God's Banker (10 page)

The IOR is best seen as an "offshore" merchant bank in the heart
of Italy, serving the universal Church—and, it has long been said, not
a few favoured Italians as well. The anomaly of the Vatican, a
sovereign state subject to neither exchange controls nor border
checks with Italy, would turn it into an ideal conduit for spiriting
money out of the country as the lira weakened and currency regu­lations tightened. Money deposited in an IOR account at an ordinary
Italian bank, or simply brought to the IOR's counter in a suitcase,
could then be sent anywhere in the world. Just how much money has
left Italy by this route is unknown. The Vatican indignantly denies
that any does now; in 1948, however, a Curia prelate called Monsignor Edoardo Cippico was arrested and imprisoned for having obliged
Italians in this way. But that was more than twenty years before the
paths of Calvi and Marcinkus crossed. The banker had far more
ambitious and sophisticated designs. For the services that the IOR
—
wittingly or unwittingly—would render him, he was prepared to pay.
And that suited the Vatican.

No-one has seriously suggested that for all his opaque dealings with
Calvi and Ambrosiano, Marcinkus was bent on self-enrichment. He
lives simply, and Sindona, undoubtedly experienced in such matters,
has said he was not to be bought with personal bribes.

But the Church's growing financial needs were another matter.
Marcinkus was a "team player", ready to serve its interests by every
means. Now the IOR had to perform; and if its success was his own
success, then so much the better. His prospects of advancement and
of becoming a cardinal, would after all only be served if he could show
the Pope he was as efficient a banker as he was organizer and advance
man. Just how much profit the IOR earned from Calvi is unknown.
What is known is that 85 per cent of its earnings are made available to
the Pope, and fifteen per cent retained for administrative and other
provisions. But Calvi, it must be assumed, helped them swell; and the
payment of unusually high interest rates by Ambrosiano on deposits
made by the IOR was just one possible way.

The lasting appeal of the IOR for unscrupulous Italian financiers is
twofold
—
or, less charitably, threefold. In the first place, it was an
ideal, much respected, candidate for the role of fiduciary or trustee.
The technique used by both Calvi and Sindona over the years was
roughly comparable to football's wall-pass or "one-two". Player
One, Calvi or Sindona, would transfer funds, or the shares of a
company, to Player Two, the IOR. According to the instructions
received from Player One, Player Two then either holds the asset in
his own name, or passes it on to a pre-specified recipient, not
infrequently on the other side of the Italian frontier. The IOR with
one foot inside the country, and the other outside, was perfect for the
role. In football, the move is supposed to split an opponent's tight
defence; for Calvi it was regularly to defeat Italy's steadily tightening
exchange controls. The second advantage was the IOR's secrecy and
offshore status, making discovery of what was taking place particu­larly difficult. The third, less charitable, advantage was that the
Vatican bank never seemed to mind.

Indeed the IOR developed a speculator's mentality, where risk
took second place to the tempting rewards on offer. It retained some
holdings in Italy, such as its interests in Banco Ambrosiano and
Pesenti's Italcementi, and smaller investments in bluechip industrial
companies like Fiat. But scandal or near-scandal would dog its
name. In the United States, the IOR was fined for an improperly
documented acquisition of a stake in a company called Vetco Indus­tries. That year too, by at least one account,* it narrowly avoided
being caught up in a giant counterfeit stock deal sponsored by the
Mafia. Then came Sindona, and then Calvi.

*The Vatican Connection,
Richard Hammer, 1982.

"The IOR is not a speculative organization, and I'm not a specula­tor," Marcinkus declared in a rare interview* after Ambrosiano lay in
ruins, in the autumn of 1982. "But can you live in this world without
worrying about money? Even the Church has to see to the financial
needs of its dependencies." God had to make an accommodation
with Mammon; or in other words, and to repeat a celebrated Mar­cinkus dictum: "You can't run the Church on Hail Marys."

The argument over whether Marcinkus was quite as innocent a
victim as he proclaimed in his dealings with Calvi would continue long
after the demise of Ambrosiano. It is unlikely that Calvi had already
conceived the perverted use to which that partnership was to be put,
but its components were by 1971 in place. Apart from the IOR,
Compendium in Luxembourg was well placed to exploit the lax
banking laws of the Grand Duchy. Just over the Swiss border in
Lugano, there was Banca del Gottardo, with emanations, through its
Ultrafin associates, in Zurich and New York. In Nassau, Cisalpine
was starting to feel its way. Then there were the shell companies, the
indirect subsidiaries which compliant lawyers would set up, never to
be mentioned on any balance sheet. One such, established in Luxem­bourg at this time or a little later, was called Manic S. A.—a singularly
apt name in the light of what was to follow. Manic, under the titular
control of the IOR, was to rise later from its obscurity with a
vengeance.

