You Can't Run the Church on Hail Marys: The Paradox of Archbishop Paul Marcinkus

Archbishop Paul Marcinkus of Chicago, the longtime head of the Vatican Bank, was one of the most controversial figures in the recent history of the Church.  To the majority of observers, Marcinkus was an overambitious schemer who was also the primary villain in one of the more spectacular scandals in Church history.  However, to others, Marcinkus was a genuinely decent man who was simply taken advantage of by unscrupulous figures in the Vatican.  Neither portrait is an accurate one.  Our goal in this paper is to examine three main events of Marcinkus’ career at the Vatican Bank: his involvement with a 1972 case where the Vatican Bank was accused of being involved in a counterfeit bond scheme; his dealings with the financier Michele Sindona; and Marcinkus’ decision to issue letters of comfort to Roberto Calvi in 1981 and, through that examination, to arrive at as objective of an assessment of Marcinkus as possible.  

 
YOU CAN’T RUN THE CHURCH ON HAIL MARYS: THE PARADOX OF ARCHBISHOP PAUL MARCINKUS

AN INSTITUTION THAT OPERATES UNDER ITS OWN RULES

When Pope Benedict XVI resigned the papacy in February of 2013 and called for the election of a new Pope, large numbers of the cardinals participating in that conclave were clear that they wanted a change of direction in two areas: the governance of the curia in general and the operations of the Vatican Bank in particular.  Benedict himself had initiated reforms at the Bank in his last years as Pope by inviting Moneyval, the Council of Europe’s anti-money laundering agency, to examine the Vatican’s finances and, in one of his last decisions as Pope, to bring in a new president of the Vatican Bank. Continuing these reforms has been one of the focal points of Francis’ papacy.  Indeed, one of Francis’ main goals has been “to get the Vatican Bank off the gossip pages and to make it boringly successful.”

The problem for Francis and his reform efforts is that the Vatican Bank has seldom been boringly successful and has continually made regular appearances on the gossip pages.  Probably the greatest single source of fodder for those gossip writers from the Vatican Bank was “the granddaddy of all scandals” when the Vatican was required to pay some $240 million dollars in 1984 for their involvement with the collapse of the Banco Ambrosiano, which was, at its demise, the second largest bank in Italy. This case also involved the very suspicious death of Roberto Calvi, who had been the chairman of the Ambrosiano and who also had significant ties to the Vatican.  The Vatican has continually denied legal, but not moral, responsibility in this case, although their denials have persuaded very few people.  This case and the Vatican Bank as a whole have been the subjects of many books, including Gerald Posner’s bestselling God’s Bankers: A History of Money and Power in the Vatican, which was published in early 2015.  

Present in all these issues have been two of the great challenges for the Church in the modern world: its long-standing opposition to modern financial practices and an almost unalterable insistence that the Church could exist financially using practices that are not accepted anymore or in any other location.  These problems, of course, did not start with the Calvi case.  As one example, until 1887, Pope Leo XIII kept the entirety of the Church’s readily available funds, which were in the form of gold coins and stored in a trunk, under his mattress. The Vatican’s finances did not get much better or more professionally managed as the twentieth century dawned.  Indeed, more than once in the early decades of the twentieth century the Vatican nearly went bankrupt, and was only bailed out by Catholics from the United States. It was not until 1942, at the height of World War II, that Pope Pius XII, with the hope of bringing more professional management to Church finances, formed the Vatican Bank or the Istituto per le Opere di Religione, or IOR.  However, the bank was unlike any other bank in the world: it was not required to make a profit, answer to outside share holders or to any outside figure other than the Pope.  When asked to describe the Vatican Bank, Archbishop Paul Marcinkus, the head of that bank from 1969 until 1989, responded by saying that while “In Italy, everybody considers us to be a bank,” in actuality “we are an institute which operates with its own procedures.”

Archbishop Marcinkus, who was at the center of the Calvi scandals, has certainly been accused of following his own procedures.  Even after his death in 2006, the assessments of his life and career at the Vatican Bank have been almost entirely negative.  Charles Raw in The Moneychangers writes of Marcinkus that: “Marcinkus was indeed ‘the villain in the Calvi affair – not, indeed, the only villain, but the crucial accomplice who made the fraud possible.  He thereby cost shareholders, creditors and the Italian taxpayers over a billion dollars.” David Yallop in his In God’s Name agrees with this assessment: “It is abundantly clear that in the mid-1970s Calvi and Marcinkus devised a scheme that spawned a multitude of crimes.” Yallop takes his condemnation of Marcinkus one step further and even accuses Marcinkus of being part of a conspiracy of six that sought to murder Pope John Paul I. Even the well regarded God’s Bankers concludes by remarking that it is a good thing that Marcinkus would probably not recognize the Vatican Bank if he were alive today. 

However, is this all that there is to the story of Paul Marcinkus, undoubtedly one of the more significant figures in the Catholic Church in the second half of the twentieth century?  Was he simply an overly ambitious prelate that took advantage of being given a job that gave him immense power in the Church?   It would seem that that conclusion is not entirely true. For one, there are significant concerns about the books mentioned above, even including the well regarded God’s Bankers and what the author chooses to report or ignore about Marcinkus.  Further, the highly regarded George Weigel describes Marcinkus’ involvements in the Calvi scandals as being caused by “inexperience, compounded by naivete and overextension” and nothing more. Andrew Greeley indicates that the ill will towards Marcinkus that comes out very strongly in the writings of his detractors is based on “attempts by the Italian curialists to oust a non-Italian from the very important post he holds.” Tom Biamonte, the FBI agent in charge of investigating a counterfeit bonds case in 1972 in which there was allegedly involvement by the Vatican Bank, agrees with Greeley and goes even further in his defense of Marcinkus: “…let me give it to you for the record…I have a reputation for scrupulous honesty…And at the time I left the FBI in Rome in 1978 there was nothing in the files of the Federal Bureau of Investigation that would even create a scintilla of evidence that Archbishop Marcinkus had any connection with any wrongdoing…I got the distinct impression in the latter years that there are a lot of people out to get Marcinkus, because if they can discredit him they can discredit Pope John Paul II.”

