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

by Gerald Posner

  49 Dimitri Cavalli, “The Commission That Couldn’t Shoot Straight,” New Oxford Review, July/August, 2002. The Vatican’s response was that it had already released plenty of documents from its archives in the collection Actes et documents du Saint Siège relatifs a la Seconde Guerre Mondiale, published between 1965 and 1981.

  50 U.S. Government Supplementary Report on Nazi Assets, U.S. Government Printing Office, June 1998; see generally Sid Balman Jr., “Vatican WWII Role Questioned,” United Press International, Washington, DC, BC cycle, June 2, 1998. As for the controversy over the change of language between a late draft and the final report, see David E. Sanger, “U.S. Says Nazis Used Gold Loot to Pay for War,” The New York Times, June 1, 1998, A1.

  51 John M. Goshko, “Trade with Neutral Countries Propelled Nazi Army, U.S. Says,” The Washington Post, June 3, 1998, A3.

  52 Transcript of Stuart Eizenstat, Undersecretary of State, briefing, Federal News Service, June 2, 1998. See also “US Study Links Neutral Countries, Switzerland to Nazi War Machine,” Agence France-Presse, June 2, 1998.

  53 “Neutrals Give Mixed Reaction to U.S. Call to Contribute to Holocaust Victims,” Section VIII, Law of War, International Enforcement Law Reporter 14, no. 7 (July 1998).

  54 Navarro-Valls quoted in David Briscoe, “Nazi Puppets Used Vatican Ties to Protect Gold, Report Says,” Associated Press, Business News, Washington, P.M. cycle, June 3, 1998.

  55 It began as thirty-nine nations but expanded quickly to forty-one. Barry Schweid, “39 Nations to Search for Loot Taken from Holocaust Victims,” Associated Press, Washington, A.M. cycle, June 30, 1998.

  56 “Report on Nazi Gold Conference Notes Vatican Failure to Open Archives,” Associated Press, Business News, London, A.M. cycle, August 24, 1998.

  57 See generally “Vatican Under Fire over Nazi Gold Riddle,” Birmingham Post, August 25, 1998, 16.

  58 See Stephanie A. Bilenker, “In Re Holocaust Victms’ Assets Litigation: Do the U.S. Courts Have Jurisdiction over the Lawsuits Filed by Holocaust Survivors Against the Swiss Banks?,” Maryland Journal of International Law 21, no. 2, Article 5 (1997). See also Authers and Wolffe, The Victim’s Fortune, 96–100.

  59 Author interview with Elan Steinberg, April 2, 2006.

  60 “US Asks Russia, Vatican to Release Information on Nazi Gold,” The White House Bulletin, September 9, 1998.

  61 Bruce Johnson, “Pope Prepares to Beatify Controversial Cardinal,” The Daily Telegraph, October 1, 1998, C5.

  62 Ibid.

  63 The Vatican was the first nation to recognize the newly independent Croatia in 1991. Journalist Stanko Vuleta wrote: “Croatia of 1991 adopted the ideology, name, flag, coat of arms, currency and linguistics of the Croatia of the Second World War,” in “Mere Words No Consolation,” The Ottawa Citizen, March 19, 2000, A17.

  64 Uki Goni, “Argentina Confronts Role as Safe Place for Nazis; Auschwitz Doctor Josef Mengele Spent Decades in Argentina,” The Guardian, November 18, 1998, 19.

  65 Gerald Posner, “The Bormann File,” The New York Times, November 13, 1991; see also Viviana Alonso, Argentina: Commission Admits Gov’t Helped Nazi War Criminals, Buenos Aires, Inter Press Service, November 19, 1998.

  66 Desson Howe, “A Wealth of New Information on Holocaust; Declassified Wartime Documents at Archives Are Generating Lots of Interest,” The Washington Post, November 18, 1998, B1.

  67 “Every now and then, you find something that truly surprises, that blows you out of the water.” Late Holocaust scholar Sybil Milton quoted in ibid.

