Caloia sent off two letters to Sodano with the grim news. By this time the Secretary of State had retained Franzo Grande Stevens, one of Italy’s most prominent and well-connected attorneys.60 Stevens, he hoped, might provide advice on how to deal with the parallel IOR that seemed beyond the control of Caloia and his lay colleagues. Giovanni Bodio, who had been the number three banker at Caloia’s Mediocredito Lombardo before coming to the Vatican, had proven a disappointment. Bodio and his two assistants, Pietro Ciocci and Antonio Chiminello, had failed to move aggressively against the IOR’s proxy foundation accounts. Instead of closing suspicious ones, they opened new ones that were often just as questionable. Caloia thought Bodio was “a very good, generous and exemplary person,” but that he paid too much deference to clerical power. “All it took him to allow an investment was to be invited for breakfast by someone with a red tunic.”61
Caloia later discovered Bodio was not only liberal when it came to opening accounts for cardinals, but that he continued the IOR’s long history of doing it for rich Italians as well. Relying on Article 2 of the Vatican Bank’s governing statutes, which allows the IOR to accept “goods with a purpose at least partially set for the future works of religion,” Bodio helped open multimillion-dollar accounts for Italian tycoons, such as industrialist Domenico Bonifaci.62 Since Italy’s highest tax rate on earned interest and stock dividends was 30 percent, Bonifaci thought the Vatican Bank was a bargain: a 10 percent fee for the cash and 7 percent for any securities and stocks, all paid to the church as a fixed annual donation. Incredibly the church lost money on Bonifaci’s account since the IOR agreed somehow to pay him 11.75 percent interest on his deposits, a rate the Vatican Bank only guaranteed monks, friars, and a handful of religious organizations.63 (Bonifaci had thoroughly ingratiated himself in the power corridors at the Vatican, helping APSA’s Cardinal Castillo Lara purchase for the church a historic luxury estate just outside Rome.)IV
A frantic internal debate played out during the fall of 1993 about whether the church should cooperate with Milanese prosecutors. Caloia and the reformers wanted to help but they were staunchly opposed by reactionary prelates who thought the church had no obligation to do anything. The charismatic Cardinal Castillo Lara made a persuasive argument against any accommodation that might weaken the church’s inviolable sovereignty. It owed no duty, he contended, to assist Italy’s criminal probe.65
Castillo Lara believed it might not be possible to demolish the parallel IOR without making the Vatican Bank crash in on itself. At every turn, he adeptly blocked Caloia’s efforts to make the bank more transparent.66 Some reformers meanwhile suspected that the cardinal was more than just an obstacle to reform. They thought the powerful APSA boss was the source of press leaks that made it appear that it was Caloia’s team that had failed to rein in the bank’s questionable activities.67
The Vatican’s resistance to cooperating with Italian prosecutors did not surprise Italy’s leading politicians. Former Prime Minister Emilio Colombo—the Minister of Foreign Affairs—later told colleagues that the Vatican did whatever it wanted and there was “nothing more we could do. When there are treaties for mutual legal assistance, the relationships are based on reciprocity. I was almost certain it would be impossible to obtain their cooperation.”68 (For that matter, not many Italian politicians had much enthusiasm about aiding the “Clean Hands” prosecutors. When Prime Minister Bettino Craxi and four top ministers resigned in April 1993, the next Prime Minister, Silvio Berlusconi, himself under investigation for possible illegal payments from one of his companies, slowed the anticorruption crusade by issuing an executive decree that severely limited the use of preventive incarceration. It had been one of the prosecutors’ most effective tools).69
By the late fall (1993), Sodano updated the Pope about the bank. The situation, he told John Paul, was much more complicated than simply identifying and closing abused proxy accounts. Disclosing information to Italian prosecutors, Sodano counseled, might set off a chain reaction of events beyond the church’s control.70 That briefing left John Paul convinced that the IOR was a minefield better left undisturbed.71
Late that autumn a Venezuelan attorney, Alberto Jaime Berti, cooperated with Italian magistrates in return for immunity from prosecution on charges that the IOR was at the center of laundering several hundred million dollars through Swiss and Panamanian banks on behalf of a handful of senior Opus Dei officials.72 The Italian media reported that Berti fingered De Bonis as his Vatican Bank connection and produced dozens of documents with the monsignor’s signature. Prosecutors believed that De Bonis had the key to a safe deposit box at Geneva’s Banque de Paris et des Pays-Bas. It was in that box, said Berti, that a cache of documents laid out exactly how the IOR laundered the money. De Bonis, cloaked by immunity in his Knights of Malta position, denied even knowing Berti.73 The prosecutors, unable to move against him, had to stand down.
