The Last Supper (10 page)

The two men first met in 1968, when Calvi was deputy chairman of the Ambrosiano. They were introduced by a relative of Sindona, Giuliano Magnoni, who had been a college friend of Calvi. Sindona was impressed by Calvi’s technical abilities and offered him a job in his own burgeoning financial empire. Calvi chose to stay put but became a business partner of Sindona and studied some of the more arcane tricks of the banking trade at his elbow.

‘I saw then that . . . there lurked in Calvi a man clearly set on winning wealth and power – not for the Ambrosiano, but for himself,’ Sindona said later in an interview with the American author Nick Tosches. ‘In effect, he . . . was asking me to find him a way to achieve a position like mine, to become his own boss. So I laid it out for him. I explained how a series of financial institutions could be created – in Luxembourg, the Bahamas, Costa Rica, Vaduz – that would retain the aegis of the Ambrosiano while enjoying the lawful luxury of secrecy offered by those countries. It was, I explained, a luxury whose value had already been proven by the world’s most important banks.’
¹

Sindona’s rise, like that of Calvi, owed much to the Vatican. In 1968 Pope Paul VI decided to reduce the Vatican’s investments
in Italy. The government was threatening to revoke the Vatican’s exemption from tax on its Italian share dividends and the pope feared that a new season of industrial unrest could result in workers from Vatican-owned companies bringing their grievances to St Peter’s Square to protest under his window. Disinvestment would also reduce the risk of embarrassing investments coming to light, such as its stake in the Beretta handgun company or in the Istituto Farmacologico Serono, which produced oral contraceptives. The Vatican would hold only minority stakes and refrain from appointing directors to the boards.

Sindona, who had got to know Cardinal Giovanni Battista Montini when he was archbishop of Milan, was just the man the Vatican needed: financially astute and with excellent international connections. In May 1969 Sindona and Hambros Bank of London bought out the Vatican’s holding in the engineering company Condotte d’Acqua and all but 5 per cent of its stake in Società Generale Immobiliare (SGI), a sprawling real estate conglomerate. By 1973 SGI had expanded further, giving Sindona control of Italy’s largest luxury hotel group, CIGA, the Montreal Stock Exchange building and the Watergate complex in Washington, a piece of real estate which would be intimately connected with the fall of Sindona’s friend Richard Nixon and where the Calvi family would seek refuge in the aftermath of Roberto’s murder.

Sindona’s choice of Hambros as a partner was significant. Founded in 1839, the British bank had been doing business with Italy for more than a century. A £4 million loan had helped Cavour to create a unified Italy in the nineteenth century, forging the modern state from a patchwork of feudal monarchies, and depriving the Vatican of its temporal power and extensive land holdings. Both Hambros’ chairman, Jocelyn Hambro, and the bank’s representative in Italy at the time, John McCaffery, were veterans of Britain’s wartime Special Operations Executive (SOE), an organization specializing in sabotage and subversion. McCaffery’s perception of
business as cold war politics by other means was made clear in an affidavit he swore in 1976 in Sindona’s favour. ‘At the end of the war many leaders of the resistance became the leaders of political parties, of finance and industry throughout Europe. Since they did not know one another and I was the only common link, I tried, on a purely private and personal basis, to bring together people who shared healthy western ideas in an attempt to oppose the spread of communism in Europe,’ he said. ‘In order to pursue this activity I entered the world of business.’

The fateful creation of the Banco Ambrosiano’s network of offshore companies – which would ultimately sink the bank under more than $1 billion of debt – began under the guidance of, and in conjunction with, Michele Sindona. In November 1970 Calvi took the first step, buying from Sindona a Luxembourg holding company called Compendium SA. The company was later renamed Banco Ambrosiano Holding and became the foundation stone of Calvi’s edifice of secret offshore financial power. In March of the following year he added the Cisalpine Overseas Bank in Nassau, another key piece. Both Sindona and the IOR took a 2.5 per cent stake. The origin of around half of the Cisalpine Bank’s initial $450 million share capital has still not been identified to this day, raising investigators’ suspicions that it was from the very start being used to launder mafia money.

