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accurate. It also told a story which reads like an outline for a
Monsignors Edward Martinez, Carl Rauber and Justin Rigali
listened while William Lynch told of a police investigation that had
begun in the world of the New York Mafia and had led inexorably to
the Vatican. He told the priests that a package of 14.5 million dollars’
worth* of American counterfeit bonds had been carefully and painstakingly created by a network of members of the Mafia in the USA.
The package had been delivered to Rome in July 1971 and there was
substantial evidence to establish that the ultimate destination of those
bonds was the Vatican Bank.
Lynch advised them that much of the evidence, from separate
sources, strongly indicated that someone with financial authority
within the Vatican had ordered the fake bonds. He pointed out that
other evidence also indicated the 14.5 million dollars was merely a
down payment, and that the total of counterfeit bonds ordered was 950
million dollars’ worth.
The attorney then revealed the name of the ‘someone with financial
authority’ who had master-minded the illegal transaction. On the basis
of the evidence in Lynch’s hands, it was Bishop Paul Marcinkus.
Displaying remarkable self-control the three priests listened as the
two US attorneys outlined the evidence.
At this stage of the investigation a number of the conspirators had
already been arrested. One of them who had felt the desire to unburden
himself was Mario Foligni, self-styled Count of San Francisco with an
honorary doctorate in Theology. A first-class conman, Foligni had on
more than one occasion narrowly avoided prison. When he was
suspected of having manipulated the fraudulent bankruptcy of a
company he controlled, a Rome magistrate had issued a search warrant
to the finance police. Opening Foligni’s safe, the police had
discovered a signed blessing from Pope Paul VI. They had apologized
for the intrusion and departed.
Subsequently others had been equally impressed with Foligni’s
Vatican connections. He had opened the Vatican doors to an Austrian
named Leopold Ledl. It was Ledl who had put the Vatican deal
together – the purchase of 950 million dollars’ worth of counterfeit
bonds, the purchase price to be 635 million dollars. ‘Commission’ of
150 million dollars would be paid back by the gang to the Vatican,
leaving the Mafia with 485 million dollars and the Vatican with bonds
that had a face value of nearly one billion dollars.
*Here and throughout, monetary figures are expressed in values at the time in question.
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The American Mafia had been sceptical about the deal until Ledl
produced a letter from the Vatican. Written under the letter-heading of
the Sacra Congregazione Dei Religiosi it was confirmation that the
Vatican wished to ‘buy the complete stock of the merchandise up to
the sum of 950 million dollars’.
Foligni had told the American investigators that Marcinkus, ever
prudent, had requested that a trial deposit of one-and-a-half million
dollars’ worth of the bonds be made at Handelsbank in Zürich.
According to Foligni, Marcinkus had wanted to satisfy himself that the
bonds would pass as genuine. Late in July the ‘trial’ deposit was duly
made by Foligni. He nominated Vatican cleric Monsignor Mario
Fornasari as the beneficiary of the account he opened.
A second ‘trial’ deposit of two-and-a-half million dollars’ worth
had been made at the Banco di Roma in September 1971. On both
occasions the bonds had passed bank scrutiny, a tribute to Mafia skill.
Regrettably for the conspirators, both banks had sent samples to New
York for physical examination. The Bankers Association in New York
ascertained that the bonds were false. Hence the unusual presence of
American attorneys and men from the FBI within the Vatican walls.
Apart from a desire to recover the balance of 10 million dollars’
worth of the initial delivery, Lynch and his colleagues were anxious to
bring all the participants in the crime to justice.
Foligni had told the investigators that the reason the Vatican
required the fake bonds was to enable Marcinkus and Italian banker
and businessman Michele Sindona to buy Bastogi, a giant Italian
company with wide interests including property, mining and
chemicals. Bastogi’s headquarters were in Milan; so were Sindona’s. It
was in this city that the then Archbishop Montini, later Pope Paul VI,
had met Sindona. When Montini had become Pope, the Vatican gained
a new heir to Peter and the Vatican Bank gained a new lay financial
adviser, Michele Sindona.
William Lynch, himself a devout Catholic, continued his story.
Mario Foligni, it transpired, had fired a series of accusations at Bishop
Marcinkus during the US Department of Justice interrogations. Apart
from the allegation that Sindona and Marcinkus had planned to buy
Bastogi with fake bonds, Foligni also asserted that with Sindona’s
assistance, the Bishop had several secret numbered bank accounts in
the Bahamas for his personal use.
