These notes are an extremely short summary of part of a detailed investigation originally published as part of In God’s Name in 1984 and in subsequent years. They are for the convenience of readers who have yet to read In God’s Name. They briefly outline the nature of the scandal which confronted Pope John Paul I and his successor.
The Church which Albino Luciani inherited had come a long way from the Church of Christ for the poor. The Vatican controlled immense secret wealth, not only in works of art and buildings, but in productive assets, in a huge portfolio of stocks and shares and real estate across the world. It operated two banks, the Vatican Bank (formally named the Institute for Religious Works) and APSA, the Extraordinary Section of the Administration of the Patrimony of the Holy See.
Built on special privileges, the Vatican’s wealth was hidden from view (even by itself) by an arcane and opaque accounting system, and fiercely denied by its spokesmen. In 1970 a Swiss estimate put the total productive capital of the Vatican at $13 billion, excluding the vast global assets owned or controlled by the Vatican Bank.
This new wealth of the Church began with Mussolini. In 1929 with the Lateran Treaty he ended nearly sixty years of conflict between the Holy See and the Italian state. It gave the Church a regular income in cash and bonds, and more important, a series of exemptions from taxation and disclosure. In 1942 Mussolini gave the Vatican’s ‘ecclesiastical corporations’ even more favourable treatment in tax and company law. This made them a very attractive conduit for all manner of funds and transactions, including criminal ones. The Church was equally successful in negotiating with Hitler. The 1933 Concordat with Nazi Germany gave the Church regular income from the German state – ‘church tax’, deducted at source from nearly all German incomes.
In 1929 Pius XI appointed a layman, Bernardino Nogara, as the Church’s ‘fund manager’. Nogara took the job only on condition that he had total freedom to invest, with no restraint from Church doctrines. Over the next thirty years he played the gold and futures markets with immense success, bought the Vatican interests in a collection of banks, a huge portfolio of stocks and shares and valuable real estate throughout the world.
Not surprisingly, this immense new wealth attracted attention from the Italian state. From 1962 to 1968 the Vatican had a long-running dispute with successive Italian governments over the payment of taxation on its share dividends. The Church was attacked by politicians, the media and public opinion. It was embarrassed by the scale of its holdings in Italian industry, including essential services such as water and power (where the Church had no wish to answer to consumer complaints) and prohibited articles including contraceptives. In 1968, seeking to combine higher profits with lower controversy, the Vatican decided on a major switch in its policy, away from Italian assets in favour of the United States and offshore investments.
This decision led the Church into a series of scandalous, criminal and financially disastrous relationships which cost it uncounted millions and threatened its entire moral reputation. The Church’s resources and, above all, its immunities and privileges were used knowingly on a massive scale for evasion of taxes and exchange control, money laundering, racketeering and fraud. The Church collectively profited from this criminal activity, as did senior members personally. The Church’s associates made systematic use of blackmail, murder and terror in their activities.
The main protagonists in these relationships were: Bishop Paul Marcinkus, Michele Sindona, Licio Gelli and Roberto Calvi.
Marcinkus rose from bodyguard to Pope Paul VI to his controller and gatekeeper to head of the Vatican Bank, without ever acquiring the necessary ability or integrity for any of his promotions. He offered respectability and concealment for the risky or criminal enterprises of Sindona and Calvi, as he sought to increase the assets of the Vatican Bank.
Sindona built a successful career as a servant and front-man for the Mafia, and then used his excellent connections, particularly with the Vatican, to build an immense fraudulent empire. He was assisted by Licio Gelli, master blackmailer, fascist, not just a double but a multiple agent, partner of escaped Nazis, drug traffickers and ultra-right military regimes in Latin America.
Gelli was master of the secretive, conspiratorial, immensely powerful P2 Masonic lodge. Its members included Sindona and Umberto Ortolani, a lawyer and businessman with highly placed friends in the Vatican. Through Ortolani, the P2 lodge built a network of contacts in the Vatican.
Roberto Calvi was paymaster to P2. He was also a banker, money launderer for the Mafia and a fraudster, once a partner of Sindona’s who became his bitter rival.
By the time Albino Luciani succeeded as John Paul I, the financial empire built by Michele Sindona had collapsed leaving thousands of ruined investors. Calvi’s empire was vulnerable. It was built on a house of cards known as the Banco Ambrosiano. The Vatican was heavily implicated in each empire. Both men were under criminal investigation in the US and Italy: Sindona was fighting extradition.
The only thing protecting them was their relationship with the Vatican through Marcinkus. But Albino Luciani was determined to fire Marcinkus, clean up the Vatican’s finances and make them transparent. His reforms, if implemented, would have destroyed the criminal alliances that had existed between the Vatican Bank and organised crime for over a decade.