CHAPTER EIGHT Rizzoli
Despite the wretched likeness of their endings, the Rizzoli story has a romantic quality which that of Calvi lacks entirely. Angelo Rizzoli, the founder of a dynasty he boasted would be eternal, built up his publishing fortune from the humblest of origins. Brought up in an orphanage, at the age of nineteen he was running a tiny printing press, turning out labels for crates of fruit. By the 1960s he was the most powerful publisher in Italy, a legacy which passed first to his son Andrea, and then to his grandson Angelo junior. To the end of his life, the old man never forgot the lessons of his youth: "My children have had the misfortune to be born rich," he would tell friends. But even in his most sober musings Angelo Rizzoli cannot have imagined that a fortune worth over $100 million could be largely destroyed by his heirs in the space of just a decade.
The fatal step was one which was supposed to seal the Rizzolis' success—the acquisition of the venerable Corriere in 1974. Founded a century before, the paper was presently owned by the Crespi family, the oil magnate Angelo Moratti, and the Agnellis, masters of the Fiat car company, and the leading industrial family of Italy. "A dream held by three generations of my family has come true," proclaimed the young Angelo on July 17, 1974, the day Rizzoli took over after paying 44 billion lire for the privilege. The size of the mistake was soon plain.
The Rizzolis, of course, were neither the first nor the last industrialists in Italy or elsewhere to have been beguiled by the prospect of owning a newspaper. But the Corriere soon revealed itself as a particularly bad buy. That first year of 1974, it lost 12 billion lire, and the Rizzoli company did not possess the management expertise to push through the changes required. Within a year the deficit, and the cost of financing the borrowings for buying the Corriere in the first place had driven the young Angelo and his finance director of eighteen months, Bruno Tassan Din, to do the rounds of the banks asking for money.
The two made a curious pair: Angelo Rizzoli, corpulent and slow speaking, was the brooding heir; part playboy, part over-conscious of the responsibility his birth had thrust upon him. Tassan Din on the other hand, with his thick mane of grey hair and aquiline features, had arrived at Rizzoli with the reputation of a financial magician. His quick tongue was matched by a natural cunning. Later he was to be portrayed as the malign, scheming adventurer who brought Rizzoli to disaster; sometimes he would be described as being Rasputin to the uncertain, ingenuous Tsar Angelo.
In the summer of 1975 they both received an unpleasant surprise: the big State banks would not lend them money. Suspicion gradually turned into certainty as to the reason: that the Corriere of the day was showing rather too little respect for the Christian Democrats and the Socialists, the two dominant parties of the establishment, and political patrons of the public sector banks. Providence, however, was to place a saviour to hand, in the person of Umberto Ortolani.
If the unctuously intimidating Gelli was Calvi's bridge to the P-2, Umberto Ortolani was to perform that function for Rizzoli. Angelo's father, Andrea, had used Ortolani as a consultant for his business ventures in South America, where the latter already had interests of his own in the local right-wing press. Andrea Rizzoli put Ortolani in touch with his son and Tassan Din, and through him the two met Licio Gelli. Gelli's own banking contacts within the rapidly expanding P-2 did the rest.
Money, previously so hard to find, now miraculously arrived, both from Banco Ambrosiano, and from other banks of whom senior executives were later shown to be involved with the P-2. Thus began the three-way relationship between Calvi, Rizzoli and the P-2 which was to run through the rest of Calvi's life. "Ambrosiano was a tap for us," Tassan Din recalled, when it was all over, years later. But the partnership between bank and publisher rapidly surpassed that of ordinary lender and borrower. With the backing of Ambrosiano, Rizzoli launched itself into a headlong expansion, as if growth alone could burst the skin of financial difficulties.
Tassan Din was authorized to purchase an insurance company, Savoia, and then two small banks. One of them, Banca Mercantile of Florence, was later sold to Ambrosiano after a bewildering string of transactions in which the IOR again would figure as a passive partner.