There are also many stories about the kindness and decency that Marcinkus would show to friends and to perfect strangers alike.  Many priests from Marcinkus’ archdiocese of Chicago reported that on their trips to Rome they would call on Marcinkus and that he was invariably polite and very helpful to them.  Newly ordained priests in Chicago would invariably be told that if they made it over to Rome that they should look up Marcinkus because he would always make time for them and would help Chicago priests in any way that he could.  Marcinkus would also make time for “tedious priestly duties like hearing confessions” and that he was an “unpretentious prelate whom even younger clerics turn to first for advice or assistance.” The future Archbishop John Neinstadt recounts how, when he was a young priest in Rome in 1978, he had his car stolen.  The person that he turned to for help was Marcinkus and, even though the two had only known each other for two weeks, Marcinkus went around Rome for the “entire night traveling to police precincts” with Neinstadt. Marcinkus’ friends would also frequently recount stories of the Archbishop giving water to workers during the extremely hot summer months in Rome and how, when Cardinal Ratzinger first moved to Rome, Marcinkus gave him an entire wardrobe.

So, then, who was Archbishop Marcinkus?  Was he the overambitious schemer or the genuinely decent man who, through his lack of experience, was taken advantage of by unscrupulous people inside the Vatican?  The answer, as with all questions like this, is most realistically somewhere in the middle.  Our purpose in this paper, then, is to get at exactly who Archbishop Marcinkus was in as objective of a way as possible.  Pope John Paul II felt that it was too bad that Marcinkus’ “well-intentioned” mistakes obscured his many good deeds in the media’s eyes and this should not be the case. By the same token, though, Marcinkus’ good deeds should not be able to obscure the negative consequences that his actions or lack of action caused.

We will focus on three key events of Marcinkus’ career.  First, we shall take up the curious case in 1972 in which the Vatican Bank and Marcinkus personally were accused of being involved in a situation where an Italian businessman tried to deposit fifteen million dollars worth of phony bonds in his personal account.  Then, we shall look at Marcinkus’ connections with Michele Sindona, who was a major figure in Vatican finance and also in the Italian underworld and whose collapse in the middle of the 1970s lost the Vatican upwards of one hundred million dollars. Last, we shall spend significant time looking at the “Letters of Comfort” that Marcinkus issued to Calvi in 1981.  This case is an extremely complex one and it is not possible to fully determine what the motivations of Marcinkus were in issuing the letters without seeing his personal papers.  However, what is apparent is that Marcinkus’ actions in this case, at a minimum, while not illegal, did not meet the moral responsibility that working for the Church obliged him to meet.  We will examine all of these incidents in turn, with the goal of showing that the truth of Marcinkus’ character and his career is most likely in between the versions of both his detractors and his supporters but is almost certainly closer to the view of his detractors.

THIS DEAL WOULD BE MADE WITH HIS PEOPLE IN THE VATICAN: MARCINKUS AND THE 1972 COUNTERFEIT BONDS CASE

By the time of the counterfeit bonds case in the early 1970s, the career of Archbishop Marcinkus had been ascending for some time, despite his not being Italian and his not being what the Italians expected a priest to be.  In 1970, during the visit of Pope Paul VI to Manila, Marcinkus and the Pope’s secretary had potentially saved the Pope’s life by preventing a man with a butcher knife who had gotten near the Pope from doing any harm. That same year, Marcinkus managed to extricate Paul from a crowd that stoned his motorcade in Sardinia as well as near Castel Gondolfo when the Pope was nearly hit in the head with a brick thrown by a heckler. For these actions, Marcinkus was awarded a special commendation medal by Pope Paul.  These evens showed the Pope that Marcinkus was someone on whom the pontiff could rely.  As a result, when, in 1971, Pope Paul needed someone that he could trust at the helm of the IOR, he made the unqualified Marcinkus the official President of the Institute for Religious Works.  The following year, Marcinkus’ hometown paper, the Chicago Tribune, went beyond all of this and noted that Marcinkus “was in the news as an outside possibility for election to the papacy.  A highly speculative list of successors to Pope Paul VI was drawn up on the basis that the pope might retire when he turns 75 in September.”

The idea that Paul Marcinkus could be the Pope was, at the same time, both laughable and horrifying to the Italians in the Curia.  Marcinkus, clearly, did not fit their definition of what a priest ought to be.  Indeed, the Italian stereotype of a priest was “somewhat of an effeminate character with a pallid complexion and a gentle manner,” which was a description that most certainly did not apply to Marcinkus.  At the same time as Marcinkus’ star was rising in the Vatican, the novelist Morris West published a bestselling novel in 1973 entitled The Salamander, which included a character named Bishop Frantisek that worked at the Opera Pontifica.  Bishop Frantisek was obviously based on Archbishop Marcinkus: “He [Bishop Frantisek] looks like a football player, talks Italian with a Brooklyn accent, has a golf handicap of five, and stands in high favour with the reigning Pontiff.  He helped to reorganize the Vatican’s financial arrangements…He’s not a very good theologian.  His philosophy is pure pragmatism.” In other words, then, Bishop Frantisek was not much of a priest.  Archbishop Marcinkus was, to the Italians, also not much of a priest and was also not considered to be trustworthy because the Italians thought that he had competing loyalties: to the Vatican and to the Chicago Archdiocese.

In the same year that The Salamander was published, Marcinkus was involved in a curious case that, while minor compared to what came later, “…was ultimately the beginning of [his] downfall.” In the late 1960s, Americans with Mafia connections had started coming to Europe in large numbers, with their activities focused on, among other things, the selling of counterfeit stock certificates.  One mob boss from New York City, Vincent Rizzo, was being investigated by the New York City police department for racketeering.  Rizzo, in February of 1972, went to Germany to meet with, among other people, Winfried Ense, who was depicted as being “a self-described ‘facilitator’ whom Interpol had investigated a year earlier for a possible role in the sale of stolen U.S. Treasury certificates.” The German authorities bugged Rizzo’s hotel room while he was meeting with Ense, with the bugs picking up Ense remarking that “I learned they had a deal in Rome; this deal would be made with his people in the Vatican…” The ultimate aim of this group, according to Ense, was to sell $950 million in counterfeit stock certificates to the Vatican for $650 million. 

