Authors: David Yallop
Why would Calvi pay so much over the odds for Zitropo? There are three reasons. Firstly, he used money belonging to others to effect the
purchase. Secondly, there was a 3.25 million dollars profit for him. Thirdly, at the conclusion of the Pachetti/Zitropo deal he acquired an option to buy Banca Cattolica del Veneto. Sindona had acquired the option from Marcinkus earlier. The fact that no one had consulted Albino Luciani, the Patriarch of Venice, or the members of his diocese who had lodged their shares with the Vatican Bank, was considered an irrelevance by Bishop Marcinkus.
Sindona and Calvi became very adept at this form of robbery. Never in the history of banking has so much been paid for so little. In 1972 Calvi pocketed a further 5 million dollars from Sindona when Bastogi shares changed hands, and an additional 450 million Swiss francs when Sindona sold him 7,200 shares in Finabank. Each time Sindona paid the kick-back to Calvi through his MANI account in Finabank. These huge amounts were paid into Calvi’s secret Swiss accounts which he held jointly with his wife. At the Union de Banques Suisses and Credit Bank of Zürich the Calvis held four secret accounts: Account number 618934; Account number 619112; Account number Ralrov/G21; and Account number Ehrenkranz. The very minimum that Sindona himself would have made on each deal was equivalent to the amount he was kicking back to Calvi.
Roberto Calvi developed an insatiable appetite for this particular game and on occasions played it as a solo performer. Hence he obliged one of his own banks, Centrale, to buy a large block of Toro Assicurazioni shares in 1976 for 25 billion lire more than they were worth. The 25 billion ended up in one of the Swiss accounts previously noted. So did a further 20 billion lire after Calvi played the game again with over one million shares in Centrale. These huge sums of money were not just items on a balance sheet. The money physically moved from a variety of shareholders’ pockets directly into the pockets of the Calvis and Sindona. What Bishop Marcinkus did with his 3,250,000 dollar kick-back from the Pacchetti swindle has yet to be established.
The shares in the Banca Cattolica were also subjected to this treatment. Sindona was aware that Calvi was negotiating with Marcinkus to acquire control of the bank – hence the share push. At the end of that exercise everyone except the Veneto Diocese was immeasurably richer.
Calvi had been introduced to Marcinkus by Sindona in 1971. Thus Bishop Marcinkus, the man who on his own admission ‘knew nothing about banking’, had two excellent tutors. Meanwhile Marcinkus had been promoted by Pope Paul and was now President of the Vatican Bank.
The various Vatican departments continued to unload a wide variety
of companies on Sindona and then on Calvi. In 1970, for example, they finally sold Serono, a pharmaceutical works which featured among its more successful lines an oral contraceptive pill.
An additional source of profit for the Sindona/Vatican-owned Finabank was another part of the cause of Italy’s faltering economy: double invoicing. As Bordoni observed: ‘It was less succulent than the kick-backs earned through the illegal exportation of black money but it still reached a high figure.’
Exports would be invoiced at costs that were much lower than the real ones. Thus the bent invoice would be officially paid via the Bank of Italy which, of course, would pass the information on to the Taxation Department. The exporter would be taxed on this low figure.
The balance was paid by the receiver of the goods abroad direct to Finabank. In many instances Italian exporters actually showed a loss which was converted into tax credits by the Government.
The large number of Sindona-owned exporting companies showed such losses. Sindona would bribe various Government politicians to allow this situation to continue. He would also argue that by doing so the Government was helping to keep down unemployment.
A similar crime was worked on imports. Then the invoice would be for a much higher figure than the actual cost of the goods. When the goods passed through customs, payment of the artificially high figure would be made by the company to the foreign supplier. The foreign supplier in turn would assign the balance to a numbered account at Finabank or occasionally one of the other Swiss banks.
Pope Paul’s poor Church for the poor grew instead immeasurably richer. The Vatican divestment of Italian wealth had resulted in men like Sindona and Calvi robbing the world to pay St Peter and Pope Paul.
