God's Bankers: A History of Money and Power at the Vatican
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That final chapter in the criminal investigation was only a couple of weeks old when the Pope introduced his next round of Curial reforms, many focused on finances. In 1981 John Paul had appointed a commission of cardinals to look for ways to increase the Vatican’s income.125 Now, among the changes addressed in a 111-page document, he expanded their scope to monitor the Vatican Bank and its thirteen employees.126 Part of their brief was to try to stem some of the large deficits. Simultaneous with the changes at the IOR, the Vatican disclosed that it had suffered another record operating loss (about $78 million, prompting a new worldwide plea for more Peter’s Pence contributions).127,VII The church was still spending far more than it took in and had almost depleted its Peter’s Pence reserves.129 Dioceses around the world, covering thousands of parishes, struggled to keep up with their own expenses, and had little extra money to send to Rome.130 The Kirchensteuer, the German tax on Catholics that helped fuel the Vatican’s coffers during World War II, was generating more than $3 billion annually, but was now consumed mostly by the German dioceses.131 Italy’s eight-per-thousand tax was bringing in a lot of money, but not enough to pull the church into the black. Although some religious orders were financially comfortable, they did not have large enough surpluses to bail out the Vatican.
Several proposals to cut the deficit were floated but rejected. Some of the oversight cardinals thought Peter’s Pence would produce more money if it got a new name that did not imply small change. “I don’t like names that don’t reflect what’s happening,” said Toronto’s Cardinal Gerald Carter. Some of the names floated included Papal Charity, Aid to the Holy Father, and Papal Support.132 None stuck. Other proposals that got serious consideration included selling some of the IOR gold Nogara had accumulated or streamlining the Curia’s lay employees (when the Vatican did sell some of its gold four years later, its timing was bad since bullion prices had dropped almost 40 percent).133 There was also a debate about renting some of the nearly 2,000 church-owned apartments in prime Roman neighborhoods at market rates instead of subsidizing rents of lay workers and clerics. Italy’s rent control law—widely ignored by ordinary Italians—prohibited such a move by the church. So that idea was shelved.134
Beyond the question of how to best cut the deficit, Philadelphia’s Cardinal Krol was the first to suggest it was time to retain an internationally recognized accounting firm to perform an annual audit of all the church’s finances.135,VIII
Not everyone was impressed by the Pope’s reforms. Some critics had hoped he would fold the Vatican Bank into the Curia. A new commission of cardinals seemed only to add another layer of bureaucracy. Nothing diminished the bank’s power, made it more transparent, or put in place autonomous lay experts who might transform it into a compliant central bank. Compounding the problem, none of the oversight cardinals had the financial training to figure out how to break free of the Vatican Bank’s morass. Giuseppe Caprio, the cardinal who ran the Prefecture for the Economic Affairs of the Holy See, told a journalist, “The changes provided are more formal than substantive.”137
To the satisfaction of the reformers, however, the restructuring did spark another round of press speculation about whether Marcinkus might be finished.138 But his staying power, and the Pope’s lasting faith in him, confounded the Vaticanologists who had half a dozen times incorrectly predicted his imminent ouster. The fifty-nine-year-old Monsignor Donato De Bonis, whose father was a successful banker, was instead elevated as a prelate of equal rank to Marcinkus.139 De Bonis, whose career had been boosted by his reputation for discretion, had emerged from the shadows. He was now the link between the supervisory committee of cardinals and the Vatican Bank.140
Massimo Spada, the IOR’s chief before leaving in the 1960s to work with Sindona, took notice of the power shift. “De Bonis is clever compared to Marcinkus,” Spada told author Benny Lai. “Marcinkus has been downgraded. . . . His power in the IOR is almost dried up.”141
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I. In June, a fifteen-year-old girl, Emanuela Orlandi, disappeared after leaving her family’s Vatican City apartment for a music class. She was never found and theories about her disappearance have gripped Italy for decades. In 2008, a mistress of a deceased Mafia don stunned authorities by claiming that her former lover’s gang had kidnapped the girl. According to this account, the mobster had been procuring young girls for sadistic sex parties at Marcinkus’s request. Since police could not substantiate her claim, her story serves as an odd footnote to the Marcinkus tale.25
