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Times Literary Supplement
Sunday, April 11th, 2004


The Vatican Exposed: Money, Murder, and the Mafia

by Paul L Williams

God's bankers

A review by John Plender

One of the more puzzling questions of the past century is how the Vatican came to be enmeshed in so much fraudulent financial activity. Michele Sindona and Roberto Calvi, Mafia-connected bankers, were trusted money managers for the Holy See who controlled the Vatican's investments. The cigar-chomping American Archbishop Paul Marcinkus avoided Italian investigators by making himself safe from extradition in the sovereign confines of the Vatican City. From the collapse of Banco Ambrosiano in 1982 to the insurance frauds carried out more recently by Martin Frankel in the United States, the footprints of Vatican officials were constantly in evidence.

Yet the immunity provided by the Lateran Treaty of 1929 turned them into clerical equivalents of McCavity, the great feline vanishing act. None was ever brought to book. A lack of transparency in finance, which marked the affairs of the Holy See and the Vatican Bank from the outset, is usually an invitation to trouble. And against the background of the Cold War, officials of the Roman Catholic Church made dubious friends in pursuit of a wider anti-Communist agenda, much as successive US administrations befriended murderous dictators in Africa and Latin America in their struggle against the Soviet Union. The purpose of P2, the notorious Masonic lodge which numbered Catholic bishops as well as Sindona among its members, was to promote right-wing, anti-Communist government. It is also relevant that the Catholic Church, notwithstanding its claims to universalism, was centrally administered in the immediate post-war period largely by Italians. Like the Italian Christian Democrat politicians whom they funded, many Vatican officials felt that the end justified the tawdry means where the anti-Communist crusade was concerned. There is clearly room for a comprehensive account of the Church's financial wheeling and dealing since Pius XI struck his pact with Mussolini in 1929. Paul L. Williams, a former consultant to the FBI with academic qualifications in philosophy and religion, brings more gusto than finesse to the task. His concern in The Vatican Exposed is primarily with the how rather than the why, which is not, in itself, a criticism. But while the book pulls together the main strands of the story, it is based largely on secondary sources and is badly flawed. Not untypical of the style is an assertion that the way to do lucrative business in modern Poland is to go through John Paul II. This is based on hearsay evidence from an unnamed businessman described as an unofficial ambassador to the Vatican with links to organized crime. Allegations that the Vatican Bank is a world leader in laundering underworld cash, while all too plausible, are lifted uncritically from a report in the Daily Telegraph. Vatican involvement in an online Mafia banking scam is sourced, bizarrely, to the Xinhua News Agency. Italian names are endlessly misspelt.

Yet the more fundamental weakness is that Williams is ill at ease with financial detail. When the Special Administration of the Holy See was established by Pius XI on the ratification of the Lateran Treaty, we are told of how the Vatican's worthless securities in the Banca di Roma were turned into a $632 million fortune. The account of this alchemical transaction is frankly garbled. Elsewhere, we learn of heavy buying that inflated the stock-market value of a company wholly owned by Roberto Calvi. If it is possible to have a buying frenzy in a company wholly owned by one man, even a man known as God's banker, we surely need to be told how this remarkable trick was done. The New York Stock Exchange, meantime, is said to have collapsed in 1929, which will come as news to this durable institution.

Williams, who begins each chapter with familiar biblical quotes on the difficulty of reconciling God and Mammon, has no difficulty in making the charge of hypocrisy stick. But he omits to say anything in mitigation, failing, for example, to point out that in 1984 the Vatican paid the National Westminster Bank, the Midland and other creditors of the failed Banco Ambrosiano some $244 million in recognition of its moral involvement in Calvi's fraud.

Some may also feel that if the opaque dealings of Vatican financiers allowed money to be channelled to Solidarity in Poland in the early 1980s, then John Paul II's reluctance to face up to the financial crookedness in the Church's midst was understandable, or even justifiable, if it hastened the collapse of the Berlin Wall. We will have to wait a little longer for the definitive account of the Vatican's compact with Mammon. And it has to be said that, for want of greater transparency and accountability, there is a serious risk that this murky tale will run and run.

John Plender writes for the Financial Times and is author of Going off the Rails: Global capital and the crisis of legitimacy (2003)

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