Church's OTHER scandal is all about money.
lawyers are attempting to break the Vatican Bank's immunity, while
our reporter catches up with the Pope's controversial banker-bodyguard
in Sun City, Arizona.
on the tide of the Catholic Churchs sex scandals, as well as mounting
demand for transparency in corporate financial dealings, a new case in
San Francisco attempts to break the Vaticans bulletproof wall of
Attorney Jonathan Levy is hoping
he can pry open the books of the worlds most secretive bank
the Instituto Per Le Opere di Religione (IOR), or the Office of Religious
Works. In other words, he hopes to break the bulletproof wall of diplomatic
immunity that surrounds and protects the Vatican Bank.
Levys case, Alperin v. Vatican Bank, filed in 1999 with the district
court of San Francisco, involves some three hundred plaintiffs seeking
restitution for assets allegedly stolen during World War II by the Ustasha
dictatorship, Hitlers Croatian puppet regime. In addition to slaughtering
Jews, Serbs, and Ukranians in Nazi-style concentration camps, the Ustashi
were also known to have drained millions worth of their victims
personal holdings into the Croat treasury.
Central to the Alperin case
is the claim that the Vatican Bank was instrumental in laundering the
stolen loot after the war, before it was spirited off to several destinations
in South America to bankroll fugitive Nazi sympathizers. Vatican officials
have so far claimed innocence in the affair, but documents recently declassified
at the plaintiffs request, including several CIA memos, have helped
to raise troubling questions about the extent of the Holy Sees involvement.
Also in the arsenal of evidence,
and perhaps most damaging of all, is a U.S. State Department report that
laid the groundwork for the Alperin case in the first place. Based on
investigations undertaken by Under Secretary of State Stuart Eizenstat
in 1998, the report implicated the Vatican in laundering Nazi gold, verifying
what had been until then a widely held but unsubstantiated myth. 200
million Swiss francs (about US $47 million) was originally held
in the Vatican before being moved to Spain and Argentina,
the report reads.
Levy believes the evidence is sufficient to warrant a formal audit of
the Vatican Bank a feat never before been undertaken by anyone
outside the Holy See. And therein lies the heart of this dark matter.
Formally established in 1942 as the official bank of the Vatican state,
the IOR enjoys sovereign immunity under the terms of a pact signed between
Pope Pius XII and Benito Mussolini in 1929. As a result, it doesnt
make its financial operations transparent to anyone but itself. That distinction
has so far allowed the bank to operate with relative impunity (while perhaps
also helping it attract a less than savory clientele). But Levy contends
the Vaticans claim to immunity is no longer morally tenable. Several
lawsuits now pending against the Holy See, involving everything from sex
scandal cover-ups to federal racketeering charges, point to a clear pattern
of corruption on the part of Vatican officials, he says.
All these scandals may be the thing to convince the U.S. courts
that the Vatican is not a hapless victim but a shrewd and corrupt
business organization, Levy said in a recent phone interview. With
so many cases against them, its very difficult for [Vatican officials]
to claim they dont know anything.
This past June, Levy filed a request with the U.S. District court of San
Francisco asking that all the U.S. cases be consolidated in one court,
with the aim of deciding once and for all if the Vatican can actually
be sued in a court of law. If granted jurisdiction to prosecute, Levy
will face the rather Herculean task of deciphering the contents of a vault
fortified by decades of secrecy, Byzantine financial arrangements and
murder. The blueprint he needs, if there is one, may rest in the mind
of an eighty year old man now living in the Arizona desert.
Born in Cicero, Illinois, the birthplace of Al Capone, Archbishop Paul
Casimir Marcinkus was head of the Vatican Bank from 1971 to 1989
a post he ran with a steely sense of pragmatism best captured in his famous
quip, You cant run the Church on Hail Marys. And indeed
he didnt. It was during his tenure that the IOR became embroiled
in several of the greatest financial scandals in history namely
the collapse of a financial empire headed by a Sicilian banker named Michele
Sindona, and, shortly afterwards, the collapse of Banco Ambrosiano, at
the time Italys largest banking group.
in earlier days with HIs Holiness.
The details remain murky to
this day, largely because the Vatican has succeeded in keeping its involvement
shrouded in secrecy. But what is known is that several large banks involved
fraudulently defaulted in the seventies and eighties. It is also known
that organized crime, under the guise of an organization called Propaganda
Due or P2, was involved and that two bankers ended up dead. One, the chairman
of Ambrosiano, Roberto Calvi, was found hanging from a London bridge in
what was initially ruled a suicide. (Now, thanks to the efforts of Calvis
son, his death has been shown in the Italian courts to have been a homicide.)
