The Catholic Church, a towering institution for centuries, also possesses a long and intricate financial past. Throughout history, the Church has employed various methods to generate income, from the sale of indulgences in the medieval era to borrowing from prominent bankers and venturing into real estate and stock markets.
The 20th century witnessed the establishment of the Vatican Bank, entrusted with managing the Church's ever-growing wealth. However, this very bank has become entangled in controversy, facing accusations of involvement in money laundering and other financial scandals.
One such scandal centered around Roberto Calvi, an Italian banker whose life met a tragic end in 1982. Calvi was found hanging from a bridge in London, a death shrouded in mystery. Many believe it stemmed from his financial dealings with the Vatican Bank. The Church has vehemently denied any involvement in Calvi's demise, but the murky circumstances surrounding his death continue to fuel speculation.
Beyond the Calvi case, the Vatican Bank's reputation has been further tarnished by accusations of financial impropriety. From allegations of risky investments to potential ties to organized crime, the bank has faced intense scrutiny in recent decades. Despite the controversies, the Church maintains its stance, denying any wrongdoing in Calvi's death and striving to distance itself from the scandals that continue to plague the Vatican Bank.
The 20th century witnessed the establishment of the Vatican Bank, entrusted with managing the Church's ever-growing wealth. However, this very bank has become entangled in controversy, facing accusations of involvement in money laundering and other financial scandals.
One such scandal centered around Roberto Calvi, an Italian banker whose life met a tragic end in 1982. Calvi was found hanging from a bridge in London, a death shrouded in mystery. Many believe it stemmed from his financial dealings with the Vatican Bank. The Church has vehemently denied any involvement in Calvi's demise, but the murky circumstances surrounding his death continue to fuel speculation.
Beyond the Calvi case, the Vatican Bank's reputation has been further tarnished by accusations of financial impropriety. From allegations of risky investments to potential ties to organized crime, the bank has faced intense scrutiny in recent decades. Despite the controversies, the Church maintains its stance, denying any wrongdoing in Calvi's death and striving to distance itself from the scandals that continue to plague the Vatican Bank.
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TVTranscript
00:00On a quiet night in 1982, Italian banker Roberto Calvi is on the run.
00:06He has spent a lifetime working for Banco Ambrosiano, a bank whose biggest customer is the Vatican.
00:13But now he's a fugitive, desperately trying to escape the long arm of the law.
00:19An Italian smuggler arranged for him to be driven overnight to Austria,
00:23where he's shuttled between several cities for a few days before boarding a private charter in Innsbruck for a flight to London.
00:33After arriving in London, he finally can catch his breath.
00:38He has no idea what fate awaits him.
00:42The body of a missing Italian financier, Roberto Calvi, the central figure in a $790 million bank fraud scandal,
00:48was found hanging from a London bridge Friday, the police said today.
00:52Mr. Calvi, dismissed as head of Italy's second largest private bank, had been missing for nine days.
00:58The police said a stroller came across his body early Friday,
01:01hanging from the scaffolding of Blackfriars Bridge over the Thames River in the heart of London's financial district.
01:09For centuries, the Catholic Church has been a monumental pillar of human history.
01:15From the echoing halls of the Vatican to the humblest of rural chapels,
01:19its influence has permeated every corner of the globe.
01:23But it is also a powerful financial institution, with the world's largest real estate collections
01:28and vested interests in a vast number of corporations.
01:33The Vatican owns more than 5,000 church and investment properties around the world.
01:38A central office at the Catholic Church revealed for the first time Saturday, according to several news outlets.
01:45Well, I think every Catholic who reads a story like this ends up caring,
01:48because in the end they want to know where their money is going.
01:51The Vatican's need to generate revenue like any large institution
01:55has occasionally led to decisions that some could perceive as morally ambiguous.
02:16It is the height of the Renaissance, and Italy is the epicenter of this movement,
02:22with major contributions in painting, sculpture, literature, and architecture.
02:28Around this time, the Vatican is a powerful entity in Europe,
02:32exerting considerable political power, influencing rulers,
02:36and governing a substantial territory in central Italy known as the Papal States.
02:42To maintain its power, the Vatican needs an ever-growing source of income.
02:47It relies on a brilliant strategy to take Vatican finances to the next level.
02:52Selling indulgences.
02:55The church found the money it needed in the selling of so-called indulgences,
02:59a 6th century invention whereby the faithful paid for a piece of paper
03:03that promised that God would forgo any earthly punishment for the buyer's sins.
03:08The Vatican set prices according to the severity of the sin,
03:11and they were initially available only to those who made a pilgrimage to Rome.
03:15This strategy has brought significant income to the Vatican, causing its assets to skyrocket.
03:21But what the church doesn't realize is that this strategy for generating extra income
03:26is quickly getting out of control.
03:29The licentious lifestyle of the papal court and the widespread abuses in selling indulgences
03:34became a rallying cry for Martin Luther and the Reformation.
03:39Ultimately, Martin Luther's Reformation transforms the religious world.
03:44But for the Catholic Church, it also represents a major financial setback.
03:49But approaching the end of the 18th century, the Vatican will suffer an even worse financial catastrophe.
