Marcinkus quickly solidified his position at the IOR with the new Pontiff. He not only fended off tales of scandal over the Sindona affair, but he managed John Paul—Pope only a month—when a new government probe put the Vatican Bank on the defensive. In November 1978, after seven months of examining Ambrosiano’s records, Bank of Italy investigators finished a five-hundred-page report that raised troubling questions about Calvi and whether the Ambrosiano was capitalized properly.1 After Sindona’s collapse, the Bank of Italy was risk-averse. But the inspectors could not gather enough information to determine if their concerns were justified. Calvi’s multiple layers of foreign shell companies did what he intended: prevented the authorities from figuring out who controlled which entities and where the money went.2 The report—named after its chief inspector, Giulio Padalino—devoted twenty-five pages to questionable dealings between Ambrosiano and the Vatican Bank.3 It chided Calvi for failing to disclose the details of his business with the Vatican.4
A few copies of the Padalino Report leaked to reporters.5 Fortunately for the Vatican, it was written in the dense language of government bureaucrats and was hobbled by numerous caveats about missing evidence. The inspectors did not seem to understand fully the relationship among the Ambrosiano, Calvi, and his spider’s web of offshore companies.6 Its convoluted dissertations fell far short of a persuasive case.7 Many reporters did not read much further than the obtuse summary.
Milan’s criminal prosecutors, however, carefully read the Padalino Report. Although they recognized it asked far more questions than it answered, they also realized it made a strong circumstantial case that Calvi had profited by violating Italy’s currency control laws. That December (1978), one of the office’s most aggressive prosecuting magistrates, Emilio Alessandrini, opened a criminal probe into Calvi and the Ambrosiano. He enlisted the help of the Guardia di Finanza, an Italian law enforcement division that specialized in white-collar crimes.8 The goal, Alessandrini instructed them, was to develop enough evidence to charge Calvi with manipulating the share prices of public companies and passing any profits through different countries to circumvent taxes and restrictions on the export of the lira.9 Calvi was stunned to learn he was under criminal investigation when a few weeks later he flipped open a January 21, 1979, issue of L’Espresso. Prosecutors had leaked news of the probe instead of giving Calvi and his lawyers a heads-up.10
Eight days after L’Espresso’s scoop, five masked men walked up to an orange Renault stopped at a traffic light in the center of Milan. The prosecuting magistrate, Alessandrini, was inside. As part of his daily routine, he had dropped off his son at a school a few blocks away just minutes earlier. The masked men dragged him from his car, forced him onto his knees, and executed him in front of horrified witnesses. They escaped in a small car, throwing smoke bombs as they sped away.11
Calvi was not the only major investigation on which Alessandrini had been working. He also was responsible for building a case against a suspect in the assassination of former Prime Minister Aldo Moro. Alessandrini’s gunmen later turned out to be from Prima Linea (Front Line), an even more violent offshoot of the Red Brigades. But in the weeks before that became clear, there was speculation the murder was tied to Calvi.12
The government’s Christian Democratic coalition, headed by Prime Minister Giulio Andreotti, had been criticized for having failed to stop domestic terrorism. Now, it collapsed two days after the assassination. It was the fortieth government in thirty-four years.13 Luca Mucci, an earnest white-collar crime specialist, took over the Calvi probe. He lacked Alessandrini’s ability to cut through the judicial bureaucracy. It would take six months before the Guardia di Finanza returned his calls. And even then it was to inform Mucci they could find no evidence of criminal wrongdoing. No one then knew that Raffaele Giudice, the Guardia di Finanza’s chief, was a P2 member whom Gelli had lobbied on Calvi’s behalf.14 Uncertain about what to do next, Mucci reached out to the Ufficio Italiano dei Cambi, the Italian government department responsible for enforcing currency laws.15
None of this gave Calvi any pause in his frenetic deal making. Despite the questions raised by the Padalino Report, Calvi persuaded four prominent Catholic businessmen—all with close Vatican ties—to serve on the board of La Centrale, his Italian holding company. And to a few colleagues he seemed more distracted by events affecting his empire in Latin America than he was about the Bank of Italy report. The civil war in Nicaragua had taken a turn against strongman Anastasio Somoza’s government forces. The Marxist Sandinista National Liberation Front was on the verge of capturing the capital. Calvi worked to move the core of his Latin American operations from Managua to Lima.16 He renamed his new venture Banco Ambrosiano Andino and promised in the Italian press that the new firm would become partners with leading South American banks in offering financial services throughout the Southern Hemisphere.17 In fact, the Ambrosiano owned Banco Andino. When South American banks did buy small stakes in the new company, Calvi supplied the funds for those investments.18 Calvi transferred to Andino more than $100 million in back-to-back loans that the Vatican Bank had made with United Trading and Cisalpine.19 The following year, emboldened by the lax banking regulations prevalent throughout Latin America, Calvi launched Banco Ambrosiano de America del Sud, headquartered in Buenos Aires.20
