Calvi had no doubt that Sindona was behind the smear, his desperation causing him to become reckless and more dangerous. A few days later, Calvi got a call from Luigi Cavallo. Calvi knew him, not from his former job as a U.N. translator, but as a renowned freelance agitator best known for his acquittal in a left-wing coup against Italy’s government.33 He also published a small quarterly, Agenzia A, a broadsheet devoured by journalists and politicians for its torrid mixture of offbeat news and blind gossip.II Cavallo told Calvi that unless he honored promises he supposedly made to Sindona years earlier, more mud would come. Calvi was noncommittal.
Everything was quiet for a few weeks. Calvi hoped that Sindona had called off his attack dog. But over the Christmas holidays Cavallo wrote Calvi a letter about a Ugandan parable of two scorpions in a bottle and how they “embark on a battle to the death which inevitably has a lethal outcome for both contenders.”35
Just after the New Year, Cavallo published an edition of Agenzia A in which he set forth a blistering, fictional indictment against Calvi, charging him with knowingly publishing false balance sheets for the Ambrosiano. More salacious posters appeared.36 Business associates urged Calvi to go to the police. But he could not publicly charge that Sindona was extorting money without possibly admitting that the charges were true. Calvi reached out to Gelli for help. The P2 chief told Calvi to pay the money, which he did that March, wiring $500,000 from United Trading to a numbered Sindona account at Union Bank in Chiasso, Switzerland.37
Calvi had much more on his mind, however, than just Sindona’s blackmail as 1978 got under way. Cisalpine’s accountant, Price Waterhouse, was insisting on answers about the bank’s confidential accounts. When he no longer could delay replying, Calvi dismissed them. Their replacement, Coopers & Lybrand, were only on the job a few months before they began peppering Calvi with queries about the IOR. They also complained about their “difficulty in obtaining any specific financial information” about the Vatican Bank. Calvi assured them that all the dealings between Cisalpine and the IOR were “on normal commercial terms.”38
Although none of Calvi’s regular colleagues noticed any change in his demeanor, the Coopers & Lybrand interest in the IOR agitated him. On top of that, a $20 million loan to the Vatican was due at the end of January. Calvi did not have the money. For months he had been trying to find new investors, pitching proposals to money managers on three continents. His efforts paid off with only days to spare. Calvi received the first of four loans totaling $160 million from Banca Nazionale del Lavoro and Ente Nazionale Idrocarburi (ENI), a state-owned bank and multinational run by two P2 members.39
Marcinkus, meanwhile, was so pleased with his mushrooming dealings with Calvi that he kicked off 1978 by renewing or expanding loans to the usual suspects—including Manic, Zitroppo, and Banco Ambrosiano Holding (BAH)—as well as giving fresh infusions of church money to new Panamanian-based firms, Astolfine and Belrosa. Despite the repayment of the $20 million loan, the Vatican Bank’s cash invested in Calvi’s labyrinthine global businesses in 1978 soared from $200 million to a dizzying $330 million ($1.2 billion in 2014 dollars).40,III
With Marcinkus confident that the Ambrosiano’s businesses were solid, Calvi concentrated on Sindona, who had continued to threaten him. Sindona had considered the $500,000 a down payment on what he believed was owed him. In April 1978—the same month that a dozen Bank of Italy inspectors showed up unexpectedly at the Ambrosiano’s headquarters—Sindona and Calvi met in Washington.42 Father Philip Guarino, a director of the Senior Citizens Division of the Republican National Committee, hosted a party for Sindona at the Capitol Hill Club.43 Calvi went to tell Sindona that he could not help him further. Sindona demanded more money and refused to back off. In the coming months, Calvi diverted upward of $5 million through Gelli to Sindona (the following spring, when Sindona learned that Calvi was a guest at New York’s Carlyle Hotel, he showed up and would not leave until Calvi agreed to accelerate the payments).44 Calvi at the time had no idea that it was a tip provided by Sindona about some of Calvi’s secret Swiss bank accounts that prompted the Bank of Italy investigators to swarm over the Ambrosiano.45 When Calvi called Gelli to fix the results of the probe, Gelli was powerless to help. None of the Bank of Italy inspectors were P2 members.46
The month after their Washington meeting, three years after the Italian government had asked for Sindona’s return, a federal judge approved the extradition.47 His lawyers appealed. As that worked its way through the legal system during the summer, the U.S. Attorney in New York announced indictments against three top ex–Franklin National executives. Sindona, and his former right-hand aide, Carlo Bordoni, were unindicted co-conspirators.48 The U.S. Attorney told reporters that the investigation into Franklin was continuing. For Sindona it was a dilemma: return to Italy and the fraudulent bankruptcy charges or stay in the United States and face a likely criminal indictment.