  68 The list was in a letter released by Bobby Brown, Prime Minister Benjamin Netanyahu’s advisor on Diaspora affairs. Nicolas B. Tatro, “Israel Calls for Opening of International Holocaust Archives,” Associated Press, International News, Jerusalem, P.M. cycle, November 26, 1998.

  69 Ibid.

  70 Madeleine Albright quoted in Laura Myers, “Albright Asks Holocaust Conference Delegates to Return Nazi-Looted Art,” Associated Press, Washington, A.M. cycle, December 1, 1998.

  71 “Vatican Denies Secret Records on Holocaust,” Agence France-Presse, International News, Vatican City, December 3, 1998.

  72 Emil Alperin v. Istituto per le Opere di Religione, U.S. District Court, San Francisco, November 1999. The suit also listed an unspecified number of unidentified international banks as defendants. The use of so-called John Doe defendants is normal in a case in which the plaintiffs believe that others than the named parties were involved but that they do not yet have the evidence to name them. The court allows the pleading so long as the allegation is made on a good faith belief and the plaintiff thinks it will uncover the identity of the unnamed parties through the discovery process.

  73 Author interview with Jonathan Levy, February 21, 2012.

  74 Ibid.

  75 By the time Levy amended the complaint, he had developed a novel argument in an effort to bring the Swiss banks—who were free from liability because they had already settled their original class action—back into the courtroom. He contended that the postwar transfers of the illicit gold and cash made the Swiss co-conspirators with the IOR and therefore their actions with the Ustašan gold fell outside the scope of their settlement. Levy’s argument was not successful.

  76 The German companies and the plaintiffs were far apart when they began settlement negotiations. The German firms thought that they could settle all the lawsuits for about $1.25 billion, the same as the Swiss banks had paid. The plaintiffs in the forced labor litigation alone were demanding $30 billion for all their claims. Authers and Wolffe, The Victim’s Fortune, 213, 218–21, 235–40; Bazyler, Holocaust Justice, location 75 of 9290; see also Authers and Wolffe, The Victim’s Fortune, 188–91.

  77 Independent Commission of Experts, Switzerland and Gold Transactions in WW2, May 25, 1998. It is often referred to as the Bergier Report, after the commission’s director, Jean-François Bergier.

  78 “Prepared testimony of Stuart E. Eizenstat, Treasury Deputy Secretary, Before the House Banking and Financial Services Committee,” Federal News Service, February 9, 2000. See also Authers and Wolffe, The Victim’s Fortune, 254–65.

  79 Vignolo Mino, “Fatima, ultimo segreto Nel conto del santuario oro rubato dai nazisti,” Corriere della Sera, April 5, 2000; see also Giles Tremlett, “Nazi Gold Taints Fatima,” Scotland on Sunday, April 16, 2000, 23.

  80 Januario Torgal Ferreira quoted in ibid., Tremlett, “Nazi Gold Taints Fatima.”

  81 Pope John Paul quoted in Jocelyn Noveck, “In Historic Speech at Holocaust Memorial, Pope Says Church Deeply Saddened,” Associated Press, International News, Jerusalem, March 23, 2000.

  82 Author interview with Elan Steinberg, April 2, 2006.

  83 See 10-31-02 WikiLeaks Vatican Archives: Archivist Confirms Partial Opening for Nazi Germany and WWII Documents Cable: 02Vatican5356_a, https://www.wikileaks.org/plusd/cables/02VATICAN5356_a.html; and 03-13-03 WikiLeaks Holocaust Museum Delegation Works in Secret Archives, Offers Collaboration to Catalogue Closed Records Cable: 03vatican1046_a, https://www.wikileaks.org/plusd/cables/03Vatican1046_a.html.

  84 Authers and Wolffe, The Victim’s Fortune, 321–23.

  85 Joseph B. Treaster, “Settlement Approved in Holocaust Victims’ Suit Against Italian Insurer,” The New York Times, February 28, 2007, reporting on a federal judge’s approval of the settlement reached in 2006. Authers and Wolffe, The Victim’s Fortune, 269–73; Author interview with Elan Steinberg, April 2, 2006.