II. Gelli evaded capture for four years before being nabbed and returned to Italy. There, tried on numerous charges, he was convicted of fraud in the Ambrosiano collapse. He again disappeared in 1998 from the confines of house arrest. He was returned to Italy the following year after being tracked down to the South of France. Incredibly, a judge ordered him returned to house arrest.27
III. Wilson resigned in 1986 after it was disclosed that he had an unauthorized secret meeting with Libyan leader Colonel Muammar Gaddafi.59
IV. Ivan Fisher, the prominent New York criminal defense counsel who had been one of Sindona’s attorneys, told the author: “Given what I knew about Michele, I believe that he arranged to have himself poisoned. My entire sense of him, of how his head worked, was that he honestly believed he would beat the fraud and murder charges in Italy and get back his reputation. Once that did not happen, once he realized he was going to just die in prison, I think he decided to take control of his own exit.”72
V. Murphy was sitting with Marcinkus one day when the IOR chief took a call. Marcinkus got angry quickly. “He’s a jailbird. What were you thinking? Why did you recommend him?” Within a minute he slammed down the phone. Murphy asked what had happened. An Italian cardinal had recommended a young accountant to take the number two position in the Governorate. Marcinkus had learned that he had a criminal record and had just been released from prison. He demanded to know from the cardinal why he suggested the youngster. “Because he is my sister’s son, my nephew,” was the answer. “That is so typical of the Italians who made up most of the Curia,” Murphy told me. “And there were a lot of them who did not like that Marcinkus applied his American standard of morality when it came to doling out favors, especially to family.”104
VI. A month after the good news from Italy’s highest court, Marcinkus sought an injunction against Doubleday and author A. J. Quinnell to stop the publication in the U.S. of an espionage novel that put him at the center of a conspiracy to assassinate the Soviet Premier. Marcinkus also asked the court to order that 77,000 copies of the novel, stored in a Long Island warehouse, be destroyed. A New York Supreme Court justice rejected both requests.121
VII. In 1985, the faithful contributed $28 million to Peter’s Pence. That increased to $32 million in 1986, but produced less money for the Vatican since so many donations were from the United States, and the lira had strengthened against the dollar. It resulted in an exchange rate of 5 billion less lire. In 1987, Peter’s Pence donations jumped to $50 million, but it was not enough to stop the hemorrhaging. It was after that collection, before the 1988 and 1989 deficits, that the Vatican issued a dire warning: “Reserves have now been almost completely exhausted.” The Vatican was so stressed by its finances that in 1989 it struck a controversial deal for $4.175 million with Japan’s Nippon Television to film the renovation of Michelangelo’s Sistine Chapel frescoes. That money bought Nippon the exclusive rights to exploit the images for three years.128
VIII. Local dioceses still got stuck with bills they thought Rome should cover. The Vatican, for instance, paid the cost for the chartered plane for the Pope and a dozen in his entourage for a ten-day trip to the United States in September 1987. The U.S. government and the American church covered the rest. While the American taxpayer bore $6 million in extra Secret Service and police security costs, dioceses covered everything from stadium rentals to cleanup expenses, to the tune of some $20 million. It took them a couple of years to pay off those expenses.136
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White Finance
Elevating De Bonis was not the clean sweep for which some had hoped. Vaticanologists did not know that Secretary of State Casaroli wanted an outsider to run the bank. The man on whom Casaroli had his eye was forty-nine-year-old Angelo Caloia, an economics professor at a Catholic university, as well as the CEO of Mediocredito Lombardo, a merchant bank. Caloia was a top Milanese Catholic financier, part of an elite group who had formed the Group for Culture, Ethics, and Finance. Their goal was to create an informal consortium of Catholic-dominated banks that earned profits without sacrificing their “Christian identity.” Together they were known as finanza bianca (white finance).1
Casaroli dispatched Monsignor Renato Dardozzi to see if Caloia might like the challenge of straightening out the IOR. Dardozzi, dressed in lay clothes, showed up one day at Caloia’s Milan office. He was so effusive in praising the Group for Culture, Ethics, and Finance that Caloia initially thought all the flattery was setting the groundwork to solicit a large donation. Instead, as the meeting drew to a close, Dardozzi surprised Caloia. “I came to tell you that we consider you the most suitable person to hold the office of the director general of the IOR. Even if I had any doubts, this meeting has dispelled them.”2
Caloia had no interest in the IOR posting. His professional and personal life revolved around Milan, where he lived with his wife and four children. He had no desire to move to Rome.