While Marcinkus did not know all the details of Calvi’s South American deals, he thought the expansion was a good idea. Sindona later told reporters: “I had told Calvi to tell Marcinkus that if they [the IOR] can help, it is in their own interest. South America is Catholic. They don’t want to lose this big a part of their account.”21
Even in Italy, where one might have expected that the Padalino Report was a flashing yellow light, Calvi was as aggressive as ever with the Ambrosiano. Some of his decisions were terrible, as when he approved a large loan to a P2 colleague, Mario Genghini, whose business empire was in serious trouble. The Ambrosiano lost more that $42 million when Genghini’s businesses collapsed.22 But as fast as he lost money, Calvi used his Vatican connections to bail out the Ambrosiano. Marcinkus persuaded some big Vatican customers to loan Calvi money, including Italy’s largest nationalized financial institution, Banca Nazionale del Lavoro, as well as Ente Nazionale Idrocarburi, the country’s state-owned energy holding company, in which the Vatican had investments.23
• • •
As Calvi expanded the Ambrosiano network, Sindona fended off an increasingly aggressive legal assault in the United States. His problems had expanded far beyond Italy’s extradition efforts. In January, the same month the Calvi criminal investigation went public in Italy, U.S. prosecutors leaked to The New York Times that a grand jury was investigating former Nixon Secretary of the Treasury David Kennedy over a $200,000 personal loan from Sindona.24 The day after that story, a federal jury in New York capped an eight-week trial by returning guilty verdicts against Franklin National’s former chairman, president, and senior vice president.25 The three were convicted of falsifying the bank’s records to cover up the extent of its losses. Sindona, one of several unindicted co-conspirators, had been subpoenaed to testify during the trial. He avoided answering any questions by invoking his Fifth Amendment rights.
The long-awaited U.S. criminal move against Sindona came less than two months later, on March 19, when a grand jury returned a sweeping ninety-nine-count indictment against him and his former top aide, Carlo Bordoni.26 The charges included fraud, conspiracy, and misappropriation of $45 million from Franklin.27 The detailed indictment was strong proof that two and a half years after the collapse of Franklin National, federal prosecutors had seemingly solved the riddle of how Sindona shuffled millions between his Italian banks and offshore shells, all intended to boost the paper value of his companies while running Franklin into the ground.28
Sindona promptly issued a statement: “I am innocent of any wrongdoing. I will plead not guilty to the charges and expect to be vindicated at trial. In any case, according to my understanding, all charges rest on false documents and information originating from Italian sources.” He added: “I was the principal victim of [Franklin’s] collapse.”29
Sindona’s indictment dominated the news in Italy. Marcinkus was not surprised that because of the American criminal charges most of Sindona’s Italian friends had further distanced themselves from him. “Everybody was calling Sindona a very close friend [during his zenith at] the Banco d’Italia,” a sarcastic Marcinkus later told author John Cornwell. “But it’s strange, that now I’m the only one who has ever known Sindona in Italy. It’s like they said right after the war, ‘There’s not a Fascist in Italy.’ Where did they all go?”30
Marcinkus was not able to rewrite history, as had many of Sindona’s less high profile friends. Sindona’s close affiliation with Pope Paul VI and the IOR was too well documented. Instead, the bishop hoped that Sindona would not try to deflect attention from his own problems by creating headaches for the church.
More bad news came a couple of weeks after the Sindona indictment. Giorgio Ambrosoli, the attorney who had been appointed by the Bank of Italy to liquidate Sindona’s $200 million bankrupt Banca Privata Italiana, released a ten-pound, two thousand–page report based on his five-year probe.31 Although Ambrosoli recycled some unfounded conjecture about Mafia connections, much of his report was a compelling indictment of the shady ways Sindona had run his business empire.32 Ambrosoli had overcome significant hurdles to gain rare access to the records of two Swiss banks Sindona controlled.33 And he demonstrated that Sindona had violated Italian laws when he used money from Banca Privata’s depositors to purchase Franklin National.34 The report exposed how Sindona looted seven banks in Italy, Switzerland, West Germany, and the United States. Two hundred and seventy million dollars had disappeared through dubious loans, vanishing interbank deposits, and questionable fiduciary contracts (the 2014 equivalent of $854 million).35
But the most explosive charge—and the worst for the Vatican—centered on Sindona’s role in Calvi’s purchase of the Banca Cattolica del Veneto. Ambrosoli had uncovered that in August 1972, Sindona had transferred $6,557,377.04 into Radowal, one of Calvi’s offshore shells. That $6.5 million, charged Ambrosoli, was “probably paid as a commission to an American bishop and a Milanese banker.”36 The unnamed American bishop was clearly Marcinkus and the Milanese banker was Calvi.37 Due to the sensitivity of naming the sitting head of a sovereign central bank—Marcinkus—as the recipient of a multimillion-dollar payoff, Ambrosoli had deferred to the wishes of others in the Italian judiciary and the Bank of Italy who thought his public report should only identify Marcinkus by his position, not name. At the time the report was released, Marcinkus did not say a word publicly.
