In God's Name (27 page)

During the intervening years a curious situation pertained. The shares never left the Vatican Bank. On October 29th, 1971, the date on which the final 5 per cent was sold to Calvi, the shares – which were still held in their entirety by the Vatican Bank – were re-assigned to Zitropo, a company owned at that time by Sindona. Later Zitropo became firstly a Calvi-owned asset and subsequently a Vatican Bank asset. And the shares of Banca Cattolica continued to remain in the Vatican safe. It is little wonder that as late as March 1982 the then Archbishop Paul Marcinkus would talk of ‘our investments in Banca Cattolica, which are going very well.’

When the Milan Stock Exchange began to fall in 1974, among those to be hurt was Banco Ambrosiano. Calvi was particularly vulnerable. The main ingredient in international banking is confidence. It was
known that he was a close associate of Sindona. When Il Crack occurred, the banking world began to take a more cautious view of The Knight. Credit limits to Ambrosiano were cut back. Loans on the international market became difficult to obtain and, most ominous of all, the demand by small investors for the Bank’s shares began to diminish, with a consequent drop in the price. Magically, at what was fast becoming the eleventh hour for Ambrosiano, a company called Suprafin SA with a registered office in Milan, entered the market. This finance house began to display supreme confidence in Signor Calvi. It bought shares in his bank daily and before there was time for the name Suprafin to be written on the list of shareholders, the shares were resold to companies in Liechtenstein and Panama. Confidence in Calvi began to return and Suprafin kept on buying. In 1975, 1976, 1977 and 1978, throughout all of these years Suprafin continued to display massive faith in the future of Calvi’s bank – 50 million dollars’ worth of faith.

Suprafin clearly knew something no one else did. Between 1974 and 1978 Ambrosiano shares continued to fall, yet Suprafin acquired over 15 per cent of the bank. Suprafin was officially owned by two Liechtenstein companies, Teclefin and Imparfin. In theory these were technically owned by the Vatican Bank. That was the technical theory. In practice Suprafin was owned by Calvi. Consequently, with the complete knowledge of the Vatican Bank, he was supporting the market value of Ambrosiano shares by massive purchases – a totally illegal activity. The money to finance the fraud came from international loans made to the Luxembourg subsidiary and from the parent bank in Milan.

The Vatican Bank received huge annual payments for providing the facilities for The Knight to operate a gigantic international fraud. This money was paid in a variety of ways. All Vatican deposits with Ambrosiano banks received interest payments of at least 1 per cent higher than other depositors. Another method was for Ambrosiano to ‘buy’ shares from the Vatican. On paper the Vatican Bank would sell a block of shares to a Panamanian company at a price approaching 50 per cent more than the shares were actually worth. The shares would never leave the Vatican portfolio and the bank that Marcinkus controlled would be millions of dollars better off. The Panamanian company, usually with a capital of only a few thousand dollars, would borrow the millions from Banco Ambrosiano Overseas in Nassau where Marcinkus was a director. The Nassau branch would have been loaned the money initially by the Luxembourg company, who in turn had borrowed the money from international banks.

Calvi was obviously hoping against hope that the price of Banco Ambrosiano shares would eventually pick up so that he could offload them. By 1978 he was walking on a knife-edge. As if this entire operation was not enough to keep the banker awake at nights, he was also contending with the problems of laundering Mafia money. Allied to that were the constant demands being made by P2 for funds. This involved further embezzlement. He was also suffering from the aftereffects of a blackmail campaign by Michele Sindona.

While The Knight was busy embezzling millions of dollars to maintain fraudulently the share price of Ambrosiano, The Shark had been far from inactive. Sindona reminds one forcibly of a character from a Pirandello play where all expectations may prove to be illusion. The man exudes theatre. A fiction writer would baulk at such a creation. Only real life could create Michele Sindona.

