The cardinal they picked, Karol Józef Wojtyla, was the youngest of three children born into a devoutly Catholic household in Wadowice, a small town thirty miles outside Kraków. His father was a noncommissioned army soldier, and his mother, a schoolteacher, died during childbirth when he was eight.1 In 1938, a year before the start of World War II, Wojtyla enrolled in Kraków’s Jagiellonian University where he studied Polish literature, was an avid member of the drama club, and played as goalkeeper on the soccer team.2 When the Nazis and Soviets divided Poland, he avoided deportation to Germany by working at menial jobs the Germans assigned him, including at a limestone quarry, then a chemical plant, and even as a messenger for a restaurant.3 After his father died in 1941, the twenty-one-year-old entered an underground theological seminary and spent the last year of the war studying for the priesthood.4 On August 6, 1944, the so-called Black Sunday on which the Nazis rounded up more than eight thousand young men, he escaped to safety in the palace of Kraków’s cardinal.5,I
After the war, Wojtyla studied for a doctorate at Rome’s Pontifical Athenaeum Angelicum, and he returned to Poland in 1948 as a parish priest in a small town just outside Kraków. He remained in Poland when the country became a full-fledged Soviet satellite in 1952. Wojtyla was a prodigious writer about church history and canon law. As a popular teacher of moral philosophy at Lublin’s Catholic University and at the Kraków seminary, he had a reputation far beyond Poland.7 At thirty-eight, he became the second youngest bishop in the world, and five years later Pope Paul VI elevated him to an archbishop.8 Most parishioners in Kraków thought he was smart and likable.9 And although he was undoubtedly spiritual and a serious scholar, his strong character was forged by his experience as a Polish prelate living under a communist government. To do something in his own diocese, he had to apply for permission to a special government ministry that oversaw all church matters. The freedom of religion taken for granted in America and many Western European countries was still a distant dream for him.
By selecting a cleric from Soviet-dominated Eastern Europe, the cardinals had selected the most fervently anticommunist Pope since Pius XII. Just three days after Wojtyla’s election, the CIA’s National Foreign Assessment Center circulated a four-page confidential memo that concluded that the election of a Polish Pontiff would complicate matters for the Soviet Union and would “undoubtedly prove extremely worrisome to Moscow.”10 And just as Pius XII’s zeal about fighting communism was shared by contemporaneous, secular Western leaders like Harry Truman and Winston Churchill, similarly like-minded heads of state would soon join Wojtyla. Margaret Thatcher began her eleven-year tenure as Britain’s Prime Minister just five months after he became Pope.11 And Ronald Reagan came into office two years later. Reagan and Thatcher would lead the fight to break the Soviet empire. They had Wojtyla’s full support.
As he settled into the Papacy, John Paul II met with CIA analysts, who briefed him on American efforts to destabilize communist governments behind the Iron Curtain. Egyptian intelligence agents gave him a better understanding of events in the Middle East. Italy sent security service officers to update him on the fight against the Red Brigades.12 The message from the new Pope was clear: he was not going to rely only on the traditional channels of information filtered first by the Curia.
Inevitably, John Paul II would revive Pius XII’s policy that the church had a duty to be involved in secular politics when it came to standing against communism. Covert money would be needed for anticommunist cells in Eastern Europe. The Vatican Bank was proven to be as instrumental in this new phase as it was in safeguarding the church’s fortune during World War II.
On December 1, 1978, less than two months after assuming the Papacy, John Paul summoned Marcinkus for a meeting at the Apostolic Palace. It was the first time since his election that the two met alone. Six weeks earlier, Cardinals Benelli and Felici had given his predecessor a damning file about the IOR chief and the unchecked manner in which he ran the Vatican Bank. They worried that John Paul might not give it the attention it deserved. Although Kraków was a large, cash-poor diocese that he managed well, he was known not to like money matters. He did not even have his own bank account.13 Before the Pope met with Marcinkus that day, Felici checked to make sure the Pope had read the file. He had.14
When Marcinkus arrived, he sat on the far side of a large desk, across from the Pontiff. Marcinkus remembered enough of his parents’ Lithuanian dialect that they made some small talk in Polish.15 It was a good start. The duo had in common their outsider status, and the Pope knew that Cody and Marcinkus had facilitated contributions from American Poles in Chicago that had helped support his Kraków diocese.