Starting in December 1978, unidentified men with Sicilian accents began calling Ambrosoli, sometimes offering bribes and other times threatening to kill him for his “lies.”38 He taped a call on January 12 in which a muffled voice said, Devi morire come un cano (You should die like a dog).39 Ambrosoli did not take the threats lightly. In one of his diary entries he wrote, “I will pay a very high price for this job. I knew this before I took it on, and I am not complaining at all because this is a unique chance for me to do something for my country.”40
Ambrosoli visited New York that June. He shared his findings with American prosecutors, including the evidence about the $6.5 million payoff split between Calvi and Marcinkus.41 A few weeks later Ambrosoli visited Boris Giuliano, the superintendent of Palermo’s noted Flying Squad, an elite anti-racketeering police unit with a storied record of success against the Mafia. They compared notes on mobsters who might have banked with Sindona as well as those who could have links to Calvi.42 Giuliano also confided he was pursuing credible leads about tens of millions laundered by Sicilian heroin traffickers and disguised as legal transfers through Sindona-owned banks in Italy and Switzerland.43
Sindona was in a fury when he learned about Ambrosoli’s cooperation with the American prosecutors and Italian racketeering squad. For five years Ambrosoli had been chasing Sindona. And it was Ambrosoli who had repeatedly blocked Gelli’s efforts to convince the Bank of Italy to bail out Sindona’s banks and give the Sicilian a second chance. Now, with his damning report, Ambrosoli was in the spotlight as the man not only capable of finishing off Sindona but also exposing the full extent of the Sicilian financier’s ties to the Vatican Bank and Roberto Calvi.
That the young prosecutor could not be bought or scared off frustrated Sindona. According to banker Enrico Cuccia, a fierce business competitor, he overheard Sindona at a meeting in New York supposedly threatening that “he wanted everyone who had done him harm killed, in particular Giorgio Ambrosoli.”44
On the evening of July 11, after a long day of depositions Ambrosoli left his office and drove to his Milan apartment.45 After parking his car in its normal spot, he crossed the dark street. Three men came around the corner and ran toward him.
“Are you Doctor Ambrosoli?”
“Yes.”
“Excuse me,” one stranger said. He pulled out a .357 Magnum and fired five bullets into Ambrosoli’s chest.46 Ambrosoli’s wife ran outside and stayed with her husband until paramedics arrived. Notwithstanding their frantic efforts, he died on the way to the hospital, but not before he managed to say that the men who killed him spoke with Italian American accents.47
The FBI and Italian police were immediately suspicious that Sindona had played a role. He certainly had the motive. Italy, however, was racked by violence against judicial officials. Since leftists and mobsters had killed eight judges, police officials, and prosecuting magistrates over several years, it was possible that someone else wanted the incorruptible Ambrosoli dead.48 When asked by reporters if he had anything to do with the murder, Sindona was outraged at the suggestion.49
Two days later, police Lieutenant Colonel Antonio Varisco, who was responsible for investigating P2 and its money laundering, was killed during the morning rush hour in central Rome. And ten days after Ambrosoli was gunned down, a hit man went after Boris Giuliano, the chief of the Flying Squad, who had just finished breakfast at his regular Palermo café. As he went to pay the cashier, a man ran up and emptied his pistol, hitting Giuliano twice in the back of the head. He died instantly.50
One result of the triple killings was that the official investigation into Sindona’s looting of Banca Privata Italiana, and the charge about the $6.5 million commission that Calvi and Marcinkus might have split, downshifted to slow motion. It was impossible for any Ambrosoli replacement to quickly master five years of files about a complex case.51 And probable suspects for the murders such as mobsters or the Red Brigades spooked some investigators. A team of five financial forensics police inspectors abandoned plans to trace lost funds transferred abroad by Banca Privata. At least one of them received death threats. Giuliano’s successor, Emanuele Basile, was killed the following year, shot repeatedly in the back while walking with his four-year-old daughter, who was not harmed.