03:58In 1789, a crisis is brewing in France.
04:02After decades of growing anger with the government, a revolution erupts,
04:07culminating in the overthrow of the monarchy and the establishment of a republic.
04:12Europe is thrown into chaos once again.
04:16But one man uses this chaos as a ladder, Napoleon Bonaparte,
04:21who rises to power in the aftermath of the revolution.
04:25He immediately sees the advantage of controlling the papacy.
04:29By 1798, French forces have invaded Rome itself,
04:34proclaiming a Roman Republic and effectively ending papal rule over the city.
04:39Pope Pius VI dies on August 29, 1799, in Valence, France, still in French captivity.
04:51The fall of the Vatican and the subsequent death of Pope Pius VI
04:55nearly bring the Roman Catholic Church to an end.
04:59In the 1830s, after the upheaval of the Napoleonic Wars and the Congress of Vienna in 1815,
05:06the papal states are restored to papal control.
05:10But the Vatican is in a dire financial situation.
05:14Desperate for enough funding to remain operational,
05:17the Church reaches out to an unlikely financier,
05:21the Rothschilds.
05:25In the 1830s, the Rothschild banking dynasty established itself as a key player in international finance.
05:34By stationing its members across key European cities,
05:38Frankfurt, London, Paris, Vienna and Naples,
05:42the Rothschilds were extensively involved in government finance,
05:46issuing bonds and lending money to states,
05:49especially during times of distress when higher interest rates could be charged.
05:53And, at the time, there is one powerful entity in Europe in such financial distress.
05:59In 1831, Gregory XVI became Pope.
06:03He knows, the Vatican might not survive long unless there is an immediate cash infusion.
06:09For the first time in the Church's history,
06:12the Vatican decides to borrow money from the most prominent Jewish banker.
06:16James de Rothschild, head of the family's Paris-based headquarters,
06:20becomes the official papal banker.
06:23One of his brothers, Karl, who runs the family's Naples branch,
06:27begins traveling to Rome to consult with the Pope.
06:30Their financial empire prompted a mixture of envy and resentment among Church officials.
06:35Most traditionalists, who referred to James as the leader of international Jewry,
06:39were appalled that the Church had resorted to Christ-killers for financial succor.
06:44French poet Alfred de Vigny wrote that,
06:47The Rothschilds lend the Vatican 40 million euros in today's money.
06:51It becomes a lifeline that the Church desperately needs.
06:57The unlikely alliance is forged, and with the Rothschilds' influence,
07:01the Church begins a series of financial reforms,
07:04which mean more ways for the Church to accumulate assets.
07:08Historically, the Vatican collected money through what is called Peter's Pence.
07:12It dates back to at least the 8th century,
07:15and has its roots in England,
07:17where Anglo-Saxon kings collected annual tax for the land to support the Pope.
07:22This donation, known traditionally as Roma Scot,
07:26was collected on the Feast of Saints Peter and Paul,
07:29and was later used to pay tribute to the Pope.
07:32This donation, known traditionally as Roma Scot,
07:35was collected on the Feast of Saints Peter and Paul,
07:38and was sent to the Pope as a gesture of solidarity and support for the papacy.
07:43But for the Catholic Church at the time,
07:45that income source alone is not sufficient,
07:48and they soon begin to sell bonds to the Catholic faithful.
07:52These bonds are essentially financial instruments that individuals can purchase,
07:57thereby loaning money to the Vatican with the promise of repayment,
08:01often with interest.
08:03This method allowed the Vatican to raise the necessary funds
08:06while engaging the faithful directly in supporting the papal mission.
08:11But the Vatican doesn't stop there.
08:13As the capital market system is being adopted across Europe,
08:17the Vatican Bank, with vast amounts of gold,
08:20needs to diversify into other assets and grow its wealth.
08:24And the Vatican begins investing in real estate across Rome,
08:28buying up properties and renting them out to generate income.
08:32But the Church also realizes the potential of stocks
08:36and begins investing heavily in the stocks of the Bank of Rome,
08:40hoping to grow the wealth of the Church.
08:43The investment in the Bank of Rome has been a profitable one.
08:47Within years of investing in the Bank's stocks,
08:50it has created huge profits for the Church.
08:53As the Vatican emerges onto the financial market as a major player,
08:57many companies and even countries begin to view the Vatican
09:00as a partner to do business with.
09:03One of them is Germany.
09:11After the assassination of Archduke Franz Ferdinand of Austria-Hungary
09:16by a Serbian nationalist,
09:18Europe is once again thrown into war on a scale unprecedented in world history.
09:25As the war escalates, Pope Benedict XV,
09:28who assumed the papacy in 1914,
09:31finds himself navigating a treacherous path between the warring nations.
09:35The war has caused a lot of financial strains on the Church.
09:39Remember, the Church's major income comes from donations from various countries.
09:45During wartime, people simply don't have the money or the time to donate.
09:50But Germany sees the importance of having the Vatican as an ally.
09:54Germany also knows that it can't just give money to the Vatican outright.
09:58Germany was covertly funneling cash to the Church through Swiss banks
10:02and labeling it Peter's Pence.
