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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.”

  • ME1420

    Calvi drama wrapped in a Cold War intelligence web

    By Philip Willan

    Rome—When police recovered the body of Roberto Calvi from scaffolding under Blackfriars Bridge they found a variety of objects in his pockets. There were five bricks and stones, more than 7,000
    pounds in foreign currencies, and the business card of a leading City of London lawyer. The latter was perhaps the most natural object to be carried by the chairman of a leading Italian bank, but closer examination of its significance leads us into an extraordinary labyrinth of Cold War intelligence connections.

    The business card belonged to Colin McFadyean, a senior partner at top City law firm Slaughter and May. The firm had close ties to Britain’s intelligence establishment dating back to World War II, when many partners worked for the Special Operations Executive (SOE), a clandestine warfare unit specialising in sabotage. McFadyean himself had been recuited into wartime naval intelligence by Ian Fleming, the creator of James Bond.

    McFadyean told City police he had never met Calvi and had never done any work for his Banco Ambrosiano, and British authorities minimised the connection. The existence of the card only became public in 1983, a year after Calvi’s death, and after two inquests had been held without casting much light on the circumstances of the banker’s demise.

    McFadyean was a director of 17 companies, some of them with a connection to the worlds of arms and intelligence. Artemis Fine Arts, for example, was used to launder money and reward people for services to the Western cause during the Cold War, or so I was told by a source who frequented this cloak-and-dagger world.

    One of McFadyean’s colleagues at Artemis was Viscount Arnold van Zeeland, a Belgian financier and art expert. His name meant nothing to me when I came across it in court documents from the Calvi murder trial. But thanks to information provided to me recently by a correspondent, Van Zeeland’s name has opened doors to interlocking chambers where it is likely that much high-level intrigue was conducted at the height of the Cold War.

    Van Zeeland’s father, Paul, it turned out, had been prime minister of Belgium. He had also been a founder member of the Bilderberg Group, a secretive forum in which the world’s social, political and economic elite meets to discuss global problems, and an object of enduring suspicion on the part of conspiracy theorists.

    The Bilderberg Group was the brain-child of Jozef Retinger, a supporter of the anti-Nazi resistance in Poland and a CIA-financed campaigner for the unification of Europe. In a brief essay about the origins of the group, Retinger explained that he and his friends had been concerned at a climate of
    growing distrust between Western Europe and the United States at the beginning of the 1950s. Informal meetings between eminent representatives of the two continents would serve to heal the breach.

    The West’s response to the challenge of communism was a key issue from the start. “The attitude towards Communism and the Soviet Union,” was the first topic discussed when the group met for the first time in Holland in May 1954. The European Defence Community and “Communist infiltration in various Western countries” were on the agenda at later meetings.

    Among the early members of the group were Sir Colin Gubbins, head of SOE at the end of the war, and Antoine Pinay, a right-wing French politician who was a tireless anti-communist schemer. Participants at later meetings included General Lyman Lemnitzer, the American military officer whose name is associated with Operation Northwoods, a plan to stage false flag terrorist attacks in the United States to justify a military invasion of Cuba, and Mario Pedini, an Italian MP who was a member of Licio Gelli’s anti-communist P2 masonic lodge.

    Roberto Calvi too was a — possibly reluctant — member of P2.

    The group, Retinger wrote, was to become a “factory of initiative”. It would not implement the ideas itself, however, preferring “that they should be passed on to some person or organisation who could further develop them”.

    One of the people who could provide a useful connection between the group’s ideas and those capable of translating them into action was Charles (C.D.) Jackson, who helped to set up the Bilderberg’s North American branch. Like Gubbins, Jackson had a background in clandestine warfare, having been responsible for General Eisenhower’s psychological warfare department in North Africa and then in London.

    After the war Jackson became vice-president of Time Inc., and president of the National Committee for a Free Europe, which was funded by the CIA and controlled Radio Free Europe. He also threw his weight behind another effective Cold War instrument, the Pro Deo Movement, founded by a remarkable Dominican priest from Belgium, Father Felix Morlion.

    Morlion’s propaganda and espionage empire was set up in Brussels before the war and went on to include the Pro Deo University in Rome, now known as LUISS. Funded by the CIA and by Fiat president Vittorio Valletta — another Bilderberger – Morlion’s “journalistic” establishment provided US intelligence with information on the Vatican and from a worldwide network of correspondents.

    Fr Morlion cut his teeth in the espionage and propaganda business in pre-war Belgium, where his Catholic Press Centre campaigned against moral decadence in the cinema and communist infiltration of Belgian industry. He reportedly entered into contact with Britain’s Secret Intelligence Service (MI6) at this time. The British were keen on his anti-communism but even more interested in his contacts with Catholic dissidents in Nazi-ruled Germany.

    Morlion’s intelligence-gathering and anti-communist agitation continued during and after the war under American auspices. US spy chief Bill Donovan helped him escape from Belgium to Portugal in 1940 and then to greater safety in New York, ultimately financing his move to Italy in 1944.

    The Dominican priest’s anti-communist activities made him a natural ally for Licio Gelli and Roberto Calvi’s P2 organisation. In a self-praising book entitled “Licio Gelli, European Poet”, Gelli published a diploma, written in Latin, confirming his receipt of an honorary degree in “financial science” from the International Pro Deo University of New York in October 1995.

    The younger generation of Van Zeelands was also involved in anti-communist action. Arnold van Zeeland’s brother-in-law, Count Arnould de Briey, was reportedly involved in a military coup plot in Belgium in 1973. De Briey was allegedly a leading figure in the French-speaking faction of the plotters. The operation is said to have been called off at the last minute as a result of ethnic feuding
    between the French and Flemish-speaking components of the conspiracy.

    Three potential witnesses to the plot are believed to have been killed in the course of the “Brabant massacres”, a series of apparently random shootings in which 28 people were killed. The massacres, which took place in the first half of the 1980s, have sometimes been attributed to the Belgian version of Italy’s Gladio stay-behind network, in a Central European version of the “strategy of tension”.

    Both Calvi and McFadyean appear to have frequented circles and institutions that were involved in a secret battle against communism in the second half of the 20th century. Institutions such as the Bilderberg Group may well have put conspirators in touch with one another, even if the subsequent action was pursued elsewhere, as Retinger seemed to suggest.

    Melanie McFadyean, the British lawyer’s journalist daughter, made contact on my behalf with some of her father’s intelligence friends as I was updating my book “The Vatican at War”. None of them wanted to talk, telling her it was “better to let sleeping dogs lie”. No one suggested, though, that the dog didn’t exist.


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