But the time had now come to develop Ambrosiano within Italy, and
events seemed to play remarkably into Calvi's hands. Following the
failure of the Bastogi takeover that autumn of 1971, Sindona had
resolved to pull out of Italy. The controlling interest in La Centrale
held by Hambro's was of no strategic value, and the London bank was
in any event anxious to break with the Sicilian. Calvi, on the other
hand, signalled his willingness to buy.

In November 1971 Hambro's sold its La Centrale stake, with 37 per
cent of the voting stock, to Compendium in Luxembourg. With La
Centrale, Calvi had the company which would handle his subsequent
investments in Italy.

*
Il Sabato,
November 1982.

At the start
of the 1970s, the Milan stock market was tiny and
unregulated, even more so than today. As a theatre for speculation
and financial manipulation it was perfect. The fewness of the com­panies quoted—never more than 150—meant that it was the smallest
of fry when set alongside Paris, Amsterdam or Frankfurt, to say
nothing of the London stock exchange or Wall Street. Rules of
disclosure were minimal, and consolidated accounts were but a gleam
in the eye of idealistic EEC officials in Brussels.

With comparatively small outlay, an imaginative and unprincipled
financier could do much as he pleased, puffing up
a
share price on
which to build paper pyramids of wealth. Reputations were made,
and in Italy, as everywhere, there were those gullible enough to be
convinced by them. Greed and fear, the dominant emotions in
financial markets anywhere, were allowed play without hindrance.
Nor did it seem that serious. Credit was easy, and OPEC's awakening
of 1973 was still in the future. If the stock market was not fulfilling its
theoretical function of providing venture capital, that did not seem to
matter either. For Italy in the previous decade had achieved the
fastest growth of any industrial nation except Japan.

And it was with truly Japanese diligence and inscrutability that
Calvi set about realizing his goal of turning Ambrosiano into an
Italian merchant bank. Throughout his life he would remain a
strangely one-dimensional figure. Socially, he might not have existed,
his culture was small, his life by most standards grey. These gaps his
wife would try to fill, in her self-imposed mission of making Calvi
outwardly, as well as inwardly, the perfect and complete banker. She
would try to persuade him, with small success, to read books and take
an interest in the arts. With her fondness of bright colours and antique
furniture, she would try, again without great success, to persuade
visitors of the taste and animation of their flat in Milan and country
villa at Drezzo, close to the Swiss border. But, then at least, these
shortcomings did not matter; her husband's dimension was finance,
where he excelled, and the moment could not have been better.

Now that Sindona was losing interest in Italy after the Bastogi
setback, Calvi, as managing director and chief executive of Ambrosiano, was his natural heir as leader of Catholic finance in Milan. He
had both the conveniences of the IOR and the resources of his bank to
hand. The combination of these with Calvi's own stealthy and
perverted financial genius was to be irresistible. Between 1972 and
1975 he endowed Ambrosiano with two banks and a large insurance
company, which in turn controlled other smaller banking interests. It
would emerge as the most powerful private financial group in Italy.

In so narrow a market as Milan, a handful of manipulators was
enough. Calvi, of course, was one, while two of the others were his
mentor Sindona and a formidable lady called Anna Bonomi who ran
a group called Invest. They were to be the main partners in the
dealings which secured Calvi's Italian kingdom. There was also a
third, more passive, partner—the
IOR.
The illegal nature of the
transactions by which he won control for La Centrale of the Toro
insurance company and a thriving Lombardy bank, Credito Varesino, would eventually lead to Calvi's downfall. But the acquisition of
his other bank, Banca Cattolica del Veneto, is perhaps even more
deserving of examination, as an illustration of both the laws of the
financial jungle which then obtained, and the complicity between
Calvi, Sindona and the Vatican bank.

All
stemmed from two apparently unrelated events: the decision of
Paul
VI
to reduce the Church's more conspicuous holdings in Italy,
and
the purchase by Sindona in 1969
of
an insignificant leather
tanning company called Pacchetti.