God's Bankers: A History of Money and Power at the Vatican

by Gerald Posner

  233 Blet, Pius XII and the Second World War, 166.

  234 Amiram Barkat, “New Research Bares Vatican Criticism of Nazi-Era Pope,” Haaretz, December 1, 2006, 1. The accounts of both Bishops Burzio and Roncalli indicate that the Vatican had the Auschwitz Protocols by May 1944, although the church’s official position is that Pius did not see the document until October.

  235 Blet, Pius XII and the Second World War, 166–67; see also David B. Woolnera and Richard G. Kuria, eds., FDR, the Vatican, and the Roman Catholic Church in America, 1933–1945 (New York: Palgrave Macmillan, 2003), chapter 13.

  236 Katz, The Battle for Rome, 188.

  237 Blet, Pius XII and the Second World War, 223–24.

  238 Katz, The Battle for Rome, 189.

  239 Foreign Office files, 371/43869/21, National Archives, Kew, UK, cited in Chadwick, Britain and the Vatican, 290; see also Robert G. Weisborg and Michael W. Honhart, “A Question of Race: Pope Pius XII and the ‘Colored Troops’ in Italy,” The Historian, vol. 65, issue 2, winter 2002, 415).

  240 As early as 1920, when he was Secretary of State, Pacelli had requested Pius XI’s intervention to stop France’s deployment of black troops, mostly of African heritage, in fighting in the Rhineland. That was because he said they were routinely raping German women and children. It was a charge the French adamantly rejected and called “odious.” Credible proof of such widespread behavior was never forthcoming. Foreign Office Papers, in Public Records Office, Kew, UK, 371/43869/21. For more information on the British national archives depository, see http://www.nationalarchives.gov.uk/default.htm See also Cornwell, Hitler’s Pope, quoting an interview with P. Gumple, S.J., 319, 320.

  241 Katz, The Battle for Rome, 157.

  242 Blet, Pius XII and the Second World War, 287.

  243 Katz, The Battle for Rome, 324–25.

  244 Hoffman, Anatomy of the Vatican, 21–22.

  245 Squires, “Wartime Pope Pius XII ‘More Concerned About Communism than Holocaust,’ ” 1, referring to the discovery of previously classified wartime correspondence from D’Arcy Osborne to the British Foreign Office recounting details of one of his meetings with Pius XII.

  246 David Kranzler, “The Swiss Press Campaign That Halted Deportations to Auschwitz and the Role of the Vatican, the Swiss and Hungarian Churches,” in Remembering for the Future: The Holocaust in an Age of Genocide, Vol. 1, 162. Since the Nazi invasion a few months earlier, Horthy was mostly sidelined and the nation’s power was held by its Nazi Governor General, SS Brigadeführer Edmund Veesenmayer.

  247 Phayer, The Catholic Church and the Holocaust, 107.

  248 Ibid., 108–9.

  249 Cooney, The American Pope, 141.

  250 In May 2014, to the consternation of church traditionalists, Pope Francis announced he was not ready to allow Pius’s beatification. “There’s still no miracle,” Francis told reporters as he returned to Rome after a two-day visit to Israel. “If there are no miracles, it can’t go forward. It’s blocked there.” Before 1983, two miracles were necessary for beatification. Only one is now required. Nicole Winfield, “Pope Francis Says Pius XII’s Beatification Won’t Go Ahead,” The Times of Israel, May 27, 2014.

  251 See generally Lawler, Popes and Politics, 133.

  252 Phayer, The Catholic Church and the Holocaust, 25–26; see also Chadwick, Britain and the Vatican, 259–60, 275; Cornwell, Hitler’s Pope.

  253 Lawler, Popes and Politics, 125. See generally Christina Susanna House, “Eugenio Pacelli: His Diplomacy Prior to His Pontificate and Its Lingering Results,” (thesis, Bowling Green State University, August 2011).

  254 Foreign Office files, Osborne to Halifax, December 7, 1940, 380/106, National Archives, Kew, UK.

  255 Kertzer, The Pope and Mussolini, Kindle edition, location 468 of 10577.

  256 When Pacelli was in Germany after World War I, there were violent pro-communist demonstrations. Pacelli wrote to the Vatican Secretary of State about how the three red leaders were all Jews. That experience helped form his later view that socialism, communism, and Jews were all intertwined. He described a trip by a colleague to meet representatives of the new Bolshevik government that controlled Munich. “An army of employees were dashing about to and fro, giving out orders, waving bits of paper, and in the middle of this, a gang of young women, of dubious appearance, Jews like all the rest of them, hanging around in all the offices with lecherous demeanor and suggestive smiles. The boss of this female rabble was Levien’s mistress, a young Russian woman, a Jew and divorcée, who was in charge. . . . This Levien is a young man, of about thirty to thirty-five, also Russian and a Jew. Pale, dirty, with vacant eyes, hoarse voice, vulgar, repulsive, with a face that is both intelligent and sly.” (Max Levien was head of the Munich Soviet movement.) See also Cornwell, Hitler’s Pope, pp. 295–96. Defenders of Pius, like Jesuit historian Pierre Blet, counter that the letter to the Vatican Secretary of State was probably only signed by Pacelli, as such matters were often prepared by one of the Nuncio’s aides. Of course, that overlooks Pacelli’s micromanagement. It would have been out of character for Pacelli to send such a letter to his superiors without signing off on every word.