In March 1976 Calvi, by then chairman of Ambrosiano, co-opted Andrea Rizzoli on to his bank's board. The appointment was recognition not so much of the close banking relationship between them, as of the fact that—unknown to the other board members—Rizzoli had temporarily become the largest shareholder of Ambrosiano. In return for his financial largesse, Calvi was using the Rizzoli name to conceal the true ownership of a block of Ambrosiano shares, held before by a Swiss front company called Locafid. Locafid, in turn, was run by his own Banca del Gottardo.j Rizzoli's involvement was short-lived, for the shares quickly disappeared into the fastness of Panama. But once again the "fiduciary" technique was at work; and Rizzoli, so heavily indebted to Ambrosiano, was an ideal candidate for the role.
But the real attraction of the publishers lay elsewhere. In Italy, perhaps more than anywhere, ownership of a newspaper was an essential part of the struggle between the competing interest groups and factions. From its columns, friends could be favoured and rivals denigrated; the owner himself would be presented in the best possible light. Subtle or less subtle hints might be dropped, incomprehensible for the general reader, but crystal clear for those to whom the message was addressed.
Visible ownership was, of course, hardly to Calvi's taste. Far better to exert influence from the wings of the stage, through provision of the funds which Rizzoli so badly needed. But that he relished such a role behind the publishing group and the Corriere, can hardly be doubted.
In the mid-1970s control of a newspaper was a subtle status symbol. It would place him on equivalent footing to the Agnellis who ran La Stampa of Turin, second only to the Corriere in terms of sales, or Montedison which had brought II Messaggero in Rome. La Nazione in Florence, and II Resto del Carlino in Bologna were owned by Attilio Monti, an oil magnate. Years before a far more potent oil industrialist
*See shareholding list of 1973, Appendix.
Enrico Mattei of ENI, even launched his own paper, II Giorno, in Milan.
Calvi was thus in excellent company, and in any case his fame was beginning to spread. In 1974 Giovanni Leone, the then President of the Republic, made him a Cavaliere del Lavoro, a distant equivalent of a British knighthood, for his services to the economy. Calvi, however, would rarely use the title.
Even Giovanni Agnelli, then President of Confindustria, the Italian employers association as well as chairman of Fiat, expressed a curiosity to meet this new leader of Milanese finance. A dinner was duly arranged; it was a quintessentially Italian occasion, discreet and non-committal, at which these two representatives of such different traditions, the cosmopolitan, patrician industrialist and the shy and devious Catholic banker, could size each other up. The evening would later be described as "hallucinating".
Aimless small talk was punctuated by frequent silences. Calvi only talked easily about his experiences in Russia. Oddly, he and Agnelli were near contemporaries who had served in the Soviet campaign at much the same time. But the two had little else in common. At last the dinner ended, after which Agnelli remarked of Calvi with effortless dismissal: "But how can anyone go through their life looking at the point of their shoes?"
As always, Calvi was not of the real establishment. He gave huge sums to the Bocconi university, to the prestigious Biblioteca Ambrosiana in Milan, and wanted to become a director of the Cini Foundation, the eminent cultural body in Venice. He would pay the membership fee for the club; but then would not cross its threshold. The encounter with Agnelli was an illustration of how in the presence of the truly well-born and well-connected, he could be dazzled and discomforted. Even within the orbit of Ambrosiano itself, he was not immune to such considerations. Years earlier he had asked Alessandro Cordero di Montezemolo, bearer of one of Italy's most aristocratic family names, to be chief executive of La Centrale. The experience was
short-lived, as di Montezemolo rapidly disagreed with Calvi. "I'm not going to go around blindfolded," he is said to have emphasized, when Calvi predictably tried to circumscribe his freedom of action.
Di Montezemolo resigned, and today is chairman of a large firm of insurance brokers in New York. Had Calvi been prepared to tolerate a few such robust critics, he would probably not have met the end he did. But it was already too late to change his ways.
Throughout his life Calvi would rarely seek the counsel of an impartial outsider. "When two people know a secret, it's not a secret anymore," was one of his favourite aphorisms. Opposition would be seen as evidence of conspiracy to overthrow him. One of the few who did attempt resistance was Luigi Agostoni, deputy general manager of Ambrosiano and a director until he resigned in October 1975. His departure did cause some people to wonder. But for the rest, the board was subservience itself. In any case it did not seem to matter much then, as Calvi and the P-2 enfolded Rizzoli in their coils.