The “scheme” started to unravel when an Italian, Mario Foligni, who, for his part, has been described as being “an extraordinary poseur who claimed to be a count and an owner of half a dozen successful businesses,” tried to take out a loan against the fraudulent securities from the Handels Bank in Switzerland.  The bank, realizing the certificates were fake, issued a warrant for Foligni’s arrest.  Foligni, for whatever reason, instead of turning himself in, went straight to the office of Tom Biamonte, who was the FBI liaison stationed at the American Embassy in Rome. Foligni told Biamonte at this time that there was a connection between this scheme and the Vatican in general and Marcinkus in particular. 

The FBI, because of the fact that a large number of the stolen securities were from American companies like Coca-Cola and IBM, began an investigation and established the connection with the Vatican, although not with Marcinkus, according to Biamonte, by citing a letter on Vatican stationary from July 29, 1971 that was signed by a “monsignor” and which confirmed that the Vatican wanted to buy the fake stock. Biamonte claimed that that monsignor was “a defrocked priest.” If that is true, then the “monsignor” would have been not Marcinkus, who was no longer a monsignor by 1971 as he was consecrated a bishop in 1969, but rather Monsignor Alberto Barbieri, who was the private secretary to Cardinal Eugene Tisserant.  Barbieri had almost as little credibility as Ense and Foligni, as he was later defrocked and had kept a secret mistress while he was Tisserant’s secretary. Additionally, the FBI had the accusations of Leopold Ledl, who was involved in the scheme, that he met with Cardinal Tisserant, Barbieri and Marcinkus in Rome in 1971, to discuss the “quality of the counterfeits and the next steps.” Ledl, however, was a convicted conman.

Despite this tenuous evidence, the FBI sent a team of investigators over to Rome to meet with Marcinkus on April 25, 1973 to investigate whether or not he was involved with the scheme to sell fraudulent securities.  Gerald Posner notes that the investigators were brought to the Vatican by Marcinkus’ “good friend Tom Biamonte.” However, to say that Biamonte was a good friend of Marcinkus is false.  Biamonte simply felt that the Marcinkus was innocent of any wrongdoing in this case and had been unfairly criticized but nowhere admits to being a friend of Marcinkus. Posner also does not cite anything to justify his characterization of Biamonte.  It is also worth noting that, in Posner’s chapter on this case in God’s Bankers, he makes minimal reference to the interview with Biamonte on this case that is recorded in John Cornwell’s A Thief in the Night.  Posner clearly was aware of the interview because he does cite it but only does so one time.  All of this becomes significant for our analysis because Biamonte’s representation of Marcinkus’ involvement in the case, while plausible, is at odds with Posner’s characterization.

Very significantly, as well, the investigators were received that day not by Archbishop Marcinkus but by Archbishop Giovanni Benelli, who was then the under-secretary of state for the Vatican. Benelli, who would eventually become the Cardinal in Florence, “cultivated few friends…was not gregarious and associates spoke of him as a man whose work at the Vatican and then in Florence was his entire life.” He was also described as “precocious, ruthless and given to stepping on the sensibilities of his elders.” Benelli “resented and disliked Marcinkus” because the latter was “independent and had direct access to the Pope” and Benelli wanted to have total control over the Vatican, which was not going to be possible as long as Marcinkus was there.  

Benelli, though, in April of 1973 had a specific reason in his mind to resent Marcinkus.  In March of 1972, a man named Carlo Pesenti proposed to the IOR that they should loan him the equivalent of $300 million US dollars.  Marcinkus met with Pesenti about this proposal, and was joined at the meeting by Foligni, and rejected it out of hand, at the same time upbraiding Pesenti and Foligni for trying to go over his head about the matter to Pope Paul VI. This refusal is important because Carlo Pesenti “was very, very close to the Vatican, and he was very familiar with a cardinal who is now dead: I mean Cardinal Benelli.” Pesenti needed the money because he had recently lost a good deal of capital when Michele Sindona had attempted to orchestrate a hostile takeover of Ital Cimenti, a company that Pesenti had owned.  While this kind of business practice was common in the United States, it was not in Italy and, to make matters worse, Michele Sindona was Sicilian and “in Italy all Sicilians are suspect, because if they have any kind of money or power-ergo they must be connected with the Mafia.” Pesenti lost his money because he needed to buy back his shares in the company when Sindona came in at a substantially inflated price.  Benelli had also recommended to Marcinkus that he loan Pesenti the money.  When Marcinkus refused, Benelli saw this as a clear case of Marcinkus favoring Sindona over his friend Pesenti.  To make matters worse for Marcinkus, this incident marked the start of Sindona’s troubles in Italy and Marcinkus had already been marked as an ally of Sindona.

The FBI investigators met with Marcinkus, who, of course, protested his innocence.  However, on July 11, 1973, charges were handed down against sixteen people in the counterfeit bonds scheme but Marcinkus was not among them.  Tom Aronwald, one of the FBI members that met with Marcinkus in Rome, indicated in 1982 that the investigation could not determine definitively whether or not the Vatican Bank was involved even though they had exhausted all the leads that they had. However, the day after the press conference, the Wall Street Journal, in its recap of the conference, made the claim that “Sources close to the investigation in Europe said a man of the cloth within the Vatican was suspected.” It is unclear who actually made this comment first.  Posner cites a 1982 Wall Street Journal and says that Tom Aronwald made the comment first.  However, Charles Raw indicates explicitly that the source was Joseph Coffey, who was a police sergeant involved with the case and wanted to see the Vatican pursued further. His contentions were eventually turned into a book entitled The Vatican Connection in 1982.  This work was significantly criticized for trying to use flimsy and “double hearsay” evidence to support a tenuous connection between the Vatican, Marcinkus and this case. 