“The meeting ended rather coldly,” Caloia later recalled. “What I knew about the IOR I had only read in the newspapers. Did I have to be an instrument of God or the Devil to work there? In any case, I thought the matter was settled.”3
A few months later Dardozzi again showed up at Caloia’s office. This time he wore his clerical garb.4 There was no small talk.
“Professor, you are the man we need. There is no need to move to Rome, just help us to give a new structure to the IOR.”
Dardozzi explained that it had taken five difficult years to reach the point where the Pope was ready to replace Marcinkus. Casaroli had twice almost resigned over the standoff.5 Caloia would be the chairman of a small board of directors and the Vatican would provide any support he required.6 And he could commute between Milan and Rome, as his full-time presence at the Vatican was not required.
Caloia accepted in principle. “You have to obey the Holy Roman Church,” he later said. “I had a priest in front of me, who spoke to me as a priest. Personal problems had to fade into the background.”7
That kicked off a series of secret meetings at the Vatican between Caloia and Casaroli. “I went in disguise so no one would know about it,” recalls Caloia.8 Their discussions about the daunting task ahead were “frank.” Caloia said he even hoped to redraft the IOR’s charter drawn by Pius XII and Bernardino Nogara. He thought the bank’s scope and authority were too broad. Casaroli knew that would be no easy task since no church institution gave up power unless ordered to do so by the Pope.
By March 1989, Casaroli privately informed Marcinkus that he would remain at his post only until a replacement arrived.9 Somehow word leaked to reporters. Still, there was no formal announcement, leaving Vaticanologists puzzled. The bank seemed to be in limbo.10
The following month events in Italy gave some impetus to hurry Marcinkus’s exit. A public prosecutor, Pierluigi Dell’Osso, announced a new round of wide-ranging indictments against dozens of former Ambrosiano executives and associates. P2 chief Licio Gelli was among those charged. And Dell’Osso made it clear that he would have indicted Marcinkus if it were not for the previous court rulings that declared the archbishop exempt.11 Marcinkus had again proven what he told Fortune a couple of years earlier: “I may be a lousy banker but at least I’m not in jail.”12
To speed Caloia’s arrival, Cardinal Casaroli called the banker to his private study. Three other laymen were there: Theodor Pietzcker, a Deutsche Bank director; former UBS chairman Philippe de Weck; and Thomas Macioce, president of the U.S. retail chain Allied Stores, and a prominent member of the Order of the Knights of Malta.13 Casaroli proposed they all be part of an extraordinary supervisory panel of laymen empowered to supervise the IOR. Within a week, José Ángel Sánchez Asiaín, cochairman of the Banco Bilbao Vizcaya, was added as the fifth member (Caloia later noted that Sánchez Asiaín was selected as a nod to the growing influence of Hispanics in the church. “He was a very nice Basque, but his English was bizarre and I had to struggle hard to understand him.”)14
For the first time in the IOR’s history, a lay board—chaired by Caloia and with de Weck as vice president—oversaw the bank’s financial operations.15 Meanwhile, Marcinkus was still at the Vatican Bank. The transition was a stop-and-start affair. It took Caloia until March of the following year (1990) to get Giovanni Bodio, the number three executive at Caloia’s Mediocredito Lombardo, appointed as the IOR’s first lay director since Henri de Maillardoz in the 1960s.16
In late May, questions about how to speed up the transfer of power were again overshadowed by news of past bank scandals. The long-awaited criminal trial against thirty-five Ambrosiano defendants had started in Milan. Although the prosecutors had been blocked from charging Marcinkus, Mennini, and de Strobel, that did not prevent them from presenting extensive evidence about the Vatican Bank’s role. The IOR was treated as if it was as culpable as any of the accused in the defendant’s dock.17 (To the great consternation of the church, Francis Ford Coppola’s Godfather III, released later that year, had a storyline based on the bank’s role in the Ambrosiano collapse; in the film, an archbishop in league with the Mafia is murdered in a Vatican stairwell, with his corpse replicating sixteenth-century Protestant images of the defeat of the Antichrist.)