Calvi and Sindona began to exchange favours as an intricate financial relationship developed between them. On 14 May 1971 the Cisalpine lent 11.5 million Swiss francs to Compendium, which used the money to buy shares in Sindona’s Geneva-based Banque de Financement (Finabank). Sindona thanked Calvi for the favour by paying him a commission of 540,000 Swiss francs. The money left a private Sindona account at Finabank and was paid into an account opened by Calvi in the name of a ‘Mr C. Ralrov and Mrs K. Ralrov’ at the Swiss Credit Bank in Zurich. Acceptance of this and other
bribes would make Calvi vulnerable to blackmail when he and Sindona fell out in the mid 1970s.
²

The cause of the rift was Sindona’s pressing demands for the money he needed to stave off bankruptcy in his transatlantic financial empire. Using money stolen from his Swiss and Italian bank depositors, as well as some provided by Calvi, Sindona had bought control of America’s twentieth largest bank, the Franklin National Bank of New York, in July 1972. Already financially insecure, a couple of years of Sindona’s piratical management was enough to tip the Franklin National into bankruptcy. Announced on 8 October 1974, it was at that time the largest bank failure in American history.

Calvi did agree to help Sindona out financially but what he offered was not enough. Stepping up the pressure, Sindona leaked embarrassing details of his dealings with Calvi to an Italian journalist, Luigi Cavallo. Cavallo spread the allegations via his news agency, Agenzia A, even writing to the Bank of Italy urging it to mount an inspection. Calvi’s response was lukewarm; he evidently required further prodding. On 9 November 1977 the claims first published in relative obscurity by Agenzia A were plastered all over the walls of central Milan, with particular emphasis on the area around the Banco Ambrosiano headquarters.

‘Jail Roberto Calvi’ was the unequivocal call, and beneath it were the gory details of the two bankers’ secret deals. ‘In connection with the sale by Sindona group companies to the Ambrosiano of equity stakes in Bastogi, Centrale, Credito Varesino, Finabank, Zitropo, etc., Roberto Calvi deposited $10 million in numbered Swiss bank accounts belonging to himself and to which he and his wife are signatories. With the Bastogi operation alone Roberto Calvi appropriated $4,823,000,’ the posters alleged. Calvi had taken secret control of the
Corriere della Sera
, Italy’s most prestigious and best selling daily newspaper, they alleged. Cavallo challenged the
Corriere
journalists to report on their new boss’s misdemeanours, including ‘fraud,
false accounting, embezzlement, illegal currency export and tax evasion’.

Calvi’s reaction was again low-key; he sent Ambrosiano staff out into the streets to tear down the offensive posters and arranged to pay Sindona $500,000, masked as the purchase of a villa in northern Italy. But this blackmail assault on him was to set in motion a chain of events that would lead directly to Calvi’s disastrous end. To make doubly sure of his hit, Cavallo wrote to the governor of the Bank of Italy on 24 November reminding him of a previous missive containing 30 pages of photocopies giving details of Calvi’s Swiss bank accounts; he complained that the governor had failed to order an inspection or pass on the information to the magistrates. ‘If my appeal remains unheard once again, I will present a complaint against you for dereliction of duty,’ he wrote. On 17 April 1978 a team of 50 officials from the Bank of Italy’s inspectorate arrived at the headquarters of the Banco Ambrosiano to examine the bank’s books.

A cultured and intelligent man, Cavallo was a remarkable protagonist of the Cold War in Italy. A communist resistance fighter during the Second World War – although he also spent part of the war studying philosophy in Berlin – he later broke with the PCI and devoted himself to anti-communist propaganda, operating between West Germany, Italy and France. Dubbed
il provocatore
by the media, he was employed by Fiat, the Turin-based car manufacturer, and by the Italian secret services to try to intimidate and demoralize the left-wing trade unions. In 1974 he was involved in an abortive coup plot mounted by another resistance hero, the right-wing aristocrat Count Edgardo Sogno, whose efforts were closely monitored and encouraged by the CIA.

Cavallo spelled out his blackmailing message to Calvi in an undated letter written in late 1977. ‘Among the tribes of Uganda the fable of the two scorpions in a bottle is well known,’ he began. ‘If they begin an all-out struggle this invariably has
lethal consequences for both contenders’ – meaning, in this case, Sindona and Calvi. Cavallo advised Calvi to give up the struggle and keep the promises he had previously made. If not, he warned, the propaganda campaign against him would continue, inciting police, magistrates, trade unions, political parties and public opinion against him and leading to his removal from the Ambrosiano board. And if that didn’t happen, extremist extra-parliamentary groups – longhand for terrorists – ‘will make your private and social life impossible. You will have to choose: either to flee abroad or be locked up in San Vittore [jail]. A civil suicide or life on the run.

