With Marcinkus gone from Rome, Angelo Caloia was unchallenged in his energetic oversight of the Vatican Bank. It seemed a much tamer institution. Under Caloia’s direction there was hope that the bank might morph into something pedestrian rather than rogue.
Although Caloia was a devout Catholic and avid member of Opus Dei, he did not have the patrician heritage that was the hallmark of the Black Nobles.I Born in 1939 into a working-class family in the small northern village of Castano Primo, his mother was a seamstress and his father a carpenter. When Caloia was eight, he fell ill with typhoid, and a burst appendix that led to peritonitis complicated his recovery. During months of difficult recuperation, he listened to the “Microphone of God,” jarring radio broadcasts by Riccardo Lombardi, a provocative politician who was a committed socialist and advocate for a “working man’s Catholic Leftist party.” Those broadcasts made an indelible impression on the youngster, so much so that in later years he was politically left of most Catholic financiers.2 Although he had worked his way to a position of privilege, he rejected the elitism that often accompanied such standing. The Italian press began referring to him as Italy’s Catholic banker. He told a colleague the only thing worse would be to be called the Pope’s banker.3
Caloia preached transparency and strict ethics. A handful of IOR officials, however, realized that no matter how pure his intentions, he faced great obstacles in reforming the Vatican Bank. His appointment marked a sea change in the personal relationship between the Pontiff and the head of the bank. Marcinkus had regular access to John Paul. It took Caloia two years before he met with the Pope. And that was only a quick greeting after a morning Mass, in which Caloia brought along his wife and children. That was a strike against him, especially since many in the Curia measured power and influence by easy and frequent access to the Pope. Caloia’s distance led some to believe he was only a temporary place holder for some other, yet undetermined, bank chief.
Monsignor Renato Dardozzi, who had convinced Caloia to take the job, thought he was a good pick. Dardozzi’s concern was that some long-serving IOR officials acted as though Caloia wielded no authority over them. Dardozzi was on the three-person panel that helped negotiate the $244 million payment to the Ambrosiano’s creditors. He had been a senior engineer at STET, the state-owned telecommunications company, before becoming a priest at fifty-one.4 Secretary of State Casaroli asked Dardozzi to keep an eye on the goings-on at the bank. Now, his frustration mounted as he watched everything from phantom charities to illicit political donations flourish despite Marcinkus’s departure.5
Dardozzi was particularly bothered by an account opened at the Vatican Bank on June 15, 1987. That was at the height of the debate over whether Italy’s arrest warrants could be executed against Marcinkus, Mennini, and de Strobel. It was the Fondazione Cardinale Francis Spellman (Cardinal Francis Spellman Foundation—no such entity existed outside of the Vatican Bank).6 The two signatories were Monsignor Donato De Bonis, the bank’s secretary, and Italy’s leading Christian Democrat politician, Giulio Andreotti (before Andreotti died in 2013, he was the nation’s most dominant postwar public figure, leading seven governments as prime minister and having served thirty-four times as a minister, eight times in charge of the Defense Department).7 The IOR required all account holders to maintain a copy of their wills on file so the bank would know what to do in case of death. De Bonis’s will provided that upon his death any funds went to “His Excellency Giulio Andreotti for charitable works and assistance according to his discretion.”8
In the six years that followed the opening of the Cardinal Francis Spellman Foundation account—during which Andreotti again became Italy’s prime minister—about $60 million passed through.9 Evidence that the church knew the account was sensitive is in internal correspondence in which senior officials referred to De Bonis by the pseudonym Roma and Andreotti as Omissis (other pseudonyms used, such as Ancona and Siena, have never been decoded).10 The reason for the subterfuge was the bank’s awareness that the disclosure of such an account—millions of dollars in a veritable slush fund run by the IOR’s top prelate together with the country’s most powerful Christian Democrat politician—would have sparked a great scandal.