Most of the remaining independence of the publishing group disappeared in the summer of 1977, on the occasion of a capital increase from 5 billion lire to 25.5 billion lire. The provision of new funds was vital, both to keep pace with Rizzoli's expanding debts, and in some measure to offset the harm caused by the Government's delay in permitting an increase in the cover price of newspapers. Ostensibly the entire sum was put up by the family, to leave it in 91 per cent command of the group. The truth was somewhat different.
Rizzoli's true financial position, and the real identity of its owner were to remain mysteries until almost the end of this story, obscured respectively by a string of scarcely intelligible balance sheets and a screen of front companies and trustees. In effect, however, the family had lost control.
The money the Rizzolis used to subscribe to the capital increase was put up by Banco Ambrosiano; it went in good measure belatedly to complete payment for the 33 per cent of the Corriere they had acquired from the Agnellis back in 1974. In return, moreover, Calvi insisted that 80 per cent of Rizzoli's capital be lodged with Banco Ambrosiano as security for the loan. Later this majority interest in the publishers appeared to have been passed on by Calvi to the IOR, under one or other of the circuitous transactions they were then elaborating. As a result control of Italy's most important paper for a long spell may—theoretically at least—have been in the hands of the Vatican. The entire arrangement, Tassan Din has since stated, was orchestrated by Ortolani, who naturally would receive a handsome commission for his pains.
But there were other and more visible consequences of the new balance of power. Ortolani joined Rizzoli's board, as did Calvi's trusted Gennaro Zanfagna, who had been involved with the birth of Suprafin back in 1971. Piero Ottone, the independent-minded editor of the Corriere, who had so disturbed the Christian Democrats, would depart, to be replaced by his deputy, Franco Di Bella. Four years later, in 1981, Di Bella in his turn would be compelled to resign. The records maintained that he had been a paid-up member of the P-2 since October 10, 1978.
For Tassan Din, on the other hand, the successful conclusion of the capital increase was the signal to embark upon a hectic shopping expedition. Rizzoli, with the financial support of Ambrosiano, bought newspapers left and right, often with an eye on the political favours that might be purchased too. The group launched new publications of its own, notably L'Occhio, supposed to be Italy's mass selling equivalent of the Daily Mirror, but which lost money from the start. Rizzoli invested much in the burgeoning Italian private television of the day, and planned ventures in Malta and beyond. For with Calvi's money and Ortolani's guidance, Tassan Din enlarged Rizzoli's Latin American interests, notably in Argentina.
Everyone could count themselves satisfied. Tassan Din could theorize about turning Rizzoli into a global communications conglomerate; the inroads of the political parties into the Italian media were fostered, while in the end, Gelli and Calvi exerted unsuspected control. Expansion, however, brought above all an expansion of losses. By 1980 Rizzoli's financial disarray was such that end-of- month salary payments were occasionally in doubt up to the last day, while Tassan Din would in time become as tireless an advocate of retrenchment as he once had been of growth.
CHAPTER NINE Revenge
By early 1976 the post-Sindona squall seemed to have blown itself out, and thanks to the surreptitious activities of Suprafin, Ambrosiano's share price had steadied. Within the bank, the new chairman was remote, vaguely feared, but seemingly infallible. Most of his interest would be devoted to La Centrale, of which he was by now also chairman; the everyday banking business of Ambrosiano scarcely bothered him. But the unfailing growth shown by its balance sheet would still most doubts.
True, some may have had misgivings, but proof did not exist. Ambrosiano that year was permitted by the Rome authorities to borrow $100 million abroad, on the loose justification that the funds would be used to help finance Italian exports (a pretext which would crop up regularly in the future). The subsidiary in Luxembourg, which had changed its name from Compendium into Banco Ambrosiano Holding, was granted permission to triple its capital; this meant that the Milan parent could "export" almost 300 million Swiss francs to subscribe its 70 per cent share of the increase.
