Authors: David Yallop
By mid-1972 the low interest loans had stopped. The Venetian clergy were advised that in future they would have to pay the full rate of interest no matter how laudable the work. The priests complained to their bishops. The bishops made a number of discreet enquiries.
Since 1946 the Istituto per le Opere di Religione, the IOR, usually referred to as the Vatican Bank, had held a majority share in Banca Cattolica del Veneto. The various dioceses in the Veneto region also had small shareholdings in the bank amounting to less than 5 per cent of the bank’s share.
In the normal commercial world this would make the minority shareholder vulnerable, but this was not the normal commercial world. A clear understanding existed between Venice and the Vatican that the IOR’s vast shareholding (by 1972 it was 51 per cent) was an insurance against any potential takeover by a third party. Despite the very low interest rates charged to the Veneto clergy the bank was one of the wealthiest in the country. Where the priest banks the parishioner will follow. (A significant amount of the bank’s wealth was derived from real estate holdings in Northern Italy.) This happy arrangement had now been abruptly terminated. The bank that the bishops believed they
owned, at least morally, had been sold over their heads without reference to the Patriarch or any person in the Veneto region. The man who had done the selling was Vatican Bank President, Paul Marcinkus. The man who had done the buying was Roberto Calvi, of Banco Ambrosiano, Milan.
The bishops of the region descended en masse on the Patriarch’s office in St Mark’s Square. He listened quietly as they outlined what had happened. They told him how in the past when they had wished to raise capital they had turned to the Vatican Bank who had loaned money, holding their shares in Banca Cattolica as security. Now these shares, along with a large stake independently acquired by the Vatican Bank, had been sold at a huge profit to Calvi.
The enraged bishops pointed out to Luciani that had they been given the opportunity they could have raised the necessary money to repay the Vatican Bank and thereby re-acquire their shares. What was more pertinent in their eyes was the appalling breach of trust perpetrated by Marcinkus, acting on behalf of the Vatican that claimed to be the moral leader in the world; he had at the very least displayed a total lack of morals. The fact that he had kept the entire profit on the transaction for the Vatican Bank may also have caused some of their anger.
The bishops urged Luciani to go directly to Rome. They wanted Papal intervention. If that intervention took the form of firing Paul Marcinkus it was clear that in the Veneto region at least, not many tears would be shed. Luciani calmly weighed the problem. Ever a prudent man, he considered he needed more facts before laying such a problem before Pope Paul.
Luciani began to probe quietly. He learned a great deal about Roberto Calvi and also about a man named Michele Sindona. What he learned appalled him. It also alerted him to the dangers of complaining directly to the Pope. Based on the information he had obtained it was clear that Calvi and Sindona were highly favoured sons of the Church and were held in great esteem by Paul VI. The man Albino Luciani turned to was one who had become a close friend over the previous five years, Under-Secretary of State Monsignor Giovanni Benelli.
Though Benelli was number two in the Secretariat of State under Cardinal Villot, to all intents and purposes he ran the department. And as Pope Paul’s troubleshooter Benelli not only knew where all the bodies were buried – he was responsible for the placement of quite a number of them.
Benelli listened while the Patriarch of Venice told his story. When
he had finished the Monsignor gave his Eminence another cup of coffee as Luciani uttered a qualification.
‘I have not of course seen any documentary evidence.’
‘I have,’ responded Benelli. ‘Calvi is now the majority shareholder in the Banca Cattolica del Veneto. Marcinkus sold him 37 per cent on March 30th.’
Benelli was a man who enjoyed reeling out facts and figures. He told the wide-eyed Luciani that Calvi had paid 27 billion lire (approximately $45 million) to Marcinkus; how the sale was the result of a scheme hatched jointly by Calvi, Sindona and Marcinkus, of a company called Pacchetti which had been purchased by Calvi from Sindona after its price had been grossly and criminally inflated on the Milan stock exchange, of how Marcinkus had assisted Calvi in masking the nature of this and other operations from the eyes of Bank of Italy officials by putting the Vatican bank facilities at the disposal of Calvi and Sindona.
Luciani was bewildered. ‘What does all this mean?’ he asked.