  257 David L. Kertzer, “The Popes Against the Jews: The Vatican’s Role in the Rise of Modern Anti-Semitism,” The New York Times, September 23, 2001.

  258 The International Catholic-Jewish Historical Commission—consisting of three Catholic scholars appointed by the Vatican and three Jewish scholars selected by a group of Jewish organizations—concluded a ten-year study into the question of Pius XII and his role during World War II in 2009. The reassessment of Pius was that “Pius XII was neither ‘Hitler’s pope’ nor a ‘righteous Gentile.’ The polished diplomat ultimately won out over the voice of conscience in facing the formidable trial of the Holocaust.” In July 2012, Yad Vashem, Israel’s Holocaust Memorial and Museum, modified text in an exhibit so it was less critical of Pius. The title of that portion of the exhibit was changed from “Pius XII” to “The Vatican.” The previous text noted that Pius had signed the Reichskonkordat with Germany “even if this meant recognizing the Nazi racist regime.” The revision noted that Pius was only the Papal Nuncio when the Concordat was negotiated and it removed the last sentence. In another instance, the previous text addressed the deportation of Rome’s Jews by concluding that Pius “did not intervene.” The revision states that Pius merely “did not publicly protest.” In September 2013, Yad Vashem further moderated its position, adding that the Vatican was sometimes aware that convents sheltered Jews hiding from the Nazis.

  Although the changes seem minor, considering they were made at Israel’s most important tribute to the Holocaust, they were significant. It was a confirmation that judging Pius’s wartime actions had become more complex and nuanced over time with the release of more documents. It was also a victory for the Vatican, which had for years bitterly protested the Yad Vashem text. In 2007, Archbishop Antonio Franco, the Papal Nuncio to Israel and the Palestinian territories, had threatened to not take part in Israel’s Holocaust Remembrance Day ceremony because of it. After the changes, Franco told the Catholic News Service that the revision was “a step forward”; see Wistrich, “Reassessing Pope Pius XII’s Attitudes Toward the Holocaust.”

  Chapter 9: The Blacklist

  1 The Nazis also collected a similar tax on behalf of Protestants. Ninety-five percent of all Germans paid the church tax during the years Hitler was in power. The concept of the tax has since spread to other countries, presently covering Catholics in Germany, Sweden, Austria, Denmark, Finland, and Iceland, as well as parts of Switzerland and Italy. The average tax is 9 percent of the person’s income tax. So someone paying a $5,000 income tax would pay another $450 as a church tax. In 2010, the last year for which the church released information, the tax brought in about $14 billion, paying 70 percent of the Vatican’s expenses. That year, a retired German professor of church law filed a lawsuit demanding that he be allowed to receive Communion and have a Catholic burial, but not
be forced to pay the tax. A German court ruled against him, in a decision the national press dubbed “pay to pray.” An extension of the tax to cover capital gains as of 2015 has caused thousands of Germans to quit their parishes. See Tom Hehegan, “Capital Gains Mean Church Losses in New German Tax Twist,” Reuters, August 29, 2014. See also Doris L. Bergen, “Nazism and Christianity: Partners and Rivals? A Response to Richard Steigmann-Gall, The Holy Reich: Nazi Conceptions of Christianity, 1919–1945,” Journal of Contemporary History 42, no. 1 (January 2007): 29–30.

  2 Clemens Vollnhals, “Das Reichskonkordat von 1933 als Konfliktfall im Alliierten Kontrollrat,” Vierteljahrshefte für Zeitgeschichte, 35, Jahrg., October 4, 1987), 677, 695–97. See also Paul L. Williams, The Vatican Exposed (Amherst, NY: Prometheus Books, 2003), Kindle edition, 428 of 2622.

  3 Because of Luxembourg’s restrictions on access to company files, it is not possible to determine how Grolux was ultimately dissolved or what happened to its 36 million Luxembourg francs (then worth approximately $2.25 million). McGoldrick, “New Perspectives on Pius XII and Vatican Financial Transactions During the Second World War,” 1033.