What to make of Marcinkus in this case?  The most plausible and reasonable conclusion to draw is what Tom Biamonte did: “we always look at the source, and if the source stinks, and it always did in this case, you want independent evidence.  It was never forthcoming.” While Biamonte’s testimony is clearly one piece of a very large puzzle and it does not, by itself, prove anything definitively, the fact remains that those who believe Marcinkus guilty in this case cannot produce anything reliable to demonstrate his involvement.  Biamonte’s version of events is not only plausible but is given by a man that was not trying to sell anything.  The figures that implicated Marcinkus were either convicted criminals or other low lifes or were journalists that were trying to sell their books, all of whom had versions of events that contained obvious problems.  At the end of the day in this matter, Marcinkus was never officially accused of anything.  As a result, this case says nothing one way or the other about Marcinkus personally.  It does, however, say a good deal about the Vatican in that Marcinkus’ enemies, of whom there were many, tried to use this case to achieve their goal of getting rid of him, even though there existed no definitive evidence to justify the claim that Marcinkus had anything to do with the case.

IT WAS NEVER CLEAR WHETHER THE DEAL WAS VATICAN BUSINESS OR SINDONA BUSINESS: MARCINKUS AND MICHELE SINDONA

Unfortunately for Marcinkus, the counterfeit bonds case was concluding immediately subsequent to the beginning of a significant international economic downturn.  The Italian economy, for one, saw its stock market peak in June of 1973 and fall nearly forty three percent in the next eighteen months.  The Italian market did not fully recover from these losses until August of 1986. It is particularly unfortunate for Marcinkus, though, that “the international financial crisis of 1974 was the most serious in decades and one man, Michele Sindona, bore a great deal of the blame.” Michele Sindona had become one of the major figures in the Vatican financial world by that time.  Born in Sicily in 1920, Sindona first trained as a tax lawyer in Messina and opened his own law office there.  By 1947, feeling as if he had reached the limit of his opportunities in Sicily, Sindona moved to Milan to establish himself in the financial capital of Italy and to work for the construction company Societa Generale Immobiliare. Sindona was able to make this move from Sicily, which is considered a backwater of Italy, to Milan because he had a letter of introduction from a Catholic bishop in Sicily written to Giovanni Battista Montini, who became the Archbishop of Milan in 1954. 

It was in the middle of the 1950s, as well, that the Vatican began to expand their investments into industry and real estate and, to be able to do this, the Vatican needed to rely on so-called “men of confidence,” which was a group of laymen that were experts in finance.  One of the primary ways that Sindona was able to become part of this group was through his relationship with Prince Massimo Spada, who was a Vatican nobleman and by 1958, when he first met Sindona, the senior layman at the IOR. In 1960, Sindona acquired the Banca Privata Finanziaria in Milan, which started getting business from the IOR in that same year.  The IOR also became partners with Sindona in two banks: the Banque de Financement in Geneva (a partnership that started in 1964) and in the Banca Unione (which started in 1968). By the time that Marcinkus was appointed secretary of the IOR in December of 1968, Sindona was firmly part of the Vatican financial world.

Sindona also benefited by having a very good working relationship with Cardinal Martini in Milan, who became Pope Paul VI in 1963.  Sindona and Martini were in agreement on many important issues, including their dislike for communism.  The two regularly went to the factories in Milan trying to convince the workers to not join the communist party and to remain loyal to the Church and to capitalism.  In 1959, when Montini needed to raise money to build a home for retired priests in Milan, he turned to Sindona to help him.  According to legend, Sindona raised the two million dollars in one day.  This may not be true, but it is certainly true that Sindona did raise the money. Montini considered Sindona to be a genius of finance.  Further, during a meeting in 1968 on church finances, Pope Paul personally signed off on Sindona’s plans for the investment of Church finances.  The Pope also named Sindona the “the leading banker of the Roman Curia.” Sindona’s Vatican connections by the time Marcinkus arrived at the IOR were as impeccable as they could be.

The above is meant to show that, when considering the relationship between Marcinkus and Sindona, one has to keep in mind that the Vatican and the IOR in particular had firmly connected themselves to Sindona well before Marcinkus arrived on the scene.  It was clear that Sindona had the unquestioned backing of the Pope as well as support from significant figures within the Vatican.  It is also clear that the responsibility for any losses or scandal that Sindona may have caused the Vatican are the responsibility of a lot more people that just Marcinkus.  Further, by the time Marcinkus arrived at the Vatican, the dealings of the IOR and Sindona were so thoroughly intertwined that “It was never altogether clear, whenever Sindona completed one of his spectacular business deals in Italy, whether the deal was Vatican business or Sindona business or both.” There are two principal areas where the Vatican’s connection to Sindona caused scandal and in both of them Marcinkus’ involvement was at best questionable.  It seems, also, on some level that Marcinkus was simply left holding the bag for the mistakes of others in the Church when the financial crisis of 1974 hit the Vatican and Sindona.

The first part of the Sindona scandal relates to the losses that the IOR suffered when Sindona’s financial empire crashed in the fall of 1974.  By the beginning of that year, Sindona was one of the wealthiest men in Italy and had been presented the Man of the Year award from the American ambassador to the Italy. However, in what was known to very few people, and there does not exist evidence that Marcinkus knew, Sindona was in a very precarious financial position.  The principal reason for Sindona’s financial issues was his determination to acquire an American bank.  Associates of Sindona recall him telling Calvi that “if he wanted to be a great international banker he had to own an American bank.” Prompted by this desire, Sindona paid some $40 million for a controlling interest in the Franklin National Bank in July of 1972.  At the time, Franklin was the twentieth largest bank in the United States.  The problem with this acquisition, though, was that the price Sindona agreed to pay for the Franklin shares represented nearly a twenty five percent premium over the level they were trading at the time.  Further, Franklin had issued, according to bank examiners, nearly $200 million in “questionable” loans. Sindona and his associates, and there is no evidence that Marcinkus was one of these associates, then began to participate in currency speculation that would result in a trading loss of $39 million for Franklin in the first quarter of 1974 and a total of $386 million in losses for Sindona’s empire in total by the fall of 1974. These losses were because of Sindona and not Marcinkus.

