The Last Supper (17 page)

Details of Britain’s alleged role in the arming of Iran and Iraq on behalf of the United States are contained in a written statement made in March 1991 by Terence Charles Byrne Snr., an American arms dealer and former director of a British company, Allivane International Ltd. Byrne claimed that Allivane International had been set up by his son, Terence Charles Byrne Jnr., in 1982 at the request of William Casey to help him deliver on his ‘October Surprise’ promise to Iran: huge quantities of ammunition, long-range artillery and electronics in return for the delayed release of the American embassy hostages. ‘Allivane and Allivane International Ltd were only two of more than 120 companies which to my knowledge were set up in Europe with the sole objective of supplying Iran and Iraq with ammunition and equipment from Europe,’ Byrne said.

The secret policy of the United States was to supply Iran and Iraq even-handedly, Byrne claimed, with the United Kingdom
being used to furnish ‘every type of defence material, including ammunition, radar, artillery and chemical and biological filling for shells’. The false accounting involved in the operation led to the closure of Allivane International in September 1988, following an investigation by the Dutch police. Byrne and his son were accused of involvement in the Iran–Contra affair and embezzlement, charges that he denied. Byrne claimed that the contracts and false end-user certificates that facilitated the trade were organized by officials in Britain’s Department of Defence Procurement. Allivane International acted as an intermediary and companies such as British Aerospace, Royal Ordnance, ISC Ferranti and Astra Defence Systems supplied the military hardware. False end-user certificates identified Spain, Portugal, Saudi Arabia and Jordan as the recipients of weapons that were in reality destined for Iraq, he alleged. ‘I can document [that] one consignment of three large flasks of radioactive caesium was sent to Denmark from where it was exported to Portugal and onwards via Cyprus and Israel to Iran.’

Britain’s culture of secrecy and dependency on the United States facilitated the illicit trade, Byrne said. Britain was overwhelmingly dependent on the US for its strategic military intelligence, including electronic surveillance, satellite reconnaissance and signal decoding. ‘Although the United Kingdom operates in tandem with the United States, the relationship is not a partnership. The United Kingdom must comply with the decisions of our administration,’ Byrne claimed. As an example of the unequal relationship, Byrne said the Royal Navy was unable to target or launch its Polaris nuclear missiles without the approval of the United States, and US intelligence agencies had free rein in Britain. ‘Our Defence Intelligence Agency and CIA now operate in the United Kingdom with the knowledge and consent of that country’s government. No other country outside the United States is now so effectively under the control of these agencies.’

One of the companies that Byrne alleged was involved in the clandestine trade was Astra Defence Systems. He claimed that the assistant director of the Ministry of Defence’s Procurement Department organized the supply of explosives to Allivane from a company in the Netherlands, ‘with a contact at Astra Defence Systems supervising the manufacture of the ammunition. This was on instructions from the Ministry of Defence, without the knowledge of the board of directors of Astra Defence Systems.’ The ammunition was secretly shipped to Iran using false end-user certificates provided by the MOD, he claimed.

Byrne’s startling allegations are supported by Gerald James, who was chairman of Astra at the time. James believes Astra and a number of other arms companies were used by the secret services as instruments of covert Anglo-American foreign policy and then wound up and dismantled to prevent details of their activities from coming to light. In a speech to a conference of the Environmental Law Centre in London, he said he had become concerned about Astra’s payments to and business with Allivane between 1983 and 1988, describing the latter company as an ‘MI6/CIA front’.

James said he had been encouraged to expand the Astra group by MOD officials who had assured him he would receive generous government contracts, but then failed to deliver on the promises. ‘The companies all had off-the-books secret activities,’ he discovered. Astra itself, he found, was paying far more than its entire turnover on political commissions to mysterious companies with names such as Casalee, Richwhite, Bhojwani, Passive Barriers and the European Pacific Trust. Allivane International was a regular recipient, as was the Italian arms company Valsella. In 1986 Astra paid a total of around £93 million in commissions, according to company records, and this at a time when its annual turnover was not much more than £10 million. ‘We checked, but you can’t deal with it if your own staff deceive you,’ James said, speaking
over coffee in a London club. ‘You may think it ridiculous, but I was reduced to sitting in a corn field with a pair of binoculars to try and see what was going in and out of my facility.’