Licio Gelli continued to repay Sindona’s commitment to P2. When the Milan public prosecutor’s office applied for The Shark’s extradition in January 1975, the American judicial authorities asked for more information, including a photograph of Sindona. They also demanded that the extradition papers be translated into English. The Milan office completed a new request running to 200 pages and sent it to the Ministry of Justice in Rome, for translation and dispatch to Washington. It was eventually returned with the observation that the Justice Department in Rome could not manage the translation. This despite the fact that they have one of the largest translation departments in Italy. The American Embassy in Rome declared that it had no knowledge of the extradition request. Licio Gelli had friends in many places.

Sindona meanwhile was living in his luxurious Hotel Pierre apartment in New York. He retained the Richard Nixon/John Mitchell law firm to help him fight extradition. He dismissed his Italian problems when questioned by reporters:

The Governor of the Bank of Italy and other members of the Italian establishment are plotting against me. I have never done a single foreign exchange contract in my life. My enemies in Italy have swindled me and I hope that one day justice will be done.

In September 1975, when photographs of the dinner-jacketed Shark shaking hands with New York’s Mayor Abraham Beame appeared in the Italian Press, there was outrage from at least some quarters in Italy.
Corriere della Sera
observed:

Sindona continues to release statements and interviews and continues, in his American exile-refuge, to frequent the jet set. The laws and mechanisms of extradition are not equal for all. Someone who steals apples can languish in prison for months, perhaps years. An emigrant working abroad who does not reply to his call-up papers is forced to come back and face the rigours of the military tribunal. For them, the twists and turns of the bureaucracy do not exist.

In Italy small savers appointed lawyers in an attempt to salvage some of their money from the Sindona wreckage and the Vatican declared a ‘serious budget deficit’. In the USA The Shark hired a public relations man and went on the University lecture circuit.

Whilst senior executives of the Franklin National Bank were arrested and charged with conspiring to misapply millions of dollars by speculating on the foreign exchange, Sindona was telling the students of Wharton Graduate School in Philadelphia;

The aim, perhaps an ambitious one, of this brief talk is to contribute to restoring the faith of the United States in its economic, financial and monetary sectors, and to remind it that the free world needs America.

Whilst he was being sentenced by a Milan court to three-and-a-half years’ imprisonment, having been found guilty on 23 counts of misappropriating 10 million pounds, he was moralizing to the students of Columbia University.

When payments are made with the intent of evading the law in order to obtain unfair benefits, a public reaction is clearly called for. Both the corrupted and the corrupter should be punished.

Whilst he planned the blackmail of his fellow P2 member and close friend Roberto Calvi, he painted a visionary image to students who yearned to emulate him.

I hope in the not too distant future, when we will have been in contact with other planets and new worlds in our myriad galaxies, the students of this University will be able to suggest to the companies they represent that they expand to the cosmos creating
‘cosmos-corporations’ which will bring the creative spirit of the private entrepreneur throughout the universe.

Sindona was clearly in earnest. He arranged a number of meetings of the American Mafia, Cosa Nostra and the Sicilian Mafia and attempted to persuade them and Licio Gelli that they should organize the secession of Sicily from Italy. He had previously, in 1972, been a conspirator in the so-called ‘White Coup’ – a plot to take over Italy. The Mafia were sceptical and Gelli contemptuous. He called the idea ‘mad’ and told Sindona that secession of Sicily could only take place with the support of the military and political members of P2, and that the members were biding their time. He advised Sindona: ‘Put the plan in the “Pending” File.’

In September 1976 the Italian authorities finally succeeded in having Sindona arrested in New York. It was the first significant breakthrough they had achieved in the long fight for his extradition. Sindona expressed surprise that ‘the United States chose now, some two years after the false charges were lodged against me in Italy, to begin these extradition proceedings. I want to emphasize that the charges were made in Italy on the basis of little or no investigation and, on their face, are false.’ He was subsequently released on 3 million dollars bail but by 1977 the net was finally beginning to close. A Federal Grand Jury began investigating alleged violations by Sindona involving the collapse of the Franklin Bank.