To raise funds for these investments, Sindona, among other things, claimed that he tried to establish a presence in Argentina for Calvi’s Banco Ambrosiano.  Sindona pitched this idea to Marcinkus, who, Sindona claimed, liking the idea, offered the IOR as a fiduciary bank.  Sindona also recounts how he and Marcinkus compiled a list of companies that would be used to circumvent the Italian currency exchange restrictions. Posner reports this interview with Sindona, which is reported in Nick Tosches’ 1986 book Power on Earth, as evidence of Marcinkus’ malevolent dealings with Sindona.  However, this is not necessarily true.  Sindona, for his part, was certainly known to stretch the truth.  Charles Raw recounts how Sindona, in at least one instance with him, deliberately misrepresented what Raw had told him in front of an Italian court. Further, Sindona at times had been addicted to painkillers and was suspected by his associates of having bipolar disorder. It is certainly possible, then, that Sindona simply made up the story of Marcinkus and Argentina.  It is also possible that Sindona simply told people that Marcinkus gave his approval to use the IOR to get around Italian banking regulations because that served Sindona’s purposes and that he never actually got approval from Marcinkus.  Indeed, Sindona himself specifically said of Marcinkus that “We used his name a lot in business deals.  I told him clearly that I put him in because it helps me get money.” This certainly would suggest that Sindona was not above using the IOR’s name and then telling Marcinkus after the fact.  In addition to these Argentina efforts, in order to raise additional funds, Sindona merged his two banks in which he was partner with the IOR into the Banca Privata Italiana in August of 1974.

None of this was successful.  The Banca Privata was “forced into liquidation” on 27 September 1974 and Franklin National failed on 8 October of the same year. Everyone involved, including the IOR, lost something in these failures.  As with all things related to specifics of the Vatican in this period, the exact amount of the loss suffered by the IOR is unclear.  Massimo Spada, who had worked at the IOR and later worked directly for Sindona, said that the Vatican probably lost approximately ten percent of its assets. Raw indicates that the “IOR’s losses in the Sindona crash were modest.” Greeley notes, in terms of financial losses, the amount lost by the Vatican in percentage terms was comparable and even less than what other foundations suffered at the same time. This is true.  The value of the Rockefeller Foundation’s assets decreased by twenty six percent from the end of 1973 until the end of 1974. Additionally, the value of Harvard University’s endowment decreased by approximately eleven percent at the same time. 

It would seem, then, that blaming Marcinkus for the losses that the IOR suffered in the Sindona is disingenuous.  The losses suffered were equivalent with what was suffered by other institutions at the same time.  Further, Sindona had clearly become so thoroughly involved in Vatican finances by the time that Marcinkus arrived that he could not very well have simply stopped dealing with Sindona.  Michele Sindona was clearly an extraordinarily ambitious man who was determined to do whatever was necessary to break into the American market and this led him to make the disastrous decisions on Franklin National.  This is not the responsibility of Marcinkus.  Further, it would seem that Marcinkus “took the heat” in this case for Pope Paul VI allowing Sindona to get into a position of such great responsibility in the IOR. The Curia officials who did not like Marcinkus used this event as a way to try and get rid of Marcinkus but they could not because “Pope Paul came to Marcinkus’ rescue and took the blame by admitting he gave the final approval on the misguided deals with Sindona.”

The second area of scandal for the Church in the Sindona affair concerns the shares of the construction company Societa Generale Immobiliare that were owned by the Vatican’s other financial institution, the APSA or L’Amministrazione del Patrimonio della Sede Apostolica. This department was created to look after the funds given to the Church from the 1929 Concordat with Mussolini and was run not by Marcinkus but by two other archbishops during this time period. In early 1969, Sindona bought most of the Vatican’s shares of SGI, leaving the Vatican a small amount.  The Vatican profited tremendously by this deal because Sindona paid twice the market value for these shares.  However, the funds for this purchase came from the London merchant bank Hambros that agreed to form a partnership with Sindona and finance this deal before they were made aware of how much Sindona had committed to pay. The value of this stock dropped significantly after Sindona’s collapse because the Italian construction firms that later bought SGI found $100 million in unreported losses. Marcinkus had nothing to do with any of this, either the profit or the loss on the remaining shares.  However, it was falsely reported that the APSA still maintained a majority stake in Immobiliare and, as such, would have suffered significant losses in the Sindona collapse.  Immobiliare also brought the Vatican into disrepute by becoming “associated with unscrupulous property development” throughout the city of Rome. Marcinkus would have had nothing to do with any of this.

THE ONLY THING ON MARCINKUS: THE 1981 LETTERS OF COMFORT AND ROBERTO CALVI 

We turn now to probably the most damning pieces of evidence against Marcinkus: the letters of comfort issued by Marcinkus to Calvi at their meeting on August 26, 1981 and the letter of indemnity that Marcinkus compelled Calvi to sign that same day that absolved the Vatican Bank of any negative consequences arising from the letters of comfort.  Even Marcinkus’ so called friend, Tom Biamonte, acknowledges the significance of these letters: “My reading of [the Marcinkus situation] is this: the only thing they had on Marcinkus were those so-called letters of comfort.  They were written with the intention of helping Calvi get straight, but they created an inference in the minds of people that Marcinkus was in fact behind the whole thing.” 

The Calvi case is so complex and detailed that it would be impossible to discuss it on any serious level within the confines of this paper.  As a result, it is necessary to focus our discussion on the letters of comfort because they are considered to be so central to any understanding of Marcinkus’ involvement in the case.  This necessarily leaves out examination of other serious issues.  However, Marcinkus was most clearly associated with the letters of comfort and to properly understand the letters, it is necessary to look at the trial and temporary imprisonment of Roberto Calvi on charges of “violating [Italy’s] currency statutes by improperly exporting up to $50 million of lire through a web of offshore operations,” a trial that concluded with a conviction of Calvi only a month before his meeting with Marcinkus.  It is also necessary to look at the rapidly disintegrating financial position of the Ambrosiano at the same time as the letters were issued as well as the status of Marcinkus within the Curia and the continuing rumors that he was to be relieved of his position at the Bank.  Also, in order to put the letters in their proper context, one must look at the changes that were made to the letters on October 26, 1981, changes that gave Calvi power of attorney privileges.  

