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

by Gerald Posner

  37 John O’Neill, “ ‘Coition Death’: Are Only the Famous Prone to Final Fun?” Sydney Morning Herald (Australia), July 1, 1987, 21; Alexander Chancellor, “Long Life,” The Spectator, July 27, 2013; author interview with a priest recounting a personal conversation with Sindona, September 21, 2013.

  38 Robert E. Bedingfield, “Strains at Bank Multiplied in Big-City Competition,” The New York Times, May 18, 1974, 39; “Banking, A Shocking Drama,” Time, May 27, 1974.

  39 DiFonzo, St. Peter’s Banker, 163–65. This trade was a staple of Sindona financial institutions: see Parliamentary Commission of Inquiry into the Case of Sindona and Responsibilities and the Political and Administrative Connected To It, 28–30.

  40 Farnsworth, “Sindona’s Empire: Sharp Trading, Big Losses,” 57.

  41 Harold Gleason quoted in DiFonzo, St. Peter’s Banker, 191.

  42 Parliamentary Commission of Inquiry into the Case of Sindona and Responsibilities and the Political and Administrative Connected To It, 14.

  43 John A. Allan, “Lag at Franklin Cited,” The New York Times, May 2, 1974, 75.

  44 Richard E. Mooney, “When a Big Bank Stumbles,” The New York Times, June 9, 1974, 164.

  45 Tosches, Power on Earth, 152.

  46 “Sindona, Self-Made Man of 53, Rules Vast Industrial Empire,” The New York Times, May 13, 1974, 48.

  47 John H. Allan, “Franklin National Bank Dismisses Its President,” The New York Times, May 14, 1974, 1; see also Robert E. Bedingfield, “Franklin Urged to Omit Payment,” The New York Times, May 11, 1974, 39; “Banking: A Shocking Drama,” Time; “Poor Sindona,” The Economist, May 18, 1974, 126.

  48 DiFonzo, St. Peter’s Banker, 198.

  49 John H. Allan, “10-Day Ban Intended to Allow Bank to Arrange Affairs,” The New York Times, May 15, 1974, 61.

  50 Farnsworth, “Sindona’s Empire: Sharp Trading, Big Losses,” 57.

  51 Robert D. Hershey Jr., “Tremors in the Banking System,” The New York Times, May 19, 1974, 159.

  52 “Poor Sindona,” The Economist, 126.

  53 Sindona interviewed in Tosches, Power on Earth, 170–71.

  54 Ibid.,171.

  55 Ibid.

  56 Ibid., 172.

  57 DiFonzo, St. Peter’s Banker, 158.

  58 Raw, The Moneychangers, 111.

  59 Farnsworth, “Sindona’s Empire: Sharp Trading, Big Losses,” 57; Turone, Il caffè di Sindona, 42–43.

  60 Parliamentary Commission of Inquiry into the Case of Sindona and Responsibilities and the Political and Administrative Connected To It, 33–35; see also “Loan to Sindona by Rome Bank Is Not Expected to Aid Franklin,” The New York Times, July 12, 1974, 55.

  61 Paul Hofmann, “Italian Financier Said to Make Concessions for $100-Million Loan,” The New York Times, July 10, 1974, 51; Farnsworth, “Sindona’s Empire: Sharp Trading, Big Losses,” 57.

  62 Farnsworth, “Sindona’s Empire: Sharp Trading, Big Losses,” 57.

  63 “Sindona: A £100m Loss?,” The Economist, September 21, 1974, 119.

  64 “Franklin Fizzles Out,” Time, October 21, 1974; see generally Parliamentary Commission of Inquiry into the Case of Sindona and Responsibilities and the Political and Administrative Connected To It, 120–22.

