VATICAN’S DARKEST SECRETS

Mafia murders, masonic conspiracies, money laundering: since its inception in 1942, the Vatican Bank has been at the centre of a number of extraordinary scandals. Here is the chronology of some of its biggest controversies.

PROLOGUE

Should the Vatican be allowed to have a bank? Should this bank be able to invest money, give out loans and charge interest? Some scholars argue that the Bible expressly forbids lending money at interest. However, towards the end of the 19th century, the Vatican began doing just that: unofficially it started to lend money to the Roman aristocracy – and charge interest. “Aside from the irony of lending believers’ money to the rich, it demonstrated something else,” says journalist and author Fidelius Schmid. “The Church no longer cared about the centuries-old ban on usury that forbade Catholics from charging interest payments.” It was the beginning of one of the murkiest episodes in the history of the Catholic Church. Not only did the Vatican bank, founded in 1942, throw Christian values out of the window, it also broke numerous secular laws – and was responsible for the deaths of many people.

It started with a pact with the devil. It was Italy’s dictator Benito Mussolini who laid the foundations for the Vatican bank. On 11th February 1929 he and Pope Pius XI struck a deal: the Church would recognise the fascist regime. This gave Mussolini such a surge in popularity that most Italians would later voluntarily follow him as he joined forces with Hitler during the Second World War. In return, the Vatican was promised its sovereignty as an independent state – along with 1.75 billion lire. This money was placed under the care of the Holy See, the universal government of the Catholic Church.

With success too: until the outbreak of the Second World War, this special administration, controlled by financial genius Bernardino Nogara, increased the money twentyfold through speculative deals. But soon the money-making administration ran out of steam. The reason? It wasn’t prepared for major crises – and the biggest crisis of all was the Second World War. The following is a drama in six acts...

ACT I - HOW DOES A BANK BECOME INVISIBLE?

Before this day in 1942, none of the cardinals even knew the room existed. Behind the heavy doors is a long table. A stout man with a beard sits at its head. His expression is serious. Bernadino Nogara is a financial advisor to the Vatican, as well as the organisation's treasure - and what he's about to say will change the Catholic Church forever. "Hitler will lose the war" he exclaims, before going on to insist that something needs to be done quickly to preventthe Church's treasures in Germany becoming the Allies' spoils of war.

A few days later, on 27th June, that something happened, Nogara convinced Pius XII to outsouce the Vatican bank under the name Institute for Works of Religion (IOR) - transforming the harmless asset management system of the Church into a network that branched into more than 70 banks within a few years. It was a brilliant move that made the Vatican bank virtually invisible as a financial institution, meaning large amounts of money coild be moved across borders during the war. At the same time, Vatican speculators undermined the global economy, investing billions by purchasing blocks of shares. Using shell companies, they boarded shares in the insurer Generali, defence group Finmeccanica, oil giant Shell. carmakers Alfa Romeo and General Motors, tech firm IBM and the pharmaceutical company Sereno - later one of the manufacturers of the contraceptive pill.

Why bother, you ask? In a word: camouflage. Because the Vatican bankno longer just looked after Church property, it had become a lucrative business model and the perfect tool to launder money for criminal gangs around the world. The first sin of "God's bank" involved truckloads of Nazi loot appearing at its headquarters in Rome...

ACT II - IS THE VATICAN BANK HIDING NAZI GOLD?

Remember your oath,” yells the Commander of the Swiss Guard to his men. “You are forbidden to ever talk about this.” He gestures towards dozens of boxes in a truck and tells his men to carry them into the Tower of Nicholas V – the home of the newly created Vatican bank. The men are silent, butthey know exactly what they're hiding: riches stolen from masscred men, women and children.