There were even signs that the tangle of overlapping shareholdings was being sorted out. The Luxembourg holding company would take charge of the foreign subsidiaries, notably Banca del Gottardo and Cisalpine Overseas in Nassau. Control of La Centrale was transferred from Luxembourg to the parent bank in Italy, where La Centrale would hold Ambrosiano's domestic interests, in Banca Cattolica del Veneto, Credito Varesino and Toro. For a moment, a measure of clarity was seemingly returning to Calvi's affairs—but predictably, it was not so. For several of these transactions had the familiar dark underside, of which a currency crisis would indirectly force exposure.
Never, before or since, has the Italian lira been so roughly treated as in the year of 1976. Three times in the space of ten months it was the target of speculators. In that period, its value against the dollar fell by 50 per cent; at one point the usable foreign exchange reserves of the Bank of Italy dwindled to beneath $500 million. International markets were full of talk of the "Italian risk", a portmanteau expression which denoted huge deficits, inflation well into double figures, and the possibility of Communist victory at the general election held that summer. As the country's credit rating fell, the Rome Government introduced drastic measures to stem the flood of capital which both individual citizens and companies were despatching to the safety of Switzerland and beyond.
Law "159" of April 1976 has survived to this day. It turned the illegal export of currency from a simple "administrative" offence into a penal one, inviting arrest and imprisonment. The "159" was a blunderbuss, a desperate measure for desperate times, whose indiscriminating nature was to be bitterly criticized. Given the shortcomings of bureaucratic Italy, the argument ran, hardly a company did not have to breach it on occasion if foreign competition in export markets was to be overcome. The law, to make matters worse still, was also retroactive.
For Calvi, there were two consequences, one general and one particular. In broad terms, the "159" made it harder to operate those convenient offshore companies with impunity. Previously, if a foreign debt became too much of a concern, the possibility existed of settling it by sending lire out of Italy. After April 1976, that safety valve was largely removed. Foreign debts could now only be paid off by contracting new ones abroad; most often these would be denominated in the ever more expensive dollar. The tiny Liechtenstein and Panama companies were obliged to borrow, to subscribe their share of the capital increase carried out by Ambrosiano in 1976, from 10 billion lire to 20 billion lire.
But the new law had even more specific relevance to Calvi. On November 17, 1975 he conducted a transaction which—though he could not possibly have imagined it then—would lead to his ruin. That day La Centrale, now Ambrosiano's arm in Italy, bought 1.1 million shares in Toro, on the face of it enough t
o secure outright majority control of the insurance company. Curiously, however, the sellers, all companies based in Liechtenstein, were instructed to make the shares available by Banca del Gottardo, Calvi's arm in Switzerland. What was more, the sellers were all, directly or indirectly, within Ambrosiano's orbit already. One of them was even Sapi, one of those mysterious offshore shareholders of Ambrosiano itself. It would later transpire that the shares in question had been bought by La Centrale itself, in the days when La Centrale was controlled through Luxembourg, in 1973 and 1974. They were then tucked away in the foreign nominee companies like Sapi.
Yet when La Centrale "re-imported" the shares into Italy in November 1975, it would pay three times the going price for them on the Milan stock market. Calvi would later claim that the exceptional price was justified, because the extra shares gave him full control of Toro. But since they had in truth been at his disposal since 1973 and 1974, and since he did not report the transaction (as he was obliged to do by the retrospective provision of Law 159) the deal would be construed as an illegal export of the difference between their value on the Milan market, and the price actually paid—in the event 23 billion lire. In 1976 Calvi performed a similar trick with a block of shares in Credito Varesino.
All of this would be unearthed by the Bank of Italy's inspectors in 1978. But why did the central bank choose to have a close look at Banco Ambrosiano at all? The answer may be traced to Michele Sindona, Calvi's former mentor and comrade-in-arms, now down, but very far from out, in the Pierre Hotel in New York.
Despite the 4,500 miles which divided them, Sindona was never long out of touch with Italy and his old friend Licio Gelli. He had already convinced himself that the collapse of his Banca Privata Italiana was unfair, that he was the blameless victim of a vendetta carried out by his "lay" enemies like Cuccia. Now, he further reasoned, all could be put right with a little assistance from grateful associates from more fortunate times.
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