  65 DiFonzo, St. Peter’s Banker, 206.

  66 Farnsworth, “Sindona’s Empire: Sharp Trading, Big Losses,” 57; “More Collateral Put Up by Sindona,” The New York Times, July 16, 1974, 51. As for how Sindona tried to insulate SGI from being infected by losses in his other financial companies, see generally Parliamentary Commission of Inquiry into the Case of Sindona and Responsibilities and the Political and Administrative Connected To It, n. 315, 35–36.

  67 Farnsworth, “Sindona’s Empire: Sharp Trading, Big Losses,” 57. See also advertisement, “A Great Bank Is Born, Banca Privata Italiana,” The Economist, July 6, 1974, 121. Sindona’s streak of bad luck continued in Italian courts that month, when shareholders of his financing company, Finambro, prevailed in their lawsuit to stop him from raising more capital.

  68 John H. Allan, “63-Million Lost by Franklin Bank in 5 Months of ’74,” The New York Times, June 21, 1974, 1.

  69 John H. Allan, “Sindona Associate Leaving Franklin,” The New York Times, June 24, 1974, 43.

  70 Tosches, Power on Earth, 153; DiFonzo, St. Peter’s Banker, 206.

  71 “Franklin Fizzles Out,” Time.

  72 Michael C. Jensen, “S.E.C. Said to Be Investigating Franklin Bank’s Sindona Deals,” The New York Times, July 18, 1974, 49; Robert J. Cole, “S.E.C. Files Fraud Charges Against Nine Once at Franklin,” The New York Times, October 18, 1974, 57. Sindona was in fact involved in shuffling money between Franklin and his other businesses in an effort to minimize the bank’s trading losses and artificially increase paper profits. See generally DiFonzo, St. Peter’s Banker, 192–94.

  73 “Sindona Said to Vow to Save Franklin,” The New York Times, July 2, 1974, 54. “After so many Italians who have come here to trade in vegetables or enroll with the gangsters, here’s now someone who has Wall Street listening to him, but instead of assisting me, they [his Italian critics] attack me,” Sindona told Corriere della Sera. He was angry at the widespread commercial success of Francis Ford Coppola’s 1972 The Godfather. Sindona told friends and business colleagues that the film reinforced the worst stereotypes of Italians in America and made it more difficult for businessmen to work with him. Meanwhile, Sindona’s former partner, Calvi, did not worry about how Americans judged him since he did so little business in the U.S. Calvi loved the film; he told a fellow financier, “Do you know The Godfather? It’s a masterpiece, because everything is in it.” Calvi quoted in Gurwin, The Calvi Affair, 36.

  74 “Sindona, Big Franklin Holder, Reported Selling a Bank in Italy,” The New York Times, September 5, 1974, 62; Raw, The Moneychangers, 119.

  75 DiFonzo, St. Peter’s Banker, 175–77.

  76 Clyde H. Farnsworth, “Bank Closes in Germany; Sindona Owned Half of It,” The New York Times, August 24, 1974, 31.

  77 “Vatican Denies Report of Big Banking Losses,” The New York Times, August 28, 1974, 39.

  78 Herbert Koshetz, “Sindona Unit Selling 53% of Talcott for 5.6-Million,” The New York Times, September 28, 1974, 35; “The American Connection,” The Economist, October 5, 1974, 106.

  79 Parliamentary Commission of Inquiry into the Case of Sindona and Responsibilities and the Political and Administrative Connected To It, 22, 37–42.

  80 See Raw, The Moneychangers, 119–20.

  81 Although Italian authorities closed Finabank’s Italian branch that September, Switzerland did not shutter its headquarters until the following January; see Turone, Il caffè di Sindona, 41–42.

  82 DiFonzo, St. Peter’s Banker, 89.

  83 Tosches, Power on Earth, 171–72.

  84 Farnsworth, “Sindona’s Empire: Sharp Trading, Big Losses,” 57.

  85 Ibid.; Clyde H. Farnsworth, “Italy Is Making Good on the Failure of Sindona’s Bank: $500-Million in Losses Books Examined,” The New York Times, September 20, 1974, 51.

