God's Banker (22 page)

After a two-year interval the Bank of Italy was again concentrating on Ambrosiano, albeit more circumspectly than in 1979, when the direct challenge of the inspection brought such rapid chastisement. But in late January 1981 the central bank finally won approval from the Government for new regulations governing foreign interests held by Italian banks. The regulations frowned upon foreign holding companies which were not themselves banks, and warned that such interests would only be permitted if a) they could be properly scrutinized by the Bank of Italy, and b) operated in countries with a proper system of supervision.

No names were mentioned, but the reference to Ambrosiano could not have been clearer. The Government's directive was to be the basis for the central bank's relentless bombardment of Calvi from the summer onwards, for details of what went on in Luxembourg, the Bahamas, Nicaragua and Peru.

Hardly less ominous, though it did not appear so at the time, was the appointment the previous October of a new Treasury Minister in Beniamino Andreatta. A Bolognese university professor of impul­sive and independent spirit, Andreatta was a devout Catholic and a Christian Democrat, but by temperament he was less caring than his colleagues for the political niceties. The impetuosity of his judgement could be questioned; but in his way Andreatta shared the "lay"
desire for a greater openness in Italian society. "A most Protes­tant Catholic", he was once described: another explanation of why he was to be peculiarly upset by the behaviour of both the Vatican and a bank supposedly the guardian of old-fashioned Catholic virtues. When the end came, Andreatta was to be implacable.

One of his early acts as Minister was to choose a new head for the decrepit Milan stock market supervisory commission, the Consob. When it was created in 1974, the Consob was portrayed as Italy's answer to the omnipotent Securities and Exchange Commission, which ruled over Wall Street. But these improbable expectations were never met, and in 1978 indignity was added to impotence when Giulio Andreotti, the Prime Minister, named a Rome theatrical impresario to its board. But the arrival of Guido Rossi in February 1981 was to jolt the Consob out of its lethargy.

Like Baffi and Sarcinelli, Rossi came from modest origins. But he had become Milan's leading corporate lawyer, and holder of that chair at the university of nearby Pavia. Harvard-trained and widely travelled, Rossi was everything that Calvi was not: rationalist, tech­nocratic and above all a believer in clarity.

At the Consob he saw his task as one of throwing open the windows of the fetid and ingrown Milan market to the daylight of consolidated balance sheets, disclosure of true shareholdings in quoted companies, and modern trading rules on a par with those elsewhere in Europe. Like Baffi and Sarcinelli, he was to be criticized for being unrealistically rigid in his approach. Indeed, from the outset Rossi found himself beset by subtle bureaucratic obstacles, such as funds allocated to Consob by Parliament but which never seemed to materialise. "You're a brave man to try and reform the stock market," a wise Milanese broker told him once. "It's like trying to bring morals to a whore-house."

Inevitably such an approach brought him into confrontation with Calvi, the emblem of financial obscurantism, head of a bank whose ownership was a mystery, and long involved in share trafficking of the type that Rossi wanted to stamp out. Rossi moved in when the market was at last recovering from the disgrace and neglect which followed the ruin of Sindona. During 1980, share prices had on average doubled, and trading volume had multiplied tenfold. Rossi's ambi­tion of widening the market was welcomed by those who wanted to use the new public interest in stocks and shares to restore its proper role, as a source of capital in a modern market economy. Otherwise the improvement might prove yet another speculative bubble, caus­ing only disillusion when it burst. As far as Rossi was concerned, no more suitable candidate existed for admission to the market than Banco Ambrosiano.

Calvi's bank had long been heavily traded, but only on the informal
mercato ristretto,
or over-the-counter market. The anomaly stemmed from Ambrosiano's origins, and the right of choice that Ambro­siano's board still technically exercised over its shareholders. For Calvi, the arrangement was ideal. The
mercato ristretto
was subject to even fewer controls than its larger brother. Consolidated accounts were not obligatory, and trading took place only one day a week. This, in turn, allowed Ambrosiano to control its own share price easily and cheaply. The consideration was vital. The last thing Calvi could afford, after borrowing so much to buy effective control of his bank, was to see the price of its shares, the main collateral for those debts, plunge.