  86 “Vatican Claims Immunity in Lawsuit,” Reuters, San Francisco, November 24, 2000.

  87 Author interview with Jonathan Levy, February 21, 2012.

  Chapter 31: “A Criminal Underground in the Priesthood”

  1 Colagiovanni’s foundation was the Monitor Ecclesiasticus Foundation. See generally Alessandra Stanley, “How 2 Priests Got Mixed Up in a Huge Insurance Scandal,” The New York Times, June 26, 1999, C1; see also Tom Lowry, “Scandal’s Cost: Consumers Probably Will Pay,” USA Today, July 26, 1999, 3B.

  2 See generally Stanl
ey, “How 2 Priests Got Mixed Up in a Huge Insurance Scandal.”

  3 Simon Fluendy, “Vatican Bank Is Sued in US over Charity Scandal,” Mail on Sunday (UK), August 11, 2002, 6.

  4 Ibid.

  5 Lowry, “Scandal’s Cost: Consumers Probably Will Pay,” 3B.

  6 Fluendy, “Vatican Bank Is Sued in US over Charity Scandal,” Mail on Sunday.

  7 See generally Stanley, “How 2 Priests Got Mixed Up in a Huge Insurance Scandal.”

  8 Author interview with a former consultant to the IOR, identity withheld at his request, in Rome, September 30, 2013.

  9 Lai, Finanze vaticane, 82. See also “A Life of Faith: Father Edmond C. Szoka, Former Detroit Archbishop, Dies at 86,” The Michigan Catholic, August 21, 2014.

  10 Other cardinals resented that Szoka carried influence with John Paul merely because he had Polish heritage. “If you want to see the real Szoka,” Cardinal Giuseppe Caprio told author Benny Lai, “get up early one morning when it does not rain, say 5:00 A.M. Go behind Castel Sant’Angelo. And you will find him jogging. Other than his Polish mother he is a real American.” Lai interview with Caprio, February 10, 1997, in Lai, Finanze vaticane, 150.

  11 Galli, Finanza bianca, 157.

  12 “Vatican Bank Sounds Out Tietmeyer,” The Australian, June 1, 1999, 25; Richard Owen, “German Favoured as ‘God’s Banker,’ ” Independent (Ireland), May 31, 1999.

  13 Richard Owen, “Benedict Eager to Modernise Arcane World of Vatican Bank: Averse to Inefficiency, the Pope Is Forming His Own Team to Control Church Finances,” The Times (London), September 18, 2006.

  14 “Vatican Bank Sounds Out Tietmeyer,” The Australian; Pope John Paul quoted in Sandro Magister, “The Pope’s Banker Speaks: ‘How I Saved the IOR.’ ” L’Espresso.

  15 All the quotes relating to Caloia’s reappointment to a third term are from an interview with Caloia set forth in Galli, Finanza bianca, 164–66.

  16 Caloia interviewed in ibid., 173.

  17 Galli, Finanza bianca, 169–70.

  18 Caloia interviewed in ibid., 179.

  19 Thomas P. Doyle and Stephen C. Rubino, “Catholic Clergy Sexual Abuse Meets the Civil Law,” Fordham Urban Law Journal 31, no. 2, Article 6, (2003): 549. What the Louisiana parents had found—the shuffling of a predator between parishes—was an occurrence far more common than anyone imagined. Another early example was that of Father Joseph Lang, who had been accused of sex abuse by several minors in his Cleveland, Ohio, parish as early as the 1980s. In 1988, Bishop Anthony Pilla loaned Lang to a parish in northern British Columbia. The Canadians were not informed about Lang’s predatory history since he was still technically under the control of the Cleveland diocese. It was not until 2012 that Lang was eventually suspended from his clerical duties after it was disclosed he was under a criminal investigation for abuse after the transfer to Canada. David Briggs and James F. Carty, “Prosecutors Didn’t Get Names of Four Who Faced Allegations,” The Plain Dealer (Cleveland), April 11, 2012. These types of stories would, unfortunately, become routine.

