One line, thus, was sealed off. They could force themselves to accept that, however bitter the aftertaste, and rationalize that Connally’s connection was probably peripheral at most. Besides, there was something much more significant to concentrate on. There was the Vatican.
Three eminent members of the Vatican hierarchy had been cited by Ledl, Foligni and others as prime movers in the plot involving the counterfeit bonds. One, Eugene Cardinal Tisserant, had died in February 1972. A second, the archbishop who had worked so closely with Tisserant in developing the scheme and in making the arrangements with Ledl, had not been identified by name. Ledl had been careful not to divulge this information, just as he had never given Monsignor Barbieri’s name—in fact, in most cases, as he told his tale and answered questions, he was careful not to give names until he was certain somebody else had already done so. Still, he had provided Coffey and the others with the means to discover the names for themselves if they wanted to look; he had given a description of the archbishop as a slim, smallish, Sicilian with white wavy hair, in his mid-fifties who was very close to Tisserant, practically his alter ego.
The third principal cited was Bishop Paul Marcinkus and he was still very much a presence, still in charge of protecting Pope Paul VI, still the man who held the reins of the Vatican’s finances, answerable only to the Pope. Most important, as far as the American investigators were concerned, Marcinkus was an American citizen and so theoretically subject to United States law. That meant not only that he could be indicted, and the indictment made public, but that his extradition to stand trial in the United States could be demanded. Even though such a demand would undoubtedly be ignored, the resulting publicity created by the indictment and the demand would serve some purpose.
But to move against an official of the Vatican was to wade into very treacherous waters, roiled by religious, diplomatic and political undercurrents. It was not something to be undertaken without considerable thought. After such careful consideration both in the district attorney’s office and by the Strike Force, there was hardly a man who was not willing to take that step, regardless of all the potential risks. Hogan was convinced it must be done, and so were Vitrano, Goldstock, Coffey and the others in the D.A’s office, as were Aronwald and Tamarro and their associates on the FBI team.
Even with that, they realized that it would be no simple matter to move against Marcinkus or anyone else in the Vatican, or against Foligni, Amato or anyone in Italy. It would not be like going after Rizzo and his minions in lower Manhattan, or against Ricky Jacobs and his people in Los Angeles. The Vatican was a sovereign state and Marcinkus was both a resident and an official of that state. American law, American court orders, American police had no legal standing there, as American authorities had no standing to operate and conduct investigations on their own anywhere beyond the United States borders. To look into the activities of Marcinkus and others, with the aim of gathering incriminating evidence to use against them, would require the permission of the sovereign power, and that could be obtained, at least as regards the Vatican, only through the most delicate of approaches. (As far as Italy itself was concerned, the Americans had written that off. The Italian authorities had already rejected requests for cooperation. Only after some intense pressure had they even agreed to question Amato, Neubert and a few others, though they had not looked very hard for them and when they turned them up, had interviewed them briefly and cursorily, asking few searching questions. They had refused, furthermore, to permit American investigators to operate within their jurisdiction.)
What was required, then, was an appeal at the highest level. Terence Cardinal Cooke, archbishop of the New York diocese, was approached. The outlines of the case were explained to him and he was asked to use his influence to win Vatican cooperation. He thought about it for a few days and then politely declined.
It would, then, have to be a top-level government-to-government approach, an appeal perhaps to Pope Paul VI himself, certainly to the papal secretary of state, Cardinal Villot. Such an appeal, if it were to be heeded, would have to be made by the president and the secretary of state, Henry Kissinger.
Once more Aronwald boarded the shuttle for Washington to seek help and approval from his superiors. If he had fears, he did not voice them. He was, as he had said the last time, going to push as hard as he could to get what he needed.
