Power, secrecy feed conspiracy theories in Vatican City

National Catholic Reporter, July 31, 1998 by John L. Jr. Allen

Marcinkus, who grew tip in A1 Capone's hometown of Cicero, Ill., had acted as a bodyguard for Paul VI -- earning the nickname "the Gorilla," both for his bulk (Marcinkus is 6'4") and his ferocious devotion to the pontiff. Out of gratitude, Paul assigned Marcinkus to the Vatican Bank, despite his total lack of financial experience. Sindona -- who had been a friend of Paul's when he was Cardinal Montini of Milan -- solved that problem by acting as Marcinkus' tutor.

Some teacher. In 1974, Sindona (known as "the Shark" in the pre-Greg Norman days) was arrested as his financial empire collapsed, taking down the Franklin Bank in the United States and a host of banks in Europe. It was clear to every one involved that Sindona had exploited his ties to the Vatican to dupe investors into backing his schemes. While he fought extradition to Italy, American police charged him with almost a hundred counts of fraud.

Out on $3 million bail in 1979, Sindona claimed to have been kidnapped and smuggled back into Italy, only to subsequently admit he had faked the whole thing. In a bizarre sidelight, Sindona later said his purpose for returning to Italy was to induce Sicily to secede and to present itself to America as the 51st state. In any event, Sindona was extradited to Italy in 1984 and imprisoned there.

Meanwhile Calvi had problems of his own. The centerpiece of his empire was the Banco Ambrosiano in Milan, once a sleepy little bank set up specifically for Catholics -- at one time, depositors had to produce a baptismal certificate to open an account. Calvi built it into one of Italy's largest banks, in the process making himself rich. He accomplished this by setting up a series of offshore shell companies and conning other banks into lending them billions, which they in turn used to buy shares in Banco Ambrosiano, thus driving the bank's value sky-high. Problem was, Calvi had no productive assets with which to repay the loans.

Why would anyone in their right mind loan Calvi dough? Because he could boast letters from the Vatican Bank that said the Holy See owned the shell companies thus lending a pontifical seal of approval to Calvi's request. Later, after Ambrosiano's collapse, the Vatican denied any owner ship role. In 1984 the Vatican put up $240 million to partially pay off Ambrosiano debts said to be nearly $1.3 billion but denied any "moral or legal" culpability Marcinkus said in a 1990 interview thai the Vatican "should never have made thai payment" and that the Italians "should look at their own banking system."

These financial shenanigans--all part of the legal record in the United States and Italy--barely scratch the surface of what has been rumored and conjectured to have actually gone on. For one thing, it's alleged that both Sindona and Calvi had deep connections to the Sicilian Mafia, and that Calvi was funneling substantial amounts of Mafia money into those offshore companies. Italian prosecutors have charged that the Vatican Bank played a role in laundering that money, charges that the Vatican has denied. The Holy See has steadfastly refused to cooperate in Italian investigations.