* * *
I. There later came to be a furious finger-pointing disagreement between Marcinkus and Calvi about whether the contract including the United Trading bearer stock certificates was fraudulently backdated to November 21, 1974 (which is what Marcinkus claimed), or whether it was really signed in 1974 and merely confirmed in Calvi’s letter three years later (Calvi’s assertion). Donato De Bonis, an IOR monsignor who worked closely with Marcinkus, and Pellegrino de Strobel, the Vatican Bank’s secretary and chief accountant, admitted they had signed the document, but claimed they left it undated. When the Vatican later tried to draw distance from Calvi’s business network, it contended it did not control United Trading as early as 1974, a date that marked the start of highly questionable financial maneuvering. Italian prosecutors and investigators with two parliamentary commissions concluded that the IOR was the effective owner as of 1974 and that Marcinkus agreed to the backdating as a favor to Calvi. Marcinkus could never explain why, when Calvi had sent him a copy of the “backdated” agreement in 1977, the archbishop did not complain about the supposedly wrong date.10
II. When it comes to Sindona, Calvi, and Marcinkus, even the simplest matters are often more complicated than they first appear. Was Cavallo working for Sindona? Guzzi, Sindona’s attorney, later claimed that he had hired Cavallo at Sindona’s direction. And Guzzi was later found guilty of extortion over this matter. Sindona denied having anything to do with Cavallo, telling author Nick Tosches that the provocateur was most likely working for the Italian government. And as for Cavallo? In an unsworn statement, he told prosecutors that Sindona retained him to squeeze as much money as possible out of Calvi. But later, under oath and threat of perjury, Cavallo told an Assize court that he had done it on his own and that Sindona had tried repeatedly to stop him.34
III. Another sign of the depth of Calvi’s involvement with the IOR was evident in January 1978, when the Vatican Bank gave Calvi letters falsely describing all its loans as Ambrosiano deposits at the IOR. Calvi stored the letters in case he needed them later to deflect Italian investigators.41
19
“A Psychopathic Paranoid”
While Sindona obsessed about where to make his best legal stand, his two former business partners had their own problems. Calvi fretted about finding more financing to prevent any single part of his empire from cracking and setting off a calamitous chain reaction. Marcinkus was absorbed not with the IOR’s business dealings, but rather with pending changes inside the Vatican that might threaten his power.
Pope Paul VI, Marcinkus’s great patron, had since 1977 become increasingly withdrawn. There was speculation that he might be the first Pope in centuries to resign. In the early part of his Pontificate, Paul had taken more international trips than the previous thirty Popes combined. Now, debilitating arthritis left him mostly confined to the city-state. He occasionally mustered enough strength to travel the seventeen miles to Castel Gandolfo, his summer residence. A combination of persistent pain and little rest took its toll, sending him spiraling into a depression.1 “He looks frail and often sounds mournful,” noted
The New York Times.2
During a 1974 synod of bishops, Paul told the cleric sitting next to him, “Old age itself is the illness” (an open microphone picked up his softly spoken Latin, senectus ipsa est morbus).3 “I see the threshold of the hereafter approaching,” an emotional and almost wistful Paul VI told pilgrims near his eightieth birthday in 1977.4 As he spent more time locked away in his private quarters, there seemed to be a rumor du jour about one medical malady or another. Unconfirmed accounts from insiders about “occasional lapses of memory” found their way into the press.5
Ironically, it was Paul VI who mandated that all bishops offer their resignations when they reached seventy-five. And he had directed that no cardinal older than eighty could vote in any conclave. Many Vaticanologists had expected that he might establish a precedent for the Roman church by stepping down on either his seventy-fifth or eightieth birthday.6 But both birthdays passed uneventfully. There was a synod of bishops four days after his eightieth birthday, and many speculated that Paul had waited to announce it there.7 But again nothing. Now, in 1978, with the Pope eighty-one years old, the resignation rumors had a renewed urgency.8