On November 13, 1993, Caloia was driving back to Rome from Padua when he swerved to avoid hitting a truck stuck in the motorway and lost control of his car. He was badly injured. A helicopter took him to a nearby hospital, and he was soon transferred to Gemelli’s trauma unit in Rome.
“In the state of unconsciousness, I had a flash of lucidity.” He believed that God had saved him so he could do the right thing when it came to the Vatican Bank. If he recovered, he promised, he would redouble his reform efforts.74
The Curia, meanwhile, was awash in malicious rumors that the wreck was the result of foul play.75 During Caloia’s nearly one-month hospital recuperation, the bank garnered more bad headlines. At the trial of Sergio Cusani, a leading socialist politician and the financier charged with engineering the kickbacks at the heart of mani pulite, prosecutors presented evidence that much of the dirty money was deposited at the Vatican Bank. Worse, the church had earned an $8 million fee for cashing the Treasury bills used as bribes to then ex–Prime Minister Bettino Craxi.76,V The former journalist Luigi Bisignani, the holder of the account through which most of the money had passed, gave a gripping account of how he brought millions in Treasury notes in large, unmarked envelopes into the IOR, where they were deposited into his slush fund.78 Bisignani received $2.6 million in cash for his services, money he used to buy a house in Venice and fuel a luxurious lifestyle.
Carlo Sama, a former top executive at Ferruzzi—Italy’s second largest private company after Fiat—told the court about how De Bonis helped him and his wife, Alessandra, open an account titled the San Serafino Foundation, named after a seventeenth-century Capuchin friar. In eighteen months, through mid-1992, about $38 million passed through it. That money went to two Swiss banks and one in Luxembourg, where it was exchanged into nontraceable bearer bonds.79 Sama testified that the IOR was his bank of choice for any clandestine money transfers as it provided “absolute confidentiality.”80
Cusani’s trial presented Caloia another opportunity to lobby Sodano for better cooperation with Italian investigators.81 But the Vatican steadfastly rebuffed all efforts by Italian investigators to open the IOR’s books.82 Prime Minister Andreotti was never charged in the Enimont scandal because the IOR remarkably kept his identity from Italian authorities (the link to Andreotti would only become public in 2009).83 Even appeals from the financiers on the supervisory lay commission—an angry letter with eighteen pointed questions for Sodano—were buried in a slow-moving internal investigation that went nowhere. Cardinal Castillo Lara again championed the theory that the latest instance was just another unfortunate example where unscrupulous laymen had taken advantage of the IOR.84
As the Enimont scandal played out, Italy oddly lost enthusiasm in pursuing any possible crimes at the Vatican Bank. There was not even a serious effort to get the IOR to return the profits it reaped from the accounts at the center of the bribery scandal. The magistrates instead accepted the church’s excuse that the Vatican Bank could not have known the final destination of the millions that flowed through its accounts, and therefore had no responsibility for how it was u
sed.85
Italy’s lack of zeal when it came to investigating the Vatican also spared the church further embarrassment a year later when a high-ranking Mafia snitch, Francesco Marino Mannoia, told investigators about how P2’s Licio Gelli used the IOR to deposit illegal money belonging to Palermo’s godfather, Salvatore Riina.86 And in 1994, during a police interrogation, mobster Vincenzo Calcara claimed that he personally knew that under Marcinkus the IOR helped launder $6.5 million in Mafia cash. In a sworn statement, Calcara said he had flown from Sicily to Rome carrying two large suitcases stuffed with 100,000-lire banknotes. Two politicians had tagged along. At Rome’s Fiumicino airport, Marcinkus and a cardinal to whom they were not introduced were waiting. The group drove to a lawyer’s office on the Via Cassia in the north of Rome.87 Calcara turned over the cash. He claimed not to know how Marcinkus did it, but in a month it was available as clean money, less the IOR’s service fee. Another ranking mobster and courtroom witness, Rosario Spatola, testified that he heard Marcinkus “bragging” about his Mafia influence.88
“We are 100 percent sure that this is pure invention,” Cardinal Castillo Lara told a reporter, perhaps sounding as hopeful as he did convincing.89