Banks naturally play a key role in the network of people and institutions that implements the secret foreign policy engendered by the arms trade, an activity that can alter the balance of power between regional contenders and generates rich off-the-books commissions, which can be converted into a further source of covert political influence. Gerald James of Astra recalled his own company’s frequent dealings with BCCI in London and the role of Italy’s Banca Nazionale del Lavoro, a Socialist-controlled bank that channelled some $4 billion towards the Iraqi arms procurement programme while authorities in Italy and the US turned a blind eye. Astra’s US accountants, he noted, were the same firm who provided accountancy services to some of Richard Brenneke’s ventures: Laventhol, Krekstein, Horwarth & Horwarth of New York. Federico Cossio, a professionally relaxed accountant who acted as the Nicaraguan arm of Horwarth & Horwarth, provided accountancy services to Calvi’s Nicaraguan subsidiary, the Banco Comercial. It is not hard to imagine a role for a banker like Roberto Calvi in a similar secret service/arms dealing network to that encountered by James during his Astra days.

‘It is my view Calvi was part of an earlier network in connection with South America and the Caribbean. He had become a liability because he had outlived his usefulness and was a possible security risk,’ he said. James said a connection between Calvi and the CIA would make perfect sense, given Calvi’s active involvement in political and financial activities in Latin America. ‘It was vital for the US to prevent these places from going communist,’ he said. ‘I can’t see it makes any sense otherwise. A man like him wouldn’t have taken these risks unless he felt he had enormous backing. These people have a
terrible habit of pulling the rug from under you and leaving you high and dry.’
⁸

There are other elements, as we shall see, that link Calvi’s death to western intelligence services and the arms trade. One of the most suggestive is a letter purportedly written by Gerald Bull, the military engineer who designed a long-range ‘supergun’ for Saddam Hussein, and who cited two of the dummy companies in receipt of Astra handouts in the same missive. These he said, were shell companies set up by the British government to handle arms projects in the Middle East. The letter is dated 12 December 1989, a time at which Bull was preparing legal action against the British government for its allegedly corrupt role in the clandestine arms market. Three months later he would be dead, shot by an unidentified gunman at the entrance to his Brussels home. Mossad, understandably concerned at his involvement in the arming of Iraq, has always been the principal suspect.

If the exact role of the P2 masonic lodge in recent Italian history remains controversial, there can be no doubt that it played a fundamental role in the rise and fall of Roberto Calvi. Clara Calvi places her first meeting with Licio Gelli in the winter of 1974. Her husband wanted to introduce her to two important people when he invited her to join him for dinner in Rome at one of the restaurants of the Grand Hotel. The important contacts were Gelli and Umberto Ortolani and the group was joined at the meal by four other people: a government minister, a businessman and two senior civil servants. All seven men were members of the secret Propaganda Due masonic lodge. Her husband’s first meeting with Gelli and Ortolani dated back to the spring of 1973, according to her memoir, and was the result of his pressing need for political protection. Two years earlier the family’s summer holiday had been ruined by a financial scandal affecting the Venice branch of the Banco Ambrosiano and another small Venetian bank, the Banco di San Marco. Calvi had managed to sort out the crisis but it had underlined his need for political patrons. Gelli and Ortolani had later made contact, saying they had been partly responsible for his problems but were prepared to give him a hand because they had been impressed by the way he had defended himself.

Documentation found in Gelli’s possession in March 1981 showed Calvi had joined the World Organization of Masonic
Thought and Assistance in Rome on 15 July 1975, receiving membership card number 020. A month later, on 23 August 1975, he was initiated into the P2 lodge in Geneva, paying a subscription fee of 530,000 lire (around £250). Three months after that he would become chairman of the Banco Ambrosiano. Calvi’s entry in the confiscated membership lists showed only that he had paid his dues from 1977. Geneva was the location chosen that same month of August 1975 for the initiation of Alberto Ferrari, the managing director of the Banca Nazionale del Lavoro, and also for Prince Victor Emmanuel of Savoy, heir to the abolished Italian throne, who lived in the Swiss city – just across the road, as it happens, from Hans Kunz, the man who would provide the private plane that carried Calvi on his final journey to London. Victor Emmanuel and Hans Kunz shared a predilection for business activities in Iran and, according to some accounts, had even been in business together.