Flashback: on 12th April 1941, Hitler's troops conquer Belgrade. They divide the region between the predominant Catholic Coratia and Protestant Serbia. In Croatia, the puppet dictator Ante Pavelic leads a brutal regime on behalf of the Nazis – up to 750,000 people, mainly Jews and Roma, are murdered. The Ustaše, the dictator’s feared militia, carries out the mass slaughter. The victims’ belongings are looted; it’s a hoard worth millions.

By the end of the war, the Ustaše had amassed a collection of gold teeth, jewellery and gemstones worth a staggering $ 80 million. They were looking for a way to transport the riches abroad which is where the Vaticanbank came in - it was established for exactly such a purpose three years earlier.

The Nazi treasure was taken to the Vatican bank and partially absorved into the Church Holocaust survivors tried suing the Institute for Works of Religion in 1999, but it remainded uncooperative. Ten years later the case was dismissed because the bank is part of the sovereignty of the Holy See - and is therefore immune from prosecution. A fact that would soon lead to dealings with the criminal underworld...

ACT III - WAS THERE A HIDDEN MAFIA-VATICAN NETWORK?

On 2nd September 1957, Michele Sindona enters the Grand Hotel Et Des Palmes in the Sicilian city of Palermo. Two bodyguards frisk the lawyer for weapons – before introducing Sindona to the crème de la crème of the criminal underworld. In a luxury suite sit representatives of the US and Italian mafia, the overlords of drugs, weapons and prostitution. “How can we launder millions of dollars?” they ask Sindona. “Don’t worry,” he replies. “I have a plan.”

At the centre of the plan was the Vatican bank. Sindona wasn’t just a lawyer but also a ruthless banker known as the “The Shark”. He transferred the money from his own account to the Vatican bank – and then on to an escrow account overseas. So, indirectly, the Vatican washed the blood and cocaine from the mafia’s banknotes. For their trouble, they picked up a fat 15%, a hefty commission.

Insider Marcello Bordoni later testified: “It took place every day and the stakes were very high. The methods were really the most primitive and criminal you can imagine.”

These financial transactions were only the beginning of a link between the Vatican and the mafia. Sindona was a ‘guest’ of the Holy See’s bank so frequently that Pope Paul VI made him a financial advisor: “I was told, Michele Sindona, that you were sent from God.” Sindona got to work immediately: he merged all of the semi-illegal and illegal assets to make himself and the Vatican rich. The cash flows of his two clients, the mafia and Vatican, soon became intertwined. But this was only the first step for Sindona and the Vatican Bank...

ACT IV - WAS THE VATICAN INVOLVED IN A MASONIC SECRET SOCIETY?

It should only be a simple search of the offices of fascist financier Licio Gelli. However, when it fell into the hands of detectives investigating the Sindona affair, none of them could believe their eyes. It was a list of 962 high-ranking members of a masonic cabal known as Propaganda Due (P2) that secretly ruled Italy. The difference from other lodges: P2 was exclusively political. Its goal was an authoritarian state – and the absolute rule by a powerful few. Its modus operandi included bombings, for which left-wing groups were blamed.

Nearly 1,000 members from the world of politics and business belonged to P2 – among them Italy’s future leader Silvio Berlusconi. The CIA also supported the lodge and gave it $10 million annually. Furthermore, 121 members of the Church were involved – even though being a member of a masonic lodge was punishable by excommunication. The 121 Church representatives in the secret society included all of the leaders of the Vatican Bank – plus its main advisor and financial manager, mafia man Michele Sindona and his successor Roberto Calvi, known as “God’s banker”.

This unholy trinity of the Vatican bank, the CIA and the mafia imploded when P2 was exposed in 1981 and the public found out for the first time that a secret society ruled them. P2 was made illegal. However, the Vatican bank didn’t have to fear any consequences – it even survived a rebellious pope...

ACT V - WHO WAS BEHIND THE MURDER OF POPE JOHN PAUL I?

Ultimate sacrifice

John Paul I was elected as pope on 26th August 1978 - and died only 33 days later. His death remains mistery. Was he the victim of a conspiracy?