  20 It was the civil deposition of Bishop Gerard Frey. See Carl M. Cannon, “The Priest Scandal: How Old News at Last Became a Dominant National Story . . . And Why It Took So Long,” American Journalism Review, May 2002.

  21 Jason Berry, “The Tragedy of Acadiana,” The Times of Acadiana, Part I–III, first published on May 23, 1985. An online copy of Part I is at http://www.bishop-accountability.org/news/1985_05_23_Berry_TheTragedy.htm.

  22 Ibid.

  23 Thomas Fox and Jason Berry in Murray Dubin, ibid. “Church Secrecy on Sex Abuse Has Long History,” The Philadelphia Inquirer, March 10, 2002.

  24 For a thorough review of why the sexual abuse story failed to become a more significant story earlier, see Carl M. Cannon, “The Priest Scandal: How Old News at Last Became a Dominant National Story . . . And Why It Took So Long,” 18.

  25 See SNAP’s self-described history at http://www.snapnetwork.org/about.

  26 Berry interviewed in Rorie Sherman, “Legal Spotlight on Priests Who are Pedophiles,” National Law Journal, April 4, 1998.

  27 Robert Matas, “B.C. Priest Goes on Leave as Past in U.S. Revealed; U.S. Investigation into Sexual Abuse by Catholic Clerics Reverberate from Florida to Terrace, B.C.”; The Globe and Mail (Canada), April 11, 2002, A3.

  28 Jason Berry, Lead Us Not into Temptation: Catholic Priests and the Sexual Abuse of Children (New York: Doubleday, 1992); Cannon, “The Priest Scandal”; see also Jason Berry, “What Explains Andy Greeley?,” America, The National Catholic Review, July 2013, online at http://www.americamagazine.org/issue/what-explains-andy-greeley.

  29 See generally Michael D’Antonio, Mortal Sins: Sex, Crime, and the Era of Catholic Scandal (New York: Thomas Dunne, 2013).

  30 Frank Bruni, “Sins of the Church,” The New York Times, April 8, 2002, A1.

  31 John L. Allen Jr., senior reporter for the National Catholic Reporter, later criticized the mainstream American press from going from little to saturation coverage. “To provide just a bit of context, in the same year that the sex abuse scandals finished on the front page of The New York Times forty-one days in a row, 2.7 million children were educated in Catholic schools in United States, nearly 10 million persons were given assistance by Catholic Charities USA, and Catholic hospitals spent $2.8 billion in providing uncompensated healthcare to millions of poor and low income Americans.” John L. Allen Jr., All the Pope’s Men: The Inside Story of How the Vatican Really Thinks (New York: Doubleday, 2004), 226.

  32 Dubin, “Church Secrecy on Sex Abuse Has Long History.”

  33 Steven Edwards, “Secrets Shatter Church’s Peace: The Archdiocese of Boston Struggles to Deal with Allegations of Sexual Abuse and a Cover-up in Its Highest Office,” National Post (Canada), March 4, 2002, A12. The scandal in Boston was covered first in a seven-thousand-word investigative article by Kristen Lombardi, a reporter with the alternative Boston Phoenix, in 2001. She did a follow-up investigation that same year. The Boston Globe won the Pulitzer for its 2002 series on sexual abuse in the Boston archdiocese, and also prompted Cardinal Law’s resignation that December, http://www.boston.com/globe/spotlight/abuse/extras/pulitzers.htm. Less than two years after his resignation, Pope John Paul transferred Law to Rome and installed him—over considerable public outcry—as a $12,000-a-month director of the basilica of Santa Maria Maggiore. Law is a member of the Congregation for Bishops, which helps select new bishops. As for the controversy over Law’s appointment, see John Phillips, “Reaction Mixed over Cardinal Law’s Duties,” The Washington Times, August 16, 2004, A15.

  34 Miro Cernetig, “Pope Speaks Out on Abuse; Says Priests Who Molest Children Cast ‘a Dark Shadow of Suspicion’ over Innocent Clergymen,” The Globe and Mail (Canada), March 22, 2002, A14.