The other banker, Michele Sindona, died in jail when he drank a cup of
coffee laced with cyanide. In the aftermath of the scandals, millions
of dollars belonging to the Vatican Bank disappeared but not before
the money was traced to Latin America.
Banco Ambrosiano first attracted the suspicion of the Italian Central
Bank in 1981, when it began booking hundred million dollar loans to a
series of companies registered in Nicaragua, Panama, and Perú.
Upon closer investigation, the Italian authorities made a curious discovery:
the Vatican in fact owned the companies, between ten and twenty in number,
most of them little more than an address. Although officials of the Holy
See initially denied any knowledge of ownership, it turned out that the
IOR had earlier, under the authority of Paul Marcinkus, issued letters
of comfort for the companies, using the Vaticans patronage
to vouch for their credibility. It has since been established that the
Vatican did own the companies, but very little has been discovered about
them or the fate of the money they were loaned. Soon after the loans were
identified, Calvi fled Italy and turned up dead in London.
Recent forensic analysis suggests
that he may have been murdered according to the rites of an early Mafia
ritual, whereby the neck of a victim is bound to his hands and feet, causing
him to strangle himself as he struggles to escape. Bereft of its chairman
and besieged by scandal, Banco Ambrosiano quickly disintegrated, sending
shockwaves throughout the international market. The paper trail was lost
in the maelstrom.
Ambrosianos offshore loans have been the center of controversy ever
since. Some claim the money was pocketed by Calvi himself, others that
it was used to pay off the Mafia. Still others say it went toward funding
the Contras or was used to purchase missiles for Argentina during the
Falkland Wars. According to Carlo Calvi, the late Robertos son,
the money could have been used for all these things. In a recent interview
from his office in Montreal, Calvi described the Latin American companies
as an offshore center that the Vatican lent out for laundering
schemes of various kinds, from paying political bribes to funding right-wing
propaganda movements throughout the region.
Some of the companies belonged
to the Vatican, he said, others only seemed to. The whole point
was to be ambiguous and incomprehensible, Calvi asserted, so
that only those inside IOR and Ambrosiano who needed to understand, could.
What wasnt ambiguous, he continued, was that the Vatican was making
a profit from the transactions.
Although Marcinkus has consistently
denied any knowledge of the Panamanian companies, Calvi says such a claim
is impossible. There were just too many transaction, over too long
a period, for Marcinkus not to have known anything, he said. This
worked well for them, and for a long time. That is, until the whole
scheme finally came crashing down.
When it did, the only one who emerged unscathed was the Archbishop Marcinkus.
Ensconced behind the walls of the Vatican, he remained in hiding for seven
years, evoking sovereign immunity to dodge the prosecutorial efforts of
the Italian magistrates. The Italian Supreme Court finally upheld the
Archbishops immunity claim in 1989, effectively freeing him from
prosecution. His good fortune has raised suspicions none ever substantiated
as to his own role in the deaths of Calvi and Sindona. The official
Vatican record, however, asserts that Marcinkus and the IOR were themselves
hapless victims of the intrigue.
Outside observers agree that the Archbishop, while centrally involved
in cultivating relationships with risky businessmen, was probably unaware
of the full implications of his actions. He took advice from a Wall
Street crowd that was far, far over his head, says John Loftus,
author of UnHoly Trinity, a historical exploration of the
links between the Vatican, the Nazis, and the Swiss banks.
Penny Lernoux, who wrote one of the classic accounts of various 1980s
banking scandals, In Banks We Trust, may have summarized Marcinkus
best: The kindest thing to be said of Marcinkus is that he was extraordinarily
naïve not a quality one hopes to find in the sole keeper of
the Vaticans purse strings. According to Carlo Calvi, When
[Marcinkus] came to the bank, the relationships with Banco Ambrosiano
and Sindona were there already. But he cultivated them further
he intensified the relationships.
Jonathan Levy considers Marcinkus the key to unlocking the
secrets of the Vatican Bank. Although the Archbishop postdates the time
period of the laundered Nazi loot, Levy believes he may be the only one
who can speak intimately about the banks operations and what may
have been contained within its vaults. Marcinkus would be a star witness
because the historical operations of the bank are bound by a continuing
course of conduct, Levy asserts. Its all connected.
