[PDF]God's Bankers A History Of Money And Power At The Vatican

A HISTORY OF
MONEY AND POWER
AT THE VATICAN


mie eie ie mie e mje oe oe mhe mie mge ae mie oje oje mie mge age mje sge oje nje mie oje ae nje je a mie mie aje mje nje nje ope mje age aje aje mie e eie


GERALD POSNER


Thank you for downloading this Simon & Schuster eBook.


Join our mailing list and get updates on new releases, deals, bonus content and other great books from Simon
& Schuster.


CLICK HERE TO SIGN UP


or visit us online to sign up at


eBookNews.SimonandSchuster.com


GOD'S
BANKERS


SIO


A History of Money and Power
at the Vatican


GERALD POSNER


Simon & Schuster
New York London ‘Toronto Sydney New Delhi


Contents


BS


Preface


1 Murder in London
2 The Last Pope King
3 Enter the Black Nobles
4 “Merely a Palace, Not a State”
5 An Unholy Alliance
6 “The Pope Banker”
7 Prelude to War
8 A Policy of Silence
9 The Blacklist
10 Blood Money
11 A Nazi Spy in the Vatican?
12 The Ratline
13 “He’s No Pope”
14 The Men of Confidence
15 “You Can’t Run the Church on Hail Marys”
16 Operation Fraulein
17 Il Crack Sindona
18 The Battle of Two Scorpions
19 “A Psychopathic Paranoid”
20 The Year of Three Popes
21 The Backdoor Deal
22 “The Vatican Has Abandoned Me”
23 “You Have to Kill the Pope”
24 “Tell Your Father to Be Quiet”


25 “Protect the Source”

26 “A Heck of a Lot of Money”

27 “Tve Been Poisoned”

28 White Finance

29 Suitcases of Cash

30 Burying the Trail on Nazi Gold
31 “A Criminal Underground in the Priesthood”
32 “His Inbox Was a Disaster”

33 The Kingmaker Becomes King
34 “As Flat as Stale Beer”

35 Chasing the White List

36 The World Has Changed

37 The Powerbroker

38 The Butler

39 A Vote of No Confidence

40 “A Time Bomb”

41 The Swiss James Bond

42 “The People’s Pope”

43 “Back from the Dead”


Photographs
Acknowledgments
Bibliography
Notes

Index

Illustration Credits


To Trisha, my muse and eternal love


Preface


In 1984, I traveled to Buenos Aires as part of my research for a biography of
Auschwitz’s “Angel of Death,” Nazi Dr. Josef Mengele. I petitioned Argentina’s first
democratically elected president, Raúl Alfonsin, for access to the country’s secret
files on Mengele. There was no response for several weeks. Then, one night, at
nearly 11:00 p.m., several uniformed police knocked on the door of my downtown
hotel. I was put into the back seat of a blue Falcon, the very type of unmarked car
that had become notorious under the military junta for taking away thousands of
dissidents, many of whom were killed. But my trip ended at the main headquarters
of the Federal Police. A grim-looking colonel informed me that he had been
ordered to produce some documents. The folder I soon reviewed in an adjacent
room contained a treasure trove of information about Josef Mengele and his decade
as a fugitive in Argentina, everything from the original International Red Cross
passport under an alias on which he had arrived from Europe to details of how he
stayed one step ahead of Nazi hunters. A few of those papers raised broader
questions about whether Nazi war criminals had reached safe haven in South
America after World War II with the assistance of a few ranking Catholic prelates in
Rome.

A few weeks later, I was in Asunción. There, I toured the country with Colonel
Alejandro von Eckstein, a military officer who was not only a good friend of the
country’s dictator, Alfredo Stroessner, but who had personally cosponsored
Mengele’s application for Paraguayan citizenship. With von Eckstein in tow, I
reviewed a small part of that country’s sealed Mengele file. And I met a contingent
of diehard neo-Nazis in Nueva Bavaria (New Bavaria), in the south of the country.
Mengele had found safe haven there in 1960. Feeling safe to talk openly because of
von Eckstein’s introduction, they regaled me with stories about how a local hotel in
the rain forest had served decades earlier as a clearinghouse for some of the most
notorious Nazis. And mixed in those stories were references once again to clerics in
Rome to whom those South American National Socialists were grateful.