  86 “Sindona Reported in a Court Inquiry,” The New York Times, September 16, 1974, 54.

  87 In just one instance, Sindona arranged for some customer deposits at the Banca Privata Finanziaria to serve as collateral for debt issues at one of his holding companies, Moizzi & Co. Those funds were sometimes transferred to the IOR, which in turn made them available to a Finabank account in Geneva. That account, nicknamed MANI, after the first two letters of Sindona’s sons’ names (Marco and Nino), served as collateral for foreign currency speculation. See generally DiFonzo, St. Peter’s Banker, 91.

  88 Farnsworth, “Sindona’s Empire: Sharp Trading, Big Losses,” 57.

  89 Ibid.

  90 John A. Allan, “Sindona Resigns His Post as Franklin Bank Director,” The New York Times, September 22, 1974, 1.

  91 John A. Allan, “F.D.I.C. Rejects Franklin’s Plan,” The New York Times, October 4, 1974, 1.

  92 For a ful
l background of the criminal charges filed against Sindona, see M. De Luca, ed., Sindona. The Indictments of the Courts of Milan (Rome: Riuniti, 1986); and Israel Shenker, “Warrant Seeks Sindona Arrest,” The New York Times, October 10, 1974, 81.

  93 Martin, The Final Conclave, 30.

  94 European-American Bank bought what was left of Franklin for $125 million, outbidding Manufacturers Hanover by $2 million. DiFonzo, St. Peter’s Banker, 213-14.

  95 Patrick J. Sloyan, “Franklin Failure Almost Caused World Panic, Burns Says,” The New York Times, December 22, 1974, 58; “Franklin Fizzles Out,” Time.

  96 “Italy Is Liquidating Bank in the Group Headed by Sindona,” The New York Times, September 29, 1974, 4. “Sindona: Worse and Worse,” The Economist, October 5, 1974, 106.

  97 Generale Immobiliare, Revealing All,” The Economist, April 5, 1975, 84.

  98 See generally Untitled, Associated Press, Rome, A.M. cycle, August 8, 1979.

  99 Sindona quoted in “Sindona Declares He Can Incriminate Leading Italians,” The New York Times, April 7, 1975, 33.

  100 Cole, “S.E.C. Files Fraud Charges On Nine Formerly at Franklin,” 57. Although the SEC described the action as “one of the biggest actions ever brought against a bank and its officers,” it admitted that its investigation had not found any “evidence of looting.”

  101 Ibid., 57, 68.

  102 Israel Shenker, “Warrant Seeks Sindona Arrest,” The New York Times, October 10, 1974, 81; “Sindona Picks Defense Lawyers,” The New York Times, October 16, 1974, 67.

  103 DiFonzo, St. Peter’s Banker, 214.

  104 Gelli quoted in Ibid., 215.

  105 Ibid., 218–19; Sindona’s mistress had been married to an American, but was divorced by the time she met Sindona at a Lehman Brothers reception in New York in 1960. Although he was married, he had had several mistresses over the years. He had a longer relationship with her than with any other woman.

  106 DiFonzo, St. Peter’s Banker, 219.

  107 Leonard Sloane, “Sindona Appears in Public to Address College Group,” The New York Times, April 16, 1997, 51; Terry Robards, “Sindona Says He Lives on Help,” The New York Times, November 27, 1975, 55. Sindona told friends and colleagues that although he was still living in his condominium at the Pierre, he had sold it to raise money and was now renting it by the day from an undisclosed buyer. In fact, Sindona still owned it. That woud be disclosed when the following year he posted its deed to help make bail.

