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The Banco Ambrosiano affair: what happened to Roberto Calvi?

The murder of Roberto Calvi in 1982 put the spotlight on corruption at the Vatican Bank. Recent allegations hint that the Catholic Church’s financial arm still isn’t without sin

God’s banker, Roberto Calvi, murdered in 1982. Calvi was found hanging under Blackfriars Bridge in London, but the exact circumstances surrounding his death are still unknown

God’s banker, Roberto Calvi, murdered in 1982. Calvi was found hanging under Blackfriars Bridge in London, but the exact circumstances surrounding his death are still unknown

With more than a billion members, the Catholic Church is the largest Christian church on the planet. Despite its colossal reach, it has garnered a reputation over its two millennia in operation of intense secrecy.

Headquartered in the Vatican City in the heart of Rome, the church’s vast power includes a considerable amount of financial influence, which means it has its own bank; a private institution that is governed by Cardinals and the Pope and has around $7bn in assets.

Unlike many traditional banks, the Vatican Bank has maintained the mysterious – and highly controversial – reputation of the religion it serves. Officially known as the Instituto per le Opere di Religione (IOR), it has been accused of a number of misdeeds over the last century, the most serious of which have been regarding money laundering.

However, the most damning scandal to hit the IOR was the Banco Ambrosiano affair that broke in the early 1980’s, and all of the subsequent stories that were connected to it. It resulted in the supposed murder of that bank’s chairman, Roberto Calvi, who had such an influence with the IOR and the Catholic Church that he was dubbed ‘God’s Banker’ by the media.

Such was the magnitude of the story that it has been linked to the death of Pope John Paul I a few years earlier, and provided the inspiration for the plot of The Godfather Part III. The scandal first broke in 1978 when the Bank of Italy (BOI) unveiled a report that said Banco Ambrosiano was heading for a disaster as a result of mismanagement and corruption. The IOR was implicated in the scandal because it was the main shareholder in Banco Ambrosiano.

Blood money
The allegations centred on Calvi moving vast sums of money out of Italy into a large collection of overseas banks, as well as intentionally inflating share prices and taking out huge unsecured loans. The initial investigation would come undone, however, when the lead magistrate was assassinated and the BOI official leading the inspection was put in prison for charges that were later dropped.

Roberto Calvi arriving at the opening of his trial on charges of the illegal export of funds, in Milan 1981

Roberto Calvi arriving at the opening of his trial on charges of the illegal export of funds, in Milan 1981

In 1981 police raided the office of illegal masonic lodge Propaganda Due (P2), finding evidence that implicated Calvi. After a trial he was sentenced to four years in prison, but was released on appeal. By 1981 it emerged that Banco Ambrosiano could not account for almost $1.3bn of funds, leading to Calvi fleeing Italy, before he was found hanging from a London bridge soon after.

The circumstances around Calvi’s death have been steeped in mystery for years. Some believe his hanging under Blackfriars Bridge was symbolic to P2, as many members described themselves as frati neri, or black friars. Meanwhile, any suggestions that he may have committed suicide seemed very unlikely – due to his clothes being stuffed with bricks.

History repeating itself
Even though the scandal was over 30 years ago, the IOR has remained clandestine in its operations and rumours of corruption have emerged once again. In 2009 it was revealed that the IOR was being investigated by authorities over money laundering worth €180m. Further allegations followed against then IOR president Gotti Tedeschi, leading to a police investigation that was later dropped. Even more allegations over money laundering soon came to light, leading to US investment bank JP Morgan closing one of the IOR’s accounts because it had failed to provide sufficient information about the sources of the €1.8bn deposits.

In order to address these concerns, recently appointed Pope Francis established a new Pontifical Commission to study IOR reforms, which would later lead to the sacking of four cardinals in an effort to clean up the group. The new head of the IOR, German banker Ernst von Freyberg, has set about reforming the institution. His goals are said to be making the IOR more transparent, as well as seriously investigating – and punishing – cases of corruption and money laundering.

Head of the IOR Ernst von Freyberg

Head of the IOR Ernst von Freyberg. He has set about reforming the institution, but journalist Philip Willan believes he may be up against “powerful forces”

Rome-based author and journalist Philip Willan, whose book The Last Supper investigated the Calvi murder and the IOR, told European CEO that the new Pope’s desire to reform the bank is welcome, but he will face considerable resistance.

