Render Unto Rome (22 page)

Every time his photograph appeared with Anne and her magic smile, Follieri knew it was good for business. The decidedly less glamorous Andrea Sodano was Follieri Group’s vice president. To call Sodano the brains of the operation would be unfair, since Follieri had the raw materials of a master salesman. But Raffaello was an amateur compared with the worldly-wise Andrea, who had the Vatican connections through his uncle.

The faxes generated from Follieri Group in New York that landed on Giovanni Carrù’s desk in the Congregation for the Clergy did not go unnoticed among other priests in the office. Gossip is the mother’s milk of bureaucracy. For Andrea and Raffaello, the information on American church properties that Carrù sent was worth the investment.

The Follieri Group website listed Raffaello as chairman-CEO and his father, Pasquale, as president. A native of Foggia, in the southern region of Puglia, Pasquale Follieri had done real estate work in Italy. His bio said he was a lawyer for two Italian banks; an expert in arbitration; a member
of “the Court of Cassation” (comparable to the United States Supreme Court); an experienced journalist and a newspaper editor—but no mention of his conviction “in an Italian court [for] misappropriating more than $300,000 from a failed resort company whose assets he had been charged with overseeing,” as the
Wall Street Journal
would report. He appealed the conviction.
⁵

Born in 1978 in Foggia, Raffaello had gone north, to Rome, to study at university. He lived for a time with the actress Isabella Orsini. Pasquale was having legal problems when his son dropped out of college. Raffaello founded Beauty Planet, a cosmetic supplies business with “the prestige hair and body care line Shatoosh.” The Follieri Group website said he sold the company in 2002 and joined a “London-based holding company” for oil trading and diamond mines. No mention that Beauty Planet lost money or the London company tanked.
⁶

Raffaello made his first trip to New York at nineteen. Back in Italy, he hungered for Manhattan, to make his name in the city of cities. He met Andrea Sodano at a party in Rome. He barely had pocket change when he returned to New York in 2003, but Raffaello was fueled by rockets of ambition. Pasquale helped him establish the company. Andrea Sodano played surrogate for “the Vatican” in pitching potential investors and clients. The plan was to buy church properties below market value and develop them for lucrative resales.

When Raffaello and Andrea pulled into Washington, D.C., for the American bishops’ autumn 2005 convention, a beaming Cardinal Francis George of Chicago greeted them in the lobby of the Capitol Hill Hyatt Regency. George’s radiant delight made an impression on Joe Feuerherd, the Washington correspondent for
National Catholic Reporter
. Feuerherd took note of Cardinal Sodano’s nephew. Slight of build, bespectacled, about five foot ten, with salt-and-pepper hair, Andrea had a patina of worldly experience that stood out in high relief from Follieri’s effusive, youthful charm.

As it happened, Joe Feuerherd had worked in the affordable housing field earlier in his career; he knew how lenders and public agencies come together on big-ticket projects to secure funding. Many bishops have staff to manage their dioceses’ real estate holdings; some help develop housing for the elderly and low-income, sometimes under church auspices. The Conference for Catholic Facility Management is a professional association
in its own right. As Follieri headed off to a Hyatt hospitality suite to welcome bishops, priests, and lay staffers, Feuerherd wondered how he got his money. Andrea Sodano, with a flip of the cell phone, had digital photographs to show of Uncle Angelo in the Vatican.
⁷
“When Raffaello wants to meet with the bishop, they put the touch on from the Vatican and they get the meeting,” a church source told Feuerherd. “They’re about as connected as it gets.”

The Follieri Group’s website announced “contracts for the acquisition of over $100 million of church property in three U.S. cities.” Follieri’s business director wrote to a religious order:

Our intention is to purchase properties from dioceses and religious organizations, to renovate them, and if necessary, convert them to new uses, such as housing (lower, middle and upper income, depending on the area) and commercial use …

Because of the Follieri family’s deep commitment to the Catholic church and its long-standing relationship with senior members of the Vatican hierarchy, the Follieri Group understands very well the imperatives of the church and is sensitive to its needs.
⁸

So, Feuerherd asked Follieri, do you plan to use the low-income housing tax credit at 4 percent or 9 percent? Raffaello had no idea, but cheerfully waved off his inexperience—he had staff to handle that.
He’s a huckster
, thought Joe Feuerherd.
⁹
Nevertheless, his article showed restraint.