But Aronwald could not have gone to Washington with such a request at a more unpropitious moment. If there had been only faint tremors earlier in the year when he had been denied permission to investigate John Connally, by mid-April the Nixon White House was in a shambles, tottering toward a collapse. Hardly a day passed that the Washington Post did not come forth with new and increasingly disturbing revelations about Watergate, that brought the scandal ever closer to the Oval Office. And the President’s counsel, John Dean, determined not to be made a scapegoat, was telling federal prosecutors the details of the Watergate cover-up, and in so doing was tightening a noose around the president’s closest advisers in government—John Ehrlichman, H. R. Haldeman, Kleindienst, former attorney general John Mitchell, former commerce secretary and financial director of the Nixon reelection campaign Maurice Stans, Connally and others. Even the president himself was becoming tainted.
And there was more. The fallout from the Watergate affair was spreading wide. A new look was being taken at the dropping of the antitrust case against IT&T, and new light was being shed on the roles played in that dubious decision by Kleindienst and Connally and others. The nomination of Pat Gray as permanent director of the FBI, which he had headed on a temporary basis since the death of J. Edgar Hoover, had to be withdrawn when Congress rose in righteous indignation at the news of his clandestine political activities and the revelation that he had destroyed sensitive Watergate files. Gray was forced to resign even his temporary post in disgrace. The public was learning of the huge, secret Nixon campaign war chest and how contributions to it had been wrung from corporations and individuals through threats of reprisals and promises of favors. The whispers about political payoffs to Spiro Agnew were growing louder.
The government, then, was in near chaos, the president’s own position becoming increasingly tenuous. Nixon was looking for support to shore him up wherever he could find it. And among those who backed him most strongly were the nation’s Catholics. He was not about to do anything that might alienate them when he most desperately needed their unquestioning allegiance. There was little doubt that an airing of charges against high Vatican prelates, including the highest-ranking American in Rome, by officials associated with the administration would cause a serious reaction in the Catholic community.
And there was another factor, as well. Marcinkus’s friend Michele Sindona had carefully cultivated friends in high places in the administration. He had become friendly with Nixon during the 1960s, and Nixon, then in private law practice in New York, began to recommend to a number of clients that they avail themselves of Sindona’s expert investment and banking advice and services. In 1972, when Nixon was running for reelection, Sindona offered a secret $1 million contribution to the president’s campaign. Though Maurice Stans, in charge of campaign finances, eventually rejected the proferred gift because Sindona insisted on anonymity, knowledge that Sindona had made the offer and was prepared to do more to help the president caused many to look on him as a man to cultivate, a man who could prove very useful in a variety of ways.
And Sindona had hired Nixon’s first secretary of the treasury, David M. Kennedy—the former chairman of the Continental Illinois National Bank and Trust Company, with which Sindona had worked in international banking partnership—as an investment adviser and ambassador of goodwill to the American financial community. He had even put Kennedy on the board of his Fasco International Holding Company. As it happened, Sindona and Kennedy had been brought together originally by a mutual friend, a onetime native of the Chicago area and himself a prominent international banker—Bishop Paul Marcinkus. Indeed, so close did the three become that when one of Sindona’s Italian aides became a father, Marcinkus baptized the boy, Sindona was the godfather, and the child was named David after Kennedy.
So, Aronwald returned from Washington emptyhanded again, reporting: “We are to forget about the Vatican. We are to stay away from that line.”
“Why?” Coffey demanded when he was told. “The Vatican’s crucial. Marcinkus is crucial.”
“It’s an order,” he was told. “It’s a policy decision. There’s nothing we can do about it.”
But Coffey did not believe it. He went to Hogan with the word of Washington’s refusal to do anything to help. Hogan was furious. Maybe they would never be able to extradite Marcinkus and try him in the United States, but with just a little more evidence, and they were sure they could get it just by asking the right questions on the spot in the Vatican, they would certainly be able to indict him and ask for his extradition, and the ensuing publicity and public outcry might at least go some distance toward preventing him from doing any more, might even force the Vatican to take some steps on its own. Hogan made some phone calls personally and in his iciest manner threatened to make a lot of noise if the decision was not reversed. He even threatened to leak the story to the press. If there was one thing an administration already in deep trouble did not need it was public accusation by a man of Hogan’s reputation that it was engaged in yet another cover-up.