‘And don’t make the mistake of counting on the survival instinct or the mercy of the first scorpion. His mind is made up: either agreement and respect for the undertakings or a fight to the finish . . . Re-finding a friend and normality is certainly more pleasant than the fate of the second scorpion in the bottle.’ Cavallo’s letter was among the documents in Calvi’s briefcase when it re-emerged in public in 1986. The briefcase contained the banker’s most sensitive documents and was a crucial instrument of his own blackmail plans. It is highly significant, then, that Calvi kept this threatening letter among his most closely guarded possessions. And that he continued to pay Sindona’s emissary until the end of his life.
³
Indeed, he may have recruited Cavallo to his own side by this stage, judging from another letter found in the briefcase. Dated 9 July 1980, and written from Paris, it appears to amount to an offer by Cavallo to switch sides. The initiatives he had conducted against Calvi were not the fruit of personal rancour but had been carried out on commission, Cavallo wrote. The Agnelli brothers were behind the latest political and judicial moves against him, Cavallo assured Calvi, but he was available to mount a counter-offensive that would stop them in their tracks: ‘I guarantee an excellent result from the operations within a short lapse of time,’ he concluded.

Cavallo’s original blackmail – for which he would be convicted by a court in Milan in March 1986 – was destined to have grave consequences for Calvi. On 17 November 1978 the Bank of Italy inspectors delivered their report on Calvi’s financial dealings. ‘Not entirely favourable,’ was the verdict, and the substance of their findings was passed on to the Milan prosecutor’s office for further investigation. In July 1980 Milan magistrates withdrew Calvi’s passport, returning it to him temporarily on 26 September. Early on the morning of 20 May 1981 the magistrates’ inquiries came to fruition when officers from the finance police descended on the Calvis’ seventh-floor apartment in Via Frua. The chairman of Italy’s largest private bank answered the door in his pyjamas to be informed that he was under arrest and would be escorted to prison in the nearby town of Lodi.

In 1976 the Christian Democrat government of Giulio Andreotti had tightened restrictions on the export of currency from Italy, increasing the penalty for offenders to a maximum of six years’ imprisonment. The Communist party was growing in electoral strength, the economy was stuttering and a safe financial haven abroad was more attractive than ever for the rich. An institution like the Banco Ambrosiano was an ideal conduit for the flight of capital, with a flexible approach to the rules, a subsidiary – the Banca del Gottardo – in Lugano, and close ties to the Vatican bank, an offshore haven conveniently located in the heart of Rome. One of the techniques Calvi had used to send money abroad was to juggle shares in the Toro insurance company between his offshore dummy companies. The result of the exercise, carried out in the early 1970s, had been to grossly inflate the value of the shares and deposit more than 23 billion lire outside Italy’s national borders.

Exactly two months after his arrest Calvi was found guilty of illegal currency export and sentenced to four years’ imprisonment and a fine of 16 billion lire (more than $10 million). The
guilty verdict would make it more difficult for the Ambrosiano to raise cash on international money markets. Released from prison pending an appeal, Calvi suffered the indignity of again having his passport withdrawn by Milan magistrates, meaning he was unable to show his face at international bankers’ gatherings and, more importantly, to continue his hands-on management of his secret offshore financial network.

But what had happened while Calvi was in prison would turn out to be even more destructive. Though not a man with a particular taste for luxury, he was accustomed to living in an exquisitely furnished apartment and being waited on by deferential staff. In Lodi prison he had been treated with humiliating familiarity by the guards and terrorized by his fellow inmates; for the first time he was exposed to uncomfortably close and prolonged contact with the exponents of organized crime – the men whose bosses were allegedly recycling their ill-gotten wealth through the Banco Ambrosiano. An intensely private person, he was traumatized by having to share a cell with two of his fellow defendants. Visitors found him nervous and irritable because he was unable to sleep properly in the presence of strangers. Raffaele Cutolo, boss of the criminal Camorra organization, claims he intervened to protect Calvi from bullying, writing to associates in Lodi prison urging them to keep a protective eye on him.