There were two initial factors motivating the company’s interest in U.S. church real estate, Raffaello Follieri told NCR. First, he said, “The [sex abuse] scandal in America [where] dioceses were paying a lot of money to pay [off] the lawsuits” would necessitate the sale of church property. Next, he said, the changing demographics of the church—from North and East to West and South and from city to suburb—mean that “a lot of the schools and churches that were full of people in the beginning” are now largely unused …

For competitive reasons the real estate industry is hyperdiscreet. Only when a deal is consummated—a process that can take months as prospective purchasers arrange financing and conduct
environmental and other land and structural analysis—do sales records become public.

Even then, in some jurisdictions, religious institutions are exempt from some disclosure requirements. Dioceses and religious orders, meanwhile, are notoriously reluctant to discuss their business dealings, especially when senior Vatican officials are involved.
¹⁰

“This thing smells in my opinion,” a religious order official told Feuerherd, his name withheld. “I wouldn’t get close to these people.” Translation: in the small tent of church politics, you don’t want your boss knowing you’ve scoffed at a pitchman in the person of Cardinal Sodano’s nephew.

“I have worked for the Follieri family for the past fifteen years as an engineering consultant,” Andrea Sodano told Feuerherd by e-mail. “My involvement long predates the Follieri Group’s interest in the States. The Follieri Group’s long and successful track record in real estate speaks for itself.”
¹¹

Melanie Bonvicino, a former
Vogue
model and a New York publicist with many celebrity clients, helped Raffaello in the start-up phase. She calls Andrea Sodano “very calculating, restrained, and absolutely gay. He looked upper class. He sits there, the nephew of the cardinal—what do you think Americans are going to think? It’s the image. Raffaello was like an actor cast in the lead of a movie. He was not particularly intellectual. He was a provincial young man from southern Italy, humble beginnings, but the accent, his good looks, and the clothes helped. He had very good manners, which goes a long way for most people. The entire business was predicated on associations, a veneer of something. He was charming, charismatic. He made people feel
good
 … [Anne Hathaway] was reading blogs all the time. He made
her
dazzling, he made
her
interesting.”
¹²

Richard Ortoli, a Manhattan attorney who drew up the incorporation papers, was so impressed with Raffaello Follieri that he invested close to $100,000; he let Raffaello sleep for a time in his spare room and hosted a party to launch the Follieri Group at the elite, wood-paneled University Club. As Michael Shnayerson reported in
Vanity Fair
, Cardinal Sodano circulated, shaking hands, smiling, his mere presence a Vatican show of support. Through Andrea Sodano, Follieri met princes of the American
church to help gloss his image. Vincent Ponte, a restaurateur and TriBeCa developer took note when New York Cardinal Edward Egan gave Raffaello the grand hello in Filli Ponte restaurant. After conversations with Raffaello, Ponte invested $300,000 in the Follieri Group and lent Raffaello a white Mercedes with a driver.
¹³

In 2004 Raffaello fell in love with the twenty-two-year-old Hathaway. She would become a bigger star as the ingenue magazine secretary in
The Devil Wears Prada
. Her celebrity status boosted his as he opened doors. Philanthropy was a calculated part of his plan. Although the Follieri Foundation did pay for vaccinations for children in Honduras, Raffaello in early 2005 sent a more important gift of 20,000 euros (roughly $34,000 at prevailing exchange rates) to the Congregation for the Clergy via Carrù. On March 8, 2005, Cardinal Castrillón sent a letter of thanks “for those priests who are most in need … Mons. Giovanni Carrù has spoken with me about your very successful professional activities in the building industry which you carry out with seriousness and devotion. I wish you every heartfelt success.”
¹⁴

Priests who bring in donations rise in the eyes of their superiors. As Monsignor Carrù pleased Cardinal Castrillón, Raffaello Follieri had in Carrù the third-ranking undersecretary in the office with files on church properties to be sold. Carrù, a priceless insider for information on real estate that bishops and cardinals had to sell, would have his needs.