While some of the money that passed through the Spellman Foundation found its way to religious orders, monasteries, and convents, much of it was scattered to Andreotti’s friends and associates, including one of his attorneys and a Florentine jewelry designer.11 And De Bonis sent millions more through untraceable wire transfers to Swiss and Luxembourg banks. Sometimes Dardozzi spotted De Bonis leaving the Vatican with suitcases of cash and later returning empty-handed.12
In 1992, a prominent socialist politician, Mario Chiesa, was charged with accepting a bribe in return for granting a political favor. Chiesa’s arrest kicked off a broad judicial investigation dubbed Mani Pulite (Clean Hands) that eventually toppled the coalition government. The Mani Pulite probe—dubbed by The New York Times as “one of the most extraordinary scandals of postwar Europe”—continued for three years, ensnaring five thousand defendants and leading to hundreds of convictions of politicians and businessmen, including a breathtaking half of parliament.13
Although Mani Pulite was then in its earliest stages, it nevertheless caused considerable concern in the Vatican. Just a month after Chiesa’s arrest, Caloia received a preliminary report raising questions about the Spellman Foundation account. That prompted the IOR’s Board of Superintendence, chaired by Caloia, to issue an April 1, 1992, edict that no one—“whether it be as an employee, active or retired, a manager, an auditor or accountant, [or] a prelate”—could trade or manage the accounts they did not personally own.14
De Bonis ignored that directive. And Caloia was frustrated he had few tools by which to force De Bonis to comply. “All [IOR] controls were internal,” Caloia later recalled. “It was not monitored. The cardinals knew little and the Holy Father was kept in the dark.”15
Although Caloia was De Bonis’s superior, it seemed that inside the Vatican a cleric had more standing and respect than a layman.16 A sign of De Bonis’s continuing power was that he retained the IOR’s “most beautiful office” and was in contact “with everyone in Rome who mattered, politically and otherwise. Francesco Cossiga [a former Italian president] called him by the affectionate nickname ‘Donatino,’ and Giulio Andreotti held him in high esteem, as did prominent aristocrats, financiers, and artists, like Sophia Loren.”17
It did not take long before Caloia discovered that the Spellman Foundation was not his only problem. He began compiling a list of questionable accounts ostensibly opened for everything from Catholic community associations to Trappist monks to Carmelite nuns. What appeared suspicious in each was outsized financial activity. Some—such as Assisi for the Amazon, Adorers of the Eucharist, Holy House of Loreto, and St. Seraphim Fund—were seemingly for nonexistent groups.18
On July 7 Caloia distributed to his fellow lay commissioners a report stamped Classified. It concluded that the situation inside the IOR was “very serious” and that the Vatican Bank was possibly on the verge of a new Marcinkus-styled scandal.19 Caloia wanted to better control the so-called numbered foundation accounts. Veterans like De Bonis were naturally resistant to anything that might limit their broad discretion.
Instead De Bonis did his best to undermine Caloia. In back halls, he ridiculed Caloia’s inexperience and warned that as a layman he would never understand the reasons why the IOR had to sometimes operate as it did. Caloia had a British wife and he had lived and studied for several years in London. That was evidence, contended De Bonis, that Caloia was not fully Italian, not in a way by which he could be trusted. Was Caloia truly loyal to the Pope or was he instead serving his own private career?20
Caloia was so concerned that he decided to appeal directly to John Paul. But the Pope had just been operated on for a malignant intestinal tumor and his doctors had ordered a lighter schedule. Caloia thought the matter too important to wait. He was worried that De Bonis and others were running the equivalent of a “laundry in the center of Rome,” protected by the Vatican’s sovereignty.21 So on August 5 he sent a memo to John Paul’s secretary, Stanislaw Dziwisz. Caloia included details about several foundations De Bonis managed. Also included were seventeen other dubious accounts on which De Bonis was the signatory. [They were pledged to never-heard-of congregations, religious shrines, and purported charities.22] One held the estate bequeathed to the IOR by Cardinal Alberto di Jorio, the bank’s former chief prelate. Di Jorio had left a villa, bonds, and cash, naming the bank as the sole beneficiary. But he also appointed De Bonis as his executor. De Bonis had never transferred any money to the IOR but instead managed the account as his own.23
One foundation accepted contributions from the faithful for Masses to be offered for the dead; ten thousand Masses had been paid for but there was no evidence that a single one was performed.24 Another account hid over $30 million belonging to a senior police commander and a bishop, both of whom were directors at Italy’s largest psychiatric hospital in Bari, an eight-hundred-bed facility that had been built on the site of property that previously belonged to the Ancelle della divina Provvidenza-Bisceglie (Sisters of Divine Providence-Bisceglie).25
Although Caloia did not yet know the full extent of the IOR’s secret network, he delivered a blunt recommendation: the Pope must act to extinguish the parallel bank flourishing inside the Vatican.26
Caloia thought it unlikely that all the money passing through the foundations was donations and inheritances. He was right. When the psychiatric hospital in Bari later became embroiled in scandal—a case of inflated public contracts and stolen funds from the Ministry of Health, resulting in multiple embezzlement and money laundering indictments—a nun from a nearby convent told prosecutors she had seen the police commander cram shoeboxes of cash into his car and drive off to the Vatican.27 Worse yet, in a related case the prosecutors wanted to indict Cardinal Fiorenzo Angelini, the head of the Vatican’s Pontifical Council for the Pastoral Care of Health Care Workers, on charges he extorted money from a pharmaceutical company.28 But the same defense of absolute sovereignty that had protected Marcinkus prevented any move against Angelini.
