated had already for a number of years been a close working partner of Michele Sindona. Through the illegal flight of currency from Sindona’s Italian banks via the Vatican Bank to the Swiss Bank which they jointly owned,
Sindona and the Vatican, if not making the goods of creation flow to the poor, were certainly making them flow out of Italy. By early 1968 another Vatican-controlled bank, the Banca Unione, was in trouble. The Vatican Bank owned approximately 20 per cent. It was represented on the Board of Directors by Massimo Spada and Luigi Mennini. By 1970, two years after Sindona bought control and with the Vatican still substantial part-owners, the bank in theory had become an astonishing success. Aiming at the small saver and offering superior rates of interest the bank’s deposits rose from 35 million dollars to over 150 million dollars – in theory.
In practice during the same period, the bank was robbed of over 250 million dollars by Sindona and his associates. Most of this fortune was poured through yet another Sindona bank, the Amincor Bank of Zürich. Much was lost in wild speculation on the Silver Market. One of the men who was deeply impressed with Sindona at this time was David Kennedy, Chairman of Continental Illinois, soon to be appointed Treasury Secretary in the President Nixon Cabinet.
In 1969 it was clear to Vatican Incorporated that it had lost the long battle with the Italian Government over taxation of its share dividends. Realizing that to unload its entire stock on the market would result in the possible collapse of the Italian economy, it occurred to the Vatican that such an action would be self-defeating. A collapse of that magnitude would result in Vatican losses.
The Pope, in conjunction with Cardinal Guerri, Head of the Special Administration of the APSA, decided to unload from the Italian portfolio a major asset, the Vatican’s share in the giant Società Generale Immobiliare. With assets in excess of half a billion dollars scattered around the world, that was certainly highly visible wealth. They again sent for The Shark.
The shares of Società Generale Immobiliare were selling at around 350 lire. The Vatican held directly and indirectly some 25 per cent of the 143 million shares. Would Sindona like to buy? The question was put by Cardinal Guerri. Sindona’s response was immediate and positive. He would take the lot – at double the market price. Guerri and Pope Paul were delighted. The agreement between Sindona and Guerri was signed at a secret midnight meeting in the Vatican, in the spring of 1969.
For the Vatican this was a particularly good meeting. It also wished to unload its majority shares in Condotte d’Acqua, Rome’s Water Company, and its controlling share of Ceramica Pozzi, a chemical and porcelain company which was losing money. The Shark smiled, agreed a price, and snapped up both holdings.
Precisely who had conceived this entire operation? Who was the man who collected a handsome commission from Sindona and high praise from Pope Paul VI and Cardinal Guerri? The answer is powerful evidence of not only how far P2 had penetrated the Vatican but also how the interests of P2, the Mafia and the Vatican were often identical. Licio Gelli’s number two, Umberto Ortolani, was the man responsible for arranging the mammoth transaction. All Sindona had to do now was to pay for it.
It is easy to purchase massive companies if you are using other people’s money. Sindona’s initial payment was made entirely with money illegally converted from the deposits of Banca Privata Finanziaria. In the last week of May 1969 Sindona transferred 5 million dollars to a small Zürich bank, Privat Kredit Bank. The Zürich bank was instructed to send the money back to BPF for the account of Mabusi Beteiligung. Mabusi resided in a Post Office Box in the Liechtenstein capital of Vaduz, and was a company controlled by Sindona. From there it was transferred again to another Sindona-controlled company, Mabusi Italiana. From there the 5 million dollars were paid to the Vatican. Further money was raised to pay for the huge acquisitions by bringing in Hambros and the American giant Gulf and Western.
Sindona obviously has a highly developed sense of humour. One company owned by Gulf and Western was Paramount and one of its most successful films of the period was the adaptation of Mario Puzo’s book
The Godfather.
Thus a film taking a highly glamorous and amoral look at the world of the Mafia produced enormous profits, some of which went to sustain Michele Sindona, financial adviser to the Mafia families Gambino and Inzerillo. They in turn were channelling the multi-million profits acquired largely from heroin dealing into Sindona’s banks. The circle was complete. Life was imitating Art.
By the early 1970s the massive illegal flight of money from Italy was having a serious effect upon the economy. Sindona and Marcinkus might be making significant profits through their efforts at diverting this money out of Italy, but the effect on the lira was devastating. Unemployment rose. The cost of living increased. Uncaring, Sindona and his associates continued to play the markets. By pushing up share prices to a much inflated level, the Sindona banks went through millions of dollars of other people’s money.
Sindona and his close friend Roberto Calvi of Banco Ambrosiano openly boasted that they controlled the Milan Stock Market at this time. It was a control which they criminally exploited again and again.
Shares went up and down like yoyos. Games were played with companies for the amusement and financial benefit of Sindona and his associates. The manipulation of a company called Pacchetti gives an example of the everyday activities of these men.
Pacchetti began as a small, insignificant, leather-tanning company. Sindona acquired it in 1969 and decided to transform it into a conglomerate. He took as his model the Gulf and Western, an American giant with a wide spread of interests ranging from Paramount studios through publishing to airlines. Sindona’s acquisitions for Pacchetti were more modest. In fact it became a commercial dustbin containing interests in unprofitable steelworks and commercially unsuccessful household cleaners. There was, however, one jewel in it: he had acquired from Bishop Marcinkus an option to purchase Banca Cattolica del Veneto. Doubtless the fact that the Administrative Secretary of the Vatican Bank, Massimo Spada, was also the President of Pacchetti and President of Banca Cattolica helped Marcinkus forget the prior claims of the Veneto clergy and Patriarch Luciani.
Roberto Calvi, who was a party to these negotiations, agreed to buy on a specified date a Sindona company called Zitropo. The scenario was now ready to manipulate the Milan Stock Market illegally yet again.
The book value of the Pacchetti shares was about 250 lire per share. Sindona instructed the Stock Exchange department of the Banca Unione to purchase Pacchetti shares. By using nominees the shares were then illegally parked in Sindona-owned companies. The price of the shares began to surge dramatically, eventually reaching 1,600 lire on the Exchange. In March 1972 the day for Calvi’s purchase of Zitropo duly arrived. Simultaneously all the parking companies dumped their Pacchetti shares into Zitropo. The effect was to inflate artificially the value of Zitropo. Calvi paid an astronomically higher price than the company was worth. Sindona, having funded the entire operation with fictitious guarantees, made a huge illegal profit. An indication of just how much profit he made on this one operation can be appreciated from the fact that in 1978 a Government-appointed liquidator, Giorgio Ambrosoli, discovered incontrovertible evidence that Sindona had paid an illegal kick-back to Calvi of 6.5 million dollars, and that Calvi shared this criminal payment fifty-fifty with Bishop Paul Marcinkus.