God’s Bankers: A History of Money and Power at the Vatican
Simon & Schuster, 2015
The Pope and Mussolini: The Secret History of Pius XI and the Rise of Fascism in Europe
Random House, 2014
God’s Bankers begins with a corpse dangling from a London bridge — suicide or murder? On the dead man’s wrist hangs a $15,000 gold watch. There are plenty of skeletons in the Vatican’s closet, both literally and figuratively. God’s Bankers digs up these skeletons but focuses on the Vatican bank, known by its Italian initials, IOR. The book reads like a thriller but teaches like a history book and an investigative magazine piece.
It comes at a time when Pope Francis has garnered headlines because of his turn away from previous popes’ stern conservatism, acknowledgment of crimes against children, more tolerant attitude toward gays, lesbians and divorced congregants and of course his critique of wanton environmental destruction and climate change. Less publicized are his efforts to clean up the scandal-tarred Vatican bank, a $6.5 billion institution that has long served as a conduit for money laundering by mafioso, corrupt Italian politicians and other less than saintly characters.
Prior to the bank’s 1942 founding, the Vatican had been reliant on tithing by the faithful called Peter’s Pence, and prior to that, indulgences — a 16th-century pope even began an indulgences futures market — payment to the Church for sins committed (or yet to be committed!). After the fall of the Papal States and the unification of Italy in 1870, a series of popes refused to set foot outside the Vatican while continuing to warn of the evils of modernity and liberal democracy. Modern bookkeeping also eluded the church; revenues and expenses were murky and in cash crunches, the church turned to wealthy American dioceses and to the Jewish Rothschild banking family. Overreliant on tithing and taking on debt, the church turned to a string of Italian businessmen. God’s Bankers follows the money trail.
Jesus may have told his followers that it is easier for a camel to go through the eye of a needle than a rich man to enter the kingdom of God, but it was Italian financier Bernardino Nogara who advised Pope Pius XII to create the Vatican bank. The original seed money was $92 million provided by Italian dictator Benito Mussolini in the 1929 Lateran Pacts that codified the Vatican’s relationship to the modern Italian state.
David Kertzer’s The Pope and Mussolini is a deep dive into the political maneuverings between the Vatican and fascist Italy, while God’s Bankers explores the Vatican bank’s role in laundering Nazi money and the historic influence of anti-Semitism on church practices. The arrangement reached with Mussolini — which continues in force to this day — compensated the Vatican for lost lands during Italian unification and established Vatican City as a sovereign entity. The church in turn agreed to curtail Catholic political parties that were critical of Il Duce’s fascist state. A common theme in both books is the church’s silence towards the Nazis’ destruction of European Jewry and its tacit alliance with fascism.
Nogara did business with both the Axis powers and the Allies. In the postwar era, Posner recounts, the Vatican bank wheeled and dealed like “any Wall Street investment bank” and counted a “postwar concentration in Italian industry” as well as international holdings.
According to his research, the Vatican bank’s financial chicanery grew more complex and shady. Italian bankers Roberto Calvi, Michele Sindona and Lithuanian-American Archbishop Paul Marcinkus pursued speculative schemes that proved disastrous. Marcinkus, a bodyguard and close confidant of Pope Paul VI with no formal training in banking or finance, was appointed the Vatican bank’s president in 1971. The questions about his business practices soon followed. Posner’s investigative and journalistic prowess are on display as he interviews Justice Department prosecutors decades later about their unsuccessful pursuit of Marcinkus’ involvement in a ’60s fake bonds scheme linked to the mafia (Posner also reveals Marcinkus as being a U.S. spy).
Bad bets on currency speculation spurred the failure in 1974 of Long Island-based Franklin Bank — then the United States’s 19th-largest bank — which was controlled by Sindona. Franklin’s collapse became an international scandal and the Vatican bank lost an estimated $56 million. Sindona’s business empire in Italy subsequently unraveled as well. He paid the Mob to murder an Italian prosecutor who was hot on his case and blackmailed Calvi for his compromised financial dealings.
The Vatican bank suffered further losses and embarrassment in 1982 with the collapse of Banco Ambrosiano, of which the church was the main shareholder. No church officials ever faced criminal charges but the Vatican did acknowledge its “moral involvement” in the fiasco and paid out $244 million to its creditors.
There were more plot twists to come. Sindona would die in prison from drinking cyanide-laced coffee, and Calvi? He was the banker found hanging from a London bridge. Investigators initially ruled his death a suicide but later declared it a murder. No one has ever been convicted of the crime. As for Marcinkus, he was never indicted or arrested and quietly retired to Sun City, Arizona where he died an assistant parish priest in 2006.
Despite the bad press, the Vatican bank’s culture of secrecy and corruption has remained largely intact. Under pressure from European Union regulators, Francis’ predecessor Benedict XVI enacted some minor reforms, including the Vatican’s first anti-money-laundering statute. Since ascending to the papacy Francis has moved aggressively, appointing an independent financial auditor and a 15-member advisory group, which includes seven lay members, to make the Vatican bank more transparent and comply with international banking standards. Still, after reading Posner and Kertzner’s deeply researched and well-written books, one can’t help but be skeptical about whether church officials can resist the worldly temptations provided by overseeing a multibillion-dollar bank.