Under interrogation Mario Foligni had claimed that he had been
working personally with Benelli’s office, the Secretariat of State, and
that as a direct result of his cooperation ‘the Secretary of State had
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caused stringent administrative action to be taken against Bishop
Marcinkus, which severely restricted the Bishop’s enormous financial
power within the Vatican.’ Foligni had insisted that he had told the
Secretariat of State of the trial deposits he had made in Switzerland
and Rome and that this information was used by Benelli’s office
against Marcinkus. He had also advised the Justice Department that he
was under orders from the Secretary of State’s office not to give the
investigators any further details concerning the swindle.
Having put this evidence forward the Americans sat back and
waited for a response. As William Lynch and William Aronwald made
clear when I interviewed them, this first meeting at the Vatican was
not seen by either side as an interrogation. It was informal, an opportunity to lay before members of the Vatican’s Secretariat of State some
very serious allegations.
The Justice Department was aware that the central thrust of the
allegations stemmed from two expert con-men but there was also
powerful internal evidence to support the validity of the statements of
Foligni and Ledl.
It was because of that evidence that William Aronwald had
contacted Cardinal Cooke of New York via the US attorney for the
southern district of that city. The Cardinal had been most co-operative
and via the Papal delegation in Washington this extraordinary meeting
had been arranged. Its real object was not merely to lay information,
but ultimately to confront Marcinkus.
While more coffee was served the three monsignors remained silent
but thoughtful. Eventually Monsignor Martinez, Assessor of the
Secretary of State’s office, responded. He assured the Americans that
he and Monsignor Rauber had complete knowledge of all the affairs of
Archbishop Benelli and categorically denied that Foligni had turned
over any evidence to Benelli’s office. As for the counterfeit bonds and
the trial deposits this was the first time that anyone on the Secretariat
of State had heard about the affair. Taking a classic Curial position he
remarked that, ‘It is not the intention of the Vatican to collaborate with
the United States officials in their investigation at this point, since this
is considered to be an informal meeting, and our purpose at the present
time is only to listen.’
What Lynch and his colleagues were confronted with was a
mentality that has defeated many better minds than theirs – that of the
Curia, a body of men that gives absolutely nothing away; a
Government machine that holds the Roman Catholic Church in a vice-
like grip. Lynch reminded the monsignors that to date only four
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million dollars’ worth of the fake bonds had been recovered and
continued: ‘Since all evidence strongly indicates that the eventual
destination for all of the bonds was the Vatican Bank and in view of
the fact that the total amount ordered is worth 950 million dollars
perhaps I can give you a list of the types of bonds?’
Martinez merely swayed out of the path of that punch. Lynch
persisted. ‘That way the records of the Istituto per le Opere di
Religione can be checked to determine if any of the counterfeit stocks
have been “inadvertently” received on deposit at that bank.’
The style of Martinez in the ring was really most impressive.
‘I, of course, have no idea if any of these American counterfeit
bonds have been received by our bank. I cannot, however, take a list
from you to check. That would be the function of Bishop Marcinkus.
He handles such matters. Perhaps if you have difficulty in contacting
the Bishop you might send a list with a formal letter to the Papal
Nuncio in Washington.’
It was obviously time for a change of tactics.
The US attorneys produced a document they had taken from
Leopold Ledl after his arrest. The Vatican seal was on the letterhead
below which was printed, ‘Sacra Congregazione Dei Religiosi’. It was
the Vatican order for nearly one billion dollars’ worth of counterfeit
securities. It had convinced the Mafia. The monsignors examined it
carefully. There was much staring and holding up to the light.
Martinez rubbed his chin thoughtfully. The Americans leaned
forward eagerly. Perhaps they had finally got one past the redoubtable
‘The letterhead appears to be identical to the letterhead of one of our
sacred congregations which is located here in the Vatican.’
There was a pause. Just time for the Americans to enjoy the
moment. Then Martinez continued:
‘However, I would note that while the letterhead appears to be
legitimate that particular congregation changed its name in 1968 and
that as of the date of this letter, June 29th, 1971, the name shown on
the letterhead would be incorrect. The new name is Sacra
Congregazione per i Religiosi e gli Istituti Secolari.’
The American investigators had, however, succeeded in their main
objective. It was agreed that they could see Bishop Paul Marcinkus
face to face the following day. This in itself was an extraordinary
achievement, for Vatican City fiercely guards its independent statehood.
During my interview with Cardinal Benelli he confirmed that he had
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indeed received information about the whole affair from Mario Foligni
before the Vatican visit of the American investigators. It had seemed
to the Cardinal to be a self-serving effort by Foligni, who by that time
knew the game was up. As to the validity of the information, Benelli
confined himself to the observation that he found the information
‘very interesting and useful’.