Two of the accounts he tagged for their frenetic money transfers were for the Santa Casa di Loreto (Holy House of Loreto), a charity based in the popular eponymously named pilgrimage town. In 1988, John Paul had appointed Monsignor Pasquale Macchi, Pope Paul VI’s closest personal aide, as Loreto’s bishop. It was Macchi, a trusted Marcinkus ally, who now helped De Bonis administer two off-shelf accounts.29 Caloia was learning a sobering lesson: “Even in priests’ robes there lurk human weaknesses,” he later said.30
Most of the troublesome accounts had opened under Marcinkus. It was not much of a secret that for decades Italy’s elite had used the IOR to hide their money. In 1981, not long after Marcinkus had taken charge, one internal review estimated there were approximately 9,300 accounts belonging to “privileged citizens of Italy” compared to only 2,500 that met the bank’s strict rules. Some accounts were rumored to be proxies for the Spatola and Inzerillo crime families. Marcinkus’s departure had not slowed the flow of untracked cash. And it was not difficult to understand why the accounts were so valued—the IOR not only paid on average about 9 percent interest on the deposits but it was tax free.31
“They really had no effective internal controls in place,” Peter Murphy, the U.S. Deputy Chief of Mission at the U.S. embassy at the Vatican, said. “There were accounts that remained active long after they should have been closed.” (After Murphy left in 1989 as an accredited diplomat appointed to the Holy See, he was no longer entitled to the IOR account that had been opened as a courtesy during his posting; it took twenty-two years before the bank closed it.)
Caloia would ultimately discover that upward of $400 million moved through seventeen in nero (in black) accounts during the first four years after Marcinkus’s departure (1989–93).32 Although that cash came almost entirely from undetermined sources, it was invariably listed on the IOR ledgers as contributions from the faithful. Much of it disappeared in a flurry of transfers to Switzerland and Luxembourg, jurisdictions where banking secrecy stopped any inquiries cold.
The Vatican bureaucracy, much to Caloia’s frustration, moved at a glacial pace.33 So it was not surprising he had not heard from the Pope. But he did not even know if Dziwisz had shown the memo to John Paul, or whether the Pontiff had not been persuaded it was urgent.
While waiting for the Pope, something unexpected added to Caloia’s sense of unease about the IOR accounts. In 1992 prosecutors indicted Pavel Hnilica, a Slovak bishop living in Rome, together with Calvi’s former colleague, Sardinian developer Flavio Carboni, over a convoluted shakedown of the Vatican concerning the contents of Calvi’s long-missing attaché case.34 Also charged was a convicted forger and reputed mobster, Giulio Lena.35 Police had raided Lena’s house in a separate counterfeiting investigation, and had stumbled across unsigned checks from Hnilica’s Vatican Bank account.36 Investigators believed the seventy-two-year-old bishop had written Carboni $2.8 million in checks from his IOR account, hoping to buy Calvi’s briefcase.37 Rome’s Public Prosecutor, Francesco De Leo, said that Lena and Carboni hoped to get upwards of $40 million from the Vatican for Calvi’s case.38
Bishop Hnilica, who became an instant paparazzi favorite with his 24/7 dark glasses and thick gold neck chain around his priest’s collar, initially insisted that someone had forged his signature on the checks. In any case, he did not want the attaché case, but thought he was simply helping Carboni launch a publicity campaign to bolster the Vatican Bank’s battered image.39 Later he changed his story to say he wanted Calvi’s documents because Carboni assured him they would clear the IOR of any wrongdoing in the Ambrosiano collapse.40 Hnilica maintained he was “inexperienced, foolish and ignorant of Italian law” but was nevertheless ready “to give my life for the Holy Father and the Church.”41
The involvement of Hnilica, a Rome-based bishop who worked with Eastern European refugees, raised more questions than it answered. It turned out that Hnilica had met Calvi shortly before the banker died. They had discussed the covert transfer of money to Poland to help the incipient pro-democracy movement. The church made no public response about the flurry of charges and countercharges, sticking instead to a policy of silence.42 The Hnilica episode further concerned Caloia, who feared that what he did not know about the inner workings of the IOR might come to haunt him.