  4 RG 226, Office of Strategic Services (OSS), Box 168, XL12579, NARA.

  5 Pollard, Money and the Rise of the Modern Papacy, 190.

  6 William Harvey Reeves, “The Control of Foreign Funds by the United States Treasury,” Law and Contemporary Problems, Duke University Law School, 1945, 22.

  7 Pollard, The Vatican and the Wall Street Crash, 1085, 1091. Some reports claim that the amount of gold transferred was substantially higher, approximately $22 million; see Lo Bello, The Vatican Empire, 27; see also McGoldrick, “New Perspectives on Pius XII and Vatican Financial Transactions During the Second World War.”

  8 Gollin, Worldly Goods, 457–58; see Pollard, Money and the Rise of the Modern Papacy, 190.

  9 In 2012, documents released from the National Archives of the United Kingdom revealed that from 1941 through mid-1943 the British government had intercepted many Vatican cables and communications about the church’s investments to the U.S. and U.K. They provide a limited view of Nogara’s overall strategy. Other documents that provide a fuller portrait of Nogara’s financial management are sealed in the British National Archives; a year of ABSS statements at J. P. Morgan are missing; and the diary of the British envoy to the Vatican, Sir D’Arcy Osborne, is in the British library but heavily redacted. U.S. Treasury Department, Treasury Financial Agent, Form 1, November 10, 1941, part of the collection of T series, 231/140, National Archives, Kew, UK; also McGoldrick, “New Perspectives on Pius XII and Vatican Financial Transactions During the Second World War,” 1032.

  10 Executive Order No. 8839, April 10, 1940, Documents Pertaining to Foreign Funds Control, U.S. Treasury Department, Washington: March 30, 1943, 6, Papers of Bernard Bernstein, Subject File, Box 23, Harry S. Truman Library, Independence, MO.

  11 American isolationists objected to the freezing order, criticizing it as a provocative act that could encourage an Axis retaliation against the U.S. FDR claimed authority for his executive order from a broad World War I–era statute, the Trading with the Enemy Act.

  12 U.S. Treasury Department, “Documents Pertaining to Foreign Funds Control,” Washington, March 30, 1943, 6, Papers of Bernard Bernstein Subject File, Box 23, Harry S. Truman Library, Independence, MO; see also Mira Wilkins, The History of Foreign Investment in the United States, 1914–1945 (Cambridge: Harvard University Press, 2004), 451–52, 829, citing U.S. Department of the Treasury, Documents Pertaining to Foreign Funds Control (Washington, DC, 1945).

  13 Executive Order 8785, 6 Federal Register, 2897, 1941. And in Documents Pertaining to Foreign Funds Control, U.S. Treasury Department, Washington: March 30, 1943, 6, 11, Papers of Bernard Bernstein, Subject File, Box 23, Harry S. Truman Library, Independence, MO.

  14 Shortly after that amendment, the Nazis attacked the Soviet Union. Russia was then removed from the blacklist.

  15 “Italians Take $480,000,000 from the U.S.,” New York Post, May 3, 1941.

  16 General License No. 44, Roman Curia—Generally Licensed National, Documents Pertaining to Foreign Funds Control, U.S. Treasury Department, Washington, March 30, 1943, 44, Papers of Bernard Bernstein, Subject File, Box 23, Harry S. Truman Library, Independence, MO.

  17 “Nephew of Pius XI Dies,” The New York Times, January 29, 1953, 28.

  18 Cardinal Carlo Salotti, Prefect of the Sacred Congregation of Rites, and one of Pius’s closest advisors, “is pro-Fascist and a close friend of Pius XII.” Cardinal Adolf Bertram, Director of the Confraternity of German Bishops, “is a weak man who has collaborated with the Nazis.” Genoa’s cardinal, Pietro Boetto, “is unquestionably the ringleader of the Fascist clique within the College of Cardinals.” Cardinal Raffaele Carlo Rossi, Secretary of the Consistorial Congregation, “is decidedly pro-Fascist.” Cardinal Celso Benigno Luigi Constantini is “a Fascist.” Argentina’s Cardinal Santiago Luis Copello is “a Fascist, [and] anti-United States.” Paris’s Cardinal Emmanuel Célestin Suhard is “a collaborationist.” And Cardinal Nicola Canali, President of Vatican City, is “a Fascist.” J.C.H. to A.W.D. (Allen Dulles), OSS, September 10, 1942, RG 226, E217, Box 20, Location 00687RWN26535, NARA.