On August 2, 1979, just three weeks after Ambrosoli’s murder, Sindona’s family reported the startling news that the Sicilian financier was missing. Eyewitnesses last spotted him wearing a light beige suit, blue shirt, and a club tie walking south along Fifth Avenue around 7:15 p.m.52 A few hours after he failed to show up for a business meeting the following morning, a man who refused to identify himself called Sindona’s secretary. In heavily accented English, he said, “We now have Michele Sindona as our prisoner. You will be hearing from us.”53
Because it was only five weeks before the start of his criminal trial, the FBI and police suspected Sindona had fled. But his family feared he was the victim of foul play.54
One of Sindona’s lead attorneys, former federal judge Marvin Frankel, received a letter from an unidentified group claiming it had Sindona and would subject him to “proletarian justice.”55 The New York bureau of ANSA, the Italian news agency, got a call from a man who spoke Italian with an American accent: “Here is proletarian justice. Michele Sindona will be executed by firing squad at dawn tomorrow.”56 A few days later Sindona’s family received a handwritten letter from him, assuring his wife, Katerina, that he was “not afraid” although the kidnappers were “interrogating me at length every day.”57 Another packet, postmarked from New York, arrived the following week. It contained short notes from Sindona mostly trying to calm his family.58
The FBI resisted changing the case from a missing person to a kidnapping. But it placed the prosecution’s key witness, codefendant Carlo Bordoni, into protective custody and issued calls for public assistance.59 By that time—two weeks after the disappearance—Interpol, and dozens of detectives and FBI agents, were working leads.60
Three weeks passed. No one knew if Sindona was alive or dead.61 His trial, scheduled to start on Monday, September 10, was adjourned indefinitely. The next day Sindona’s son-in-law, Pier Sandro Magnoni, received a letter asking for details about Sindona’s businesses, and warning, “If you value his life, you will provide all the facts in your possession.” Sindona’s Rome attorney, Rodolfo Guzzi, got an envelope postmarked from Brooklyn. It included ten handwritten questions about senior Italian politicians, prominent businessmen including Fiat’s Agnelli family, and even the Vatican. A notation after the last one said, “All written by me on precise orders, Sindona.”62 An enclosed photo showed Sindona thin and haggard and sporting an unkempt beard. Around his neck hung a sign with the hand-scrawled words, Il giusto processo lo faremo noi (The fair trial will be done by us). The note was signed by the Cornitato Proletario di Eversione per una Giutizia Migliore (the Proletarian Committee of Subversion for Better Justice).63
A few days later the first letter asking for money arrived. The kidnappers boasted that Sindona had given up incriminating information about some noted Italians and the Vatican.64 But this time the Italian police got lucky and arrested the messenger who delivered the letter. He was Vincenzo Spatola, a thirty-one-year-old Palermo contractor with solid ties to New York’s Gambino family (the Gambinos were one of New York’s original five Mafia families).65
Just a few days after Spatola’s arrest, on October 16, 1979, Sindona’s attorney, Marvin Frankel, picked up the telephone at his office. Sindona was on the other end. He sounded exhausted, his voice barely audible: “I was kidnapped but I am free now.” He was at a pay phone in Manhattan at 42nd Street and Tenth Avenue. It had been seventy-six days since his disappearance.
When his son-in-law and psychiatrist picked him up, Sindona seemed almost hallucinatory. He was recovering from a poorly stitched-up bullet wound on the back of his left thigh.66,I They checked him into Manhattan’s Doctors Hospital with two federal marshals posted outside his private room.68
Eight days after his return, a still weak Sindona appeared before Judge Thomas Griesa. Claiming his memory was poor as the kidnappers had kept him drugged, he gave a brief and vague account of what had happened, “Leftists” took him at gunpoint from midtown Manhattan. They demanded information they could use against the rich and threatened to try him for “economic crimes” against the people.69 His captors wore masks so he could not identify them, and they all spoke perfect Italian.70 He was blindfolded and moved four times, each trip taking at least an hour. His wound came when a guard shot him during a failed escape. And, Sindona said—speaking in a voice so low that the judge often had to ask him to speak up—he was shocked when the kidnappers set him free in Manhattan.
Although the prosecutors wanted Sindona remanded to jail, Judge Griesa allowed him to stay free on bail and ordered around-the-clock security for him and his family.71 The judge, concerned that speculation about Sindona’s disappearance might prejudice the jury pool, imposed a gag order on the lawyers.72
Unknown to Sindona and his legal team, Italian police had detained John Gambino, a senior captain in the Brooklyn-based crime family, during a visit to Italy. Stopped for a passport irregularity, when they searched him they found a slip of paper containing the notation in Italian, “741, Saturday, Frankfurt.” It seemed unimportant. But the FBI discovered that a TWA flight with that number had left Frankfurt for New York’s Kennedy Airport on October 13, three days before Sindona turned up.73 Gambino was a cousin of Vincenzo Spatola, the man arrested in Rome on October 9 for delivering hostage letters.