Hardly had Rossi taken over at Consob, than he informed Calvi of his wish. Ambrosiano was after all, he argued, the most important private banking group in the country, with over 30,000 shareholders. But Calvi was appalled. Such a step would oblige Ambrosiano to publish detailed accounts, consolidated to include the secret foreign operations. More important, it would become far harder, and more expensive, to prop up the bank's share price. Worst of all, Calvi suspected that Rossi would simply order the full market quotation, whether he liked it or not.

At their first meetings, in that early spring of 1981, Calvi attempted to dissuade Rossi. Ambrosiano's image would suffer, he implied, giving no reasons. Rossi was distinctly bemused and pointed out that, surely, to be traded on the major Milan market ought to
enhance
the bank's prestige. But Calvi still opposed the idea. He would alternate the same arguments with long moments of silence, always his defence when under pressure. Rossi, who previously had never met Calvi, was no less astonished by his mechanical capacity to tell one lie after another, by his very ordinariness. How could so unimpressive a figure be where he was, Rossi wondered. His curiosity was further aroused by the capital increase Calvi had just announced at Ambrosiano's annual meeting, to the ever-admiring shareholders. Their apparently unshakeable faith in Calvi was as well. For they were being asked to provide in all 240 billion lire of fresh funds, a large sum by any standards. What the shareholders did not know, of course, was that those Panamanian and Liechtenstein companies, whose existence only a few were aware of, would be borrowing still more money to subscribe to their quota of shares. Calvi was to present the capital increase as a seal on Ambrosiano's expansion and success under his guidance.

In fact the new money was urgently required to offset losses the bank had incurred after Genghini's collapse, and might incur over the struggling Rizzoli. There was a smaller loss around then in Spain also, when Banco Occidental, in which Ambrosiano held a ten per cent interest, collapsed with $100 million of debts. For Rossi however, the sheer size of the sum that Calvi was seeking was just another excellent reason to force him on to the main market.

But for Calvi, fencing with the chairman of Consob rapidly became a secondary consideration. For April and May of 1981 brought a sequence of overlapping disasters, dispelling the almost mystical aura upon which his reputation rested. The mysteries were crudely re­vealed for what they were: membership of a sinister freemasons' lodge, improper entanglement with Italy's biggest newspaper and publishing group, and total disregard of Italian currency regulations. Those New Year forebodings in Nassau were to prove only too well grounded.

The weakest link in the chain was Rizzoli. By the autumn of 1980, the publishing group was in a wretched state. Tassan Din's reckless expansion of the previous three years, encouraged by Gelli and Ortolani with Calvi's acquiescence, had proved a calamity. Tassan Din, never short of ideas, had drawn up a new three-year plan; but this time the emphasis was on cutbacks and closures. Equally neces­sary, however, was a substantial injection of new capital, to reduce debts now costing Rizzoli 60 billion lire a year in interest payments alone.

The obvious options were two: either the sale of the group, with its tempting bait of the
Corriere della Sera,
to a third party; or a capital increase; which would have to be paid for by Ambrosiano. Tassan Din presented Calvi with the unpleasant choice, for both solutions had drawbacks. The advent of a major outside shareholder could lead to effective surrender of the
Corriere,
among the most potent weapons of the P-2. On the other hand, a direct shareholding by Ambrosiano would expose Calvi's involvement with the paper, and run foul of a regulation which banned such investments. In any case he already surreptitiously controlled 80 per cent of Rizzoli, following its pre­vious capital increase in 1977. But with Gelli's and Ortolani's help, Tassan Din came up with an ingenious answer.

Angelo Rizzoli, who in theory still owned 90 per cent of the company his family had founded, would retain 40 per cent. The remaining 50 per cent would be held through an unspecified "institu­tion", whose identity Calvi and Gelli refused to disclose. Was it the P-2 they were referring to, or could they have meant the Vatican bank? After all, 80 per cent of the publishing group's capital had been lodged with first Calvi and then the IOR in 1977; and if the IOR had acted as a front for Calvi so often before, why should it not do so in the case of Rizzoli? To preserve the illusion that the Rizzolis still ruled the group which bore their name, a controlling syndicate would be created, containing the 40 per cent of Angelo Rizzoli, plus 10.2 per cent supplied by the "institution". The money for the capital in­crease—150 billion lire—would, of course, come from Banco Ambrosiano, and Calvi would be the real owner of Rizzoli.