The goal of looking at this episode is not to absolve or defend Marcinkus.  Our goal is to offer something on why Marcinkus acted the way that he did.  Posner is certainly correct when he castigates the supporters of Marcinkus for “excusing” his conduct with these letters. Posner is also correct in stating that George Weigel’s comment, which said that Marcinkus’ issuing of the letters was only “indicative of his naivete,” is an inaccurate assessment.  Marcinkus is certainly guilty of something beyond naivete, although, given the lack of sufficient definitive evidence, it is not clear of what exactly he should be considered guilty.  The evidence available does seem to indicate that, at least with these letters of comfort, Marcinkus was guilty of bad faith but not necessarily of participating in a conspiracy with Calvi to defraud investors.  However, the evidence would also seem to indicate that, while he is certainly not morally right in concluding this, Marcinkus himself could have reasonably concluded that, as he often said, he did nothing wrong with issuing these letters. 

On the morning of Wednesday, May 20, 1981, four members of the Guardia di Finanza arrived at Roberto Calvi’s residence in Milan and placed him under arrest on charges “of illegal export of currency.” Calvi was denied bail and taken to a white-collar prison in the town of Lodi, where he was remanded to custody.  Once there, the reality of his new surroundings hit Calvi very quickly.  He was, at the time, one of the preeminent financial people in Italy but was still treated like a common criminal by prison guards who were younger than Calvi’s children. His first night in prison proved to be worse: Calvi was forced to share a cell with two of his fellow defendants and, being an extremely private person, he was unable to get a normal nights sleep for several days, something that left Calvi “destroyed.” The trial, which started on June 10, would last into July, during which time Calvi had all three of his bail applications rejected.  These weeks in prison proved to be very difficult for Calvi.  As one example, Calvi agreed to talk with magistrates who were investigating another matter on the condition that he be allowed out of prison on bail.  Calvi told the magistrates when they arrived at the prison: “You must get me out of here, I can’t take it any more.” When the magistrates told him that this was impossible, Calvi, who was known in the financial world for being extremely reserved, began to cry.

These details about Calvi while he was in prison are mentioned in order to show the state of mind that Calvi was in during the weeks immediately preceding his approaching Marcinkus about the letters of comfort.  Clearly, Calvi was someone who was petrified of spending a lengthy period in prison and he also could not have been unaware that his schemes to inflate the share price of the Ambrosiano were gradually becoming undone by 1981.  He even stated explicitly to his wife and daughter that he would be “finished” if the Bank of Italy followed through on their threats to put in administrators to run the Ambrosiano while Calvi was on trial.  Calvi, then, needed help and was desperate to get it and the only place that he was going to get that help from was Marcinkus and the Vatican Bank: “Since the early 1970s Calvi had climbed to the top of Banco Ambrosiano…with the help of Michele Sindona, Licio Gelli and Archbishop Paul Marcinkus.  Sindona had turned from a friend into a bitter enemy.  Gelli had turned from protector into manipulator.  The only one of the three who could help Calvi now was Marcinkus.” This situation was something that was certainly on Calvi’s mind.  

These facts, though, need to be combined with Calvi’s insistence on seeing everything in terms of a conspiracy.  This propensity of Calvi’s was attested to by his own attorney, Valerio Mazzola: “How can you defend a client who has two brains?  Brain number one is good…Brain number two has no relation to the first.  [This brain] thinks the world is run by conspiracies.” There certainly were many conspiracies in Italy and Calvi was convinced that he was quickly becoming the victim in one of them: “I’m just the last wheel on the cart…try to understand.  Banco Ambrosiano is not mine.  I’m simply in the service of someone else.” This is an extraordinary statement for Calvi to make, given that he had transformed the Ambrosiano from “the priest’s bank” into one of the largest banks in Italy.  Calvi went on the make similar statements in an interview that he gave in early 1982 to the Italian La Stampa. Who Calvi felt that he was being manipulated by was not clear, although it is certainly clear that he felt that the Vatican could extricate him from his current situation.  All of this (Calvi’s state of mind, his seeing the world as a series of conspiracies and his awareness that the Vatican Bank was the only group that could help him) can explain why Marcinkus had to take Calvi seriously and had to respond somehow when he said things like what his daughter reported: “I heard my father telling Carboni [an associate of Calvi’s] that he must make them understand clearly in the Vatican that the priests must make up their minds to honor their commitments, because otherwise he would tell all.” 

Calvi “telling all” was not something that Marcinkus could allow.  Less than two weeks before Calvi’s conviction on currency fraud on July 22, 1981, Pope John Paul II had appointed a committee of fifteen cardinals to study the Vatican’s finances, with the explicit goal of seeing that the Vatican was not dragged into another Sindona like scandal again.  One of the members of the committee said explicitly that the Vatican needed to not participate in speculative financial ventures. This was also only six years after Pope Paul VI had created a commission of his own to investigate the money the Church lost in the Sindona case and had later been forced to veto the Church’s 1975 proposed budget because the Church had lost so much in the Sindona collapse. Calvi’s daughter also had reported that “[My father] told me that Marcinkus was in a fairly precarious position in the Vatican and that he was undergoing a kind of internal inquiry because of the irregular financial operations he had carried out and because he had a private life unworthy of a priest.” While Marcinkus enjoyed the confidence of Pope John Paul II in 1981, it would hardly be a stretch to see how this confidence could quickly evaporate if the dealings that the Vatican Bank, under Marcinkus’ watch, had been participating in were made public.  