The infirm Paul was under siege on many fronts. Fresh efforts to overturn his encyclical banning all artificial birth control had gathered momentum, especially in America. British scientists had conceived the world’s first test-tube baby. The development rattled the Vatican. And French scientists had created a fly from a test tube after ten years of research. What did it mean when life could come from a laboratory? A modern Protestant reformation that allowed priests to marry and liberalized previously orthodox views of homosexuality put pressure on the Roman church to loosen its rules.9 Some of the impetus to modify the centuries-old mandatory clerical celibacy came from polls that showed that 40 percent of Italian clerics thought it should be abolished, and a third of Spanish priests wanted it optional.10 A new study showed that record numbers of priests and nuns were leaving their orders.11
The church itself seemed in revolt, with priests contesting orders from their bishops, and bishops in turn resisting directives from Rome. The Pope struggled to maintain a monolithic faith in which all direction came from Rome. Traditionalists blamed Paul VI for misguided and heterodox reforms. They demanded a return to the church as it existed before the Second Vatican Council. A tad more reasonable were so-called conservatives, who were open to some modernization. Those conservatives also castigated Paul VI, not as a heretic, but as someone who went too far in his zeal to update the church. Yet another group, modern theologians, represented by the Swiss priest Hans Küng, questioned all conventional thinking, on everything from Papal infallibility to homosexuality and abortion to even limits on the divinity of Christ (Küng’s 1971 bestseller, Infallible? An Inquiry, challenged the heart of whether a Pope spoke for God on matters of faith). The Charismatics believed that the church needed to return to its early roots by emphasizing the power of the Holy Spirit. The progressives, a fast growing subset, believed Paul had not gone far enough in his reforms and that the ideal future was in a loose partnership with leftist secular governments who followed the teachings of Jesus by redistributing wealth to the poor and underclass.
The threats the church had faced during World War II and the early Cold War seemed lost in the confusion of the social revolution that had kicked off in the mid-1960s. It showed little signs of abating.
A steady stream of bad news also left Paul emotionally exhausted. The brutal murder of Congolese Cardinal Émilie Biayenda, to whom he had personally given the red hat in 1973, put him into a funk.12 But no event affected him more than when the radical left-wing Red Brigades killed five bodyguards and kidnapped Aldo Moro, a two-time Italian Prime Minister, from a busy Rome street. The Pope, who had long known Moro and had great affection for him, led the appeals for his release. For two months, starting in March 1978, the kidnappers managed to keep one step ahead of a massive security hunt. The captive Moro wrote personal letters to his political colleagues and to Paul, begging them to do whatever was needed to free him. And the Pontiff in turn pleaded with Italy to strike any necessary compromise. Against the advice of his advisors, he even made a dramatic public offer to trade places with Moro.13 The Red Brigades ignored his appeal. Instead, that May, Moro was shot ten times in a circle around his heart and left to bleed to death, stuffed into the trunk of an abandoned car in central Rome.14
Pope Paul was inconsolable.15 He joined the nation in heartfelt mourning. Despite his pain, he insisted that he personally say the funeral Mass for the assassinated leader. On a cold spring day that May, Paul VI crossed Rome to preside over the funeral at a packed Basilica of St. John Lateran. It was the first time Vaticanologists could recall a Pope saying a requiem Mass for anyone other than a cardinal.16 And a few days after Moro’s murder, the normally taciturn Paul fought back tears as he addressed a group of children at St. Peter’s.17 Both the church and his beloved Italy, he later dejectedly told his personal secretary, Monsignor Macchi, seemed under attack.