On the morning of April 26th, 1973, the two American attorneys
and the two FBI men were shown into the private office of Bishop
Paul Marcinkus. Lynch and Aronwald repeated the story they had told
the previous day while Marcinkus puffed on a large cigar. In the light
of some of his subsequent omissions his initial remark is of particular
‘I am very disturbed by the seriousness of the allegations. In view
of them I’ll answer each and every question to the best of my ability.’
He began with Michele Sindona.
‘Michele and I are very good friends. We’ve known each other for
several years. My financial dealings with him, however, have only been
very limited. He is, you know, one of the wealthiest industrialists in Italy.
He is well ahead of his time as far as financial matters are concerned.’
He extolled the virtues and talents of Michele Sindona at some
considerable length. Then, placing the Vatican Bank on a par with the
confessional, Marcinkus remarked:
‘I would prefer to withhold names in many of the instances I intend
to give because although the charges that Foligni makes against me are
extremely serious they are so wild that I do not believe it necessary to
break banking secrecy laws in order to defend myself.’
While the previous day’s meeting had been largely of an informal
nature, this confrontation with Marcinkus was an interrogation. On
the evidence that the US Department of Justice had carefully and
painstakingly acquired over more than two years, Lynch and
Aronwald and FBI agents Biamonte and Tammaro had before them
the man who had master-minded one of the world’s greatest swindles.
If the evidence was correct then the Chicago suburb of Cicero’s claim
for world notoriety would in future be shared by Al Capone and Paul
Marcinkus. But as Mrs Beeton observed, ‘first catch your hare’.
William Lynch raised the temperature a little.
‘If it becomes necessary at some future date will you make yourself
available for a face to face confrontation with Mario Foligni?’
‘Yes, I will.’
‘If it becomes necessary are you also prepared to testify in a United
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‘Well, yes, if it’s absolutely necessary. I hope it won’t be though.’
‘Well the only people who would gain anything if I appeared in
court would be the Italian Press.’
‘They frequently relish the opportunity to write inflammatory
material concerning the Vatican, whether it’s true or not.’
Lynch and Aronwald showed a total lack of concern at the Vatican’s
sensitivity towards the Italian Press.
‘Do you have a private numbered account in the Bahamas?’
‘Do you have an ordinary account in the Bahamas?’
‘No, I don’t.’
‘Are you quite certain, Bishop?’
‘The Vatican does have a financial interest in the Bahamas but it’s
strictly a business transaction similar to many controlled by the
Vatican. It’s not for any one person’s private financial gain.’
‘No, we are interested in personal accounts that you have.’
‘I don’t have any private or public account in the Bahamas or
How Marcinkus constantly carried his salary and expenses around in
cash was not explored. Neither did Marcinkus reveal that he was in fact
on the board of directors of Banco Ambrosiano Overseas in Nassau and
had been since 1971. He had been invited on to the board by the two men
who had set up this Bahamas operation, Michele Sindona and Roberto
Calvi. Both men used the Bishop’s name frequently in their business
deals. Sindona put it bluntly to Marcinkus on one occasion: ‘I’ve put you
on the board because your name helps me to raise money.’
Sindona and Calvi showed their gratitude by giving Marcinkus and
the Vatican Bank 2.5 per cent of the Nassau Bank’s stock. This
eventually rose to 8 per cent. Marcinkus frequently attended board
meetings and took holidays in the Bahamas. It must have been irksome
constantly having to change the large amounts of currency that,
according to the statements he made to the American investigators, he
would have been obliged to carry – the first President of a Bank in the
world’s history without a personal bank account.
At this point in the interrogation Bishop Marcinkus observed: ‘You
know my position within the Vatican is unique.’
One of the world’s great understatements was followed by: ‘I’m in
charge of what many people commonly refer to as the Vatican Bank.
As such I have complete control of Vatican financial affairs. One of
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the things that makes my position completely unique is that I am
answerable only to the Pope as to how I handle those financial affairs.
In theory my operations are directed by a group of cardinals who meet
from time to time and generally act as overseers to the Bank. In reality,
however, I virtually have a sole hand in directing the financial affairs
of the Vatican.’
The personal testimony did not impress the Bishop’s listeners.
‘What’s the point you’re trying to make?’
‘Well, this position that I hold has led to, shall we say, certain hard
feelings by other men in responsible positions within the Vatican.’
‘Oh yes, it’s just part of the job I’m afraid. I am the first American
ever to have risen to such a position of power within the Vatican and
I’m sure that this has also caused a certain amount of hard feelings.’
Whether he was guilty or not of being the mastermind behind this
enormous swindle, Paul Marcinkus undoubtedly spoke the truth when
he talked about ‘certain hard feelings’ held by other senior men within
the Vatican, and not only there. In Venice, Cardinal Albino Luciani
was another whose feelings towards Marcinkus grew somewhat more
than ‘hard’ as Benelli told him of this latest episode in the Marcinkus
saga. Ironically what Benelli did not know was that, during that private
interview with the American investigators, Paul Marcinkus had
attempted to entangle him in the swindle.