In a pre-9/11 era, airlines never maintained passenger lists after flights were completed. FBI agents had to examine every customs declaration filled out at JFK the day TWA 741 arrived. One bore the name Joseph Bonamico of Brooklyn. The street address did not exist, so the agents sent it to the bureau’s forensics lab. Near the same time, Luigi Cavallo, the provocateur who had blackmailed Calvi on Sindona’s behalf was detained by the FBI at JFK. He was traveling on a false passport. And in Italy, police arrested two brothers with ties to the Gambino family, suspects they thought might help answer what happened to Sindona during the ten weeks he was missing.74 Meanwhile, the FBI lab’s results were startling: not only did the handwriting belong to Sindona but his fingerprints were on the customs declaration card in the name Bonamico.
What the FBI could not yet prove was whether Sindona had planned his “kidnapping.”75
When FBI agents confronted Sindona about the TWA flight, he seemed nonplussed. Some in the U.S. Attorney’s office thought he had used his “kidnapping” to raise money in Sicily for his expensive legal defense. But they could not trace the money paid to his attorneys.76
Sindona, meanwhile, was focused again on his upcoming criminal trial. He reached out through Guzzi, his Roman attorney, to the Vatican. Sindona needed strong witnesses willing to testify about his good character. None of his business colleagues were willing to come forward and vouch for his honesty and integrity. What better character witnesses than bishops or cardinals from the Vatican? Guzzi telephoned Marcinkus.
It is difficult to imagine that after all the terrible fallout from the Vatican’s relationship with Sindona, that Marcinkus—or any other ranking prelate for that matter—would consider doing anything publicly to help Sindona. At an extraordinary special congress, John Paul II called all of the church’s 123 cardinals to Rome a few months earlier. They addressed a series of important issues at the one-year point of his Papacy. And Vatican finances, which were in the red by $20 million, were a priority (the deficit marked the first time the church had ever announced a year-end profit or loss).77 News stories about how “the Vatican has been plagued by money worries” and “serious financial problems” often mentioned the still-undetermined losses from the Sindona affair.78 John Paul had closed the congress and “painted a gloomy picture.” The Associated Press reported, “No Pope has ever spoken so openly on the Vatican’s finances.”79 Some top prelates, including the Pope’s close friend, Warsaw Cardinal Stefan Wyszyński, suggested that the IOR’s profits be used to erase the Church’s deficit. That idea never gained any traction.80
On December 5, 1979, Marcinkus met in his IOR office with Graham Garner, a partner of the accounting firm Coopers & Lybrand. For more than a year Calvi had foiled Garner’s inquiries about the Vatican Bank and the Nassau-based Cisalpine. Since Marcinkus was still a Cisalpine director, Garner had badgered him for a couple of months before getting the December meeting.81
Marcinkus introduced Garner to Mennini and de Strobel, and then for an hour gave him a broad description of how the IOR functioned. He tried addressing Garner’s confusion over the Vatican Bank’s dual role as borrower and depositor at the Cisalpine. Every time Garner asked for specifics, Marcinkus either dodged the question or claimed that the IOR’s governing rules prevented him from providing details.82 Garner left that meeting still in the dark that some $228 million in transfers from the Cisalpine to the IOR were in fact back-to-back loans. Most of that money was ending up in a tiny Panamanian firm.83 It was the IOR that stood to lose more than $137 million if Cisalpine and the rest of Calvi’s network collapsed. So while it might be understandable as to why Marcinkus would cover for Calvi, doing so created tremendous liability that would haunt the church in a few years.II
Given the spotlight on the church’s finances, it would have seemed natural for Marcinkus to pull away from Calvi and Sindona. But he did the opposite. December 1980 marked the first time in several years that Marcinkus approved the Vatican Bank’s purchase of another $65 million in promissory notes issued by some of the Ambrosiano’s offshore companies.85
And incredibly, as for Sindona’s request made through his Italian attorney for Vatican assistance, Marcinkus agreed to help. The bishop also lobbied two cardinals, Giuseppe Caprio and Sergio Guerri—both familiar with Sindona from his APSA dealings—to testify that Sindona was a stalwart, decent, and hardworking businessman. They agreed.86 Sindona’s legal team was so pleased that on January 24, lead counsel Marvin Frankel informed Judge Thomas Griesa that the high-ranking church trio would testify.87 Frankel said that under the policies of the city-state, the clerics could not appear in person at the New York trial. Griesa allowed their testimony to be videotaped at the American embassy in Rome on February 1.88
The Vatican’s new Secretary of State, Cardinal Agostino Casaroli, was enraged when he learned about it.89 He knew that supporting Sindona would be a public relations nightmare. Casaroli banned the three clerics from making the depositions.