10:05That helped stabilize the Church's finances.
10:08The German foreign ministry separately sent the Vatican cash
10:11from a propaganda slush fund,
10:13and the Austrians joined with a clandestine subsidy to Benedict.
10:17And it soon becomes clear that the Vatican is an ideal party for covert money operations.
10:23The Vatican realizes that it needs a professional to manage its growing financial empire.
10:28And soon, they find the perfect man for the job.
10:36Bernardino Nogara grew up in a middle-class farming family
10:39with Jewish lineage near Lake Como.
10:42But Nogara was a devout Catholic
10:44who graduated with honors in industrial and electrical engineering
10:47from Politecnico di Milano.
10:50Starting in the mining industry,
10:52Nogara quickly develops a reputation for his financial acumen,
10:56especially his ability to manage risk.
10:59His career propels him to become the Italian delegate
11:02to the Ottoman Public Debt Council
11:05and to participate in the Versailles Peace Conference after World War I.
11:09But for Nogara, a bigger opportunity awaits.
11:13After a masterly speech by Premier Mussolini in the Senate this evening,
11:17by 315 votes to 6,
11:19approved the Lateran treaties affecting the pacification of the church and state in Italy
11:24amidst stirring scenes of enthusiasm.
11:27In 1929, the country of Italy and the Vatican reached a landmark agreement.
11:33Known as the Lateran Pacts,
11:35it creates Vatican City as its own country,
11:38allowing the Pope to rule it.
11:41As part of the agreement,
11:43the government of Italy pays the Holy See 750 million Italian Lira in cash
11:48and 1 billion Lira in government bonds.
11:52With this sudden increase in capital,
11:54the Vatican needs a man capable enough to manage it.
11:58Nogara was very well connected,
12:00even though there were some whispers about the family's Jewish background.
12:04He seemed like a very faithful Catholic
12:07and had a really strong financial expertise,
12:10so Pope Pius chose him to handle the significant funds that came from the Lateran Pacts.
12:25Within just months after Nogara becomes the banker for the church,
12:29a global crisis erupts.
12:31Premier Mussolini delivered in the Senate a frank and caustic speech
12:35on Italy's financial and economic situation
12:38in which he blamed this country's ills on the depression in America.
12:41Initially after the crash of 1929,
12:44there was a veep-shaped recovery
12:46and people thought it was just a temporary stock market glitch,
12:50but the real economic depression didn't really hit until 2 and 3 years later.
12:55By 1932, the Great Depression has reached and spread all over Europe.
13:00The Vatican sees its assets lose 30% of their value
13:04and its debt payments mount.
13:06To tackle the financial difficulty,
13:08Pope Pius XI gives Nogara full authority
13:11to do whatever is necessary to help save the Vatican's finances.
13:17For Nogara, it is the biggest challenge he has ever faced.
13:21He knows that if he lets the Vatican go bankrupt,
13:24all the blame will fall on him
13:26and he may go down as one of the most hated people in history.
13:32To boost finances, he asked the Pope to declare 1933 a holy year
13:38to boost donations from believers.
13:40Nogara also begins to hedge against any potential financial downfall
13:44by loading up on gold.
13:46The way we like to describe gold is it's a hedge against debasement.
13:51Let's go back to the word debasement.
13:53Where does it come from?
13:54It means adding base metals into precious metals.
13:57You're debasing the gold.
14:00If you own pure gold, it's a really good hedge against debasement.
14:04He also begins to buy up real estate at low prices
14:07in France, Britain, and Switzerland.
14:10At the same time, he notices price discrepancies
14:13with various government bonds.
14:15He sees an opportunity for arbitrage.
14:18To ensure his actions don't draw unnecessary attention to the Church,
14:22he establishes a network of holding companies
14:25to manage these investments discreetly,
14:27ensuring confidentiality and minimizing political and financial exposure.
14:34Thanks to his trading strategy and financial acumen,
14:37the Church avoids another financial collapse by 1936.
14:41His strategic investments position the Church
14:44for an unprecedented recovery,
14:46especially with its real estate holdings soaring in value.
14:50Bernardino Nogara is now one of the most important
14:54and powerful men in the Vatican.
14:58The Vatican may have bounced back from the Great Depression,
15:02but little does it know that another global crisis is about to erupt.
15:08On September 1, 1939, Germany invades Poland,
15:13showing the world just how powerful the country has become.
15:17What Hitler's army introduced was the onset of mechanized warfare.
15:23So this is tanks supported by infantry, artillery supporting them,
15:29and then on top of that you had tactical air support.
15:33They're all coordinated, synchronized, harmonized,
15:37and moving very, very rapidly.
15:41Back in Italy, Mussolini's government is preparing to make a move as well.
15:46Nogara sees a great risk with the potential global conflict.
15:50He realizes the urgency to safeguard the Vatican's assets.
15:54The way to do this is by moving assets to neutral countries at the time,
15:59namely Switzerland and the United States.
16:03But America won't remain neutral for long.
16:07Yesterday, December 7, 1941,
16:12a date which will live in infamy.
16:16The United States of America was suddenly and deliberately attacked
16:21by naval and air forces of the Empire of Japan.