Macchi had witnessed for several years the bitter resignation with which Paul observed the secular violence and instability in Italy. All the leading Red Brigades were Catholics who had abandoned their faith to embrace a violent strain of communism that now engulfed Italian cities. And it was not just Italy. The grim news continued to pour in that summer. A Spanish general and his aide were assassinated in broad daylight by left-wing terrorists in Madrid.18 Twelve white teachers and children were butchered by guerrillas in Rhodesia.19 A grenade nearly killed Iraq’s ambassador in London, and a terror attack on the Iraqi embassy in Paris left two dead.20 PLO bombs killed five and wounded dozens of Israelis on a Jerusalem bus.21
The spiraling violence played to Paul’s natural pessimism. The Pope had lost interest in the more mundane aspects of overseeing the Curia. For nearly a year, day-to-day administrative duties had been split between Archbishop Giovanni Benelli, the powerful Substitute Secretary of State, and Macchi. The two often clashed.22 That was resolved when the Pope elevated Benelli to the rank of cardinal and dispatched him to Florence. But removing Benelli did not help. Benelli may have irritated many with his abrupt Tuscan ways, but even his detractors knew he was capable of making quick decisions and sticking to them. Cardinal Jean-Marie Villot, who had been Secretary of State for a decade, wielded tremendous influence with Paul, but the aloof Frenchman was himself challenged when it came to the Curial bureaucracy. And Macchi seemed exhausted, unable to prevent Paul from indulging in interminable vacillation.
In the spring, Malachi Martin, a former Jesuit professor at Rome’s Pontifical Biblical Institute, told The Boston Globe that the only reason Paul VI had not yet resigned was because he had not succeeded in rallying enough support for a radical plan to allow some limited participation in the next conclave by non-Catholic Christian faiths.23 By appointing many Third World cardinals among twenty-nine red hats in 1973, Paul had eliminated the possibility that a European-only bloc could elect the next Pope. And in 1976, when he elevated another twenty-one bishops to become cardinals, most were from outside Europe. Only two were Italians, the smallest percentage from Italy in the church’s history.24 Still, according to Martin, the demographics of the cardinals were too conservative to guarantee the Pope he would get the progressive successor he wanted. As a result, claimed Martin, Paul clung to the Papacy.25
A resignation by Paul would have a more deleterious effect on Marcinkus than most Curia power brokers. Marcinkus’s frankness and no-frills manner had inspired confidence in the Pope for over fifteen years. Paul relied on the American bishop’s fearlessness, a trait he admired but could never emulate. The unique dynamic of their friendship meant that Paul never hobbled the IOR through the fog of indecision and equivocation that was a trademark of his Papacy. He allowed Marcinkus to run the Vatican Bank.
When il crack Sindona had exploded three years earlier, the Pope could have silenced any criticism over the IOR’s role by transferring Marcinkus to Curial Siberia. Some prominent cardinal
s and bishops had demanded just that. But Paul had proven decisive and firm in sticking by his beleaguered IOR chief.
The Pope’s resignation would also end the tenure of Monsignor Macchi. Many Curialists resented Macchi for the outsized power he wielded as Paul’s alter ego. Macchi and Marcinkus ranked as the two most unpopular officials at the Vatican. An unnamed monsignor in the Curia told author John Cornwell that “Maachi had the Pope’s ear and Marcinkus had the pursestrings.”26 Persistent gossip accused the duo of plotting to get their pet projects rubber-stamped by the infirm Pontiff.27
Marcinkus was not only concerned about losing his patrons at the top of the Vatican. Developments in the United States also threatened his strongest ally there, Chicago Cardinal John Cody. The two had been friends since the 1950s. For several years there had been some published reports critical of Cody’s authoritarian governance. As head of America’s largest Catholic diocese, Cody wielded tremendous power. And after New York’s Cardinal Spellman died in 1967, he had become the biggest American fundraiser for Rome. Through the 1970s, Cody had seemed untouchable. This despite the energetic efforts of Father Andrew Greeley, a liberal American priest and professor of sociology much admired by the American media, who was on a mission to prove that Cody was guilty of financial improprieties.28 Greeley used his syndicated national newspaper column to press his case.29 And privately, and later in print, Greeley often became an armchair psychologist, diagnosing Cody with “a borderline personality disorder” or speculating that he was even “a psychopathic paranoid.”30 According to Greeley, Cody was a binge drinker who checked into a handful of southwest Chicago hotels so he could go on all-night benders. And Greeley accused the Chicago police of suppressing several drunk-driving arrests.31 Rome judged Greeley an unreliable, attention-hungry gadfly, dismissing his wild charges without paying them much heed.
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