It is, then, in this situation that Calvi and Marcinkus met on August 26, 1981 in Rome and it is was in this meeting that Marcinkus operated almost entirely out of self- interest.  The evidence above shows a man who was not acting to further a conspiracy that he was not behind in the first place but to protect the IOR and his own position in the IOR, the loss of both of which could easily be the end result if Calvi’s Ambrosiano group went under or it Calvi made good with his threats to reveal the IOR’s dealings.  Calvi had constructed a ghost company scheme to arbitrarily raise the price of the Ambrosiano shares.  Ambrosiano had numerous subsidiaries, particularly in Central and South America, and these companies had borrowed hundreds of millions of dollars from other banks, money that was then sent back to Calvi through the ghost companies to invest in shares of Ambrosiano.  This worked well enough for a while but by 1981 the scheme was about to unravel.  Between the combination of a fall in the price of Ambrosiano stock and a rise in interest rates, there existed a $400 million deficit in the value of the Ambrosiano shares that the companies in Latin America owned and what those same companies owed in loans. These subsidiaries, particularly the one in Peru, began to ask about how these loans were going to be repaid and it was entirely possible that their questioning could have revealed that the Ambrosiano was insolvent.  The Peruvians wanted something in writing that indicated that the Vatican Bank was behind these ghost companies.

If Calvi did not get something from Marcinkus, then, the Ambrosiano could have gone into default very quickly.  This not only would have endangered Marcinkus but would have meant significant financial problems for the Vatican.  Marcinkus did not want either of those results to happen and the only way for that to happen was for him to issue the letters of comfort.  A letter of comfort is not intended to give a guarantee of repayment of a debt.  Rather, the letter would be intended to create a moral obligation rather than a legal obligation and would basically acknowledge that a parent company, in this case the IOR, supports the efforts of a subsidiary company, in this case the Ambrosiano, to obtain financing. A letter of comfort would also only be issued in very extreme circumstances.  Thus, the letters from the Vatican would be taken to indicate that they supported the efforts of the Ambrosiano and Calvi to obtain financing.  The IOR issued a letter to Calvi on 26 August 1981 saying that they “confirm our awareness of their indebtedness towards yourselves as of 10 June 1981…” On the same day, in order for the letters of comfort to be issued, Marcinkus demanded that Calvi sign a letter of indemnity for the IOR and, among other things, that Calvi’s companies take no actions other than to reduce indebtedness.  The letters of comfort would also expire on 30 June 1982. Thus, the letters of comfort were worthless even before they were actually issued because the IOR had no intention of honoring the debts of Calvi in any event.  

Marcinkus, as we have demonstrated, had no choice but to issue the letters of comfort.  He could have reproached Calvi for his activities and he could have tried to distance himself and the IOR from Calvi right away.  However, this would have likely caused the immediate collapse of the Ambrosiano group and would have accomplished nothing practical anyways.  Further, when Calvi met with Marcinkus on 26 August, he brought with him financial statements showing that his companies had assets of $1.21 billion and liabilities of $922 million.  These figures were not at all true and Charles Raw rightfully points out that Marcinkus could have figured this out simply by taking a couple of minutes and using a calculator. However, it is important that Marcinkus was a man that had no financial training or background.  Marcinkus himself said that his financial training was composed of visiting a few bank branches in New York and Chicago and some of his colleagues were convinced he did not even know how to read a balance sheet. It is entirely possible, therefore, that Marcinkus believed the balance sheets that Calvi showed him on 26 August or at the very least latched on to them as hope that the situation was not as dire as he had thought.  Marcinkus himself said to John Cornwell that “we knew what their [Calvi’s companies] indebtedness was, that’s all…The reports we had from the company – they had more assets than debits…” Marcinkus may very well be guilty of fraud.  However, it is also entirely possible, when the evidence is looked at in the manner that we have looked at it, to conclude that Marcinkus was not guilty of fraud in issuing the letters of comfort but genuinely believed that he was doing what was necessary to save himself, the IOR and the Ambrosiano.

However, the letter of indemnity is a more difficult issue.  Marcinkus himself commented on this to Cornwell: “In the letter I asked [Calvi] to write for us-a condition letter, where he said they’re [the debts] are not yours and they never had been yours.  And I insisted everything has to be done to decrease indebtedness, and that in one year and a half everything has to be settled and we’re out.” It is difficult to find a way out for Marcinkus in this case.  Clearly, this letter means that the letters of comfort were issued in bad faith and were done from a purely self-interested point of view.  The only path for Marcinkus here short of fraud, and Marcinkus’ previous record that we have examined indicates someone that was not interested in personal gain enough to knowingly participate in fraud, is to agree with John Cornwell who concluded that Marcinkus’ “fatal flaw, it seemed to me, was his decision to adapt to the standards of Italian business practice to the detriment of the high moral claims of the institution that he represents.”

Marcinkus seems, in this case, to have wholly adapted himself to the Italian business practices.  On one level this is very consistent with his pragmatic approach to things that was portrayed in The Salamander.  However, the Italian business practices leave much to be desired, a problem that John Allen describes quite well in recent work on the reform efforts of Pope Francis.  Allen points out that the first thing that one needs to remember about the Vatican is that it is still located within the boundaries of Rome and nearly all of the people who work in the Vatican return to Italy at night.  The problem, then, is that the Vatican Bank is run by people trained in the Italian business world and “behavior long considered taboo in modern business practice isn’t even perceived as corrupt.” Not asking questions is considered to be simply the way things were done in Italy and fully ninety seven percent of the country even today believes that corruption is still widespread. This is the culture that Marcinkus became a product of and it is the same culture that is evidenced when, in response to why he still did business with Calvi after Calvi was convicted of fraud, Marcinkus responded by saying: “I asked somebody – ‘Hey! What’s going on [with Calvi’s trial]?’ And the fellow says, ‘Nah, if you’re not caught, you’re not worth anything.’” This is also the environment that Marcinkus had been operating in for over three decades by the time of the letter of indemnity and it is, then, that environment that conditioned him to be able to say, without irony, “I’m not ashamed really for anything I’ve done…I’ve nothing to apologize for because we didn’t do anything.” That may very well be true when looked at by the standards of the culture in which he was operating, but it is most definitively not true when looked at by the standards to which the Vatican’s bank should be held.