16:27After the Pearl Harbor attack, America is drawn into the war.
16:31The U.S. also begins economic sanctions on Axis powers,
16:35including Japan, Germany, and Italy,
16:38with asset freezes and import controls.
16:41This is when Nogara's talent really shined.
16:44His goal was solely focused on maximizing and safeguarding the Church's wealth.
16:49And because of his strategic investments in America,
16:52he was able to secure exemptions from the U.S. economic sanctions.
17:00And he doesn't stop there.
17:02To better navigate the financial environment during World War II,
17:06Nogara realizes that the Vatican should have its own bank,
17:10one that has the ability to operate in complete secrecy and without any transparency.
17:16On June 27, 1942,
17:19the Vatican establishes the Istituto per le Opere di Religione,
17:24also known as the Vatican Bank.
17:26The IOR operated without the need to disclose its financial statements or activities publicly,
17:33did not pay taxes, and was not required to show profits.
17:37It also had the unique ability to destroy its files every decade.
17:44It's a perfect vehicle to hide and launder money.
17:48By 1945, Nazi officials realize that they are losing.
17:53They turn to the Vatican Bank to help move their money.
17:57It is estimated that the Nazis stole $598 million.
18:04This is 1945 dollars.
18:06Worth of gold.
18:08Around 200 million Swiss francs worth of gold are allegedly funneled through the Vatican Bank
18:14and possibly transferred onwards to South America.
18:18And it doesn't stop there.
18:20The Vatican also begins helping Nazi fugitives escape to South America as well.
18:25U.S. intelligence had concluded that Archbishop Antonio Caggiano, a close Peron ally,
18:30was a conduit between the Italian escape networks and the South American church
18:35and that the Vatican, as an institution, not merely as a group of scattered rogue clerics,
18:41was helping high-ranking Nazis escape justice.
18:51In the aftermath left by World War II, the continent lies in ruins.
18:56From the smoldering ashes of once great cities to the shattered lives of millions,
19:01Europe now needs rebuilding.
19:04To take full advantage of Europe's resurgence,
19:07Noguera realizes there are two industries in which the Vatican must invest heavily.
19:12The construction industry and the banking industry.
19:16Confident that any recovery would include the financial sector,
19:19Noguera's team went on a buying binge of Italian banks.
19:22By 1950, the IOR owned a share or had a majority interest in 79 of the country's banks.
19:29Real estate has been, and perhaps always will be, a profitable business for the church.
19:34In 1956, the church made millions just by selling lands to Italy to prepare for the Summer Olympics.
19:42As the Vatican Bank widens its financial empire across different countries,
19:46it needs someone with legal expertise to streamline transactions and investments.
19:53And in the late 1950s, an up-and-coming financial hustler is looking for an opportunity to make a name for himself.
20:00His name is Michel Sindona.
20:06Michel Sindona grows up in a poverty-stricken family in 1920.
20:10But even as a young man, Sindona shows an above-average ability with numbers.
20:16Michel Sindona's aptitude for math wins him a full scholarship to the University of Messina.
20:22But after graduation, he feels stuck at a dead-end job.
20:26He knows that to become rich, he must be willing to take risks that others don't have the guts to take.
20:32Soon, he finds his groove, helping wealthy people and organizations evade taxes, including the mafia.
20:41At the beginning of the 1950s, he traveled to New York and met with the Gambito family.
20:46In 1957, he had become closely associated with them and was chosen to manage their profits from heroin sales.
20:54His ability to help people avoid taxes means he can maximize profit for his clients.
21:00It is a skill highly desired by the Vatican.
21:05In early 1959, the future Pope of the Catholic Church, Montini, John XXIII, wants to build a retirement home called Casa Madonina.
21:16But he wants to raise money secretly and quickly.
21:20So, he turns to Sindona for help.
21:23Sindona was able to raise $2 million needed for the project in a single day.
21:29This kind of speed of moving money around will come really handy for the Church in the future.
21:35In the end, working with Sindona will be one of the worst mistakes the Church has ever made.
21:41But in the meantime, the Church is poised to make more tax-free money than at any other time in its history.
21:49As the Vatican's finance becomes more global, the Church promotes Cardinal Paul Marcinkus as the President of the Vatican Bank.
22:08Marcinkus grew up in a working-class American family.
22:12He was educated at Quigley Preparatory Seminary and later at the University of St. Mary of the Lake in Mundelein, Illinois, where he was ordained a priest in 1947.
22:24The 6'3 American-born Marcinkus seemed more like a football lineman than a low-ranking clerical bureaucrat assigned to the Secretary of State's office.
22:32When he drank whiskey, he did not hide the bottle.
22:35When a senior cleric walked into the room, he smoked cigars and did not ask permission before lighting one.
22:40As an American working for the Vatican, Marcinkus was a very great diplomat.
22:45He was adept at handling all the international assignments given by the Church.
22:50And he managed to become a part of the inner circle of the Pope.
22:54For Marcinkus, his predecessor Nogara's achievements loom large.
22:59He knows that although he doesn't have that financial genius, he is determined to accomplish great things for the Vatican by working with smart financiers.