To read the statement Marcinkus made, it is clear that in his eyes
everyone but himself merited investigation. Of Father Mario
Fornasari, who was allegedly deeply involved in the affair, Marcinkus
‘Some of the people who work for me at the Bank have pointed
Fornasari out to me as an individual to avoid. I’m sure you know that
Fornasari was denounced some time ago for writing libellous letters.’
‘Really, what happened?’
‘I believe the charges were dropped.’
Marcinkus conceded that he had been involved with Mario Foligni,
without doubt one of the principal figures in the billion dollar swindle,
on at least two business ventures. The first concerned a 100 million
dollar investment scheme that did not come to fruition. The second
was a 300 million dollar deal involving Foligni and the Italian industrialist Carlo Pesenti. That too had aborted, but as Marcinkus told his
convoluted tale he was at pains to drag in Benelli’s name. Apart from
demonstrating that his ego had been bruised because Benelli had asked
Pope Paul to consider the 300 million dollar deal and Marcinkus
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clearly believed that no one should talk to the Pope about money but
him, Marcinkus also attempted to link Benelli and Foligni, presumably
working on the law of guilt by association. In view of the subsequent
activities of Michele Sindona and Roberto Calvi, both close friends of
Marcinkus, it would be interesting to know if Marcinkus still holds to
this dubious legal tenet.
What Marcinkus neglected to explain, perhaps because he was not
asked to, was why he was even prepared to consider the 300 million
dollar deal involving Foligni, some eight months after Foligni had
unloaded 1.5 million dollars’ worth of fake securities in a Swiss Bank
and some six months after he had unloaded 2.5 million dollars’ worth
of phoney bonds in the Banco di Roma. As President of the Vatican
Bank it is inconceivable that Marcinkus was the only head of a bank
in Europe not to know of these criminal activities.
At the end of a long interrogation, Marcinkus maintained total
innocence and disclaimed all knowledge. He happily accepted a list of
the counterfeit bonds and said he would keep his eye open for them.
A variety of people were eventually found guilty of involvement
in the billion dollar swindle. With regard to the allegations that
Bishop Paul Marcinkus was involved, Attorney William Aronwald
The most that could be said is that we were satisfied that the
investigation had not disclosed sufficiently credible evidence to
prove or disprove the allegation. Consequently since we were not
morally satisfied ourselves that there was anything wrong, or that
Marcinkus or anyone else in the Vatican had done anything
wrong, it would have been improper of us to try to grab some
It is abundantly clear that what seriously restricted this investigation
was not the lack of will of the United States investigators. They tried
hard, very hard. It would later be alleged that they were themselves
part of a giant coverup,* that they had merely gone through the
motions of an enquiry. This is nonsense and shows total ignorance of
the very real problems that are posed when an investigation which
begins in one country has to be continued inside another. The Vatican
City is an independent State. That Lynch and Aronwald and the men
from the FBI got inside the Vatican gates at all is a tribute to their
tenacity. One cannot go rushing over the Tiber like a TV New York
*Richard Hamer, The Vatican Connection, Holt, Rinehart and Winston, 1982.
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cop, armed with a .45 gun, search warrants, authority to hold and
question witnesses and the many other legal devices that can be used
within the United States.
If Vatican City were part of the United States then doubtless all
members of the Curia working in the Sacra Congregazione Dei
Religiosi would have been interrogated in depth. Fingerprints would
have been taken. Forensic tests on all typewriters within the
Congregation would have been made. If all that could have been done
the question of Bishop Marcinkus’s guilt or innocence might have
been resolved. The fact that the United States Government took the
evidence seriously enough to risk a very delicate political situation is
illuminating in itself. As William Aronwald said to me, ‘We were not
about to waste that amount of taxpayers’ money unless we took the
evidence very seriously indeed. At the end of the investigation the case
against Marcinkus had to be filed for lack of evidence that might have
convinced a jury.’
The question therefore remains unanswered. Who was the customer
who ordered the counterfeit bonds? Based on all the available official
evidence it is possible to draw only two conclusions. Each is bizarre.
Leopold Ledl and Mario Foligni were planning to steal from the
American Mafia a huge fortune in counterfeit bonds, having first
conned the Mafia into going to the very considerable expense of creating the bonds. This particular section of the Mafia had a number of
members who killed or maimed people who they merely imagined had
insulted them. If this is the real reason then Ledl and Foligni were
seeking an unusual form of suicide. The other conclusion is that the
950 million dollars’ worth of counterfeit bonds were destined for the
To be continued.