When Frankel arrived at the Vatican to prepare Marcinkus, Caprio, and Guerri for their testimony, they informed him that they had no choice but to decline. Frankel pressed hard to change their minds. Marcinkus spoke for the trio, unswerving in his no.90
Sindona, upon hearing about the reversal, told Frankel that “the Vatican has abandoned me.”91 He blamed Marcinkus for the change, not knowing that Marcinkus had battled Casaroli over the ban, at one stage threatening to still go public for Sindona.92
What Casaroli did next is disclosed here for the first time. He was so upset with Marcinkus that he asked a close aide, Monsignor Luigi Celata—now an archbishop—to enlist the help of General Giuseppe Santovito, Italy’s Military and Security Service chief, to obtain compromising information about Marcinkus. Santovito appointed Francesco Pazienza, an ambitious young intelligence officer, to the matter.93 Pazienza did not uncover any straightforward blackmail. But in Switzerland, he unearthed documents that revealed how Marcinkus was the conduit for funneling church money to key conservative politicians. It would create a firestorm in the Italian press and add to the pressure for Marcinkus to resign.94
Instead of handing the information to Casaroli, Pazienza decided that Marcinkus was a more important Vatican power broker than the Secretary of State. “So I arranged a meeting with Marcinkus,” Pazienza revealed to the author. “I knew he loved power. He would not want to lose it.”95
“I have been hired to fuck you,” Pazienza told the IOR chief. Marcinkus did not show any visible sign of surprise.
“What do you intend to do?” Marcinkus asked.
“Nothing.”96
Pazienza got what he wanted: a bond of loyalty.
While Marcinkus had dodged a possible bullet with Pazienza, Casaroli had demonstrated his power by prevailing in the standoff over the Sindona character testimony. In withdrawing Marcinkus and the cardinals from the witness list, Frankel informed Judge Griesa that his trip to the Vatican was a “catastrophe.”97
The day before the trial got under way, on February 6, the U.S. Attorney’s office asked for a closed hearing in the judge’s chambers. There the FBI presented the evidence that instead of being ferried around blindfolded by kidnappers in New York and New Jersey, Sindona had engineered his own disappearance and spent it in Europe, mostly Sicily.98 The fake abduction was intended to generate sympathy, but it had turned into a tragi-comedy. The Sicilian mobsters who afforded him safe haven decided they could make more money by extorting information from him and threatening his family.99 The bullet wound was the result of a deliberate shot from an Italian doctor, Joseph Miceli Crimi, who knew where to aim the gun so it inflicted the least damage.100 When the gangsters had released Sindona, they swore him to silence lest his wife and children became targets.101
The judge later called it “the blackest day of my life in a courthouse.” He revoked the $3 million bail. A dozen federal marshals descended on the courtroom and hustled Sindona to jail.102
The trial started on February 7, 1980. Sindona’s ex-friend and Franklin colleague, Carlo Bordoni, was the prosecution’s star witness.103 And the government used evidence of the fake kidnapping to demonstrate to the jury a “consciousness of guilt.”104 Much of the testimony and legal arguments centered on financial minutiae. Although no one from the Vatican was on trial, and the indictment did not list the IOR as an unindicted co-conspirator, the lead prosecutor, John Kenney, repeatedly linked the Vatican Bank to the case. He told the court that the IOR had worked with Sindona to help “prominent Italian depositors” engage in financial dealings “which would not comply with the religious tenets of the Vatican or the Roman Catholic Church.”105
The end of the trial could not come quickly enough for Marcinkus. It took seven weeks for the case to go to the sequestered jury. The six men and six women deliberated for six days before reaching a verdict: guilty on sixty-five counts of fraud, misappropriation of bank funds, and perjury.106
In June, two days before he was to be sentenced, Sindona—who said later that the verdict made him “believe only in injustice . . . the government is the real Mafia”—slashed one wrist and took a pharmaceutical cocktail he had somehow smuggled into prison (a mixture of digitalis, a heart stimulant; Darvon, a painkiller; and Librium, an antianxiety medication).107 But he was quickly resuscitated, and after a few days in the hospital the judge ordered him to appear for his sentencing.108 Griesa meted out the maximum to the unrepentant defendant, four twenty-five-year sentences to be served concurrently.109
Sindona soon got more bad news. The FBI was hunting for a low-level American hoodlum, forty-five-year-old William Arico. The charge: being the hit man in the 1979 execution-style murder of Giorgio Ambrosoli, the Milanese magistrate who had been investigating Sindona. The break came through an unlikely source, Henry Hill. He was a convicted extortionist later made famous in Nicholas Pileggi’s book Wiseguy, and played by Ray Liotta in Martin Scorsese’s 1990 film Goodfellas.110 At the time of Ambrosoli’s murder, Hill and his family were only months away from entering the U.S. witness protection program.111 The gangster told the FBI that during the mid-1970s he had served time at a federal prison with two New York Gambino-connected hoodlums, Billy “The Exterminator” Arico, and a convicted heroin trafficker, Robert Venetucci. In the fall of 1978, according to Hill, after all three were released and living near one another on Long Island, Hill sold Arico five pistols and a machine gun with a silencer. “The Exterminator” bragged that Sindona hired him for a contract murder in Italy. Hill next ran into Arico in 1979, just after Ambrosoli was killed in Milan. Arico pointed to an Italian newspaper clipping about the murder and bragged: “This is the fellow I whacked out over there.”112