23:09People like Sindona and Roberto Calvi.
23:17Roberto Calvi grew up in a banking family. His father was a prominent banker.
23:22At a young age, his father showed him there was only one business worth getting into. The business of money.
23:29From the very beginning, he learned that by networking and moving money around, it was possible to build a fortune without having to create or build anything himself.
23:39In 1960, while working at Banco Ambrosiano, a bank catered to Catholic clients, Calvi has the major breakthrough when Sindona introduces him to Marcinkus.
23:50As the new president of the Vatican Bank, Paul Marcinkus is criticized for his lack of financial training.
23:57Marcinkus believes that in order to make up for that shortcoming, he needs to do something big.
24:03And Calvi could be just the guy to make it happen for him.
24:07Unlike his predecessor Nogara, he lacked the ability to master the complexities of international finance.
24:14Some speculate that Marcinkus being financially illiterate was easily taken advantage of by Calvi and Sindona.
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25:41As the chief at the Vatican Bank, Marcinkus wants to greatly expand the bank's business and operation to a global scale.
25:58Roberto Calvi immediately sees this as an opportunity to prove himself to Marcinkus.
26:04At the time, the Vatican Bank and Banco Ambrosiano wanted to engage in more aggressive, riskier, and more profitable businesses.
26:12But being in Italy, they faced a lot of regulations.
26:16An obvious way to circumvent this was by creating satellite banks in other countries with little to no regulations.
26:24Calvi decides to partner with Sendona, and together they form Sisselpine Overseas Bank in the Bahamas.
26:32This bank will serve as a vehicle to channel Vatican money discreetly and use that to enter the global market, especially the American market.
26:41With the backing of the tax-free money from the Vatican, Calvi and Sendona decide to go on a buying spree.
26:48In Italy, he and Calvi bought La Centrale Financiaria, a financial holding company that had long been on his wish list.
26:55And at the behest of Graham Martin, the American ambassador to Italy, Sendona purchased an influential Rome-based English-language newspaper, the Daily American.
27:04For Sendona, there is a grand prize waiting for him.
27:08The Lowe's Corporation announced yesterday that it had sold a block of one million shares of the Franklin New York Corporation,
27:14the parent company of the $3.3 billion Franklin National Bank, to Fasco International Holdings, A.G.,
27:21which is wholly owned by Michelle Sendona, an extremely wealthy but little-known Italian financier.
27:27Franklin National Bank is the 18th largest bank in America at the time of the takeover, with assets valued at $3.4 billion.
27:37Michelle Sendona has gone from an Italian lawyer to a banking tycoon in America.
27:44Within just a few short years, Calvi and Sendona have grown their own financial empires bigger and faster than almost anyone.
27:52With the protection and backing of the Vatican Bank, no one can touch them.
27:59There is but one exception.
28:13After taking over Franklin National Bank, Sendona begins to engage in risky foreign exchange trades using the bank.
28:20Soon enough, the bank incurs tens of millions in losses.
28:24The outflow of deposits from the Franklin National Bank increased somewhat during the week ended Wednesday.
28:30As a result, the bank has now lost nearly 24% of its deposits since its troubles first came to light on May 10th.
28:384,000 miles away from the U.S., Sendona's investment in Italian banks also begins to fail.
28:44This must have been a really chaotic period for Sendona.
28:48He tried to use his legal expertise by merging various banks together to hide losses.
28:54Sendona hopes that as a major U.S. bank, Franklin National Bank will survive through a government bailout.
29:01But he has no idea what is about to happen.
29:04The Franklin National Bank was declared insolvent yesterday in the largest bank failure in American banking history.
29:10The institution was immediately taken over by the European American Bank and Trust Company,
29:15a New York State chartered entity owned by six of the largest banks in Europe.
29:19By the early 1970s, Sendona's world is collapsing down on him.
29:24The Italian authorities have liquidated all of his assets in Italy and seek the extradition of Sendona from the U.S.
29:31And with Franklin National's collapse, the U.S. Justice Department is also looking to indict Sendona.
29:40With the complete collapse of Sendona's empire, one man sees an opportunity to exploit and profit from the situation for himself.
29:48With his former partner in peril, Calvi realizes that he can take over Sendona's assets for pennies on the dollar and use that to deepen his ties with the Vatican.
30:06So he essentially claimed the stocks that Sendona used to own in these various shell companies and satellite banks,
30:14making himself the largest shareholder in all of these firms.
30:19And with Sendona in jail, the Vatican's international business is now mostly in the hands of Calvi.
30:25The Ambrosiano and the Vatican Bank were shuffling back and forth tens of millions of dollars between their many offshore companies.
30:32The IOR by this time had loaned or invested $175 million in Calvi-backed offshore companies.
30:40But Sendona, desperate, is not about to back down from Calvi.
30:44He begins to threaten and attempt blackmail against his former partner.
30:48Sendona tries to force Calvi to provide financial help to cover his spiraling legal costs and to support him through fraudulent schemes.
30:57Under pressure, Calvi gives in.
31:01He diverts substantial funds to Sendona.
31:04This includes a significant transaction where Calvi is forced to wire $500,000 to Sendona's account under duress.