In the spring of 1993, Caloia thought he had prevailed. De Bonis was transferred from the IOR. But it was a short-lived victory. Instead of rebuking De Bonis, the Pope elevated him from monsignor to bishop and appointed him the chaplain of the Sovereign Military Order of Malta, a position with diplomatic immunity.43 De Bonis no longer worked inside the IOR; he continued exercising influence at the bank through a handful of friends and colleagues.44 The Cardinal Spellman account and others were frozen but not closed.
Caloia soon appealed to Cardinal Rosalio José Castillo Lara, president of APSA and the chairman of the IOR’s cardinal oversight committee. Cardinal Castillo Lara was a powerhouse in the church’s money departments and a personal favorite of John Paul.45 Maybe, Caloia thought, Castillo Lara might make headway with the Pontiff. But the Venezuelan-born cardinal, who had a well-deserved Curial reputation as a masterful political infighter, was allied with De Bonis.46
Next Caloia went to the new Secretary of State, Angelo Sodano, who had replaced Cardinal Casaroli in 1990. Sodano was different from his predecessor.II He was loud, confrontational, and often struck newcomers as brash. Combined with a well-deserved reputation as a Machiavellian Curialist who had an appetite for power and a habit of doling out favors to friends, the lifelong diplomat was in the style of princes of the church from a bygone era.48 Caloia knew that one of Sodano’s brothers, Alessandro, had been arrested and charged with fraud in the sweeping Mani Pulite probe.49
Caloia wrote Sodano a six-page handwritten letter that July. He did not mince words. “It is increasingly clear that criminal activity is being conducted deliberately by those who, according to their chosen way of life and the role they fulfill, should instead have provided a strict critical conscience. It is becoming more and more difficult to understand the continuation of a situation such that the person in question [De Bonis] continues, from a no less privileged position, to manage indirectly the activities of the IOR.”50
The IOR chief soon learned that Sodano’s view of damage control was keeping any news that might be embarrassing sealed inside the Vatican. The Secretary of State once told a Papal aide that bad information could only harm the church if it became public.51
In October, Caloia’s worst fears were realized. Once again some of Italy’s top industrialists were under indictment in the so-called Enimont scandal, for having paid outsized bribes to dozens of leading politicians. The difference this time was the amount of money, a staggering $100 million in illegal payoffs resulting from a multibillion-dollar joint venture between ENI, a state-owned oil company, and Montedison, a privately owned chemical firm.52 On October 4, Milan’s chief prosecutor, Francesco Saverio Borelli, telephoned Caloia.
“Hello, nice to hear from you,” Caloia said. “What do I owe the pleasure of this call?”
Borelli was not in the mood for small talk. “Dear Professor. There are problems concerning the IOR, contacts with Enimont . . .”
Just the word Enimont chilled Caloia. “We are in the middle of the Tangentopoli scandal, and it is defined by Enimont, the ‘mother of all bribes,’ ” Caloia later recounted to author Giancarlo Galli. “The President of ENI, Gabriele Cagliari, had taken his own life in jail a few months before [Cagliari had suffocated himself in prison while awaiting trial by tying a plastic bag around his head]. The exuberant Raul Gardini, owner of the Ferruzzi Group, fearing for his arrest, had shot himself in the head on a summer morning.”53
Borelli invited Caloia to visit with his investigative unit “so that we could clarify some things, without the press or TV.” When Caloia arrived the next day he learned some sobering details. About $4 million in the tainted Enimont cash had landed in De Bonis’s Spellman Foundation.54 And worse, more than half of all the bribes ($75 million) had passed through an IOR account held for Luigi Bisignani, a former P2 member and chief publicist for Montedison as well as a novelist and editor-in-chief of the Italian news wire service ANSA (De Bonis had performed Bisignani’s 1990 wedding Mass).55 The most active Bisignani account was titled the Louis Augustus Jonas Foundation (USA), supposedly organized to collect money to “help poor children.” There was in fact such an organization with headquarters in New York City, but Caloia could not determine if the eponymously named IOR account had anything to do with it.56,III
The Milanese prosecutors asked Caloia to take some interrogatories back to the Vatican. He declined. He was savvy enough to know that if he took the questions with him it would have spared the prosecutors the difficult task of trying to serve legal papers on the Vatican. But he assured them that he would do all he could to ensure that the IOR cooperated.58 (The prosecutors submitted their interrogatories through official diplomatic channels).59