The FBI did not then know that since 1978 Sindona had been Venetucci’s silent partner in Ace Pizza, a cheese and olive oil importing company in Queens.113 Venetucci had hired Arico after Sindona asked him to handle his problem with Ambrosoli. At Sindona’s direction, his son was wiring money from the Union Bank of Switzerland to Ace Pizza’s account at New York’s Bank Leumi (some investigators suspected that was how Venetucci got the $40,000 he paid Arico).114,III
At the time the FBI got the tip from Hill, Arico was serving a four-year sentence on an unrelated jewelry heist in Manhattan’s diamond district. But before the bureau questioned him, Arico escaped from New York’s Rikers Island in June 1980, the same month Sindona was sentenced on the Franklin case.116 It was two years before the FBI ran him to ground in Philadelphia.117
When the Arico news went public, the Italians insisted Sindona be extradited to stand trial for Ambrosoli’s murder. But under the existing U.S.-Italy extradition treaty, Sindona had to finish at least five years of his jail sentence for his American conviction.118
• • •
Three months after Sindona’s sentencing, Luca Mucci, the Italian prosecutor in charge of the Ambrosiano investigation, ordered Calvi to surrender his passport. Mucci based his decision on a fresh June 12, 1980, report from the Guardia di Finanza that concluded Calvi likely violated currency laws, falsified bank records, and even committed fraud.119
Calvi reached out to Marcinkus for help. Much of his work at the Ambrosiano had been in partnership with the IOR. He thought the two of them could fend off the prosecutors. But Marcinkus and the IOR had their own problems. On February 5, 1981, Milan prosecutors had stunned the Vatican by arresting Luigi Mennini, the bank’s long-serving chief administrator, and Marcinkus’s most trusted deputy.120 The seventy-one-year-old Mennini had served as the IOR’s director at Sindona’s Banca Unione, and prosecutors thought he might be complicit in illegal currency trading there.121 Mennini was an iconic figure inside the Vatican, having been hand-selected in 1930 by Bernardino Nogara.122 And in 1967, when Henri de Maillardoz left as the chief layman at the IOR, Mennini took his position.
Italian police had arrested Mennini when he left the Vatican after work one day. John Paul II and Marcinkus raised a howl. After spending a few weeks in jail, Mennini was given “provisional liberty.”123
The arrest caused great concern at the Vatican. Were former or current IOR officials so involved with Sindona that they may have broken the law? What trouble could Sindona cause when he was extradited to Italy to stand trial over charges similar to those brought against Mennini?
No one outside of a few executives knew what was going on inside the secretive IOR. Marcinkus had developed a defense: Mennini was a political target for leftists as payback for all the church’s work over the years on behalf of the Christian Democrats. That sounded reasonable since a left-leaning coalition was in power. Combined with Mennini’s proclamations of innocence, it was enough to calm jittery nerves in the Vatican.
Since Marcinkus was consumed with his own problems, Calvi sought help elsewhere. He again turned to Licio Gelli. But the P2 chief, who had earned millions by working his extensive contacts for Sindona and Calvi, was himself about to come undone. The break came in February 1981. Two Italian magistrates were investigating whether the Mafia had helped Sindona during his fake kidnapping. They noticed that when Sindona was in Palermo, Joseph Miceli Crimi, the financier’s physician, had taken a two-day trip to the small northern village of Arezzo, a six-hundred-mile journey. The magistrates questioned Dr. Crimi, who claimed the trip was because he had had a toothache and his dentist lived there. But the investigators were skeptical. Crimi ultimately admitted he went to Arezzo to visit Licio Gelli. “Gelli is my Masonic brother,” the physician confessed. “And a close friend of Michele Sindona.”124
The magistrates applied for a search warrant for Gelli’s villa and an office he maintained at a local textile factory.125 One of Gelli’s nicknames was Il Cartofilo (the Paper Lover), a tribute to his obsessive collection and organization of paperwork.126 Although the search of his house yielded nothing, when the police executed the warrant at his office on March 17, 1981, they discovered a brown leather attaché inside a safe.127 It contained a treasure trove of documents and membership applications detailing 953 of P2’s members and its convoluted activities.128 There were thirty-two sealed manila envelopes with photocopies of bank transfers and cash receipts attached to names of ranking politicians, judges, and private industry titans. In the seized files police found inciminating information about oil bribes and the state-run petroleum agency, arms discussions with Argentine military officers, illegal payments to political parties, and tax evasion by top businessmen.129 One of the folders was labeled Roberto Calvi and detailed the many times Gelli had intervened to derail official investigations into the Ambrosiano chairman.130 And the police discovered a cache of startling photographs, including embarrassing ones of prominent Italians.131 The investigators ultimately concluded that Gelli had obtained many of the most salacious pictures from P2’s intelligence members. Most were never used as blackmail, but Gelli seemed a compulsive collector of information that one day might prove useful.132 One of the photos was of a naked Pope John Paul II sunning himself by a pool. The police did not then know that Gelli had sometimes shown that photo to others, using it as an example of how poor the personal security was around the Pontiff: “If it’s possible to take these pictures of the Pope, imagine how easy it is to shoot him.”133