31:12But for Sendona, it isn't enough.
31:15He demands more payment from Calvi.
31:18When Calvi refuses, Sendona tips off journalists about Calvi's secret Swiss bank accounts, leading to massive public and legal scrutiny.
31:27In just three years, Calvi struggles to keep his financial empire afloat amid mounting legal and financial pressures.
31:35His own financial empire is crumbling.
31:38By 1982, Roberto Calvi realizes that his financial schemes cannot be sustained any longer.
31:45On the night of June 10th, he decides to flee Italy for London.
31:50From Mugia, an Italian smuggler arranged for him to be driven overnight to Austria,
31:54where he shuttled between several cities for a few days before boarding a private charter in Innsbruck for a flight to London.
32:00He spent the last three days of his life in flat 881, a tiny room at the Chelsea Cloisters,
32:06a dreary guest house in the capital's posh South Kensington district.
32:10The body of a missing Italian financier, Roberto Calvi, the central figure in a $790 million bank fraud scandal,
32:21was found hanging from a London bridge Friday, the police said today.
32:25Mr. Calvi, dismissed as head of Italy's second largest private bank, had been missing for nine days.
32:31The police said a stroller came across his body early Friday,
32:34hanging from the scaffolding of Blackfriars Bridge over the Thames River in the heart of London's financial district.
32:49No doubt that Calvi had a strong connection with the Vatican.
32:53His activities helped bring a lot of money into the church.
32:56But as Banco Imbriziano came close to failing, threatening to reveal more than just financial losses,
33:03this has turned Calvi from an asset to a liability for the Vatican.
33:09Could it be that those who once offered him protection have turned their backs,
33:14or worse, orchestrated his demise to silence his confessions?
33:19Michel Sindona, who at the time was a disgraced banker and former ally of Calvi,
33:24he became yet another potential suspect.
33:28Their partnership used to be very profitable for both of them,
33:31but now it has gone bad because of the accusations and betrayals.
33:36Sindona was very clever, and he was also facing his own legal problems.
33:41He might have seen Calvi's downfall as a final chess move.
33:53The darkest possibility is the mafia.
33:57Calvi had been their money manager, laundering large amounts of money through the complex network of Banco Imbriziano.
34:05But working for the mafia came with a huge risk.
34:10His death, set up like a dramatic public execution under a bridge named Blackfriars,
34:16looks like a mafia killing, a warning written in the criminal world's record.
34:22In the end, the Vatican decides to publicly acknowledge that it was a mistake to work with Calvi,
34:28but denies that it has anything to do with his death.
34:31The church agrees to pay $244 million in a legal settlement involving Banco Imbriziano.
34:39The public scandal is a huge blow to the church.
34:42Seeing their money being misused, Catholics around the world decide to lower their contributions to the Vatican,
34:49leading to a budget deficit for the church from around 1984 to 1985.
34:59After the death of Calvi, Sindona fights hard to avoid being extradited to Italy,
35:04because he knows that may just be a death sentence for him as well.
35:09But on March 30th, 1985, Italian authorities successfully extradite Michele Sindona to Italy.
35:17Sindona's worst fear comes true.
35:20Michele Sindona, one of Italy's most successful financiers,
35:24whose empire collapsed amid charges of fraud and murder,
35:28died today in a Vogera hospital of cyanide poisoning.
35:32He was 65 years old.
35:34His mysterious death removed from the scene a man who was at the center
35:38of many of Italy's most important recent financial and political scandals.
35:42Sindona was once mafia's favorite member.
35:45But things changed when his golden touch failed,
35:48losing millions in mafia's money through bad management and the eventual collapse of his financial empire.
35:55The mafia, like the Gambito family, known for their ruthlessness, rarely forgives such mistakes.
36:03His fall from grace makes him a marked man.
36:06His knowledge and potential cooperation with authorities make him a dead one.
36:11The cyanide-laced coffee could easily have been the mafia's closing statement,
36:16a signature act of retribution.
36:19Their reach extends even behind bars, and the message is clear.
36:24Betrayal, real or perceived, is a deadly sin with only one atonement.
36:31Archbishop Paul Marcinkus had long dealt with the murky finances of the Vatican.
36:37His partnership with Sindona had been very extensive and secretive.
36:42But as Sindona's usefulness decreased and his risks increased,
36:47rumors of his potential testimony involving Vatican-backed operations
36:51turned him from a helpful ally into a threat.
36:56Could it be that Marcinkus, acting on a higher directive or his initiative,
37:00orchestrated Sindona's silent assassination to forever seal those lips that threatened to speak?
37:12With the permanent silence of Calvi and Sindona,
37:15the Vatican's secret dealings with them may be permanently buried.
37:19But what they don't know is that their trouble is far from over.
37:24Italian authorities last week issued a warrant for the arrest of Archbishop Paul C. Marcinkus,
37:28but it did not appear that they would be confronting him any time soon.
37:32For the Vatican, if an archbishop is arrested,
37:35the publicity will be a huge blow to the Church,
37:38and it will likely destroy the beliefs of many of the faithful,
37:42leading to even less donations from them.
