In God's Name (19 page)

In France they built a huge block of offices and shops at 90 Avenue des Champs Elysées, another at 61 Rue de Ponthieu, and another at 6 Rue de Berry.

In Canada they owned the world’s tallest skyscraper – the Stock Exchange Tower situated in Montreal – the Port Royal tower,
a 224-apartment block, a huge residential area in Greensdale, Montreal . . .

In the United States they had five huge apartment blocks in Washington, including the Watergate Hotel, and in New York a residential area of 277 acres situated at Oyster Bay.

In Mexico they owned an entire satellite city of Mexico City called Lomas Verdes.

This list of properties is by no means exhaustive. Nogara also bought into General Motors, Shell, Gulf Oil, General Electric, Bethlehem Steel, IBM and TWA. If the shares moved, and moved upwards, it was men like Nogara who created the movement.

Although Nogara retired in 1954, he continued to give the Vatican his unique brand of financial advice until his death in 1958. Scant mention was made of the man’s passing by the Press, as the majority of his activities on behalf of the Roman Catholic Church had been cloaked in secrecy. This one man who demonstrated that, wherever Christ’s Kingdom might be, that of the Catholic Church was most assuredly of this world, was given a memorable epitaph by Cardinal Spellman of New York. ‘Next to Jesus Christ the greatest thing that has happened to the Catholic Church is Bernardino Nogara.’

Starting with 80 million dollars, less the 30 million dollars that Pius XI and his successor Pius XII held back to spend on regional seminaries and parish houses in South Italy, the building of Santa Maria and the massive building projects in Rome, including the setting up of the Vatican library and art gallery, Nogara had created Vatican Incorporated. Between 1929 and 1939 he had also had access to the annual world-wide collection of Peter’s Pence. With the ‘pennies’ of the faithful plus the lire from Mussolini and the Deutschemarks from Hitler, he handed on to his successors a complex array of financial interests worth at a very conservative estimate 500 million dollars controlled by the Special Administration, 650 million dollars controlled by the Ordinary Section of the APSA, and assets in the Vatican Bank in excess of 940 million dollars, with an annual profit from the Bank averaging 40 million dollars going directly to the Pope. In capitalistic terms, Nogara’s service in the cause of the Roman Catholic Church was an incredible success. Viewed in the light of the message contained in the Gospels it was an unmitigated disaster. The Vicar of Christ was now Chairman of the Board.

Four years after Nogara’s death in 1958 the Vatican had urgent need of his expertize. The Italian Government of the day had raised the
spectre of taxing share dividends again. What followed has a direct bearing on a sequence of disasters for the Vatican, including Mafia involvement, financial mayhem and murder. That would begin in 1968.

In any list of years purporting to be the worst in the Church’s history, 1968 should feature very near the top. It was the year of
Humanae Vitae.
It was also the year when The Gorilla and The Shark, as they were known, were let loose on the two Vatican banks. The Gorilla is Paul Marcinkus; the Shark, Michele Sindona; and the events which led to their control of Vatican finances make salutary reading.

Benjamin Franklin said, ‘But in this world nothing can be said to be certain except death and taxes.’ Not many have chosen to argue with that statement. Among the few who have are the men who control the Vatican’s finances. They have made strenuous attempts to eliminate taxes.

In December 1962 the Italian Government passed legislation taxing the profits on share dividends. Initially the tax was set at 15 per cent. Then it went the way of all taxes and was doubled.

The Vatican at first raised no objection to paying the tax, at least not publicly. Privately, through diplomatic channels, it advised the Italian Government that: ‘In the spirit of our Concordat and considering the Law of 2nd October 1942, it would be desirable that a favourable treatment be granted to the Holy See.’ Negotiations had begun.

The secret letter from Vatican Secretary of State, Cardinal Cicognani, to the Italian Ambassador to the Holy See, Bartolomeo Mignone, goes on to detail exactly what the ‘favourable treatment’ should be: tax exemption for a list of departments as long as a cardinal’s arm, including of course the two Vatican banks, The Special Administration and the IOR.