Gelli got a tip about the search warrant too late to empty his safe, but before customs had received an all points bulletin to detain him, he fled to Uruguay via Switzerland on an Argentine passport.134 Umberto Ortolani, Gelli’s deputy, who was also involved as a middleman for many Sindona and Marcinkus money transfers, fled to Brazil.135
The public was stunned when the names of the P2 members were released that May. The list was a who’s-who of leading businessmen, prominent judges and prosecutors, top-ranking military and intelligence officers, and respected journalists (one of the less well-known names was Silvio Berlusconi, the founder of a new television channel, and later three times a Prime Minister). A report from the investigating magistrate to Prime Minister Arnaldo Forlani concluded, “P-2 is a secret sect that has combined business and politics with the intention of destroying the constitutional order of the country and of transforming the parliamentary system into a presidential system.”136 Authorities had also found evidence of P2’s role in right-wing terror plots.137 It had not helped that three cabinet ministers, including the country’s Attorney General, were P2 members. Speculation was rampant that there were more P2 members than those whose names were seized in Gelli’s files. Many thought that Marcinkus was part of P2, disguised with a secret code name. Three years earlier L’Osservatore Politico, a muckraking weekly, named Marcinkus—with 120 cardinals, bishops, and influential monsignors—as Freemasons. Marcinkus later denied any role in P2 member or that he was a Mason: “I don’t even know what a lodge looks like. . . . I was brought up to believe it was a mortal sin.”138,IV
The days when Calvi could reach out to Gelli and his P2 colleagues were over. An aggressive new investigating magistrate was now in charge of the criminal probe. Only the Vatican might be able to help the Ambrosiano banker retain his power. Calvi was about to test the limits of his relationship with the church.
I. Sindona had been treated by several psychiatrists for more than a decade, and was at different times prescribed a combination of anti–depressant/psychotic/anxiety medications. Side effects caused him to stop taking some antipsychotics. He also had at times a dependence on narcotic painkillers, and then laxatives to counter the constipating effects of the opiates. Although none of his psychiatrists ever disclosed the clinical diagnosis, business colleagues and some family members speculated it might have been bipolar disorder. Some of his worst business decisions coincided with stretches of little sleep but tremendous energy, what psychiatrists consider the manifestations of the manic phase of that mental illness.67
II. Ten weeks later, on February 21, at Claridge’s Hotel in London, the full Cisalpine board met with Garner and another accountant: the directors approved financial statements that confirmed that the IOR owed Cisalpine $228 million. Only Calvi and Marcinkus knew that was not true, but neither objected. The Coopers & Lybrand accountants submitted a management letter stating in part: “It is our understanding that none of the directors of Cisalpine, other than Bishop Marcinkus, are aware of the current financial condition of this entity.” Marcinkus evidently objected to being listed as the sole official with full knowledge of what was taking place at the IOR. Garner modified the letter to say instead that the full information was “only available to a very limited number of individuals in the Vatican.”84
III. Sindona’s son, Nino, then a thirty-five-year-old businessman who had worked with his father, demonstrated the extent to which the Sindona family detested Ambrosoli, in a contemporaneous interview with journalist Luigi DiFonzo. In discussing the deceased Ambrosoli, Nino said: “I have no compassion for the fucking guy. [He] deserves to die—and this is not enough for a son-of-a-bitch like him. I’m sorry he dies without suffering. Let’s make sure on this point . . . Ambrosoli doesn’t deserve to be on this earth.” (Nino Sindona refused requests by the author for an interview.)115
IV. The journalist behind the story of the Freemason-Vatican connection, Carmine “Mino” Pecorelli, was shot to death the following year by a hit man armed with a silencer-equipped pistol. Sixteen years later, Giulio Andreotti, the seven-time Italian Prime Minister, went on trial along with dozens of top mobsters for ordering Pecorelli’s murder to cover up a pending bribery story. When Andreotti, a devout Catholic and daily-Mass attendee, was later acquitted of all charges, a Vatican spokesman, Joaquín Navarro-Valls, issued a statement that John Paul II learned of the verdict with “satisfaction.”139