“I think Pope Francis has a sincere desire to turn the page on an embarrassing past and reform the way in which the Catholic Church handles money. I also think Ernst von Freyberg’s reforms are serious and are part of a profound transformation of the culture at the IOR, a consequence of a change in the culture of the church following the end of the Cold War and a response to the drive against tax evasion and money laundering pursued in the west since the 2008 financial crisis.

“I don’t doubt, though, that there are powerful forces ranged against the reformists. The recent scandals show how a habit of flouting the law had become deeply ingrained among senior Vatican bureaucrats and their friends.” While many at the Vatican have talked of their wish to reform the IOR and quash the rumours of corruption, Willan believes that the current Pope is the most serious about actually doing something about it.

“A thorough reform of the church’s business culture will not be either easy or quick, but I think Pope Francis and his team are serious about pursuing it.”

God’s banker
The man central to the scandal, Roberto Calvi’s death added intrigue and mystery to the money laundering affair. His murder still unsolved, was a shocking twist in the scandal of one of the most high profile banker’s at the time. Born in Milan in 1920, Calvi worked his way up to the top of Italy’s banking industry. Joining Milan-based Banco Ambrosiano in 1967, he was appointed general manager four years later, and chairman the following year.

The recent scandals show how a habit of flouting the law had become deeply ingrained among senior Vatican bureaucrats and their friends

Now fully in control, Calvi expanded the bank’s operations considerably, moving much of its capital overseas to South America and the Bahamas and taking a controlling interest in rival Banca Cattolica del Veneto. He also oversaw a fundraising initiative that enabled publishing house Rizzoli to buy newspaper Corriere della Sera. As a result of his close links to Vatican Bank Chief Bishop Paul Marcinkus, Calvi was able to arrange a large amount of business between the two institutions.

These ties led to the Vatican Bank becoming the largest shareholder in Banco Ambrosiano. His membership of secretive – and illegal – masonic lodge Propaganda Due (P2) added fuel to the conspiracy theories about his dealings and later demise. Tried in 1981 for illegally exporting $27m out of Italy, Calvi was given a four year suspended sentence and fined $19.8m. Briefly imprisoned, he attempted suicide, before being released on bail and returned to his position at the head of Banco Ambrosiano.

In early June 1982, Calvi wrote to Pope John Paul II warning that a forthcoming event would lead to “a catastrophe of unimaginable proportions in which the Church will suffer the gravest damage”. Two weeks later, the bank collapsed and Calvi was found hanging under Blackfriars Bridge in London. More than 30 years later and no one has been convicted of his murder.

The smiling pope
Born in 1912, Albino Luciani was raised in the Veneto region of northern Italy, before entering the church in 1935. By 1958 he was appointed Bishop of Vittorio Veneto by Pope John XXIII, before his ascension to the position of Cardinal-Priest of San Marco in 1973. He was praised for encouraging colleagues to donate their valuable possessions to help those with disabilities.

Remembered as ‘The Smiling Pope’, John Paul I was a popular choice to succeed Pope Paul VI in 1978. A man unfortunate to hold the title of shortest papal reign in the modern era, Pope John Paul I lasted just 33 days in charge of the Catholic Church. Appointed on 26 August 1978, his abrupt death on 28 September – supposedly of natural causes – sparked wild rumours about whether the causes were indeed more nefarious.

Found dead sitting upright, killed by a suspected heart attack, Pope John Paul I’s death has been linked to a number of theories, the most prominent of which was the Banco Ambrosiano scandal.

‘The Smiling Pope’, John Paul I. He was Pope for just 33 days, before he died on suspicious circumstances in 1978

‘The Smiling Pope’, John Paul I. Pope for just 33 days, before he died in suspicious circumstances in 1978

The rumours centred on the discrepancies in the Vatican’s official account of the events surrounding his death. Statements over who found the body were contradictory, while there was no confirmation that an autopsy was ever carried out.