Finabank was also a part of the giant laundry for Mafia/P2/criminal money. With the Vatican retaining a 5 per cent of Società General Immobiliare it owned part of that laundry. With the further use by the Mafia of the Vatican Bank to move money both into and out of Italy, the Vatican ultimately owned the entire laundry. Use by Sindona and his staff of the Vatican Bank’s accounts at BPF has already been explained. That was one of the methods of getting dirty money out of the country and cleaning it at Finabank, but this was a two-way operation. Dirty money from the Mafia operating in Mexico and Canada and the USA was also being cleaned as it flowed into Italy. The operation was very simple. To quote again from Carlo Bordoni:
These companies in Canada and Mexico were used to bring into the USA over the Canadian and Mexican borders dollars from the Mafia, from the Freemasons and from numerous illegal and criminal operations; the money arrived in suitcases and was then invested in US State Bonds. These were then sent to Finabank. Clean and easily negotiable.
The USA Mafia obviously had no problems with borders. Their money was converted to State Bonds directly by Edilcentro of Washington, a subsidiary of SGI; then the Bonds also found their way to Finabank. If the Mafia wished to bring some of their clean money into Italy they used Vatican Bank channels.
In the early 1970s Sindona extolled his own virtues to Bordoni. ‘My operating philosophy is based on my personality which is unique in the world, on well-told lies and on the efficient weapon of blackmail.’
Part of the blackmail technique was to bribe. A bribe in Sindona’s view was ‘merely an investment. It gave you a hold over the individual bribed’. Thus he unofficially ‘financed’ the ruling Italian political party, the Christian Democrats: 2 billion lire to ensure the promotion of party nominee Mario Barone to the position of Managing Director of Banco di Roma; 11 billion lire to finance the same party’s campaign against the divorce referendum. He arranged for the Christian Democrats to ‘earn’ billions of dollars. He opened an account for the party at Finabank, account no SIDC. Throughout the early 1970s three-quarters of a million dollars were transferred to this account. Sindona, the self-proclaimed hero of anti-communism, was also a man to hedge his bets. He opened another account at Finabank for the Italian Communist Party. Into this he also poured three-quarters of a million dollars per month, of other people’s money, account no SICO.
He speculated against the lira, the dollar, the German Mark and the Swiss franc. With regard to his massive speculation against the lira (a 650 million dollar operation entirely created by Sindona), he told Italian Prime Minister Andreotti that he was aware of the existence of heavy speculation against the lira, and in order to learn more about the size of the operation and the source, he had instructed Bordoni through Moneyrex to join in in a ‘symbolic’ manner. Having reaped enormous profits by attacking the lira, he was hailed by Andreotti as ‘The Saviour of the Lira’. It was during this period that he received a citation presented by the American Ambassador to Rome. He was named ‘Man of the Year for 1973’.
A year earlier, at a reception given to celebrate his purchase of the
Rome
Daily American,
Sindona had announced that he intended to expand his interests and move a further 100 million dollars into the USA. Among those listening to his speech was his close friend Bishop Paul Marcinkus. In reality, by purchasing the
Daily American
Sindona was already expanding his USA interests. The paper had been backed by the CIA. American Congress was pressing the CIA to make precise disclosures of exactly what they did with the millions allocated to them. Like Pope Paul, they thought the moment seemed propitious to jettison a few embarrassing investments. Sindona insists that he bought the paper at the specific request of Ambassador Martin, who feared that it would ‘fall into the hands of the leftists’. Martin in decidedly undiplomatic language has denied this. He called Sindona ‘a liar’.
Whoever asked him, there is no doubt that the paper had been previously subsidized by the CIA. There is equally no doubt that this was not the first favour Sindona did for The Company. In 1970 the CIA had asked him to buy a 2 million bond issue from the National Bank of Yugoslavia. Sindona obliged. The CIA placed the bonds in Yugoslavia in what they considered ‘friendly hands’. Sindona also moved money on behalf of the CIA into the hands of right-wing groups in Greece and Italy.
Thwarted in his attempt to take over Bastogi, the large Milan-based holding company, by the Italian Establishment, who were motivated partially by fear of an ever-increasingly powerful Sindona and partially by racialism towards a Sicilian, The Shark turned his attention to the USA. There this man, who already owned more banks than many men have shirts, bought another bank, the Franklin National Bank of New York.