  19 Foreign Office files, 37150078, Financial Activities of the Vatican, John Crump, Ministry of Economic Warfare, to Peter Hebblethwaite, Foreign Office, March 29, 1945, National Archives, Kew, UK; U.S. Treasury Department, “Documents Pertaining to Foreign Funds Control,” Washington, March 30, 1943, 24, Papers of Bernard Bernstein, Subject File, Box 23, Harry S. Truman Library, Independence, MO.

  20 Besier, The Holy See and Hitler’s Germany, 163.

  21 RG 131, Department of Justice, Foreign Funds and Control Records, Box 487, Letter of John Pehle to Henry Morgenthau, April 21, 1942, NARA; see also Charles Higham, Trading with the Enemy: An Exposé of the Nazi-American Money Plot, 1933–1949 (New York: Delacorte, 1983), 191. The U.S. did more than simply fail to list the Vatican as a blocked country under the president’s executive order. At times, the U.S. gave the church, under the direction of Pius XII’s nephew Carlo Pacelli, permission to import supplies through an Allied naval blockade.

  22 Harold H. Tittmann Jr., Inside the Vatican of Pius XII, Kindle edition, locations 665–77.

  23 Ibid.

  24 McGoldrick, “New Perspectives on Pius XII and Vatican Financial Transactions During the Second World War,” 1045; Phayer, Pius XII, the Holocaust, and the Cold War, 96, citing J. Edgar Hoover, FBI Director, to Adolf Berle Jr., Assistant Secretary of State, September 22, 1941, Decimal File 1940–44, Box 5689, File 866A.001/103, RG 59, NARA. For details on the Pope’s personal account, see Memo from Chase National Bank to Ferdinando Federici, September 30, 1941,“Pope’s Account with Chase National Bank, New York,” RG 59, IWG (Nazi war crimes working group), FBI Secret Intercepts, NARA.

  25 “Authorizing a Proclaimed List of Certain Blocked Nationals and Controlling Certain Exports,” July 22, 1941, Documents Pertaining to Foreign Funds Control, U.S. Treasury Department, Washington: March 30, 1943, 14–15, Papers of Bernard Bernstein Subject File, Box 23, Harry S. Truman Library, Independence, MO. See also Reeves, “The Control of Foreign Funds by the United States Treasury,” 57.

  26 A historical review of the Proclaimed List for just Latin America—in which most of the countries were neutral during the war—reveals that in the first year it was issued some six thousand businesses were listed. Those marked as pro-Axis by the State Department, relying invariably on undisclosed evidence assembled by the FBI, included a diverse group, ranging from accountants, lawyers, even landlords who had done business with a German, Italian, or Japanese national: Max Paul Friedman, Economic Warfare, Enemy Civilians, and the Lessons of World War II Nazis and Good Neighbors: The United States Campaign Against the Germans of Latin American World War II (Cambridge: Cambridge University Press, 2005), 418.

  27 F. W. W. McCombe’s Report on Vatican Funds, May 16, 1941, T 231, 1131, National Archives, Kew, UK.
The TWE (Trading with the Enemy) files were released by the British government mostly between 1999 and 2008 and are maintained at the Department of Trade and Industry: Enemy Property Claims Assessment Panel (EPCAP) Secretariat; Database of Seized Property, Reference Section NK 1, National Archives, Kew, UK. The British published a “Statutory List,” which was their blacklist.

  28 McGoldrick, “New Perspectives on Pius XII and Vatican Financial Transactions During the Second World War,” 1043.

  29 On January 21, 2013, The Guardian published a “special investigation” under the banner headline, “How the Vatican Built a Secret Property Empire Using Mussolini’s Millions.” The newspaper followed the Lateran Pacts money that was deposited into British Grolux to list the properties the church had acquired over the years. “Behind a disguised offshore company structure, the church’s international portfolio has been built up over the years, using cash originally handed over by Mussolini in return for papal recognition of the Italian fascist regime in 1929. Since then the international value of Mussolini’s nest-egg has mounted until it now exceeds £500m.” A Vatican spokesman dismissed it the following day: “I am amazed by this article in the Guardian, which seems to come from someone who is among the asteroids. . . . These things have been public knowledge for 80 years.” David Leigh, Jean François Tanda, and Jessica Benhamou, “Mussolini, a Vatican Vow of Silence and the Secret £500m Property Portfolio: Offshore Structure Veils List of London Properties Fascist Origins of Papacy’s Wealth Hidden from 1931,” The Guardian, January 22, 2013, 1.

  As for Nogara’s transfer of the Vatican’s share of British Grolux to the Morgan Bank, see Foreign Commonwealth Office files, 371/30197, letter of P. W. Dixon to F. W. Combe, Trading with the Enemy Branch, August 27, 1941, National Archives, Kew, UK; see also Pollard, Money and the Rise of the Modern Papacy, 189, and “The Vatican and the Wall Street Crash,” 1088.