Five months into the trial, Mennini and de Strobel resigned their bank postings and moved out of Vatican City. And to the relief of almost everyone, Marcinkus submitted his formal resignation to John Paul.
“I am very grateful to the Holy Father for having granted my request to retire from Vatican service and to return to the United States. The forty years that I have spent away from my diocese—in diplomatic service, working with the preparation and performance of Papal trips, serving the Institute for Works of Religion and the Governorate—have enriched my priesthood and given me a keener perception and deeper appreciation of the unity and universality of the Church. They have also confirmed my conviction about the necessity of pastoral work in the life of every priest. The ministry of the parish has always been my ambition and day after day I tried to be faithful to this vocation addressing every aspect of my work with pastoral spirit. Now that I am free from administrative responsibilities and returning to the U.S., I will be useful in those pastoral services that I will be given to perform, as are many other elderly priests of my diocese.”18
A few days later, Marcinkus told a reporter: “I have never done anything wrong. I would like to set the record straight.”19 Marcinkus’s exile was as an ordinary priest in the rather unremarkable parish of a retirement community in Sun City, Arizona. In his new diocese, no one was quite certain of why such a high-ranking Curia official had become their pastor. There was no dearth of misinformation. Marcinkus was “wanted in Rome for being associated with a bank robbery,” one local detective answered an Interpol inquiry in 2003.20
“He was a broken man but would never give his enemies the satisfaction of revealing that,” his friend U.S. diplomat Peter Murphy said.21
To The New York Times, Marcinkus said, “I think they were surprised when I told them I was leaving.”22 Many Vaticanologists had trouble believing that. “I have no doubt that I will be remembered as the villain in the Calvi affair.” That was something on which most agreed.I
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I. Marcinkus died in 2006 at the age of eighty-four from complications from emphysema. He never gave a wide-ranging interview about his Vatican tenure once he returned to the States. When the author reached him by phone in November 2005, he said, “I have no interest in revisiting that time.” The author was not successful i
n finding Marcinkus’s personal papers and journals. In particular, the Chicago diocese never responded to written requests as to whether a published report that Marcinkus had left his personal diaries and papers to that diocese was correct. As for Marcinkus’s two lay colleagues, they also died without addressing the controversies that had tarnished the final years of their service. Mennini’s son Paolo is currently the chief of the Extraordinary Division at the Vatican’s APSA.23
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Suitcases of Cash
With Marcinkus gone from Rome, Angelo Caloia was unchallenged in his energetic oversight of the Vatican Bank. It seemed a much tamer institution. Under Caloia’s direction there was hope that the bank might morph into something pedestrian rather than rogue.
Although Caloia was a devout Catholic and avid member of Opus Dei, he did not have the patrician heritage that was the hallmark of the Black Nobles.I Born in 1939 into a working-class family in the small northern village of Castano Primo, his mother was a seamstress and his father a carpenter. When Caloia was eight, he fell ill with typhoid, and a burst appendix that led to peritonitis complicated his recovery. During months of difficult recuperation, he listened to the “Microphone of God,” jarring radio broadcasts by Riccardo Lombardi, a provocative politician who was a committed socialist and advocate for a “working man’s Catholic Leftist party.” Those broadcasts made an indelible impression on the youngster, so much so that in later years he was politically left of most Catholic financiers.2 Although he had worked his way to a position of privilege, he rejected the elitism that often accompanied such standing. The Italian press began referring to him as Italy’s Catholic banker. He told a colleague the only thing worse would be to be called the Pope’s banker.3