Caloia sent off two letters to Sodano with the grim news. By this time the Secretary of State had retained Franzo Grande Stevens, one of Italy’s most prominent and well-connected attorneys.60 Stevens, he hoped, might provide advice on how to deal with the parallel IOR that seemed beyond the control of Caloia and his lay colleagues. Giovanni Bodio, who had been the number three banker at Caloia’s Mediocredito Lombardo before coming to the Vatican, had proven a disappointment. Bodio and his two assistants, Pietro Ciocci and Antonio Chiminello, had failed to move aggressively against the IOR’s proxy foundation accounts. Instead of closing suspicious ones, they opened new ones that were often just as questionable. Caloia thought Bodio was “a very good, generous and exemplary person,” but that he paid too much deference to clerical power. “All it took him to allow an investment was to be invited for breakfast by someone with a red tunic.”61
Caloia later discovered Bodio was not only liberal when it came to opening accounts for cardinals, but that he continued the IOR’s long history of doing it for rich Italians as well. Relying on Article 2 of the Vatican Bank’s governing statutes, which allows the IOR to accept “goods with a purpose at least partially set for the future works of religion,” Bodio helped open multimillion-dollar accounts for Italian tycoons, such as industrialist Domenico Bonifaci.62 Since Italy’s highest tax rate on earned interest and stock dividends was 30 percent, Bonifaci thought the Vatican Bank was a bargain: a 10 percent fee for the cash and 7 percent for any securities and stocks, all paid to the church as a fixed annual donation. Incredibly the church lost money on Bonifaci’s account since the IOR agreed somehow to pay him 11.75 percent interest on his deposits, a rate the Vatican Bank only guaranteed monks, friars, and a handful of religious organizations.63 (Bonifaci had thoroughly ingratiated himself in the power corridors at the Vatican, helping APSA’s Cardinal Castillo Lara purchase for the church a historic luxury estate just outside Rome.)IV
A frantic internal debate played out during the fall of 1993 about whether the church should cooperate with Milanese prosecutors. Caloia and the reformers wanted to help but they were staunchly opposed by reactionary prelates who thought the church had no obligation to do anything. The charismatic Cardinal Castillo Lara made a persuasive argument against any accommodation that might weaken the church’s inviolable sovereignty. It owed no duty, he contended, to assist Italy’s criminal probe.65
Castillo Lara believed it might not be possible to demolish the parallel IOR without making the Vatican Bank crash in on itself. At every turn, he adeptly blocked Caloia’s efforts to make the bank more transparent.66 Some reformers meanwhile suspected that the cardinal was more than just an obstacle to reform. They thought the powerful APSA boss was the source of press leaks that made it appear that it was Caloia’s team that had failed to rein in the bank’s questionable activities.67
The Vatican’s resistance to cooperating with Italian prosecutors did not surprise Italy’s leading politicians. Former Prime Minister Emilio Colombo—the Minister of Foreign Affairs—later told colleagues that the Vatican did whatever it wanted and there was “nothing more we could do. When there are treaties for mutual legal assistance, the relationships are based on reciprocity. I was almost certain it would be impossible to obtain their cooperation.”68 (For that matter, not many Italian politicians had much enthusiasm about aiding the “Clean Hands” prosecutors. When Prime Minister Bettino Craxi and four top ministers resigned in April 1993, the next Prime Minister, Silvio Berlusconi, himself under investigation for possible illegal payments from one of his companies, slowed the anticorruption crusade by issuing an executive decree that severely limited the use of preventive incarceration. It had been one of the prosecutors’ most effective tools).69
By the late fall (1993), Sodano updated the Pope about the bank. The situation, he told John Paul, was much more complicated than simply identifying and closing abused proxy accounts. Disclosing information to Italian prosecutors, Sodano counseled, might set off a chain reaction of events beyond the church’s control.70 That briefing left John Paul convinced that the IOR was a minefield better left undisturbed.71
Late that autumn a Venezuelan attorney, Alberto Jaime Berti, cooperated with Italian magistrates in return for immunity from prosecution on charges that the IOR was at the center of laundering several hundred million dollars through Swiss and Panamanian banks on behalf of a handful of senior Opus Dei officials.72 The Italian media reported that Berti fingered De Bonis as his Vatican Bank connection and produced dozens of documents with the monsignor’s signature. Prosecutors believed that De Bonis had the key to a safe deposit box at Geneva’s Banque de Paris et des Pays-Bas. It was in that box, said Berti, that a cache of documents laid out exactly how the IOR laundered the money. De Bonis, cloaked by immunity in his Knights of Malta position, denied even knowing Berti.73 The prosecutors, unable to move against him, had to stand down.