It is worth mentioning here that the letters do not even have Marcinkus’ name on them.  It was, in fact, his two deputies, Luigi Mennini and Pellegrino De Strobel, who actually signed the letters.  This becomes important when, on 26 October, the letters were amended to state that “with regard to the ‘attorney in fact,’ we advise you that Mr. Roberto Calvi will act as ‘attorney in fact’ to all relevant purposes.” Thus, the IOR was empowering Calvi to do basically whatever he wanted and to potentially even increase the debts of the companies mentioned in the comfort letters.  This is an astounding action given that Calvi had already been convicted of fraud and there were enormous questions around him.  However, the changes to the letters were signed not by Marcinkus but by Mennini and de Strobel.  There is no evidence that these two acted on Marcinkus’ instructions.  The day after, 27 October, Marcinkus was in Zurich to attend a board meeting of the Cisalpine, which was one of Calvi’s companies.  Significantly, “Calvi could not come, as he had no passport.” Posner writes of this events and says that Mennini and de Strobel acted “with Marcinkus’ approval,” without providing a citation or giving evidence of that and saying that Marcinkus and Calvi were in Zurich for the meeting and that neither “Marcinkus not Calvi disclosed to their fellow directors anything about the patronage or indemnity letters.” Calvi, of course, could not disclose anything because he was not at the meeting.  The problem with this deliberate falsification by Posner is that it creates a greater appearance of evidence that Marcinkus and Calvi were involved in a conspiracy to defraud investors than actually existed.

What, then, are we to make of Archbishop Paul Marcinkus?  Our goal here has been to be fair to Marcinkus and to see the kind of man that he really was.  It is certainly true that many people, both writers and people who worked with him in the Curia, were not fair to him and made him out to be far worse than he really was.  Given the innumerable acts of kindness that Marcinkus did time and again for many different people, he deserves better than that.  Marcinkus was not a bad person; this fact is true.  In addition to the stories mentioned earlier, and many that were not, there is this comment from Bishop John Magee, who was the secretary for three separate Popes: “I remember what people had often said.  That the only man you could turn to in any kind of trouble in that entire place [the Vatican] was Archbishop Marcinkus.  In any kind of difficulty he was the one man with a human heart, who would help you.”

These testimonials, however, do not change the fact that Marcinkus did do things that were, at an absolute minimum, not honorable when dealing with Roberto Calvi and issuing the letters of comfort and indemnity.  Marcinkus’ comment when he refused to honor the letter of comfort that “I realize I’m going to have to pay a high price for that, personally,” has been proven true and it is a consequence that Marcinkus deserves.  Marcinkus certainly did not help himself after the crash of the Ambrosiano and his actions and statements afterwards certainly gave the appearance that he had something to hide.  What precisely he had to hide will probably never be known for certain.  It is probably only that he wanted to keep his job and reputation.  However, this obviously does not justify what he did.  Marcinkus’ actions with Calvi and the letters (and there are, of course, many other parts of this case that space limitations precluded an examination of) were not worthy of an honorable man and certainly not worthy of an archbishop.  It is likely that Marcinkus had either nothing to do or very little to do with the two preceding scandals that we discussed.  However, he certainly did have something to do with the letters and, while it is plausible that his enemies in the Curia that he had made throughout the years took advantage of the opportunity provided by the Ambrosiano crash to make Marcinkus look much worse than he actually deserved, his conduct here did need to be condemned.

HIS PHILOSOPHY IS PURE PRAGMATISM

What happened to Marcinkus, then?  How did a good man end up leaving the Vatican under the circumstances that he did?  Marcinkus was probably too pragmatic for his own good.  Working at the Vatican Bank requires someone to be held to a different and higher standard of morality than someone working for the Bank of Italy, for example.  Marcinkus did not live up to this standard.  Marcinkus also did not really know what he was doing with financial matters.  He admitted that he had never had any training in business and Pope Paul VI could have made a much better choice to run the IOR.  

Marcinkus’ story, also, fits almost exactly a warning that Machiavelli wrote about in The Prince.  He writes there: “Those who solely by good fortune become princes from being private citizens have little trouble in rising, but have much trouble in staying at the top.  They do not have any difficulties on the way up, because they fly, but they have many when they reach the top.” The reason for this trouble is that the people who rise by good fortune, which Marcinkus certainly did given that he was very surprisingly appointed by Paul VI to run the IOR when he had no qualifications for the position, “stand simply upon the favor and the fortune of him who has given them the position.  Neither have they the knowledge required for the position…In addition, they cannot hold their position, because they do not have forces which they can keep friendly and faithful.” Marcinkus had the firm support of Popes Paul VI and John Paul II.  However, that was about all the support that he had in Vatican.  Those two were, of course, the only two people that really mattered in the Vatican while Marcinkus was head of the IOR.  But, when someone is in a job that they are not qualified for and are there solely because of the good favor of someone else, they cannot be expected to stay clear of trouble for any length of time.  This is exactly what happened to Marcinkus.

The departure of Marcinkus from the Vatican in 1990 and his death in 2006 do nothing, though, to help the Church answer the larger questions here: how does the Church want to engage the world in the twenty first century?  How can the Church remain grounded in its ancient faith and its externals of protocol, yet actually be the Church of the poor and dispossessed like Jesus wanted it to be?  There is not a fundamental contradiction between the two and saying one of those is more important or better than the other is also incorrect.  Additionally, simply saying that Marcinkus is entirely to blame for the financial scandals of the 1970s and 1980s is not only inaccurate but also invites having the same scandals again.  All of this reflects a Church that wants to engage with the world the way that the Church wants to and not with the way that the world actually is.  The fact that the Church has had to deal with numerous scandals since Marcinkus in 1982 is due in no small measure to this fact.  

As for Marcinkus, if he had never risen in the Vatican hierarchy the way that he did, or if he had never come to the Vatican, he most likely would have made a very effective parish priest.  When he says to James Gallagher like he did in 1983 that “I want to do pastoral work.  I want to be a parish priest again before I die…And if I keep myself in shape, I’ll be able to help [a parish].  I’d like to work with kids….That’s the kind of priest I’ve always wanted to be,” it is difficult not to believe him.  So, it is appropriate that, after leaving the Vatican in 1990, Marcinkus returned briefly to Chicago and then lived out his days as a parish priest in Sun City, Arizona, where he was said to be very popular with his parishioners.  He died there on February 20, 2006.