Roberto Calvi: Italy’s Corruption Laid Bare

**Caemin** (0:10)
Morning, folks, and welcome to today's episode called Roberto Calvi, Italy's Corruption Laid-Bare. And this is a story I've wanted to get to the bottom of for years, because for those of you who aren't aware of who Calvi is, he was known as God's Banker. He's the guy who managed the Vatican's money back in the 70s and the early 80s, and he was found hanged under Blackfriars Bridge in 1982 And here's an excerpt from the BBC on Calvi.
Calvi was at the center of an incredibly complex web of international fraud and intrigue. It involved the Italian banking world, the underworld, the Mafia, Freemasonry and most startling of all, the Vatican. The banker's debt would trigger a wide ranging political and financial scandal in Italy. It would involve the disappearance of millions of dollars and leave behind an enduring mystery. So as you can imagine, this is a story that has so many different strands. You could probably do a dozen different stories, a dozen different episodes on all of the characters and plot lines in this, but Calvi's story, it shines a light on just how corrupt Italy was. It is a cracking episode. Enjoy.
So Roberto Calvi, born April 1920 in Milan, his father was a senior banking executive. He goes to Bocconi University in Milan. It was described as the Harvard of Italian economics. Now, why not Bocconi, the young Calvi? He runs the press and propaganda office for the university's fascist student group, because this is 1939, so it's Mussolini's Italy. So I suppose you have to read it in that context.
During World War II, Calvi gets conscripted as a cavalry officer and they sent him to the Russian front, where he gets severe frostbite. Three fingers are permanently paralyzed. Then after the war, he initially joins the Banca's father work desk before leaving to join Banco and Brosiana in 1947 as a junior clerk. Now, Banco and Brosiana, it was set up to cater very, very explicitly to Catholics only. It was known as the Priest's Bank. And to open an account there, you had to present a baptismal certificate and a letter from your local parish priest. So as you can imagine, it was a very, very conservative bank. And for context, Italian banking overall back then was very conservative and restrictive. It was difficult to move large amounts of money out of Italy. So you had companies and wealthy Italians. They wanted a way to secretly hide their money from the Italian tax authorities because tax rates were very high. And Calvi and his direct boss, a guy called Alessandro Canese, who was next in line to take over the bank, they began designing an overseas network to help these wealthy Italians and companies hide their money from the tax authorities. So they co-founded a bank in Switzerland, which of course was shielded by Swiss banking secrecy laws. They also register a holding company in Luxembourg, and the way they structured this meant that it was exempt from local banking supervision. But their plan isn't simply to help rich Italians and companies avoid the tax man. They also use these offshore entities to borrow from foreign banks without the Italian regulators knowing about these loans, so that they can then use this money from these loans for other activities, such as buying Ambrosiana's bank stock to both enrich themselves and also to keep the stock price up. And they can also funnel money into political activities, which I'll cover later in the episode. Now, Calvi learns French, German and English. So he becomes one of the very few people in the bank who can negotiate directly with foreign financial institutions. He installed a large computer accounting center to process foreign exchange transactions. And the traditionalist bank board members, they're old school and they're kind of illiterate in computing and in modern foreign exchange mechanics. So Calvi's department becomes, in the words of one insider, a state within a state. So throughout the 1960s, Calvi, he started to build real influence inside Banco Ambrosiana. And it's around this time that he gets involved with two very, very controversial men who are central to the story. The first is Michel Sindona. Sindona was an international banker, but that's kind of a nice way of describing him. He was this Sicilian born tax lawyer. And in Italian financial circles, they called him the shark. And here's a quote from an article in Mother Jones, describing Sindona.
Sindona rose from peasant roots in Sicily to become one of the most influential bankers in the Western world. At the height of his power, he lorded over a financial empire that stretched from Rome to Hollywood and included half the largest banks in Switzerland. He'd a knack for making the right connections. So he'd built this vast empire by connecting legitimate corporate structures with the Vatican bank on one side and organized crime on the other.