The Franklin was the twentieth largest bank in the country. Sindona paid 40 million dollars for one million shares in it, representing 21.6 interest. He paid 40 dollars per share at a time when the share price was 32 dollars. More important, this time he had bought a very sick bank. It was tottering on the edge of bankruptcy. The fact that he used 40 million dollars of other people’s money from his Italian banks without reference to the owners should not hide from us that, for once, a few people in New York saw the boy from Patti coming.
The true megalomania of Sindona can be gauged from the fact that, having realized what he had acquired, he did not give a damn. To him dealing with tottering banks was an everyday event as long as huge deposits could be kept whirling around on paper – as long as the Telex machine was there to transfer A to B and then to C and then back to A again.
Within twenty-four hours of his purchase and before he had even had an opportunity to try out the boardroom for size, the Franklin Bank announced its trading figures for the second quarter of 1972. They showed a 28 per cent drop from the same period for 1971. Sindona The Shark, the saviour of the lira and the man Marcinkus considered to ‘be well ahead of his time as far as banking matters are concerned’, took the news in typical Sindona manner. ‘I have important connections in all important financial centres. Those who do business with Michele Sindona will do business with Franklin National.’ The previous owners meanwhile were laughing all the way to another bank.
As to the ‘important connections’, none could deny the truth of that. They ranged from the Mafia families Gambino and Inzerillo in Sicily and New York to Pope Paul VI, Cardinals Guerri and Caprio and Bishop Marcinkus in the Vatican. They covered the political spectrum from Andreotti and Fanfani in Italy to President Nixon and David Kennedy in the White House. They included intimate banking relationships with some of the most powerful institutions in the world – the Vatican Bank, Hambros of London, Continental of Chicago and Rothschilds of Paris. Through Gelli’s P2 he had forged close links with the men who ruled in Argentina, Paraguay, Uruguay, Venezuela, and Nicaragua. Of the Nicaraguan dictator, Somoza, he told a Rome lawyer:
I prefer to deal with men like Somoza. Doing business with a one man dictatorship is much easier than doing business with democratically elected Governments. They have too many committees, too many controls. They also aspire to honesty, that’s bad for the banking business.
This is a perfect illustration of the P2 philosophy given to its members by its founder Licio Gelli: ‘The doors to all bank vaults open to the Right.’ While Sindona was doing business with Somoza and looking for a United States equivalent, Gelli had not been idle in Argentina. Sensing the nation’s disenchantment with the ruling junta, he began to plot the return of General Peron from exile. In 1971 he convinced the then President Lanusse that the only way Argentina could regain political stability was through the return of Peron. The General returned in triumph. One of his first actions was to kneel in gratitude at the feet of Licio Gelli, a gesture witnessed by, among others, Italian Prime Minister Andreotti. By September 1973, Peron had become President of Argentina.
While Gelli was busy making one President, Sindona, having surveyed the political arena. in the United States, focused on the man who to his mind was closest to the political ideals of Somoza and Peron, Richard Millhouse Nixon.
To help along his good connections, Sindona arranged a meeting with Maurice Stans, Nixon’s chief fund raiser in the 1972 Presidential Campaign. He took with him to the meeting a very large suitcase. It contained one million dollars in cash. Sindona offered it to Stans for the Campaign Fund to ‘show his faith in America’. His faith was clearly limited, as he insisted the gift to assist Nixon back into the White House must remain a secret. According to later statements, Stans declined the gift because under a new Federal Law anonymous election gifts were no longer allowed.
At about the time that Bishop Marcinkus was extolling the banking brilliance of The Shark to the USA attorneys investigating the billion dollar counterfeit securities operation, he was also writing out a cheque for 307,000 dollars. It was the amount Sindona had cost the Vatican as a result of illegal dealings on the American Stock Exchange in the shares of a company called Vetco Industries. In violation of SEC regulations a Los Angeles investment broker had acquired on behalf of Sindona and Marcinkus some 27 per cent of Vetco. The Vatican paid the fine, then sold its shares at a profit.