  35 Pope John Paul quoted in Michael Paulson, “Pope Decries ‘Sins’ of Priests,” The Boston Globe, March 22, 2002.

  36 John L. Allen Jr. interview in Michael Paulson, “World Doesn’t Share US View of Scandal,” The Boston Globe, April 8, 2002. See also Allen, All the Pope’s Men, 229-30.

  37 Sodano quoted in “Top Cardinal Says Media Overplay Sex Scandal,” The New York Times, October 11, 2003, A7.

  38 Alan Cooperman, “Hundreds of Priests Removed Since ’60s; Survey Shows Scope Wider than Disclosed,” The Washington Post, June 9, 2002, A1; Laurie Goodstein, “Scandals in the Church; the Sexuality Issue; Homosexuality in Priesthood Is Under Increasing Scrutiny,” The New York Times, April 19, 2002, A1; Frank Walker, “One in 10 Clergy Accused; Church Sex Abuse Total Revealed,” The Sun Herald (Sydney), July 7, 2002, 24. As for the latest estimate on the possible number of victims—more than 100,000—see “Data on the Crisis: The Human Toll,” http://www.bishop-accountability.org/AtAGlance/data.htm.

  39 Transcript, “Pope Meeting with American Cardinals at Vatican,” reporters Daryn Kagan and Miles O’Brien, CNN Live Today, April 23, 2002.

  40 “Address of John Paul II to the Cardinals of the United States,” April 23, 2002
, online at http://www.vatican.va/holy_father/john_paul_ii/speeches/2002/april/documents/hf_jp-ii_spe_20020423_usa-cardinals_en.html; see also Berry, “The Shame of John Paul II.”

  41 “Cardinals Stop Short of Policy of ‘Zero Tolerance’ for Priests, Boston Globe, April 25, 2002. See also “Bishops Reject Zero Tolerance: U.S. Clerics Demur on One-Time Abuse Cases; Mahony Sees Blanket Policy Emerging in Church’s Future,” San Bernardino Sun, April 29, 2002.

  42 Julia Duin, “Bishops Lenient for Past Sex Abuse; Propose Mercy in Isolated Cases,” The Washington Times, June 5, 2002, A1.

  43 “Cardinal’s Compromise Comes Up Short,” The Globe and Mail (Canada), April 27, 2002, A18.

  44 “Bishops Reject Zero Tolerance” San Bernardino Sun.

  45 Herranz Lasado quoted in “Spanish Archbishop Casado: Civil Penalties for Sexual Abuse are Unwarranted,” April 29, 2002, online at http://skepticism.org/timeline/april-history/5453-spanish-archbishop-casado-civil-penalties-for-sexual-abuse-are-unwarranted.html

  46 Laurie Goodstein, “A Vatican Lawyer Says Bishops Should Not Reveal Abuse Claims,” The New York Times, May 18, 2002; “Letter to the Bishops of the Catholic Church on the Pastoral Care of Homosexual Persons,” Congregation of the Doctrine of the Faith, October 1, 1986; Judy L. Thomas, “Catholic Priests Are Dying of AIDS, Often in Silence,” The Kansas City Star, January 29, 2000; “Politics Color John Jay Study,” Catholic League/Catalyst, July/August Issue, 2011; Bill Donohue, “John Jay Study Undermined by Its Own Data,” National Catholic Register, June 6, 2011.

  47 Ghirlanda quoted in Goodstein, “A Vatican Lawyer Says Bishops Should Not Reveal Abuse Claims.”

  48 Bishop Gregory quoted in Edward Walsh, “Bishops Pass Compromise on Sexual Abuse Policy,” The Washington Post, June 15, 2002, A1. Walsh, “Bishops Pass Compromise on Sexual Abuse Policy.”

  49 Bishop Gregory quoted in Edward Walsh, “Bishops Pass Compromise on Sexual Abuse Policy.”

  50 Alan Cooperman, “Catholics Question Gray Areas of Abuse; Critics Say Some Priests’ Misconduct Goes Unpunished Under New Guidelines,” The Washington Post, November 30, 2002, A2.