She opens a crack in the door and peeks into the papal bedroom. The light is on, but nothing is moving. Sister Vincenza Taffarel has been Pope John Paul I’s housekeeper for 19 years, but has never seen him sleeping. When she enters, she finds him in bed. His face is contorted and his rigid fingers are clasping a sheet of paper. It’s immediately clear that all is not well: the Pope is dead.

Before the doctor can get there, Jean-Marie Villot turns up. Villot is the Cardinal Secretary of State, the second most powerful man in the Vatican – at least he was before the Pope fired him hours earlier for being a member of the masonic lodge P2. Just after he arrived, the paper clasped by John Paul I disappeared – along with a bottle of blood pressure medication on his bedside table and his testament. Was the Pope poisoned on the night of 28th September 1978 – just 33 days after taking office?

By the end of the 1970s, the Vatican bank was the cash cow of the Freemasons and the Sicilian mafia. John Paul I, on the other hand, was a staunch opponent of the financial institution. He knew all about the dirty business the bankers Michele Sindona and Roberto Calvi conducted under the smokescreen of the Church – and was determined to stamp it out. Was it a decision he paid for with his life, say conspiracy theorists?

With John Paul I’s death, Villot reversed his own dismissal, prevented the dissolution of the Vatican bank, and prevented a post-mortem examination of John Paul I after his murder. When asked why, he cited canon law.

ACT VI - HOW MUCH BLOOD IS ON THE HANDS OF GOD’S BANK?

“Giorgio Ambrosoli?” asks a voice behind him. Ambrosoli turns around. It’s close to midnight on 11th July 1979. Three men stand in front of him. “Yes?” the lawyer confirms, only twigging fractions of a second later that he’s just uttered his own death sentence. Four bullets hit his body. Ambrosoli collapses on the pavement outside his Milan home.

The Vatican bank’s biggest scandal was like the end of a Shakespearean tragedy: everyone died. The two main protagonists of this wild violence were Michele Sindona and Roberto Calvi. While attempting to further bend the laws of the financial world, they triggered a crisis that tore down powerful banks and numerous illegal businesses that had the Vatican bank as one of their main shareholders.

Giorgio Ambrosoli was appointed as a liquidator to one of the banks controlled by Michele Sindona and discovered unusual payments involving Sindona’s account, which had been handled by the Vatican bank. He threatened to reveal what many had long suspected: the mafia’s money laundering, the involvement of the Vatican bank and the role of Michele Sindona. The latter hired three killers, but their victim Ambrosoli was only one of many deaths: everyone who got too close to the secrets of the Vatican bank was murdered – even the protagonists themselves died in the end. Michele Sindona was sentenced to 25 years in prison, where he died from cyanide poisoning after announcing he was going to spill the beans about the Vatican bank. Meanwhile, Roberto Calvi was found hanging under Blackfriars Bridge in London in 1982 after also wanting to confess. The two bankers had made a pact with the devil – and paid the price.

And today? Well, fresh allegations of money laundering continue to dog the Vatican bank, despite Pope Francis ordering it to be more transparent. Will a moderniser such as he be able to open all of the doors?

EPILOGUE - CAN POPE FRANCIS EVER CLEAN UP THE VATICAN?

It was in July 2013 that current pontiff Pope Francis announced to the world that he was about to get tough on the Vatican’s shady financial dealings. On his way back to Rome after attending World Youth Day in Brazil, Francis gave a surprise press conference on the papal plane, admitting that the latest transgression ripping through the Catholic church was damaging the Vatican’s already scarred reputation. “These are scandals,” said Francis. “And they do harm.”

The incident in question centred around Monsignor Nunzio Scarano, head of accounting at the Amministrazione del Patrimonio della Sede Apostolica (APSA), the department that managed the Vatican’s property holdings and controlled its purchasing affairs. The slick, good-looking clergyman had built a reputation for extravagance, earning the nickname My Lord Five Hundred thanks to his habit of only carrying €500 banknotes. When Scarano reported a burglary at his 17-room apartment in one of Naples’ wealthiest suburbs, police were stunned to find an opulent home full of expensive art. The value of the missing artworks was around €6 million, leaving some to ponder how a priest earning €36,000 a year could reap such rewards. “Donations,” Scarano told police.