Marcinkus is aware of it. Some of the money used in Marcinkus
dealings, Levy speculates, may even have been derived from the Nazi loot.
Retired in Arizona since 1990, where no one has heard from him, the Archbishop
is also the only former Vatican bank official not still hiding out
in the Vatican.
Thats why we want to depose him. Hes the first person
wed want to question, Levy said.
But doing so will likely prove difficult. While Marcinkus may be the custodian
of the Vatican banks secrets, he also personifies the difficulties
involved in suing the Holy See. Theres a reason that the Archbishop,
once a fugitive from Italian justice and a man of international notoriety,
now spends his days playing golf and living an otherwise pastoral life
of the utmost quiet. If theres anything conspicuous about him now,
its only his silence.
T he Italian press used to call Marcinkus The Gorilla because
of his six-foot-four-inch frame and his burly Chicago mannerisms
traits that served him well in his service as the Popes bodyguard
prior to running the bank. According to public records, he lived on a
golf course in Sun City, a suburban retirement enclave just twenty miles
northwest of Phoenix.
church in Sun City where Marcinkus gives Mass. Photo/David Montero
The road out to Sun City
cuts through a mostly forsaken stretch of land, bounded on one side by
cinderblock warrens wrapped in barbed wire, on the other by junkyards
piled high with rusted cars. The only sign of human activity is the kind
one might expect amid such roadside blight: the Platinum Club advertised
Baby Dolls in the evening. Mr. Luckys promised nude
dancers. A sign standing lonely in a field advertised an upcoming gun
show. But then a church appeared off to the side, standing in sharp relief
against a depot of yellow school buses lined up in rows like a field of
corn. Incongruously, the dust on the side of the road swept into red dirt,
and from red dirt into grass. And then the walled communities began to
appear, sprouting just like the oases in the desert they were intended
to be. Finally a sign: Sun City. Founded in 1960. The City of Volunteers.
When I imagined the Archbishop, I pictured him always in dark chambers
shut out from the light, large halls with sonorous marble floors tucked
away in some part of the Vatican that no one was ever supposed to see.
So I was surprised when I pulled up in front of a nicely appointed home
of blaring white bricks, on an ordinary street adorned with well-kept
gardens. A large Welcome sign hung just to the side of his
door, in plain view for all the world to see. I pressed the doorbell and
prepared myself to meet the man. But I was suddenly distracted by a rustling
at my feet. When I looked down, I discovered a wounded bird fluttering
by the doorstep. From the amount of feathers piled around him, and his
near inability to fly, it seemed to me the bird must have been there for
some time. I was just thinking that when the door opened.
And then there he was, the Archbishop, epicenter of mystery and controversy,
the priest whose secrets no one outside the Vatican has ever known. He
stared directly at me. It seems you have a wounded bird at your
doorstep, sir, came out of my mouth. The words seemed to put the
Archbishop at ease. Yes, I know, he replied, staring down
at the fledgling bird, before smiling back up at me. I explained that
I was a reporter.
His face did not collapse
into anger. Instead, all the shift of emotion happened in the background,
behind his eyes. His smile straightened to just above a frown, and he
leaned back slightly to say, About what? Whats this about?
Apparently in the middle of this senior paradise, where golf carts are
as common a mode of transportation as Cadillacs, it had been some time
since he had said anything like this.
I explained that I had just a couple of questions to ask him. Oh
no, youve got the wrong guy. I know that guy. Hes not here.
Besides, he never talks. He told me he never talks, he parlayed.
It was the Archbishop, and he appeared just as he had in photos, only
twenty years had of course carved more wrinkles and caused the veins in
his nose to bulge. When I said that no one had heard from the Archbishop
in nearly twenty years, he interjected, Thats a good thing.
Thank God no ones heard from him in a long time.
According to neighbors, the Archbishop is a humorous, well-liked man,
and very close to the people of the town. They say he makes regular trips
to the local hospital to visit the sick. At the Sun City churches where
the Archbishop still gives mass, no one wanted to say much about him except
that he was marvelous. Otherwise, I was told he didnt
do interviews, that there was nothing to be said that I couldnt
hear from the man himself, and that no one wanted to get him in trouble
and therefore they werent going to say anything.