37:44Remember, the Vatican is its own sovereign state,
37:49so they don't have to let any country arrest any of their own people.
37:53So the Church fought really, really hard against Italian jurisdiction over Marcinkus.
37:58The Vatican, throwing its full weight behind Archbishop Paul C. Marcinkus,
38:02issued a sharply worded statement today expressing
38:05profound astonishment at efforts by the Italian authorities
38:09to arrest the American head of the Vatican Bank and two of his closest associates.
38:14Despite being implicated in the massive financial scandal
38:17surrounding the collapse of Banco Ambrosiano in 1982,
38:21Marcinkus manages to avoid legal consequences
38:24primarily due to the legal protections afforded by his position within the Vatican.
38:30In the 1990s, the Vatican Bank faces unprecedented scrutiny and scandal.
38:35The institution struggles under the weight of corruption allegations and financial mismanagement.
38:41With the retirement of Marcinkus, the Church is eager to look for a replacement
38:46for the late Archbishop Paul C. Marcinkus,
38:49who had been the patron saint of the Vatican since his time in office.
38:55With the retirement of Marcinkus, the Church is eager to look for a replacement
38:59that can restore the trust of the Vatican Bank.
39:02The Church was looking to hire Angelo Caloia,
39:05a respected banker known for his commitment to ethical finance.
39:10Caloia is the CEO of Medio Credito Lombardo, a prominent merchant bank in Milan.
39:15Notably, he is deeply involved in the Catholic financial community
39:19as a leading member of the Group for Culture, Ethics and Finance.
39:23The Church realizes to help repair the damaging reputation left by Marcinkus,
39:28Caloia is the perfect candidate for the job.
39:35The Vatican today turned over the management of its scandal-tainted bank
39:39to financial experts not connected with the clergy,
39:42ending the 20-year presidency of Paul C. Marcinkus, an American Archbishop.
39:50During the first few years, Angelo Caloia battles internal resistance and attempts reforms.
39:56With secret accounts, illicit financial flows, and high-profile legal challenges,
40:01the bank's struggles highlight significant governance issues.
40:05The results of Caloia's initiatives are mixed.
40:08The IOR continues to face legal and ethical challenges.
40:13The Vatican and Caloia may have been focused on fixing the Church and its finances,
40:18but their problems are about to be dwarfed.
40:21A crisis is brewing, one that will expose a darkness far greater than any financial misdeeds.
40:35Cardinal Bernard Law, who protected the priest accused of molesting more than 130 children,
40:42is under growing pressure to resign himself.
40:45Boston's Bernard Cardinal Law breaks his silence and apologizes
40:49in the case of a former priest accused of molesting children.
40:53More than 130 people have accused this man, John Gagin, of assaulting them over three decades,
40:58and dozens have charged that Cardinal Law and the Catholic Church protected Gagin.
41:03In 2002, a series of reports by the Boston Globe's investigative team,
41:08known as the Spotlight Team,
41:10uncovers a pattern of sexual abuse by priests in the Boston Archdiocese,
41:15as well as efforts by Church leaders to cover up the incidents and protect the abusers.
41:21The escalating sexual abuse scandal involving a few priests
41:23has shaken not just the American Catholic Church, but also the Vatican.
41:27Pope John Paul II has summoned U.S. Cardinals for a meeting next week in Rome.
41:31The meeting will provide, quote,
41:32guidelines aimed at restoring a sense of safety and tranquility to families
41:36and trust to clergy and the faithful.
41:39While the scandal is initially most prominent in the United States,
41:43similar allegations soon emerge worldwide,
41:46including in Ireland, Australia, Canada, and various countries in Europe and Latin America.
41:55As a result of the scandal, the Vatican faces a financial fallout
41:59on a scale they have never seen in its recent past.
42:03The scandal crushes the faith of many Catholics around the world.
42:07Many dioceses worldwide face enormous financial burdens
42:11due to settlements and legal costs associated with sex abuse cases.
42:16This leads to some dioceses, like Portland, Oregon, declaring bankruptcy.
42:22Others have to liquidate assets, close schools,
42:25or tap into clergy pension and retirement funds to cover settlements and legal expenses.
42:31The scandal affects the Catholic Church's income,
42:34particularly contributions to the Peter's Pens collection,
42:38which supports Vatican activities.
42:41Amid the scandal and the financial difficulties,
42:44Pope John Paul II passes away on April 2, 2005.
42:55After the passing of Pope John Paul II,
42:58a surprising candidate rises to the top
43:01and gains the votes to become the next pope.
43:04Cardinal Joseph Ratzinger becomes the first German pope in a thousand years.
43:10He became pope at a very peculiar time.
43:13The Church, and particularly the Vatican Bank,
43:16was still acting with a lot of secrecy and backroom dealings.
43:20There was a demand from everyone else
43:23for more transparency and adherence to regulations in different countries.
43:28As the new pope, Benedict makes efforts to increase transparency and compliance
43:33within the Vatican's financial institutions,
43:36particularly the Vatican Bank.
43:39To repair the broken image left by the sex scandal,
43:42Benedict takes significant steps to address the clergy sexual abuse crisis.
43:47He is the first pope to meet with abuse victims,
43:50an action he repeats in several countries.