Hogan’s fury and his threats paid off. A diplomatic request was dispatched to Cardinal Villot for Vatican cooperation. In early April 1973, the cardinal responded. A small party of American officials would be permitted to call on the Vatican.
Hogan was elated when he heard the news. He asked when the investigative team was planning to leave for Rome because he wanted to make sure that Coffey was fully briefed and prepared for those impending sessions in the Vatican.
Coffey’s not going, he was told.
Why? Hogan demanded.
This was to be strictly a federal affair, for it was a federal case. Aronwald was going. Tamarro was going. And the man who would lead the team would be William Lynch, boss of the Organized Crime and Racketeering Section of the Department of Justice. Just those three. Nobody else.
Why was Coffey being cut out?
He was not needed.
Hogan seethed. Not needed? Did anybody know more about this investigation than Joe Coffey? Had anybody been working on it longer or harder or in more detail or on more aspects or with better results than Coffey? He had the whole thing at his fingertips. He knew better than anybody else what questions to ask. Without Coffey, the mission could turn into a farce.
They didn’t need Coffey.
If Coffey didn’t go, then nobody ought to go, Hogan said. Maybe they ought to forget the whole thing, which was probably what they wanted anyway.
Three people were going, he was told, but they were only the federal people, Aronwald, Tamarro and Lynch. Coffey was not part of it. Hogan had insisted on diplomatic approaches to the Vatican and he had gotten them. The Vatican had agreed to see the American investigators. Hogan ought to be satisfied with that.
Hogan wasn’t, but there was little he could do. He was a Democrat and the administration in power in Washington was Republican. And, despite his concern that the Vatican affair not be bungled or covered up, he could not devote all his energies to preventing it. There were other things that were making demands on him and they could not be ignored. For the first time in his quarter-century as Manhattan district attorney, he was facing a serious challenge to his continued tenure in the forthcoming Democratic primary. And there was something even more serious: his health was failing. He had cancer and he did not have much longer to live.
So, Coffey remained behind, frustrated and furious, convinced that Henry Kissinger or whoever in the State Department had made the contacts with the Vatican had given assurances that the Vatican would be treated gently by the visiting Americans, that the church had nothing to worry about.
On April 25, 1973, Aronwald, Tamarro and Lynch paid their call on Vatican City. They were ushered into the offices of Archbishop Giovanni Benelli, the assistant secretary of state and friend of Mario Foligni. Benelli remained with them for only a few moments, just long enough to introduce them to three monsignors on his staff—Edward Martinez, Carl Rauber and Justin Rigali.
Tamarro was sent outside, to wait in an anteroom, while Lynch and Aronwald met with the monsignors; Lynch did all the talking for the Americans. He outlined the information in the hands of the authorities and the grand juries, telling them that $14.3 million in counterfeit American bonds had been delivered to Rome in July 1971, destined for the Vatican, that those bonds were only a sample and that the people in the Vatican who were part of the scheme had actually ordered an eventual delivery of $950 million worth of such bonds. Lynch talked about the trial deposits by Foligni at Handels Bank in Zurich and at the Banco di Roma. He said that during the investigation, charges had been made that Bishop Marcinkus had been directly involved in the plot as well as in several other illegal projects in association with Michele Sindona. As an internal FBI report put it, Lynch informed the three monsignors “that indictments in this matter would be handed down in the near future and that some of the allegations concerning the Vatican or of the use of the good name and reputation of the Vatican would then become a part of the public record and possibly would be the subject of some press inquiries.”
Monsignor Martinez, the assessor in the secretary of state’s office, heard Lynch out, then responded that he had no knowledge whether anyone in the Vatican had previously known anything about this situation. But, in any case, “it was not the intention of the Vatican to collaborate with United States officials in their investigation at this point, since this was considered to be an informal meeting and their purpose at the present time was only to listen.”