The Sandra Day OConnor U.S. District Courthouse in Phoenix
is an architectural wonder. A glass box encasing a huge open plaza and
a cylindrical courtroom piercing its ceiling, it occupies an entire block
of downtown Phoenix. A spray of water falls from the upper levels to cool
inhabitants below, creating a mist that adds to the overall futuristic
aura of the place. Among the voluminous cases filed there, one under the
name Paul C. Marcinkus has sat unnoticed since 1994.
The file originally piqued our interest because it involved a court in
Geneva, Switzerland, leading us to speculate that the Archbishop might
keep money in a bank account there. Not so. Although the Archbishop has
retired from the Vatican Bank, the Ambrosiano scandal, it seems, refuses
to be retired.
Beginning in June of 1993, a civil court in Switzerland tried to depose
Marcinkus regarding his knowledge of monies transferred between the Vatican
and one of the Ambrosiano banks involved in the financial scandal. Letters
rogatory, or letters requesting an accounting of his affairs while president
at the bank, were forwarded to his address in Sun City, along with fifteen
pages of pointed questions. These include: Can you confirm that
the relations between the IOR and the Ambrosiano group started in the
1960s? and Werent IORs assets at that time higher
than US $2 billion, value 1969?
Much of the information in the file was already widely reported, but of
particular note (and unnoticed by the press) was the outcome of the case:
it was dismissed, by order of the State Department no less, and Marcinkus
was never questioned. Also of interest are letters from the Vatican stating
that the Archbishop, although retired from the Holy See, is still considered
a member of the Consulta of the State of Vatican City in the capacity
of Consultore and is therefore privy to functional immunity
a privilege that may stay with him for the remainder of his days.
The paper trail revealed by the file is also most interesting: after being
forwarded to the Department of Justice, the Vaticans letters were
sent to the U.S. State Department, which evidently weighed in and upheld
the Vaticans claim for immunity. On February 23, 1994 the case was
closed. Although Marcinkus was born in Illinois and lived in Arizona,
his Vatican passport even protected him from U.S. prosecutors in this
case. The U.S. District Attorneys involved did not respond to repeated
requests for comment.
The Vaticans record of stonewalling inquiries may not bode well
for Jonathan Levys case. In fact, the Holy See has filed a request
with the U.S. State Department to have the Alperin case thrown out
once again, on the grounds of sovereign immunity.
Surprisingly, however, that request has yet to be acknowledged, let alone
fulfilled a positive sign in Levys eyes. Its his contention
that the State Department, having itself raised the issue of the Vaticans
involvement with Nazi gold, will want to see the matter through to trial.
Levy is confident that when the State Department does weigh in on the
matter, they will grant him jurisdiction to prosecute. And when
they do, Marcinkus will have to cooperate.
That evening around dinnertime,
the Archbishop didnt want to talk about the Swiss case. He kept
up the third-person routine. Ive been very nice now, and I
told you he just doesnt talk. I understand what youre trying
to do, but Ive already told you, he doesnt give interviews,
After more pressing, he insisted
with a shrug of his long arms, Aw, forget about that guy. Nobody
cares about that guy anymore. Asked about his famous golf habits,
the Monsignor replied, A fella plays a couple of games of golf and
he gets a reputation. If we played one game a week in Rome it was a lot.
Then he began closing the door,
but stopped to ask, Do you play golf? I told him that I tried,
to which he replied, Well, its like I always tell him,
motioning with his head to the inside of the house, Hit em
straight, hit em long, and keep on trying. I thanked him for
the advice. God bless, he said before closing the door.
The Archbishops life now seems a stark contrast to the scandalous
Ambrosiano days. He stands today as one of the few Americans ever to have
attained a position of such authority within the Holy See. Still a practicing
clergyman, he draws a large crowd to his Saturday afternoon mass at St.
Clement of Rome, a Catholic church in Sun City, which lists him in its
brochure as Retired Clergy Assisting.
On a Saturday afternoon, his crimson vestments hanging loosely
on his shoulders, he could be seen walking among the pews in the minutes
before mass, talking with the most elderly of the parishioners sitting
in back. He focused on the nature of faith that afternoon, reading the
story of Peter from Matthew, in his Chicago-tinted drawl. Afterward, he
met with parishioners just outside the entrance to the church, his tall
frame jutting above a ring of children who swarmed eagerly around him.
Meanwhile, Jonathan Levy waits to see if the Archbishop will be called
forth from his desert parish to illuminate the workings of his highly
secretive employer, that restitution might finally be served.
This article was produced in collaboration with the Center for Investigative
Reporting in San Francisco, www.muckraker.org.
© 2002 El Andar Magazine