43:53But none of his actions will prevent the storm that happens next.
43:58The Pentecostal Mass at St. Peter's Basilica.
44:01It is normally a moment of celebration,
44:04but these are difficult times for the leader of the Catholic Church.
44:09His Holy See at the center of scandal.
44:13Just hours before, the Pope's personal butler, Paolo Gabrielli,
44:17was charged with possessing confidential papal papers.
44:22In 2012, Paolo Gabrielli, the butler to Pope Benedict,
44:26steals and leaks documents exposing internal Vatican correspondents,
44:30including letters and memos between high-ranking officials.
44:34They reveal a range of issues, such as allegations of corruption,
44:39financial mismanagement, power struggles,
44:42and internal conflict within the Vatican hierarchy.
44:46The leaks caused huge embarrassment to the Vatican,
44:49exposing deep rifts and power struggles.
44:52They led to widespread media coverage and public scrutiny,
44:55adding pressure to an already in-battle institution grappling with various scandals.
45:01The Vatican condemns the leaks and initiates an internal investigation,
45:06which leads to the identification and arrest of Gabrielli.
45:10He is subsequently tried and found guilty of theft in October 2012,
45:16receiving a sentence of 18 months in prison,
45:19which is later commuted by Pope Benedict XVI as part of a papal pardon.
45:26By 2012, the pressure that Pope Benedict XVI faces is immense.
45:31At the same time, the U.S. lists the Vatican as a concern for money laundering.
45:37The State Department has put the Vatican on a list of countries of concern
45:41for money laundering or other financial crimes.
45:44Robert Mickens, correspondent for the Catholic weekly The Tablet,
45:48says it's suspected that the Vatican Bank is run like an offshore bank.
45:52You know, like a Swiss bank account, hiding funds.
45:55It's suspicion, but many of the regulators think it's well-founded suspicion.
45:59To make matters worse for the Church,
46:01Italy's central bank blocks electronic payments in the Vatican
46:05due to its non-compliance with EU regulations.
46:08A month later, Pope Benedict makes a shocking announcement.
46:14And welcome back to ABC Action News on this early Monday morning.
46:16We're following breaking news as you wake up and get your day started.
46:20The Pope, Pope Benedict XVI, announcing just a little over half an hour ago
46:24that he is stepping down as leader of the Catholic Church.
46:27This is an unprecedented move in modern times.
46:29It's been many hundreds of years since a Pope resigned while in office.
46:32Most of them, of course, die while in office.
46:35The situation facing the Vatican may seem dire.
46:39And the next Pope is going to change all of that.
46:44Pope Benedict XVI Resignation
46:49Jorge Mario Bergoglio was born on December 17, 1936, in Buenos Aires, Argentina.
46:57Before 2013, he served as the Archbishop of Buenos Aires from 1998
47:03and was made a Cardinal in 2001 by Pope John Paul II.
47:08Following Pope Benedict XVI's unexpected resignation,
47:12the Cardinals have a very limited time for any pre-conclave political maneuvers.
47:17Despite not being a frontrunner and having previously planned for retirement,
47:22Bergoglio emerges as a strong candidate in a tightly contested election,
47:27ultimately winning on the fifth ballot.
47:33Pope Francis quickly distinguishes himself with his humble, populist approach,
47:39contrasting sharply with his predecessor's style.
47:42He shuns traditional papal luxuries and focuses on outreach to the poor and marginalized.
47:48His approach to contentious issues like homosexuality, abortion, and church doctrine
47:54is more inclusive and compassionate,
47:56which resonates with many but also sparks debates about the potential for doctrinal changes.
48:02Pope Francis was much more progressive than his predecessor.
48:06Early in his role, he refreshed church's image,
48:09appealing widely to Catholics and non-Catholics around the world.
48:14The effects of Pope Francis have fared even better for the Vatican Bank.
48:19As a result of increased mass attendance and volunteer participation in Catholic charities,
48:25the Vatican Bank receives an unprecedented amount of donations from the faithful again.
48:36In 2024, under the leadership of Pope Francis,
48:47the Vatican Bank publishes annual financial reports regularly, enhancing its transparency.
48:53While Europe and America see a decrease in the number of priests,
48:57there is an increase in Africa and Asia,
49:00indicating a shift in the geographic centers of growth within the Church.
49:06Despite its recent turbulent financial crises,
49:09the Church may have finally found a place of positive outlook for its future.
49:14There are nearly a thousand men, most celibate, who live and work together
49:19and wield not only great earthly power, but who believe, for the most part,
49:24that they have inherited divine rights in safeguarding the one and true Church.
49:29In the end, they are human, hobbled by the same frailties and shortcomings,
49:34common to the rest of us.
49:36The Vatican will always be a unique presence in the world.
49:40Throughout its recent history, by embracing capitalism,
49:43the Church has engaged in many predatory practices that go against the Catholic faith.
49:50The global Catholic population continues to grow,
49:53reaching 1.378 billion by the end of 2021,
49:59which represents a 1.3% increase from the previous year.
50:04In the long run, regardless of its past mistakes,
50:07this powerful and seminal institution will live on.