  108 Sindona quoted in DiFonzo, St. Peter’s Banker, 220.

  109 The New York Times, January 8, 1975, 51 (no article title or byline).

  110 Lloyd Shearer, “Intelligence Report,” The Boston Globe, Parade supplement, titled “The Vatican Takes a Bath,” March 23, 1975, H16, referring to how Pope Paul VI “also brought in his old friend, Michele Sindona [to the IOR].” See also “Allah Be Praised,” Forbes, February 15, 1975, 8; “Vatican’s Budget Is Vetoed by Pope,” The New York Times, January 23, 1975, 14. No article title for the statement by Vatican spokesman, Federico Alessandrini, about the church’s limited losses, The New York Times, February 1, 1975, 4. See also The New York Times, January 23, 1975, 14 (no title to article and no byline). And see also Raw, The Moneychangers, 120.

  111 Italian magazine Panorama, cited in “Report Chicagoan Out as Vatican Bank Head,” Chicago Tribune, November 22, 1974, 1.

  112 Italian magazine Panorama, cited in Andrew Blake, “Financier’s Fall Costly to Vatican,” The Boston Globe, February 2, 1975, 21.

  113 Kay Withers, “Vatican Aide Denies Pope May Fire Him,” Chicago Tribune, November 23, 1974, D11.

  114 Kay Withers, “Vatican Wealth: The Bottom Line Isn’t Too Blessed,” Chicago Tribune, April 20, 1975, A1.

  115 “Vatican’s Finances: Paul’s Pence,” The Economist, February 8, 1975, 71.

  116 “Vatican’s Budget Is Vetoed by Pope,” The New York Times, January 23, 1975, 14; “Vatican Finances; Paul’s Pence,” The Economist, 71.

  117 Edward Magri, “Vatican Reportedly Lost $56m in Bank Scandal,” The Boston Globe, January 31, 1975, 40.

  118 “Vatican’s Finances; Paul’s Pence,” The Economist, 71.

  119 Cornwell, God’s Banker, 131–34.

  120 Sindona quoted in Tosches, Power on Earth, 173; see also Brendan Jones, no title to article, The New York Times, February 21, 1975, 41.

  121 DiFonzo, St. Peter’s Banker, 222.

  122 “People and Business: Problems as Banks Flee Saigon,” The New York Times, April 10, 1975, 62.

  123 Sloane, “Sindona Appears in Public to Address College Group,” 51. The article is one of the few that mentions that Sindona’s English was not good, describing him as “Speaking in a heavily accented English.” New York criminal defense attorney Ivan Fisher told me that when he first met Sindona, “One of my biggest problems representing him was how poorly he spoke English. He told me in our first meeting that I should contact A, to see if he might be able to help. He said it with such respect that I didn’t want to admit I didn’t know who A was. It took until our third meeting before I realized he was saying Haig (then the Supreme Commander of NATO, and someone Sindona knew from Haig’s tenure as chief of staff for Nixon). I could not get close to him in the way I am most comfortable because it was so difficult to understand him. I suggested an interpreter. He was really offended because he thought his English was magnificent.” Author interview with Ivan Fisher, June 19, 2013.

  124 DiFonzo, St. Peter’s Banker, 222.

  125 “An Unlikelääy Lecturer,” Time, December 8, 1975. Between 1975 and 1977, Sindona spoke at sixteen university business schools.

  126 Michael C. Jensen, “Sindona Assails Governmental Bailouts,” The New York Times, June 13, 1975, 51.

  127 Prosecutors were particularly incensed by photos in the New York Post of Sindona partying with New York Mayor Abraham Beame.

  128 “Carli and Others Are Investigated,” The New York Times, June 27, 1975, 47.

  129 Arnold H. Lubasch, “8 Former Aides of Franklin Bank Indicted by U.S.,” The New York Times, April 13, 1975, 1.

  130 Kay Withers, “Legendary Vatican Wealth May Be Just a Myth,” The Boston Globe, May 11, 1975, B2.

  131 Horne, “How the Vatican Manages Its Money.”

  132 Withers, “Vatican Wealth: The Bottom Line Isn’t Too Blessed,” A1; Kay Withers, “Legendary Vatican Wealth May Be Just a Myth,” B2.