Lynch had a document he wanted the monsignors to examine, at least for an opinion as to its authenticity. Among the papers that had been seized from Ledl at the time of his arrest in Vienna, and which later had been turned over to Coffey and Tamarro by the Austrian police, was the contract-letter from the Vatican’s Sacre Congregazione Dei Religiosi setting forth the details of the order for the $950 million in counterfeit bonds. The three monsignors took the letter and studied it. Martinez said the letterhead appeared to be legitimate and “identical with the letterhead of a legitimate sacred congregation of religious which is located at the Vatican.”
But, whether that indicated that a deal had been made, Martinez did not know and would not speculate, nor, he said, did he know if there were any counterfeit American bonds on deposit in the Vatican Bank. When Lynch offered to give him a list of the types of bonds that had comprised the package so that the monsignor might check the records of the bank, Martinez refused to accept the offer. That, he said, was the function of Bishop Marcinkus. There was nothing further to discuss. The interview was closed.
The next morning, Bishop Paul Marcinkus himself saw Lynch and Aronwald in his private office, while once more Tamarro was told to wait outside. Marcinkus listened intently as Lynch went through the evidence and the allegations once again. When Lynch was finished, Marcinkus said he would try to answer those charges to the best of his ability. To deal with the question of Michele Sindona first, he said, while he and Sindona had been good friends for several years and while he considered Sindona “well ahead of his time as far as financial matters are concerned,” they had only very limited financial dealings together. He might mention one or two of those dealings in general terms, he said, but he would not go into any detail about them. Though the charges that had been made against him were “extremely serious, [they] are so wild I do not believe it is necessary that banking secrecy laws be broken in order to defend myself.”
Marcinkus was sure he knew exactly what lay behind those charges. His position as head of the Vatican Bank, answerable only to the Pope, “has led to certain hard feelings by other men in responsible positions in the Vatican. That is unavoidable and just part of my job. I am, as you know, the first American to have risen to such a position of power within the Vatican and this also may have caused a certain amount of hard feelings.”
Now, Marcinkus said, to deal with specifics. Take Monsignor Mario Fornasari. While he had met the monsignor on several occasions, “some of the people who work for me at the Vatican Bank pointed out Fornasari as an individual to avoid. You know, Fornasari was denounced some time ago for writing slanderous letters, though the charges against him were dropped.”
As for Mario Foligni, he had been involved in two transactions with the man, but neither of them had ever come to fruition. One had taken place on or about July 29, 1971, and had revolved around a $100 million investment that was supposed to have benefited the Diocese of Rome. It was to have been a joint venture of the Vatican Bank and Foligni’s Nuova Sirce and Intercommerce Group. For various complex and confidential reasons he did not want to discuss, though none was illegal, Marcinkus said, he decided not to pursue the proposal and so it never went beyond the paper stage.
The second deal with Foligni, he said, had taken place about a year before, in March 1972. Again, the bishop said, he could not go into detail because that would be a violation of banking secrecy laws. What he could say, though, was that the proposition had come to him in a very unusual fashion. He had received personally from Pope Paul VI a letter from Foligni and Foligni’s friend, the industrialist Carlo Pesenti, outlining a $300 million investment scheme. The Pope instructed Marcinkus to see if it was worthwhile. Marcinkus said his initial step had been to go to the Pope and ask how he had become involved. He was told that the letter had been handed to the Pope by Archbishop Benelli. Marcinkus immediately called Benelli and “told him that in the future all financial dealings should be worked through me and not the Pope, according to proper Vatican practices.”
Still, because of the Pope’s interest and instructions, he met with Pesenti and Foligni. The main thrust of the meeting, however, was not a discussion of the deal but how Foligni had managed to involve the Pope. “Pesenti apologized,” Marcinkus said, “and said that Foligni was the one who got the letter directly to the Holy Father.” Marcinkus said he demanded to know the name of the person Foligni had used as a direct line to the Pope. Was it Benelli? “Foligni gave me a name some time later, but I dismissed that because that person was too far removed from Rome to have any high-ranking Vatican contacts.” Then Foligni handed Marcinkus a letter saying “my staff was completely corrupt and dishonest. I was appalled by the letter. It was nothing but a piece of worthless trash which had absolutely no basis in fact.” That was enough for him, Marcinkus said, and he informed Foligni that he wanted nothing to do with the Foligni-Pesenti proposition. Soon after, “I found out that Mario Foligni was bad-mouthing me all over town and making wild accusations against my character.”