On November 13, 1993, Caloia was driving back to Rome from Padua when he swerved to avoid hitting a truck stuck in the motorway and lost control of his car. He was badly injured. A helicopter took him to a nearby hospital, and he was soon transferred to Gemelli’s trauma unit in Rome.
“In the state of unconsciousness, I had a flash of lucidity.” He believed that God had saved him so he could do the right thing when it came to the Vatican Bank. If he recovered, he promised, he would redouble his reform efforts.74
The Curia, meanwhile, was awash in malicious rumors that the wreck was the result of foul play.75 During Caloia’s nearly one-month hospital recuperation, the bank garnered more bad headlines. At the trial of Sergio Cusani, a leading socialist politician and the financier charged with engineering the kickbacks at the heart of mani pulite, prosecutors presented evidence that much of the dirty money was deposited at the Vatican Bank. Worse, the church had earned an $8 million fee for cashing the Treasury bills used as bribes to then ex–Prime Minister Bettino Craxi.76,V The former journalist Luigi Bisignani, the holder of the account through which most of the money had passed, gave a gripping account of how he brought millions in Treasury notes in large, unmarked envelopes into the IOR, where they were deposited into his slush fund.78 Bisignani received $2.6 million in cash for his services, money he used to buy a house in Venice and fuel a luxurious lifestyle.
Carlo Sama, a former top executive at Ferruzzi—Italy’s second largest private company after Fiat—told the court about how De Bonis helped him and his wife, Alessandra, open an account titled the San Serafino Foundation, named after a seventeenth-century Capuchin friar. In eighteen months, through mid-1992, about $38 million passed through it. That money went to two Swiss banks and one in Luxembourg, where it was exchanged into nontraceable bearer bonds.79 Sama testified that the IOR was his bank of choice for any clandestine money transfers as it provided “absolute confidentiality.”80
Cusani’s trial presented Caloia another opportunity to lobby Sodano for better cooperation with Italian investigators.81 But the Vatican steadfastly rebuffed all efforts by Italian investigators to open the IOR’s books.82 Prime Minister Andreotti was never charged in the Enimont scandal because the IOR remarkably kept his identity from Italian authorities (the link to Andreotti would only become public in 2009).83 Even appeals from the financiers on the supervisory lay commission—an angry letter with eighteen pointed questions for Sodano—were buried in a slow-moving internal investigation that went nowhere. Cardinal Castillo Lara again championed the theory that the latest instance was just another unfortunate example where unscrupulous laymen had taken advantage of the IOR.84
As the Enimont scandal played out, Italy oddly lost enthusiasm in pursuing any possible crimes at the Vatican Bank. There was not even a serious effort to get the IOR to return the profits it reaped from the accounts at the center of the bribery scandal. The magistrates instead accepted the church’s excuse that the Vatican Bank could not have known the final destination of the millions that flowed through its accounts, and therefore had no responsibility for how it was used.85
Italy’s lack of zeal when it came to investigating the Vatican also spared the church further embarrassment a year later when a high-ranking Mafia snitch, Francesco Marino Mannoia, told investigators about how P2’s Licio Gelli used the IOR to deposit illegal money belonging to Palermo’s godfather, Salvatore Riina.86 And in 1994, during a police interrogation, mobster Vincenzo Calcara claimed that he personally knew that under Marcinkus the IOR helped launder $6.5 million in Mafia cash. In a sworn statement, Calcara said he had flown from Sicily to Rome carrying two large suitcases stuffed with 100,000-lire banknotes. Two politicians had tagged along. At Rome’s Fiumicino airport, Marcinkus and a cardinal to whom they were not introduced were waiting. The group drove to a lawyer’s office on the Via Cassia in the north of Rome.87 Calcara turned over the cash. He claimed not to know how Marcinkus did it, but in a month it was available as clean money, less the IOR’s service fee. Another ranking mobster and courtroom witness, Rosario Spatola, testified that he heard Marcinkus “bragging” about his Mafia influence.88
“We are 100 percent sure that this is pure invention,” Cardinal Castillo Lara told a reporter, perhaps sounding as hopeful as he did convincing.89
What did Italy’s Justice Ministry do with the well-placed tips that the mob had found safe haven inside the IOR? Top prosecutors decided not to pursue the leads. “Go after the Vatican?” asked one magistrate of the Palermo court. “Haven’t we made enough enemies already?”90