It has been suggested by a number of authors, notably David Yallop in his 1984 book In God’s Name, that Pope John Paul I was assassinated because of corruption at the IOR. Many leading figures in P2, including Calvi, were involved in the corruption, as well as IOR chief Marcinkus.

Yallop promised when the book was released that he would donate all proceeds to a charity of the Vatican’s choice if they investigated his claim that the Pope died holding a piece of paper naming senior P2 figures involved in the scandal, which was later burned. The Vatican has so far never acknowledged this claim and the official cause of death remains a heart attack.

A suspicious bishop
An American bishop, Paul Marcinkus headed up the Vatican Bank from 1971 until 1989. Born in Cicero, Illinois, in 1922, Marcinkus’s father was a Lithuanian refugee that had fled conscription to the Russian army. Growing up near Chicago, he would be ordained to the priesthood for the Archdiocese of Chicago in 1947.

In 1950 he moved to Rome to study canon law at the Gregorian University, where he become close to Giovanni Battista Montini, who would later become John Paul VI. Marcinkus spent the following two decades serving both Pope John XXIII and his successor Pope Paul VI as chief English translator. In 1971 he would assume the role of president of the IRO, a position he held until 1989.

Such was the magnitude of the story that it has been linked to the death of Pope John Paul I a few years earlier, and provided the inspiration for the plot of The Godfather Part III

His time running the IRO was littered with scandal, especially that of the Banco Ambrosiano affair. Suspicions over his activities arose as early as 1973, when US Department of Justice prosecutors questioned him over his involvement in the delivery of $14.5m of counterfeit bonds to the Vatican two years earlier. By 1982 he was implicated in the Ambrosiano scandal, and two years later was suggested by Yallop as a possible accomplice in the alleged murder of Pope John Paul I six years earlier.

When the Vatican agreed to pay a £145m settlement to creditors in 1986, Marcinkus said, “You can’t run the Church on Hail Marys.” He was never charged with any crimes, however, even though rumours and controversy engulfed his reputation. He refused to cooperate with investigators, and no leads would materialise, many still believe he was integral to the corruption scandal, as well as a number of others.

Stepping down from his position as the head of the IOR in 1989, he returned to the Archdiocese of Chicago the following year, before retiring to Arizona. He died in 2006 form undisclosed causes at the age of 84.

Suspects and informants
A number of people have been accused over Calvi’s murder. The most prominent figures include Flavio Carboni, a businessmen with links to the P2 lodge. Mafia boss Pippo Calò has also been tried for ordering Calvi’s murder. Carboni is said to have been involved in money laundering for Calò, and was described by informant Antonio Mancini as an “essential link” between Calò’s Magliana gang and the P2 lodge.

In 1991 Mafioso turned informer Francessco Marino Mannoia pointed the finger at Calò and P2 head Licio Gelli, claiming they’d ordered Calvi’s murder. By 1997, Italian prosecutors took Calò and Carboni were implicated, alongside alleged Magliana Gang members Ernesto Diotallevi and Francesco Di Carlo, resulting in a prolonged trial. Di Carlo would later turn informant, claiming Calò had approached him over Calvi’s murder but that he hadn’t carried it out.

In 2003, prosecutors announced that they believed the Mafia had assassinated Calvi to prevent him from blackmailing a number of senior political figures linked to the P2 lodge, as well as the IOR. The trial began in 2007, with life sentences requested for Calò, Carboni, Diotallevi and Calvi’s bodyguard Silvano Vittor. Each of them denied being involved, and were subsequently cleared of the murder due to “insufficient evidence.”

Willan believes that the likes of Carboni are still prominent in Italy, and the Vatican needs to do more to distance itself from them. “It is remarkable how defendants from the Calvi murder trial, Flavio Carboni and Ernesto Diotallevi, have continued to have business contacts with people associated with the Vatican. Paolo Oliverio, a financial consultant to the Camilliani, a religious order dedicated to the service of the sick, was arrested last year on suspicion of laundering money for the Calabrian mafia – Europe’s biggest cocaine traffickers. He is reported to have been in contact with Carboni and Diotallevi, as well as their offspring. Carboni has also been shown to have cultivated contacts with members of Silvio Berlusconi’s inner circle in recent years, despite having been on trial for murder.”