Banco Ambrosiano

IN 1982, Banco Ambrosiano, then Italy's largest private bank, collapsed with estimated debts of $1.3 billion. Ambrosiano had come close to collapsing in May 1981 when the bank's president, Roberto Calvi, was convicted of illegally exporting billions of lire and was sentenced to four years' imprisonment.

Calvi was bailed-out pending an appeal after spending a short time in jail. When it was revealed that Calvi was a member of the P2 masonic lodge, press speculation further undermined confidence in Ambrosiano.

The Vatican, which owned a large number of shares in Ambrosiano, took the unprecedented step [Page 73]of issuing letters reassuring creditors that the Vatican would assume the bank's liabilities. However, the letters did not halt the official investigation of Ambrosiano's affairs. In June 1982, the Italian Treasury dissolved the bank's administration and made the Bank of Italy a temporary commissioner when the investigators discovered a $1.3 billion “hole” in Ambrosiano's accounts. Further investigation revealed that Calvi had worked closely with Arch-bishop Paul Casimir Marcinkus, head of the Institute of Religious Works, known by its Italian initials IOR, to channel Vatican funds into a network of secret offshore accounts, creating a Bahamian subsidiary of Banco Ambrosiano and a series of Vatican-owned shell companies in Nicaragua, Panama, and Peru.

Ambrosiano booked loans of millions of dollars to these dummy companies. With or without the Vatican's blessing, Calvi used the shell companies to make other investments such as buying control of Banco Ambrosiano and the Rizzoli media empire. The “hole” in the accounts came about when these investments collapsed, wiping out the loans along with interest charges. Calvi fled Italy when the Italian authorities discovered the extent of the bank's losses. Several days later, his dead body was found hanging under London's Blackfriars Bridge with 11 pounds of bricks and $15,000 in his pockets. His secretary had killed herself the day before.

Calvi's death, the death of his secretary, and the refusal of the Vatican to cooperate with the Italian authorities prevented investigators from fully unravelling Ambrosiano's financial network. Although the investigation revealed that the IOR held a controlling interest in the bank, the Vatican denied legal responsibility for the collapse of Ambrosiano arguing that the shell companies were nominally owned by the IOR. However, the Vatican admitted “moral involvement” in the collapse and paid $241 million to Ambrosiano's creditors in 1984.

The collapse of the bank and the circumstances surrounding Calvi's death continue to puzzle British and Italian police. An inquest in London recorded a suicide in July 1982, but a second inquest in July 1983 delivered an open conclusion, while a civil court in Milan concluded that Calvi was murdered.

In 1997, Italian prosecutors began to investigate Calvi's death once more. In July 2003, the prosecutors concluded that the Mafia murdered Calvi to punish him for misappropriating Mafia funds and to prevent him from blackmailing powerful figures in Italian society. The prosecutors went on to name four people suspected of murdering Calvi. Two months later, the City of London Police announced that they had reopened the investigation into Calvi's death.

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