“My boyfriend is incredible in a lot of ways,” Hathaway gushed to a fashion writer. “One of the most untouched aphrodisiacs in the world is charity work. Seriously, you want a girl to be impressed, vaccinate some kids, build a house.”
¹⁵
Although Raffaello and Anne did go to Honduras to inoculate poor children against hepatitis, Follieri’s public relations firm made sure the wire services got access to the right photographs. Follieri cast lines to Doug Band, the gatekeeper to Bill Clinton, suggesting he was poised to make a big donation to the Clinton Global Initiative. Soon he had a meeting with Clinton and his pal Ron Burkle, a billionaire real estate developer. Cardinal Sodano vouched for Follieri to Clinton’s office. When reached by the
Wall Street Journal
, Sodano’s “personal secretary [said] the cardinal declines to comment.”
¹⁶

Burkle was so impressed that his private equity fund, Yucaipa Companies (board members included Clinton and Jesse Jackson), which funded
inner-city supermarkets among other projects, agreed to a $100 million stake in Follieri Group LLC, to be paid in installments pegged to specific deals.

Follieri’s early purchases included an abandoned school-and-parish complex in the Camden, New Jersey, diocese. An Atlantic City pastor, Monsignor William Hodge, was “absolutely thrilled” with Follieri and soon went to work for him. The company bought a vacant lot from the Chicago archdiocese and two closed parish facilities in North Philadelphia for more than $1 million.
¹⁷

In Boston, Follieri did not succeed. “He kept saying, ‘I want to
buy,
’ ” recalled Bill McCall, the chairman of the archdiocese’s real estate office. “To me, there was a naïveté there—I’m not sure he ever would have achieved the rezoning that he needed.”
¹⁸

In the summer of 2005, flush with money from Yucaipa, Raffaello Follieri had a $480,000 salary, yet his spending was off the charts. Beyond the $37,000 monthly rent at the Olympic Tower apartment, he had an executive chef, a Trump Tower flat for his parents, his father Pasquale’s orthodontist bills, the dog-walking service, and lavish trips with Anne Hathaway. Among the celebrity-glommers to visit their rented yacht in the Mediterranean was Senator John McCain, a maverick in his own mind. Follieri siphoned off Yucaipa funds for a nonexistent office in Rome. At Follieri Group’s Park Avenue office, the receptionists were Filipina nuns. Raffaello put an altar in one room and stocked black clericals in a closet for Hodge and another monsignor on staff, George Tomashek, to wear for image enhancement on property calls.

In the weekly conference calls with Burkle’s company, Follieri escalated the requests to pay Andrea Sodano, stressing that the Vatican needed the engineering reports in order to approve the sales of church property. The Follieri-Yucaipa partnership paid more than $800,000 to that end. The Follieri office sent payments to Andrea Sodano’s office in Italy (and in some cases directly to the Vatican) by bank wire transfer. The invoices disclose a two-month flurry of payments in 2005 (the money came from Yucaipa’s investors). The Follieri-to-Sodano outlays included $75,000 on August 22, for “Engineering Services”; a September 12 invoice for $15,000 for work in Atlantic City, New Jersey, and $80,000 for Orland Park in the Chicago archdiocese; and on October 21, $70,000 for Canyon City (no state given in the invoice), another $50,000 for
Orland Park, and $75,000 for unspecified “Engineering Services,” making a tidy $195,000 net on that single day. None of the invoices included a paragraph on work done.
¹⁹

An FBI investigation later determined that Follieri wired $387,300 to a layman who worked as an administrator in the Vatican, one Antonio Mainiero. Mainiero’s day job was on the staff of the Congregation for the Causes of Saints. His role, as the FBI determined, was to help cultivate church officials, “show the gardens of the Vatican to Follieri and his guests, and arrange for guided tours of a museum at the Vatican to make it falsely appear that Follieri’s ties to the Vatican provided him with the right of first refusal” on church properties.
²⁰
But to appear as if Follieri had a right of first refusal was an image of mutual design. Follieri’s bank wire transfers to Mainiero in the Vatican spotlight an enterprise whereby Vatican-connected operators profit off U.S. church sales. On November 2, 2005, Follieri wired Mainiero $25,000; on March 1, 2006, a wire for $140,000; on May 16, 2006, a wire for $70,000; on June 30, 2006, a wire for $52,300; and on November 17, 2006, a wire for $100,000.