Instead of talking about finances, John Paul surprised Marcinkus by discussing his plans for a foreign trip. Mexico would be his first stop, John Paul told him, since the church was challenged on many fronts there, from ingrained poverty, corruption, a power surge by leftists, and even the growth of rival Pentecostals. Would Marcinkus organize the trip and accompany him? The fifty-six-year-old IOR chief must have felt great relief. He had gone from almost certain banishment a couple of months earlier under Luciani to being offered a chance by the new Pope to reprise his insider’s role on foreign trips.
And there was something else addressed—revealed here for the first time. For several years there had been a simmering financial scandal about a group of Pauline monks that ran a Philadelphia-area shrine to Our Lady of Czestochowa, the “Black Madonna” revered by Polish Catholics for having spared a holy monastery from a seventeenth-century Swedish siege.16 A month before John Paul became Pope, the scandal about the Polish monastic order went public in the United States when Gannett News Service published an investigative series.17 The Vatican, with assistance from U.S. cardinals, had appointed in 1975 two hard-nosed prelates—Camden, New Jersey’s, Bishop George Guilfoyle and the Reverend Paul Boyle, the provincial chief of Chicago’s Passionist Fathers—to look into possible financial mismanagement at the shrine and monastery.18
What they discovered shocked church officials. The Pauline Fathers had not only squandered nearly $20 million in charitable contributions, but there was evidence of “mismanagement, dubious business practices and what Vatican investigators described as ‘chaotic’ and ‘immoral’ life styles.”19 Guilfoyle and Boyle compiled a long list of problems. The Paulines had raised $400,000 for bronze plaques for the shrine but never made a single one. Donors gave $250,000 for Masses that the priests never celebrated. Sixty-four thousand dollars went to cemetery upkeep that was never performed. Making matters worse, the monks had violated their poverty vows. Although the order had defaulted on $4.3 million in church bonds bought mostly by Polish American Catholics, Guilfoyle and Boyle concluded the Paulines ran their 130-acre hilltop monastery “more like a resort hotel than a monastic institution.” A majority of the thirty monks had their own cars, paid for by contributions from the faithful, and all had credit cards that were charged against donations.20
The wayward Paulines had retained the services of a disbarred attorney—who had served jail time for federal tax evasion—as their chief financial advisor. The Vatican auditors also uncovered a trail of secret investments in private companies in five states, all designed as “tax-avoidance schemes.”21
Guilfoyle and Boyle found the monks’ accounting so convoluted that they retained Peat, Marwick & Mitchell to make sense of it. Typical of what they discovered was the monks’ purchase of the local Westminster Cemetery at a “grossly inflated price” from the order’s attorney.22 In less than a year, the monks had emptied the cemetery’s legally mandated $500,000 perpetual care fund, improperly withdrawn $120,000 of its operating revenue, pledged its ninety-seven acres to borrow another $660,000, and even padded its payroll with friends.23 To the anger of local parishioners, the Paulines took another $100,000 to allow Sun Oil to build a gas station at the cemetery’s entrance, although it meant relocating many existing graves.24 The monks had appointed two friends of their disbarred advisor at $1,000 a week each to manage the graveyard. When Guilfoyle and Boyle interviewed the managers, they claimed they were forced to kick back half their salaries to Father Michael Zembrzuski, the shrine’s seventy-year-old vicar-general. Zembrzuski kept a mistress with church money (one of the managers later told reporters Zembrzuski avoided criminal charges only by threatening to go public with what he knew).25
When Guilfoyle and Boyle ordered the Paulines to turn in their televisions, high-end stereos, credit cards, and car keys, half the monks left the order.26 The report that made its way to the Vatican was several hundred pages and crammed with supporting details.II The unwavering recommendation from Guilfoyle and Boyle—backed by Philadelphia’s Cardinal John Krol—was that Zembrzuski tender his resignation and that the offending priests be “severely disciplined.”27
Before any news broke, Zembrzuski had traveled to Poland to discuss with his close friends—the country’s top prelate, Cardinal Stefan Wyszyński, and Kraków’s cardinal, Karol Wojtyla—what he should do. Wyszyński oversaw the entire Pauline order. The meetings took place by coincidence just before John Paul I died. With his death, and the ensuing focus on the conclave, any action on the Pauline scandal was postponed.