The Vatican wanted to play the market but not to pay for the privilege. The minority Vatican-backed Christian Democrat Government of the day touched its forelock, kissed the Papal ring and agreed to the Vatican’s request. No reference was made to the Italian Parliament or to public opinion. When the minority Government fell, to be replaced by Christian Democrat Aldo Moro with a coalition of Christian Democrats and Socialists, the post of Finance Minister went to Socialist Roberto Tremelloni. He was disinclined to approve what was clearly an illegal agreement made by his predecessor, made furthermore without being ratified by Parliament and, even more important, made eight days after the government had resigned.

Aldo Moro, confronted with a Finance Minister threatening to
resign on the one hand and an intransigent Vatican on the other, sought a compromise. He asked the Vatican to submit a statement of its shareholdings as a prelude to obtaining exemption. Not unreasonably, the Prime Minister felt that the Italian nation should know of just how much money they were being deprived. The Vatican refused to reveal the details and talked loudly about being a Sovereign State. Apparently it is perfectly permissible to exploit the stock market of another Sovereign State and make profits from the exploitation, but the exploited State is not allowed to know by just how much it is being exploited.

Various governments came and went. The issue was discussed from time to time in the Italian Parliament. At one point in 1964 the Vatican indicated just how far they had abandoned Christ’s dictum ‘my kingdom is not of this earth’ and had embraced instead the teachings of Bernardino Nogara: ‘Increase the size of your Company because fiscal controls on the part of Government become advantageously difficult.’ The ‘Company’ to which Nogara was referring was Vatican Incorporated, the ‘Government’ those unfortunates across the Tiber, who were obliged to deal with an off-shore tax-haven in the middle of Rome.

In June 1964, with Aldo Moro yet again in power, the Church of the poor threatened to bring down the entire Italian economy. During negotiations Vatican officals told the Italian Government that if they did not get their way they would throw on to the market every single share they held in Italy. They picked their moment well. The Italian Stock Market was going through a particularly bad period, with shares dropping daily. Suddenly to place on the market the enormous shareholdings of the Vatican would have destroyed the entire Italian economy. The Italian Government, faced with this reality, capitulated. In October 1964 a draft Bill was prepared which would ratify the illegal agreement.

The draft Bill was never put before Parliament, mainly because Governments were collapsing quicker than various Finance Ministers could discover what was in their pending trays. Meanwhile the Vatican continued to enjoy tax exemption. It had not paid tax on its shares since April 1963. In 1967 the Italian Press, specifically the left-wing Press, went on to the attack. They wanted to know why. They also wanted to know how much. They also wanted to know how many shares the Vatican held in their country. Figures began to fly. They ranged from estimates that put the worth of the Vatican investment on the Italian Stock Exchange at 160 million dollars to others that put it at 2.4 billion dollars.

In March 1967, the then Italian Finance Minister, Luigi Preti, in response to questions in the Italian Senate, threw some official light on the Vatican’s shareholdings in Italy. His breakdown showed that by far the biggest Vatican investor was the IOR, followed by The Special Administration. Various other Vatican Departments with high-sounding names such as The Fabric of St Peter’s, The Pontifical Society for St Peter Apostle, the Administration of the Holy See Patrimony, and Propaganda Fide were also revealed as players of the Stock Market. Finance Minister Preti stated that the Vatican owned shares worth approximately 100 billion lire, 104.4 million dollars, at the then rate of exchange. The actual total figure was undoubtedly much higher. Preti’s figures did not take account of the large Vatican investment in State Bonds and Debentures which are completely exempt from any form of taxation. He was dealing only with shares that were liable for the tax levy.

Neither did the Finance Minister concern himself with the fact that under Italian Stock Exchange regulations, the holder of shares is allowed to leave the dividends uncollected for five years. Evidence indicates that the Vatican investments covered by these two aspects were, at the very least, as great as those that had come under the Minister’s province. The real value, therefore, of the Vatican investment in 1968 in Italian shares alone is at the very minimum 202.2 million dollars. Added to that should be the value of the Vatican’s real estate holdings, particularly in Rome and the surrounding districts, and also all non-Italian investments.