• • •
In 1994, the Pope and Cardinal Sodano discussed whether it was finally time to select a cleric to replace De Bonis at the Vatican Bank. Monsignor Dardozzi let it be known that he might be interested. But Sodano wanted the position left unfilled. He tasked one of his assistants in the Secretary of State’s office, Monsignor Gianfranco Piovano, a career diplomat responsible for Peter’s Pence, to familiarize himself with the bank’s operation.91 On the rise at the same time as Piovano was Lelio Scaletti, a nondescript sixty-five-year-old layman who had worked his way up the IOR ranks since starting at the church when Pius XII was Pope. It was doubtful that Scaletti, a traditionalist who would remain at the Vatican Bank for another fifteen years, would back bold changes.92
Meanwhile, Caloia and his fellow director, Philippe de Weck, persuaded the IOR’s supervisory cardinals to hire outside auditors. Their choice was Switzerland’s Revisuisse, a Price Waterhouse subsidiary. Cardinal Casimir Szoka, the chief of the Prefecture of Economic Affairs, and former treasurer of the American Bishops’ Conference, soon heralded Revisuisse’s work as providing the Vatican’s first ever “consolidated balance sheet.”93
Dardozzi, who by now had decided that reporting wrongdoing was essentially a waste of time since no one seemed to do anything about it, watched as the Revisuisse auditors failed repeatedly to uncover information that might unmask the bank’s proxy account problems. The one department to which Revisuisse did not have access to any books or ledgers was the IOR.
At a mid-June 1994 press conference, Cardinal Szoka presented the “audited” figures confirming an annual surplus for the Vatican. It was strong evidence that at least the church had turned a financial corner. A reporter asked what was so revolutionary about retaining outside accountants so long as the IOR’s financial statements were still secret. The question irritated Szoka. The IOR is not part of the Holy See, he answered; it is a separate department, unique inside the Vatican.94 That belied that all IOR profits belonged only to the Pope, who distributed them at his own discretion. Just three months before, Caloia had written a private letter to John Paul, passing along the news that the IOR had earned $70 million in profit the previous year.95
In 1995, Caloia broke nearly five years of silence as the IOR’s director. “We’ve tried to move on by tapping the transparency button,” he told a reporter from Corriere della Sera. “Unfortunately, recently, in the past months [the Enimont scandal], we ended up in the newspapers, but through no fault of our own.”96
Caloia was well aware that his “transparency button” was not working well. That year an Italian lawyer arranged a meeting with Dardozzi and Scaletti. He represented the heirs of one of Italy’s deceased property tycoons, Alessandro Gerini, who had been dubbed “God’s Builder” in Italy because of the dominant role he played on many Vatican construction projects. Gerini had created an eponymously named foundation to benefit the Salesians of Don Bosco, a religious order.97 Now, the heirs—Gerini’s grandchildren—wanted to claw back some of the nearly $175 million that Gerini had bequeathed. During the talks, the Vatican learned about a multimillion-dollar bank account in Uruguay that supposedly had some money that had gone missing during the frenetic final days of Calvi and the Ambrosiano.98
Monsignor Dardozzi feared that the Ambrosiano tip might be some sort of trap and passed it along to Secretary of State Sodano. It soon made its way to the Pope. And Sodano again sought the advice of Franzo Grande Stevens, the elite attorney retained for special consulting. The church decided it was too risky to pursue any Uruguayan account. The clerics feared it might prompt Italy to take a second look at the Vatican’s $244 million settlement over the Ambrosiano. If any money related to the Calvi affair was recovered, Italian officials might contend the Vatican should contribute more to the Ambrosiano creditors.99,VI