Once Wojtyla became Pope, the Paulines appealed directly to him. Only seventeen days after assuming the Papacy, John Paul reversed the recommendations of the investigating committee. The following May he issued a Papal Decree ending all investigation into the Paulines and vacating the original findings.28
The problem facing John Paul was that most of the Polish American faithful who had loaned money to the monks had resisted efforts by the church to forgive the debt and write it off as a donation. Many were elderly parishioners. In some instances they had put their entire savings into the low-interest bonds issued by the Paulines. Since the bonds were unsecured, they were last on the list for repayment. Some devout Catholics were so furious with the loose operations by the monks that they consulted attorneys about suing. There was even talk of possible criminal charges, and the SEC was probing whether there was fraud in the sale of bonds to build a 1,700-seat cathedral that never got off the drawing board.29
Only one thing could put the mess to rest. Money. John Paul knew the American church had already spent considerably on cleaning up after the Paulines. Cardinal Krol of Philadelphia had used emergency diocese funds to pay off $722,000 in bank loans.30 But individual bondholders clamored for another $4 million, far more than Krol could spare. So, John Paul raised the matter with Marcinkus at their December 1 meeting. The beleaguered IOR chief saw it as a chance to ingratiate himself further with the new Pontiff. Over the next several months, Marcinkus directed more than $5 million to Cardinal Krol, all of which paid creditors—from additional banks to most of the faithful—as well as to reimburse the Philadelphia diocese for much of the money it had spent.31
The backdoor deal over the Paulines was the initial glue in the John Paul–Marcinkus friendship.32 In the coming months, as they prepared for the Mexico trip, Marcinkus spent hours alone with John Paul. Marcinkus then had no idea of just how dramatic a turn his fortunes had taken. John Paul II saw in him a trustworthy ally capable of finding the money to bolster nascent pro-democracy movements. And he knew from Marcinkus’s service to Pope Paul VI that the American prelate prided himself on loyalty and secrecy. His help in resolving the Pauline payments without garnering any additional publicity was a good sign, indicating how quietly he could operate. The new Pope knew he would need those traits as a buffer against the undercutting Italians that dominated the Curia.III
Three months after assuming the Papacy (January 1979), John Paul II flew to Mexico. Marcinkus handled all logistics and security. During that trip, Marcinkus told the new Pope who he believed had planted the rumors about foul play in the death of John Paul I: the KGB, to create mischief in the church.34 For John Paul, a prelate who had fought for decades the communist efforts to destabilize the Polish church, it made sense. Had the KGB also fanned the rumors about the Vatican Bank and Sindona in order to hurt the church further? The two men had little doubt it was possible. John Paul assured Marcinkus that under no circumstances would he allow the KGB or any other disinformation effort to ruin the reputation of the IOR or Marcinkus.35
By the time they returned to Rome, Marcinkus was joking with the Pope, about how the Curia would soon punish him for not being servile enough. Marcinkus’s long-entrenched enemies were disappointed at the obvious friendship. The bishop from Cicero had lived to serve another day.36
His foes did not know that in March, Marcinkus received an inquiry from the FBI about the possible criminal misuse of a Vatican Bank account. The author has discovered that the U.S. Deputy Presidential Envoy to the Holy See delivered a three-page telex to Marcinkus from Benjamin Civiletti, the Deputy Attorney General. It provided details about a Justice Department probe into whether “a United States corporation appears to have defrauded the United States Government and others, by concealing millions of dollars in the Institute of Religious Works.”37 According to Civiletti, a federal contractor, American Training Services, had gone bankrupt owing the government more than $1 million. That debt was settled for 10 cents on the dollar before the government learned “ATS concealed millions of dollars in foreign bank accounts” including that “$7.7 million is in two accounts in the Institute Per Le Opera di Religione.” Those had been opened five years earlier by American officers of ATS or its subsidiaries.
Civiletti was straightforward: “There is evidence indicating that much of the money may originally have been obtained by fraud.” Civiletti wanted Marcinkus to provide “any assistance you could render to temporarily immobilize these funds.”