After that book, Mengele, was published in 1986, I moved on to other subjects.
But the story about the church and its possible ties to the Third Reich had captured
my attention and I tried staying abreast of it. In 1989, The New York Times
published my long letter, “Why the Vatican Kept Silent on Nazi Atrocities; The
Failure to Act.” That was a response to an editorial by conservative commentator
Patrick Buchanan absolving the church of any moral responsibility for the
Holocaust. Two years later the Times published my op-ed, “The Bormann File,” in
which I castigated Argentina for not releasing a secret dossier about Hitler’s deputy
that I had seen when I was inside the country’s Federal Police headquarters.

The last paragraph of my 1989 Times letter explained that I approached the
question of any role the church might have played during World War II both as a
reporter and a Catholic: “Although my father was Jewish, my mother was Catholic,
and I was educated by Jesuits. I consider myself as much a Catholic as Mr.
Buchanan. But I am embarrassed by his need to defend the church on every
historical issue. The church has been involved in terrible undertakings, and they
cannot be denied. That many individual nuns and priests exhibited great bravery
during World War II to save many victims does not diminish the silence or acts of
the church’s hierarchy.”

My focus, I would discover in the coming years, was far too narrow. I had
thought the story was about a volatile mixture: institutional anti-Semitism and a
fear of communism exacerbated by church leaders who failed to act forcefully when
confronted with one of history’s greatest horrors in the Holocaust. What I
discovered instead was that what happened within the church during World War II
was part of a much more complex saga. The truth could be found only by following
the trail of money.

As Elliot Welles, an Auschwitz survivor and a Nazi hunter for the Anti-
Defamation League, told me, “Profits. They matter as much in the church as they
do inside IBM. Don’t forget it.”

Even in 2005, when I started this book in earnest, I still underestimated its
scope. Then I envisioned reporting only the story of the scandal-ridden Vatican
Bank, founded in the middle of World War II. It has operated for seventy years as a
hybrid between a central bank of a sovereign government and an aggressive
investment banking house. While the Vatican Bank is at the center of this modern
chronicle, it is impossible to fully understand the finances of the Vatican without
going back in church history.

This story is a classic investigative tale about the political intrigue and secretive
inner workings of the world’s largest religion. It is not about faith, belief in God, or


questions about the existence of a higher power. Instead, God's Bankers is about how
money, and accumulating and fighting over it, has been a dominant theme in the
history of the Catholic Church and often in shaping its divine mission. “You can’t
run the church on Hail Marys,” said one bishop who ran the Vatican Bank.

God's Bankers lays bare how over centuries the church went from surviving on
donations from the faithful and taxes levied in its vast earthly kingdom to a
Lilliputian country that hesitatingly embraced capitalism and modern finance.
During the 1800s, Catholics were barred from even making loans that charged
interest. A century later the Vatican Bank orchestrated complex schemes involving
dozens of offshore shell companies as well as businessmen who often ended up in
jail or dead. How and why that remarkable transformation took place is in part the
tale of God's Bankers.

The challenge in this project was to follow the money from the Borgias to Pope
Francis, all the while prying into an institution that guards its secrets and keeps
massive documentation sealed in its self-described Secret Archives. Compounding
the problem, as one author wrote in 1996, “Vatican officials would sooner talk
about sex than money.” The story that Rome preferred I not tell had to be pieced
together from documents scattered in private and public archives, information
gleaned from litigation files and court records, and dozens of interviews. A handful
of clerics and lay officials in Rome—who, fearing retribution, spoke only on the
condition of anonymity—provided an unprecedented insight into the cutthroat
infighting that has often crippled the modern Papacy. Those interviews laid out the
considerable challenge confronting Pope Francis when it comes to reforming the
finances of the Vatican.

As I assembled my reporting, I realized a crucial part of the mix was missing: the
inexorable quest for power that is tied to the pursuit of money. In the Vatican, it is
a volatile brew. There are nearly a thousand men, most celibate, who live and work
together, and wield not only great earthly power but who believe for the most part
that they have inherited divine rights in safeguarding the “one and true” church. In
the end, they are human, hobbled by the same frailties and shortcomings common
to the rest of us. Little wonder that despite their best intentions they have often
ended up in internecine wars and stunning scandals that rival those of any secular
government.

A public mythology in books, articles, and movies has grown around the church
and its money. Freemasons, the Illuminati, mobsters protected by priests, murdered
Popes, hoards of Nazi gold in the Vatican’s basement—the wildest theories might
be entertaining but they poorly serve history. God’s Bankers cuts through the masses


of misinformation to present an unvarnished account of the quest for money and
power in the Roman Catholic Church. No embellishment is needed. That real tale
is shocking enough.