What did Italy’s Justice Ministry do with the well-placed tips that the mob had found safe haven inside the IOR? Top prosecutors decided not to pursue the leads. “Go after the Vatican?” asked one magistrate of the Palermo court. “Haven’t we made enough enemies already?”90
• • •
In 1994, the Pope and Cardinal Sodano discussed whether it was finally time to select a cleric to replace De Bonis at the Vatican Bank. Monsignor Dardozzi let it be known that he might be interested. But Sodano wanted the position left unfilled. He tasked one of his assistants in the Secretary of State’s office, Monsignor Gianfranco Piovano, a career diplomat responsible for Peter’s Pence, to familiarize himself with the bank’s operation.91 On the rise at the same time as Piovano was Lelio Scaletti, a nondescript sixty-five-year-old layman who had worked his way up the IOR ranks since starting at the church when Pius XII was Pope. It was doubtful that Scaletti, a traditionalist who would remain at the Vatican Bank for another fifteen years, would back bold changes.92
Meanwhile, Caloia and his fellow director, Philippe de Weck, persuaded the IOR’s supervisory cardinals to hire outside auditors. Their choice was Switzerland’s Revisuisse, a Price Waterhouse subsidiary. Cardinal Casimir Szoka, the chief of the Prefecture of Economic Affairs, and former treasurer of the American Bishops’ Conference, soon heralded Revisuisse’s work as providing the Vatican’s first ever “consolidated balance sheet.”93
Dardozzi, who by now had decided that reporting wrongdoing was essentially a waste of time since no one seemed to do anything about it, watched as the Revisuisse auditors failed repeatedly to uncover information that might unmask the bank’s proxy account problems. The one department to which Revisuisse did not have access to any books or ledgers was the IOR.
At a mid-June 1994 press conference, Cardinal Szoka presented the “audited” figures confirming an annual surplus for the Vatican. It was strong evidence that at least the church had turned a financial corner. A reporter asked what was so revolutionary about retaining outside accountants so long as the IOR’s financial statements were still secret. The question irritated Szoka. The IOR is not part of the Holy See, he answered; it is a separate department, unique inside the Vatican.94 That belied that all IOR profits belonged only to the Pope, who distributed them at his own discretion. Just three months before, Caloia had written a private letter to John Paul, passing along the news that the IOR had earned $70 million in profit the previous year.95
In 1995, Caloia broke nearly five years of silence as the IOR’s director. “We’ve tried to move on by tapping the transparency button,” he told a reporter from Corriere della Sera. “Unfortunately, recently, in the past months [the Enimont scandal], we ended up in the newspapers, but through no fault of our own.”96
Caloia was well aware that his “transparency button” was not working well. That year an Italian lawyer arranged a meeting with Dardozzi and Scaletti. He represented the heirs of one of Italy’s deceased property tycoons, Alessandro Gerini, who had been dubbed “God’s Builder” in Italy because of the dominant role he played on many Vatican construction projects. Gerini had created an eponymously named foundation to benefit the Salesians of Don Bosco, a religious order.97 Now, the heirs—Gerini’s grandchildren—wanted to claw back some of the nearly $175 million that Gerini had bequeathed. During the talks, the Vatican learned about a multimillion-dollar bank account in Uruguay that supposedly had some money that had gone missing during the frenetic final days of Calvi and the Ambrosiano.98
Monsignor Dardozzi feared that the Ambrosiano tip might be some sort of trap and passed it along to Secretary of State Sodano. It soon made its way to the Pope. And Sodano again sought the advice of Franzo Grande Stevens, the elite attorney retained for special consulting. The church decided it was too risky to pursue any Uruguayan account. The clerics feared it might prompt Italy to take a second look at the Vatican’s $244 million settlement over the Ambrosiano. If any money related to the Calvi affair was recovered, Italian officials might contend the Vatican should contribute more to the Ambrosiano creditors.99,VI