Calvi himself attributed his decision to join the lodge specifically to his need for protection. He told magistrates that he had been impressed by Gelli’s business initiatives and his claim that he operated under the aegis of the Grand Mother Lodge of London. ‘Gelli gathered people around him, and he managed to gather me too, because of the sense of protection that he gave to membership of the P2 lodge,’ he said. Attempting to extend that helpful patronage to business circles in the City of London, he reportedly joined London Lodge 901 at about the same time.
¹

Appropriately enough, a certain amount of confusion continues to surround the exact date and circumstances under which Calvi began his liaison with Gelli. Michele Sindona claimed he was responsible for introducing the two men over the telephone when Gelli visited him in New York in 1975. Gelli and Calvi met in Rome the following week, Sindona claimed in an interview with the author Nick Tosches. The by now bankrupt Sicilian financier asked Gelli to pump Calvi
for the money he considered that the Banco Ambrosiano chief owed him. ‘Calvi, who in his worldly impotence was ever eager to believe in the occult powers of others, was quite swept away by Gelli at their first meeting. He believed that Gelli and P2 could be of inestimable help to him in Italy and abroad,’
²
Sindona said. Another version has the men meeting for the first time at a Christmas dinner in Rome as early as 1969, a social occasion hosted by Umberto Ortolani and attended by Michele Sindona as well. Ortolani’s own recollection, in an interview with
L’Espresso
news magazine, in the edition of 25 December 1983, was that Gelli had first introduced him to Calvi in 1974, at the Intercontinental Hotel in Geneva.

The P2 venerable master’s taste for secrecy was apparent in his dealings with Calvi. The banker had a special phone installed at his country home to receive calls from Gelli and Ortolani. Ever the one for discretion, Gelli would identify himself as ‘
Signor Luciani’
when he called. Clara took an almost instant dislike to her husband’s new friends. She would refer to them as the ‘Cat’ and the ‘Fox’, two cunning characters from
Pinocchio.
In Collodi’s fable the two villains manage to separate Pinocchio from his treasure by convincing him that his gold coins will grow into bushes and multiply if he plants them in a magic field overnight. Exactly the same fate befell Roberto Calvi for accepting the financial advice of the crafty P2 duo. The dream of multiplied wealth and power that they encouraged led him straight to bankruptcy, and – unlike Pinocchio – to death.

The rest of the world’s first real meeting with Licio Gelli and his secret organization dates from 17 March 1981. At 9 a.m. on that morning officers of the Milan finance police raided Gelli’s home on a hillside outside the Tuscan town of Arezzo, and his office in a mattress factory nearby. They were acting on the orders of Milan magistrates investigating Michele Sindona’s mysterious disappearance to Sicily two years earlier and were brought to Gelli’s door by the admissions of Joseph
Miceli Crimi, the Sicilian-American doctor implicated in Sindona’s fake kidnap. What the magistrates, Giuliano Turone and Gherardo Colombo, were probably hoping to find was Sindona’s fabled ‘list of 500’. Instead they found something even more explosive: in a locked suitcase ready to be spirited abroad from Gelli’s office in the Giole mattress factory in Castiglion Fibocchi was a list of 962 members of his secret, elite lodge. Calvi’s name was among the ‘C’s, Sindona’s listed under ‘S’. They were in good company. There were 43 members of parliament, including four cabinet ministers, plus the heads of all branches of the armed services and of the principal intelligence agencies. There were businessmen, journalists and public officials, but Gelli appeared to have a particular predilection for the world of finance. Some 119 lodge members were distributed between the treasury and finance ministries and the banks. The director of currencies at the foreign trade ministry – potentially important for bankers seeking permission to send money abroad – was also apparently a P2 ‘brother’. Thirty-seven names on the list were drawn from the finance police, the body carrying out the raids on Gelli’s properties; among them the commander of the corps, General Orazio Giannini, who telephoned while the search was under way to recommend the maximum discretion.