  133 Vagnozzi revealed that salaries consumed 10 percent of the Holy See’s budget. Their employment included a generous health plan and pension coverage, and some fifteen hundred retired lay employees received their full salaries for the rest of their life. “A trend to internationalization” meant there were “many [lay] non-Italians now in the Curia.” That meant “considerably” increased costs since they brought their families to Rome at church expense.

  134 Withers, “Vatican Wealth: The Bottom Line Isn’t Too Blessed,” A1.

  135 “Milan’s Prosecutor Visiting U.S. to Ask Sindona Extradition,” The New York Times, November 25, 1975.

  136 “An Unlikely Lecturer,” Time.

  137 Robards, “Sindona Says He Lives on Help,” The New York Times 55. Sindona claimed he had received anonymous telephone calls and letters urging him to commit suicide.

  138 Enrico Cuccia quoted in Tosches, Power on Earth, 167.

  139 Lubasch, “Ex-Franklin Bank Aide Pleads Guilty,” 43.

  140 Raw, The Moneychangers, 119.

  141 Tosches, Power on Earth, 120; Raw, The Moneychangers, 138–39.

  142 Gurwin, The Calvi Affair, 28.

  143 Willan, The Last Supper, 36–37; see Calvi statement to judicial magistrates in July 1981, quoted in Raw, The Moneychangers, 146.

  144 Willan, The Last Supper, 113.

  145 Raw, The Moneychangers, 145, 149. Marcinkus interviewed in Cornwell, A Thief in the Night, 134.

  146 Gurwin, The Calvi Affair, 31; Willan, The Last Supper, 36–37.

  147 Handwritten notes by Philip Willan of audiotaped interviews
between John Cornwell and Marcinkus, February 8, 1988, 4b, 5a, 9b, provided to author courtesy of Willan.

  148 Ibid., 4b.

  149 Raw, The Moneychangers, 119, 125–26, 129–31.

  150 Ibid., 124–25.

  151 Laura Colby, “Vatican Bank Played a Central Role in Fall of Banco Ambrosiano,” Wall Street Journal, April 27, 1987, 1.

  152 Raw, The Moneychangers, 135–36.

  153 Ibid., 137.

  154 The dollar and Swiss franc back-to-back schemes were so useful for Calvi and profitable for Marcinkus that by December 1975 the duo also began back-to-back lira transfers. Raw, The Moneychangers, 161–72, 176, 184–94, 209–12, 247–49, 365–66.

  155 Based on Calvi’s new advice, Marcinkus made substantial investments into United Trading Corporation, a Panamanian holding company with nominee subsidiaries (Teclefin and Imparfin) based in Liechtenstein. Cornwell, God’s Banker, 71; see also Raw, The Moneychangers, 49, 95, 108–9. In December 1974, the IOR had made its first installment payment to United Trading, sending the funds through Cisalpine in Nassau. The IOR had also made a $43.5 million loan in May 1972 to Radowal, a Liechtenstein company that later became United Trading. Marcinkus had also approved in late 1973 a Vatican Bank loan of $45 million to Manic, the newly formed Calvi holding company headquartered in Luxembourg. In each case, the IOR got above-market interest rates on its money, as well as lump-sum commission payments of nearly $4 million for the loans. Criminal investigators later examined those commissions, scattered across the books of banks and holding companies in several countries, to determine if they constituted bribes to Marcinkus for the use of the church’s money. Although the prosecutors suspected they were, they never developed enough evidence to make a criminal case.

  By 1978, the IOR secretly owned United Trading, although Vatican Bank attorneys later contended the IOR “did not control” it. This was in reference to what the lawyers considered administrative control exerted by Calvi, that United Trading “was directly managed by the [Ambrosiano] Group in its own sole interest.” See generally Colby, “Vatican Bank Played a Central Role in Fall of Banco Ambrosiano,” 1; see also “Memo prepared by IOR’s lawyers re Laura Colby’s article,” reproduced in its entirety in Cornwell, A Thief in the Night, 354–58.