‘Tax evasion, illegal movement of shares. I also believe that Marcinkus sold the shares in your Venice bank at a deliberately low price and Calvi paid the balance, a separate 31 billion lire deal on Credito Varesino.’
Luciani became angry. ‘What has all this to do with the Church of the poor? In the name of God . . .’
Benelli held up a hand to silence him. ‘No, Albino, in the name of profit.’
‘Does the Holy Father know these things?’
Benelli nodded.
‘So?’
‘So you must remember who put Paul Marcinkus in charge of our bank.’
‘The Holy Father.’
‘Precisely. And I must confess I fully approved. I’ve had cause to regret that many times.’
‘Then what are we to do? What am I to tell my priests and bishops?’
‘You must tell them to be patient, to wait. Eventually Marcinkus will over-reach himself. His Achilles heel is his greed for Papal praise.’
‘But what does he want to do with all this money?’
‘He wants to make more money.’
‘For what purpose?’
‘To make more money.’
‘And in the meantime should my priests get out begging bowls and tramp through the Veneto?’
‘In the meantime you must counsel patience. I know you have it. Teach it to your priests. I’m having to apply it.’
Albino Luciani returned to Venice and called his fellow bishops to his office. He told them some of what had transpired in Rome, enough to make it abundantly clear that the Banca Cattolica was now for ever lost to the diocese. Later some of them talked about it. They concluded that this would never have happened in the days of Cardinal Urbani. They felt that Luciani’s innate goodness had proved a useless weapon against the IOR. Most of them, including Luciani, sold what remaining shares they held in the bank to express their disapproval of the Vatican’s conduct. In Milan Roberto Calvi was gratified to note that his brokers had acquired on his behalf another small piece of the priests’ bank in Venice.
Albino Luciani and many others in Venice closed their accounts at the Banca Cattolica. For the Patriarch of Venice to move the official diocesan accounts to the small Banco San Marco was an extraordinary step. He confided to one colleague, ‘Calvi’s money is tainted. The man is tainted. After what I have learned of Roberto Calvi I would not leave the accounts in his bank if the loans they granted to the diocese were totally free of interest.’
Luciani then attempted to get the directors of Banca Cattolica to change the name of the bank. He insisted that for the word Catholic to appear in their title was an outrage and a libel on all Catholics.
In Rome Pope Paul VI was made fully aware of the added burden that had been placed on the Veneto region by the sale of the Banca Cattolica. Giovanni Benelli urged the Holy Father to intervene but by then the sale to Calvi was already a reality. When Benelli argued for the removal of Marcinkus the Pope responded with an agonized helpless shrug of the shoulders but the fact that Luciani had not led an open rebellion left a deep impression on Paul. At the slightest opportunity he would proclaim the goodness of the man he had appointed Patriarch of Venice. In an audience with Venetian priest Mario Ferrarese he declared three times, ‘Tell the priests of Venice that they should love their Patriarch because he is a good, holy, wise, learned man.’
In September 1972, Pope Paul stayed at the Patriarch’s Palace on his way to a Eucharistic Congress in Udine. In a packed St Mark’s Square the Pope removed his stole and placed it over the shoulders of a blushing Luciani. The crowd went wild. Paul was not a man to make insignificant public gestures.
When the two men were being served coffee in the Palace he made a more private one. He indicated to Luciani that ‘the little local difficulty over finance’ had reached his ears. He had also heard that Luciani was trying to raise money for the creation of a work centre for the sub-normal at Marghera. He told Luciani how much he approved of such work and said that he would like to make a personal donation. Between Italians, that most voluble of races, much is often unsaid but understood.
Six months later during March 1973, the Pope made Albino Luciani a Cardinal. Whatever his deep misgivings about the fiscal policies of the IOR, Luciani considered that he owed the Pope, his Pope, complete and unswerving loyalty. Italian bishops are in a unique position with regard to their relationship to the Vatican. Control of their actions is tighter. Retribution for any failure, real or imagined, is quicker.