That some IOR-Calvi money might be sitting in an abandoned account in South America was simply another vivid reminder to Caloia of the bank’s hidden landmines. And just when he thought he had heard the worst of it, there was a new setback. An account belonging to the religious movement Lumen Christi, run by a charismatic Argentine priest, Domingo Izzi, emerged as problematic. Upon opening it in 1991, Izzi had requested an IOR loan for disparate Argentine ventures including livestock, a helicopter service, and organizing a national lottery.101 All of that, promised Izzi, would “provide for the needs resulting from the activities of the movement in the Lumen Christi and the propagation of the Faith” in South America and Italy. Six million dollars went from the IOR to Father Izzi and Lumen Christi less than twenty-four hours after he applied for a loan. Repayment was due in two years. Izzi did not repay a cent. When Caloia instructed the IOR to collect, it got the title instead to the Lumen Christi share of two Rome apartments. But those were so encumbered with mortgages that they were worth less than what was owed. Caloia was nothing if not persistent. Despite appeals to Cardinal Castillo Lara and the Papal Nuncio to Argentina, and personal calls to Father Izzi urging him to repay the money, Caloia could not collect any of the loan. It had ballooned by 1995 to $8.2 million with interest and penalties.102 (Although Caloia would chase it for several more frustrating years, the IOR had to ultimately write it off.)103
The following year, 1996, the Vatican bragged that the Enimont scandal had prompted the IOR to adopt “the principles laid down by the FATF [Financial Action Task Force] regarding measures to prevent money laundering.”104 That sounded good at first pass. The FATF was an intergovernmental body established in 1989 by sixteen European countries to “set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.”105 Yet, despite the Vatican’s claim, it had not subjected itself to any FATF supervision or regulation. Other FATF-member countries with dodgy reputations when it came to money laundering—including Luxembourg, Switzerland, Singapore, and Hong Kong—had by then taken more concrete steps than the Vatican toward opening their banking systems to independent regulators.106
Vatican Bank insiders knew that the announcement about the FATF guidelines changed nothing.
I. Members of Opus Dei dominated the lay selections for prominent Vatican positions under Pope John Paul II. The Pontiff reduced the influence wielded by the Jesuits, an order that had long opposed elevating Opus Dei to a personal prelature of the Pope. Fifteen years earlier, Pope Paul VI had rejected Opus Dei’s application for such a special status. John Paul II granted it in 1982. That was precisely what Roberto Calvi had told his family Opus Dei had wanted in failed discussions he had with it about bailing out the Ambrosiano.1
II. Author Jason Berry wrote about Sodano in his seminal book Render Unto Rome and noted that he was a “committed anti-leftist” who had been close to Chilean strongman Augusto Pinochet when he had served as Nuncio there. According to Berry, Pope John Paul II was “famously bored by Curial politics, [and] had in Sodano a firewall from the inner wrangles.” Berry also broke the story that Sodano had pressured German Cardinal Joseph Ratzinger (later Pope Benedict XVI) to scuttle investigations into appalling charges of sex abuse in two high-profile cases: Vienna’s archbishop Hans Hermann Groёr and Marcial Maciel Degollado, the founder of the religious order Legion of Christ. Repeated entreaties to the Vatican Press Office to interview Cardinal Sodano went unanswered.47
III. The Manhattan foundation was a nonprofit organization that ran a full-scholarship, invitation-only leadership camp in Rhinebeck, New York, for boys aged fourteen to sixteen. George Edward (Freddie) Jonas, a former OSS officer during World War II and also the heir to a felt hat manufacturing fortune, established the foundation in 1930. According to Bisignani, Jonas and Marcinkus had set up the account at the IOR in the early 1970s and they later passed it to De Bonis.57
IV. Caloia replaced Bodio with Andrea Gibellini, a sixty-three-year-old banker and director from Banca Popolare di Bergamo. Gibellini had a reputation as a tough disciplinarian. And Caloia sometimes began relying for advice on Vincenzo Perrone, a Milanese friend and professor of business management. Sodano, meanwhile, assigned his personal secretary, a forty-two-year-old American monsignor, Timothy Broglio, to assist Stevens and Caloia.64
V. After Cusani’s 1994 conviction, he served nearly six years in prison. The Vatican inexplicably petitioned the government to pardon him.77
VI. It took another twelve years to resolve the dispute with Gerini’s heirs. The succeeding Secretary of State, Tarcisio Bertone, himself a Salesian, negotiated and signed the settlement. But five years after that, the Salesians were fighting hard to stay out of bankruptcy after losing a court case in which Bertone claimed he had been misled into signing an agreement that upon closer inspection was actually against the best interests of the Salesian Order. In July 2014, Rome magistrates announced charges against a Syrian businessman, an Italian lawyer, and the priest who had been the chief financial officer for the Salesians, for falsifying documents and inflating the value of Gerini’s estate so they could get a commission of more than $100 million.100