Sindona used all the weapons at his disposal. Important people went to court to speak for The Shark as he fought extradition. Carmelo Spagnuolo, President of a division of the Supreme Court in Rome, swore an affidavit testifying that the charges against Sindona were a Communist plot. He also swore that Sindona was a great protector of the working class, that the people investigating Sindona in Italy were at best incompetent and were controlled by political persecutors. For good measure he advised the United States Court that many members of the Italian judiciary were left-wing extremists and that if The Shark was returned to Italy he would be murdered. Carmelo Spagnuolo was a member of P2.

Licio Gelli also swore an affidavit on behalf of Sindona. He noted that he himself had been accused of being a ‘C.I.A. agent; the chief of the Argentine Death Squad; a representative of the Portuguese secret service; the co-ordinator of the Greek, Chilean and West German secret services; the chief of the international movement of underground Fascism, etc.’

He made no attempt to deny these various allegations, and offered no evidence that all of them or any of them were ill-founded. He attributed them to ‘the rise of Communist power in Italy’. On oath he then went on to make a few allegations of his own including: ‘Communist influence has already reached certain sectors of the Government, particularly the Justice Department, where during the last five years there has been a political shift from the centre towards the extreme left’. Again he offered no evidence. Gelli asserted that because of ‘left-wing infiltration’ Sindona would not receive a fair trial in Italy and would probably be murdered. He continued: ‘The Communists’ hatred of Michele Sindona is due to the fact that he is an anti-Communist and that he has always been favourable to the free enterprise system in a democratic Italy.’

On November 13th, 1977, Sindona gave a demonstration of his version of the free enterprise system at work in democratic Italy. The planned blackmail of Calvi was activated and posters and pamphlets began to appear all over Milan. They accused Calvi of fraud, exporting currency, falsifying accounts, embezzlement, tax evasion. They quoted secret Swiss Bank Account numbers belonging to Calvi. They detailed illicit deals. They referred to his Mafia links. It became more interesting to read the walls of the city than
Corriere della Sera.
Sindona, who had orchestrated this public washing of Calvi’s dirty laundry, had come to the conclusion that his fellow P2 member and former protégé Roberto Calvi was not taking a sufficiently active interest in The Shark’s predicament. Sindona had appealed to Licio Gelli, who agreed that Calvi should make a ‘substantial contribution’ to Sindona’s war chest. Gelli offered himself as an intermediary between his two masonic friends. This ensured that they both paid Gelli a commission.

Roberto Calvi dipped into his pocket yet again, or more accurately dipped into the pockets of those who banked with him. Half-a-million dollars were paid by Calvi into Banca del Gottardo, Lugano in April 1978. It was placed in a Sindona account.

The man who had organized the poster and pamphlet campaign on behalf of Sindona, Luigi Cavallo, had gone about his task with enormous relish. Cavallo had operated for some time in Italy as a one-man smear campaign unit that, like all professional whores, sold itself to the highest bidder. The posters were followed on November 24th, 1977, with a letter to the Governor of the Bank of Italy, Paolo Baffi, listing all the accusations which had appeared on the walls of Milan. It also referred to an earlier communication which had given
photocopies of Calvi’s Swiss Bank accounts. Cavallo concluded his letter to the Governor with the threat to sue the Bank of Italy for failure to carry out its legal duties unless they began to investigate the Banco Ambrosiano.

This letter shows the fundamental difference between a first-division criminal like Sindona and a third-division crook like Cavallo. The letter was Cavallo’s idea and was written without reference to Sindona, who would never have authorized such action. You may steal eggs from the golden goose but you do not kill it, at least not while it is still capable of laying.

The same week in April 1978 in which Sindona received his half-a-million-dollar pay-off, officials from the Bank of Italy who, for a number of years had retained the gravest reservations about Banco Ambrosiano and Roberto Calvi, moved into the bank in force. The twelve men had been carefully chosen by Paolo Baffi and his senior colleague Mario Sarcinelli. The man selected to head the inspection was Giulio Padalino. Unfortunately for Calvi, Padalino was incorruptible.