Murder in London


London, June 18, 1982, 7:30 a.m. Anthony Huntley, a young postal clerk at the
Daily Express, was walking to work along the footpath under Blackfriars Bridge. His
daily commute had become so routine that he paid little attention to the bridge’s
distinctive pale blue and white wrought iron arches. But a yellowish orange rope
tied to a pipe at the far end of the north arch caught his attention. Curious, he
leaned over the parapet and froze. A body hung from the rope, a thick knot tied
around its neck. The dead man’s eyes were partially open. The river lapped at his
feet. Huntley rubbed his eyes in disbelief and then walked to a nearby terrace with
an unobstructed view over the Thames: he wanted to confirm what he had seen.
The shock of his grisly discovery sank in.1 By the time Huntley made his way to his
newspaper office, he was pale and felt ill. He was so distressed that a colleague had
to make the emergency call to Scotland Yard.2

In thirty minutes the Thames River Police anchored one of their boats beneath
Blackfriars’ Number One arch. There they got a close-up of the dead man. He
appeared to be about sixty, average height, slightly overweight, and his receding hair
was dyed jet black. His expensive gray suit was lumpy and distorted. After cutting
him down, they laid the body on the boat deck. It was then they discovered the
reason his suit was so misshapen. He had stones stuffed in his trouser pockets, and
half a brick inside his jacket and another half crammed in his pants.3 The River
Police thought it a likely suicide. They took no crime scene photos before moving
the body to nearby Waterloo Pier, where murder squad detectives were waiting.4

There the first pictures were taken of the corpse and clothing. The stones and
brick weighed nearly twelve pounds. The name in his Italian passport was Gian
Roberto Calvini.5 He had $13,700 in British, Swiss, and Italian currency. The
$15,000 gold Patek Philippe on his wrist had stopped at 1:52 a.m. and a pocket
watch was frozen at 5:49 a.m. Sandwiched between the rocks in his pockets were
two wallets, a ring, cuff links, some papers, four eyeglasses, three eyeglass cases, a
few photographs, and a pencil. Among the papers was an address book page with
the contact details for a former official at the Banca Nazionale del Lavoro; Italy’s
Socialist Finance Minister; a prominent London solicitor; and Monsignor Hilary
Franco, who held the honorary title of Prelate of the Pope.” Police never found the
rest of the book.


A city coroner arrived at 9:30, two hours after the body’s discovery, and took it
to London’s Milton Court morgue.8 There they stripped the corpse, took his
fingerprints, and prepared for an autopsy. Their notes reflect that the dead man
oddly wore two pairs of underwear.9

London police quickly learned from the Italian embassy that the passport was a
fake. And it took only a day to discover the false name was simply a variation of the
dead man’s real one: he was sixty-two-year-old Italian banker Roberto Calvi,
chairman and managing director of Milan’s Banco Ambrosiano, one of Italy’s
largest private banks. He had been missing for a week. A judge there had issued a
fugitive warrant because Calvi had jumped bail pending the appeal of a criminal
fraud conviction the previous year.

A Roman magistrate and four Italian detectives flew to London to help British
police cobble together a personal dossier.10 Calvi had risen from a middle-class
family to become the chief of the Ambrosiano. He had turned a sleepy provincial
bank into an aggressive international merchant bank. The magistrate informed his
British counterpart that Calvi was no ordinary banker. He was involved with some
of Italy’s greatest power brokers in a secret Masonic lodge and he was a confidant of
the Vatican’s top moneymen.!1

Despite his criminal conviction, the Ambrosiano’s board had allowed him to
remain at the helm of the bank. Although Calvi publicly promised to rescue his
financial empire and restore its reputation, he knew that the Ambrosiano was near
collapse under the weight of enormous debts and bad investments.!2 The bank’s
board of directors had fired him only the day before his body swung from
Blackfriars. 13

The police began patching together how Calvi ended up in London. His odyssey
had begun a week earlier when he had flown from Rome to Venice. From there he
went by car to Trieste, where a fishing trawler took him on the short journey across
the Gulf of Trieste to the tiny Yugoslavian fishing village of Muggia.14 The moment
he left Italy’s territorial waters he became a fugitive. From Muggia, an Italian
smuggler arranged for him to be driven overnight to Austria, where he shuttled
between several cities for a few days before boarding a private charter in Innsbruck
for a flight to London. He spent the last three days of his life in flat 881, a tiny
room at the Chelsea Cloisters, a dreary guesthouse in the capital’s posh South
>>>