The scheme was elegant, but never materialized. For in mid-March 1981 Gelli, the self-proclaimed puppet-master, suddenly became a fugitive, his occult realm of the P-2 a matter for the magistrates and the police. Fittingly enough, the indirect cause of this disaster, which would have fatal repercussions later for both Rizzoli and Ambro­siano, was none other than Michele Sindona.

The decisive breakthrough was made neither in Milan nor Rome, but in Palermo, where Joseph Miceli Crimi, an Italo-American surgeon suspected of involvement in the huge drugs trade between Sicily and the US, was being questioned. Among his interrogators were Giuliano Turone and Gherardo Colombo, two magistrates from Milan who had long been probing the Sindona bankruptcy and its implications.

Turone and Colombo were less concerned with uncovering the "Sicilian Connection" than establishing Crimi's exact role in Sin­dona's erratic voyage around Europe during his "kidnapping" in the summer of 1979. Crimi, an admitted freemason, had helped organize Sindona's hideaway in Palermo. But the magistrates also knew he had made a strange trip to Arezzo, and wanted to know why. At first Crimi stonewalled, claiming he was visiting his Italian dentist there for a check-up. Then on March 14, 1981, he unexpectedly gave way. He had been to Arezzo, he said, to see a fellow mason, Licio Gelli, about arrangements for Sindona.

The magistrates quickly followed up this new lead. Three days later a
Guardia di Finanza
detachment went to Gelli's villa in Arezzo, but Gelli was away and they found nothing of particular interest. The next stop was Gelli's office at the Gio-Le textile factory. And there, in an ordinary wall safe and a brown leather suitcase alongside it, were the secrets of the P-2. In the safe the
Guardia di Finanza
discovered the list of the 962 names of members of the lodge, together with bundles of payments slips and receipts. In the suitcase they found 32 dossiers, and the headings of another 400-odd. The magistrates could hardly believe it.

The membership lists amounted to little short of a parallel state. The names included those of two current cabinet ministers, large segments of Italy's military and secret service hierarchy ranging from the chief of the general staff to the past and present heads of the
Guardia di Finanza
itself. No less than 50 generals and admirals, serving or retired, featured on the lists. There were industrialists, financiers, diplomats, top civil servants, police officers. The journal­ists numbered 24, the parliamentarians (including two ministers) were 38—drawn from every major party except the left-wing Radicals and the Communists. Calvi was there, of course, as were Sindona, Angelo Rizzoli, Tassan Din, the
Corriere's
editor Franco Di Bella, and Mario Genghini, that other notable beneficiary of Ambrosiano's generosity.

If the importance of the members was not enough, any doubts as to Gelli's penetration of the machinery of the Italian state were banished by the documents in the various dossiers, not a few of them highly confidential Government papers. Quite evidently Gelli had constructed a breathtaking mechanism for advancement, manipula­tion, and if he wanted, blackmail and extortion. He himself had vanished to the safety of South America, along, presumably, with many of the dossiers, whose contents would tantalize for many months afterwards. But enough was left behind to compromise Calvi further.

File heading No 351 read "Calvi—statement to magistrates by the Bank of Italy". It contained copious notes by Gelli himself, indicating intimate knowledge of the progress of the investigations into the alleged currency offences. There were documents too, some man­ifestly forged but enough to suggest that Gelli had his informers everywhere. Among them was a separate slip apparently indicating that $800,000 had been credited to a secret numbered account at a Geneva bank for the benefit of Ugo Zilletti, then the deputy chair­man of the Upper Council of Italian magistrates, the apex of the judiciary, and whose head is the President of the Republic himself. The note was easily to be construed as payment for services rendered in securing the return of Calvi's passport. Zilletti adamantly denied the suggestion. But in April 1981 he was obliged to resign from his post.

Calvi curtly dismissed Gelli's file on his legal misadventures as a "contrived folly". But the consequences could not have been graver. As suspicions grew over the two years of meandering taken by the affair since Alessandrini had been murdered in 1979, Mucci was taken off the case, to be replaced by Gerardo d'Ambrosio, among the sternest of the young Milan magistrates. Day after day, fresh details of the scandal emerged in the press. At the same time, with Gelli on the other side of the Atlantic and his organization in ruins, the entire Rizzoli rescue plan had to be recast.