Six months later however, the sky began to cave in on the debonair cleric. Italian police arrived at Scarano’s rectory early one morning, arresting him on suspicion of being part of a money-laundering conspiracy that saw the priest smuggling €20 million on a private plane from Switzerland. Investigators suspected that Scarano had been running APSA as a ‘parallel bank’, used by both the Italian elite to avoid taxes, and the mafia to launder the proceeds of crime.

So, in light of this and an 80-year history of financial misdemeanours, will Pope Francis be the man who finally cleans up the Vatican? He’s certainly earned his stripes, having addressed money-related scandals in Argentina during his stint as archbishop of Buenos Aries. As well as removing various bonuses and stipends for Vatican staff and cardinals, Pope Francis has employed a group of outside experts with the power to prod and poke every aspect of the Vatican’s finances. They’ve been encouraged to employ some blue-sky thinking, including whether the Vatican bank should even be closed.

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Are priests breaking celibacy vows?

It was one of the more unusual letters the Pope Francis receives: a petition signed by 26 women asking the pontiff to end the church’s celibacy requirements – so they could then have sex with their priest boyfriends. The authors of the missive, sent in 2014, say they represent only a “small sample” of women worldwide who are in a secret sexual relationship with a priest. Although celibacy has been practiced in Catholicism since the year 1100, it’s considered a discipline, not doctrine – meaning Francis, or in fact any pope, could repeal it.

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Why did the Catholic church steal 300,000 babies?

Between 1960 and 1990, the Spanish Catholic church stole up to 300,000 babies from their parents, and then sold them for adoption through a network of doctor, nurses, priests and nuns. Mothers, often young and unmarried, who had just given birth in hospitals, usually run by the church, were told that their babies had just died – and that they couldn’t see the body of the dead infant or attend the funeral. The babies were then given to childless couples viewed by the church as being more ‘worthy’ parents, usually on the basis of their religious beliefs and/or financial security.

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Who is the woman behind ‘Vatileaks’?

Francesca Chaouqui was supposed to help mop up the Vatican’s mess; instead she made it dirtier. In 2013, the public relations expert served on a high-profile Vatican commission examining financial reforms. It’s alleged that during this time 33-year-old Chaouqui and two others stole confidential documents and then leaked them to journalists, who used them as basis for controversial books about the Vatican’s financial mismanagement of church funds. Chaouqui maintains her innocence, but says she’s willing to accept jail if the Vatican court finds her guilty. To add fuel to the fire, the Italian media has alleged that Chaouqui had sex with Spanish monsignor, Lucio Angel Vallejo Balda, while she worked on the commission.

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Was a gay prostitution ring operating in the Vatican?

In one of the most damning accusations ever levelled at the church, two Vatican employees – Angelo Balducci, a senior usher at the Vatican, and Ghinedu Ehiem, a former member of an elite Vatican choir – were recorded on a wire tap discussing how to arrange male prostitutes for a papal gentleman-in-waiting. The transcripts, published by Italian newspaper La Repubblica in 2010, show Ehiem suggesting to Balducci, under suspicion of corruption at the time, that he meet a man whom he describes as “two metres tall...97 kilos...aged 33, completely active.” Three years later, the same newspaper leaked a Vatican dossier which revealed the existence of a “gay conclave ”, a group of senior clergymen “united by their sexuality” who held parties with gay male prostitutes. According to Catholic teachings, homosexual acts are “intrinsically disordered.”

Published in "World of Knowledge Australia", Sydney, issue 42, September 2016, excerpts pp.8-15. Adapted and illustrated to be posted by Leopoldo Costa