It would seem a simple matter. Bank officials routinely work with law enforcement to freeze funds while a criminal probe is under way. It was not clear why the two IOR accounts listed by Civiletti even existed at the Vatican. Neither had a cleric or religious order as an account signatory, and neither had as its stated purpose religious philanthropy or service.38
Marcinkus replied a month later about what he called “the deplorable situation created by American Training Services,” but claimed he could not help since he had gone through all the relevant records and could not find any of the names or companies listed in Civiletti’s letter. Marcinkus said with considerable understatement: “First of all, let me explain our organization to you. The Institute for Religious Works is not a bank in the ordinary sense of the word.”39 Marcinkus disingenuously said he was confident that such accounts did not exist at the IOR, since the $7 million of deposits pinpointed by the Justice Department were such “large sums . . . we would have been very much aware of any such operation. Ours is a modest organization and any operation involving large sums would not go unnoticed.” That statement was contradicted by the tens of millions of dollars that had transferred back and forth with Sindona and Calvi. But Marcinkus said “to be on the safe side” he had checked to see if he could match the “sums of the size you mention coming from the U.S. in the period indicated in your letter.” He found nothing. “I am at a loss to know how I can be of assistance to you on this matter.”40
Blocked by Marcinkus from examining the records at the Vatican Bank, Civiletti had no choice but to accept the bishop’s denial as the final word.41 Justice Department officials complained privately about the IOR’s failure to conduct a more thorough search for records and transactions. When word of their displeasure reached Marcinkus several weeks later, he sent off a missive to Civiletti in which he said he was “perplexed.” But most of his two-page, typewritten letter was a rebuke—revealed here for the first time—of how the FBI handled sensitive information it gathered as part of the bureau’s 1973 investigation into counterfeit bonds and securities that had climaxed when two federal prosecutors and an FBI agent visited Marcinkus at the Vatican.
“Now I come to the point,” Marcinkus wrote before launching into his diatribe. He set the background with the origin of the “investigations concerning a gigantic fraud, which involved the sale of some $900,000,000 worth of stocks and bonds, made up of stolen and counterfeit denominations.” The IOR got swept into it, he said, because of the stories told by some “confidence people.”42
He emphasized that he had voluntarily met with the American investigators and answered their questions to the “best of my ability.” The reason Marcinkus was so furious is that he had learned that in the German trial of one of the defendants, an FBI memo summarizing the agents’ talk with Marcinkus had been submitted into evidence.
“Much to my surprise and stupefaction,” he wrote, “the memorandum . . . was inaccurate in many respects, [and] it seemed to me to be even tendentious. I feel if good relations are going to exist, confidence must be respected and above all accuracy of statements must be maintained. I feel injured by this testimony and I wish to be assured that the F.B.I. will make amends.”43
The Justice Department ignored Marcinkus’s outburst. No one had any intention of apologizing to the IOR prelate. Those who ran the 1973 probe felt he was somehow involved, but they simply never found the evidence to charge him.44
I. Just after the war, the twenty-six-year-old priest faced an unusual situation. A Catholic family had hidden a Jewish boy from the Nazis, and had learned that the Germans had murdered the child’s parents. They brought the youngster to Wojtyla and asked him to baptize the child. In contrast to Pope Pius IX and his abductions and forced baptisms of two Jewish boys, Wojtyla refused. The boy should be raised Jewish in the tradition of his parents, Wojtyla told the parents.6
II. The Vatican has never released the complete report, and this author’s requests to review it went unanswered.
III. Wojtyla’s election was as fortuitous for Cardinal Cody as it was for Marcinkus. After reading the Cody file, the new Pope decided not to do anything until he visited Chicago, a trip planned for October 1979. Ultimately, when John Paul got there, Cody presented him with a reputed $1 million gift and lobbied hard to defend himself. Although John Paul repeatedly told his aides he intended to move Cody out, he never did. Instead, a lay insider from the Chicago diocese got in touch with the U.S. Attorney the following year. The tales of financial impropriety were enough for a grand jury to be impaneled. And the Chicago Sun-Times soon assigned a team of investigative reporters to chase the many Cody rumors. In 1981, that resulted in one of the most carefully vetted investigations in the paper’s 137-year history. It was a devastating tell-all that showed that Paul VI and John Paul II were wrong when they did not insist Cody step down.33