That some IOR-Calvi money might be sitting in an abandoned account in South America was simply another vivid reminder to Caloia of the bank’s hidden landmines. And just when he thought he had heard the worst of it, there was a new setback. An account belonging to the religious movement Lumen Christi, run by a charismatic Argentine priest, Domingo Izzi, emerged as problematic. Upon opening it in 1991, Izzi had requested an IOR loan for disparate Argentine ventures including livestock, a helicopter service, and organizing a national lottery.101 All of that, promised Izzi, would “provide for the needs resulting from the activities of the movement in the Lumen Christi and the propagation of the Faith” in South America and Italy. Six million dollars went from the IOR to Father Izzi and Lumen Christi less than twenty-four hours after he applied for a loan. Repayment was due in two years. Izzi did not repay a cent. When Caloia instructed the IOR to collect, it got the title instead to the Lumen Christi share of two Rome apartments. But those were so encumbered with mortgages that they were worth less than what was owed. Caloia was nothing if not persistent. Despite appeals to Cardinal Castillo Lara and the Papal Nuncio to Argentina, and personal calls to Father Izzi urging him to repay the money, Caloia could not collect any of the loan. It had ballooned by 1995 to $8.2 million with interest and penalties.102 (Although Caloia would chase it for several more frustrating years, the IOR had to ultimately write it off.)103
The following year, 1996, the Vatican bragged that the Enimont scandal had prompted the IOR to adopt “the principles laid down by the FATF [Financial Action Task Force] regarding measures to prevent money laundering.”104 That sounded good at first pass. The FATF was an intergovernmental body established in 1989 by sixteen European countries to “set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.”105 Yet, despite the Vatican’s claim, it had not subjected itself to any FATF supervision or regulation. Other FATF-member countries with dodgy reputations when it came to money laundering—including Luxembourg, Switzerland, Singapore, and Hong Kong—had by then taken more concrete steps than the Vatican toward opening their banking systems to independent regulators.106
Vatican Bank insiders knew that the announcement about the FATF guidelines changed nothing.
* * *
I. Members of Opus Dei dominated the lay selections for prominent Vatican positions under Pope John Paul II. The Pontiff reduced the influence wielded by the Jesuits, an order that had long opposed elevating Opus Dei to a personal prelature of the Pope. Fifteen years earlier, Pope Paul VI had rejected Opus Dei’s application for such a special status. John Paul
II granted it in 1982. That was precisely what Roberto Calvi had told his family Opus Dei had wanted in failed discussions he had with it about bailing out the Ambrosiano.1
II. Author Jason Berry wrote about Sodano in his seminal book Render Unto Rome and noted that he was a “committed anti-leftist” who had been close to Chilean strongman Augusto Pinochet when he had served as Nuncio there. According to Berry, Pope John Paul II was “famously bored by Curial politics, [and] had in Sodano a firewall from the inner wrangles.” Berry also broke the story that Sodano had pressured German Cardinal Joseph Ratzinger (later Pope Benedict XVI) to scuttle investigations into appalling charges of sex abuse in two high-profile cases: Vienna’s archbishop Hans Hermann Groёr and Marcial Maciel Degollado, the founder of the religious order Legion of Christ. Repeated entreaties to the Vatican Press Office to interview Cardinal Sodano went unanswered.47
III. The Manhattan foundation was a nonprofit organization that ran a full-scholarship, invitation-only leadership camp in Rhinebeck, New York, for boys aged fourteen to sixteen. George Edward (Freddie) Jonas, a former OSS officer during World War II and also the heir to a felt hat manufacturing fortune, established the foundation in 1930. According to Bisignani, Jonas and Marcinkus had set up the account at the IOR in the early 1970s and they later passed it to De Bonis.57
IV. Caloia replaced Bodio with Andrea Gibellini, a sixty-three-year-old banker and director from Banca Popolare di Bergamo. Gibellini had a reputation as a tough disciplinarian. And Caloia sometimes began relying for advice on Vincenzo Perrone, a Milanese friend and professor of business management. Sodano, meanwhile, assigned his personal secretary, a forty-two-year-old American monsignor, Timothy Broglio, to assist Stevens and Caloia.64
V. After Cusani’s 1994 conviction, he served nearly six years in prison. The Vatican inexplicably petitioned the government to pardon him.77
God's Bankers: A History of Money and Power at the Vatican Page 50