It was obvious to him, then, Marcinkus concluded, that the charges that he was involved with counterfeit American bonds were just more of Foligni’s slander. He was certainly not aware of any attempt to deposit such bonds in his Vatican Bank, had never discussed such a thing with anyone and he would certainly accept a list of the types of bonds so that he could be on the alert should they ever appear.
Lynch thanked him for his cooperation. The interview ended.
What Lynch neglected to note and what Marcinkus ignored in his discussion of the two deals with Mario Foligni was a curious and perhaps significant conjunction of dates. That first deal with Foligni, for $100 million, had taken place just two days after Foligni made that initial trial deposit of $1.5 million in counterfeit bonds at Handels Bank in Zurich. Perhaps Marcinkus could have claimed that, at that point, he would have had no way of knowing of Foligni’s involvement in such an illegal venture. But the second deal with Foligni, for $300 million, had taken place eight months after the Handels Bank operation and six and a half months after the one at the Banco di Roma. News of those deposits and Foligni’s role in them was no longer a secret. Yet, despite that, Marcinkus was still dealing with the man in huge investment schemes.
A little later, back in New York City, Coffey read the reports of those two sessions in the Vatican with growing rage and a certainty his feeling had been confirmed. “My son could read those reports,” he says, “and see right through them, see that they never asked the right questions, never pressed, just sat there and let Marcinkus and the others say whatever they pleased, and all they did was nod and say thank you. About the only thing you can say for them was that they at least got the thing out in the open so none of those people in the Vatican could ever claim again that they didn’t know about it.”
Coffey cornered Tamarro and Aronwald and demanded an explanation. Why had they been so gentle? Why had they willingly accepted everything that had been said to them? Why had they not asked one single tough question and demanded an answer? Why had they done no digging at all?
Tamarro agreed that the mission had been a botch, had accomplished almost nothing except to put the facts and the innuendos directly before the people in power in the Vatican. But, he said, “I wasn’t in the room, Joe. They wouldn’t let me in the room.”
Coffey glared at him. “You’re full of shit, Dick,” he said, “just like those reports, and you know it. You’re supposed to be a good agent. You’re supposed to know this case. You believe in it. You fought for it. And you let them get away with that!”
Then he turned to Aronwald. “You’re full of shit, too,” he raged, “and don’t tell me any different. If you had allowed us to go over there and conduct this investigation the way an investigation is supposed to be conducted, we would have had it all. But you wouldn’t agree to that and now you’ve blown it.”
His anger had grown from frustration, and eventually he realized he should not have expected any more. He liked Tamarro, respected him, but he knew Tamarro well enough to understand that he had been nurtured in the traditions of Hoover’s FBI and that his future in the agency depended on adherence to the rules and to orders. Tamarro would follow directions no matter what his inner feelings; he was not one to make waves. And Aronwald might be a good prosecutor, might be committed to this investigation, as he had shown often enough in the past, but he was still a bureaucrat whose future depended on following the lines laid down for him. There was no way, Coffey understood when he cooled off, that Aronwald would dispute Lynch, his superior, or go against a policy set by his department.
Two years later, Aronwald appeared before a Senate subcommittee in Washington to go through the story of the tangled affair that some called Operation Fraulein. During his testimony, he told the Senators, “Because of the serious allegations that had been made with respect to someone in the Vatican, although the name of the individual was never given, the Department of Justice made contacts with the Vatican and obtained their cooperation.… As a result of our visit and a result of the cooperation of the Vatican, we were able to conclude that there was no substance to the allegation that anyone within the Vatican was culpably involved in this scheme.”