When Luciani was made Cardinal he was aware that Ottaviani and other Curial reactionaries, far from demonstrating total obedience, were in fact involved in a long, acrimonious argument with the Pope. They were quite simply trying to destroy any good that had flowed from the historic Vatican Council II series of meetings. Called upon to make a speech in front of not only the other new cardinals and the Pope but also Ottaviani and his clique, Albino Luciani observed, ‘Vatican Council I has many followers and so has Vatican Council III. Vatican Council II, however, has far too few.’
Two months later during May 1973, Luciani found himself playing host yet again to a visitor from Rome, Giovanni Benelli. In general Benelli had come to assure him that the problems they had discussed the previous year had not been forgotten. In particular he had an extraordinary story to tell about the American Mafia, nearly one billion dollars’ worth of counterfeit securities and Paul Marcinkus.
On April 25th, 1973, Benelli had received some very unusual guests in his offices at the Secretariat of State in Vatican City: William Lynch, Chief of the Organized Crime and Racketeering section of the US Department of Justice, and William Aronwald, Assistant Chief of the Strike Force in the Southern District of New York. Two members of the FBI had accompanied them.
‘Having met these gentlemen from the United States,’ Benelli told me, ‘I made my apologies and left them in the capable hands of three of my staff. They of course subsequently reported to me exactly what had taken place.’
The secret FBI report that I acquired many months after my conversation with Cardinal Benelli confirmed that his account was very
accurate. It also told a story which reads like an outline for a Hollywood movie.
Monsignors Edward Martinez, Carl Rauber and Justin Rigali listened while William Lynch told of a police investigation that had begun in the world of the New York Mafia and had led inexorably to the Vatican. He told the priests that a package of 14.5 million dollars’ worth
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of American counterfeit bonds had been carefully and painstakingly created by a network of members of the Mafia in the USA. The package had been delivered to Rome in July 1971 and there was substantial evidence to establish that the ultimate destination of those bonds was the Vatican Bank.
Lynch advised them that much of the evidence, from separate sources, strongly indicated that someone with financial authority within the Vatican had ordered the fake bonds. He pointed out that other evidence also indicated the 14.5 million dollars was merely a down payment, and that the total of counterfeit bonds ordered was 950 million dollars’ worth.
The attorney then revealed the name of the ‘someone with financial authority’ who had master-minded the illegal transaction. On the basis of the evidence in Lynch’s hands, it was Bishop Paul Marcinkus.
Displaying remarkable self-control the three priests listened as the two US attorneys outlined the evidence.
At this stage of the investigation a number of the conspirators had already been arrested. One of them who had felt the desire to unburden himself was Mario Foligni, self-styled Count of San Francisco with an honorary doctorate in Theology. A first-class conman, Foligni had on more than one occasion narrowly avoided prison. When he was suspected of having manipulated the fraudulent bankruptcy of a company he controlled, a Rome magistrate had issued a search warrant to the finance police. Opening Foligni’s safe, the police had discovered a signed blessing from Pope Paul VI. They had apologized for the intrusion and departed.
Subsequently others had been equally impressed with Foligni’s Vatican connections. He had opened the Vatican doors to an Austrian named Leopold Ledl. It was Ledl who had put the Vatican deal together – the purchase of 950 million dollars’ worth of counterfeit bonds, the purchase price to be 635 million dollars. ‘Commission’ of 150 million dollars would be paid back by the gang to the Vatican, leaving the Mafia with 485 million dollars and the Vatican with bonds that had a face value of nearly one billion dollars.
The American Mafia had been sceptical about the deal until Ledl produced a letter from the Vatican. Written under the letter-heading of the Sacra Congregazione Dei Religiosi it was confirmation that the Vatican wished to ‘buy the complete stock of the merchandise up to the sum of 950 million dollars’.
Foligni had told the American investigators that Marcinkus, ever prudent, had requested that a trial deposit of one-and-a-half million dollars’ worth of the bonds be made at Handelsbank in Zürich. According to Foligni, Marcinkus had wanted to satisfy himself that the bonds would pass as genuine. Late in July the ‘trial’ deposit was duly made by Foligni. He nominated Vatican cleric Monsignor Mario Fornasari as the beneficiary of the account he opened.