Eventually Italy decided to call the Vatican’s bluff: the Roman Catholic Church should, at least in Italy, render unto Caesar what was Caesar’s. In January 1968 yet another transitory Government led by Giovanni Leone declared that at the end of the year the Vatican would have to pay up. With considerable ill grace and comments about its investments being a wonderful stimulus for the Italian economy, the Vatican agreed – but in typical Vatican fashion. Like the prisoner in the dock found guilty, it asked for time to pay in easy instalments.

The whole affair had a number of unfortunate results for the Vatican. Whatever the actual total, everyone in Italy was now aware that the Church of the poor had very large investments producing millions of dollars of annual profit. Further, the six-year-old argument had resulted in many companies being identified as Vatican owned or controlled. The wide portfolio might indicate shrewd capitalism, but it was bad public relations to let the man who complained that his phone/water/electricity/gas were not working, know that he had the
Church to thank for it. Then, most important of all, if the Vatican maintained its heavy investment in Italy it was going to face very large tax bills. Pope Paul VI had a problem. The men he turned to for the solution were The Gorilla and The Shark.

If Sigmund Freud’s conclusion that a man’s entire personality is formed in the first five years of life is correct, then Paul Marcinkus merits particularly close study by the experts. Even if one disputes Freud’s opinion few would argue with the view that environment is certainly a major influence in the formative years.

Marcinkus was born into a city ruled by the Mafia, where gangland murder was an everyday event; where corruption reached from the Mayor to the pre-pubescent youth. It was a city riddled with every conceivable type of crime, in which, between 1919 and 1960, 976 gangland murders were committed and only two of the murderers convicted. It was a city where in the autumn of 1928 the President of the Crime Commission appealed to one man to ensure that the forthcoming November elections were conducted in an honest, democratic manner. The man in question was Al Capone; the city, Chicago. Capone boasted, ‘I own the police’. A more accurate statement would have been, ‘I own the city’. Capone responded to the plea for fair elections. He told the police of America’s second largest city what to do and the police obeyed. The President of the Crime Commission later observed: ‘It turned out to be the squarest and the most successful election day in forty years. There was not one complaint, not one election fraud and no threat of trouble all day.’

Paul Marcinkus was born in the suburb of Cicero, Illinois on January 15th, 1922. The following year Al Capone, confronted with the extraordinary spectacle of an honest Mayor and an equally honest Chief of Police in Chicago, moved his headquarters to Cicero. The population of some 60,000, mainly first and second generation Poles, Bohemians and Lithuanians, became accustomed to the sight of the Mafia in their midst. Capone set up headquarters at the Hawthorne Inn at 4833 Twenty-second Street. Along with Capone came such gentlemen as Jake ‘Greasy Thumb’ Guzik, Tony ‘Mops’ Volpi, Frank ‘The Enforcer’ Nitti, Frankie ‘The Millionaire Newsboy’ Pope.

This was the Cicero in which Paul Casimir Marcinkus grew up. His parents were Lithuanian immigrants. His father earned a living cleaning those windows that were not being smashed by machine gun bullets, and his mother worked in a bakery. Their grasp of the English language was poor. In the classic manner of many of the poor immigrants who sought a better life in the land of the free, they
determined that their children through honest endeavour and hard work should have better lives. Marcinkus, the youngest of their five children, succeeded beyond their wildest dreams. His is the story of local boy makes God’s banker.

Guided by his parish priest, Marcinkus developed a vocation for the priesthood. He was ordained in 1947, the year Al Capone died of syphilis. The Catholic burial of America’s all-time Public Enemy Number One in Chicago was officiated by Monsignor William Gorman, who explained to reporters: ‘The Church never condones evil, nor the evil in any man’s life. This very brief ceremony is to recognize his (Capone’s) penitence and the fact that he died fortified by the Sacraments of the Church.’

Marcinkus went to Rome and studied at the same Catholic University, the Gregorian, at which Albino Luciani had obtained his degree. Marcinkus was equally successful and obtained his doctorate in Canon Law. During his seminarian days, he had used his 6 ft 3 ins of height and his 16-stone of brawn with considerable success on the playing fields. When he went in for the ball during a football match, he usually came out with it. His physical strength was to prove a decided asset in his rise to the top. Clearly some of the lessons learned on the streets of Cicero paid off.