Archbishop Paul Marcinkus

Vatican Bank head hit by scandal

Paul Casimir Marcinkus, priest: born Cicero, Illinois 15 January 1922; ordained priest 1947; general manager, Istituto per le Opere di Religione 1969-71, president 1971-89; Pro-President, Pontifical Commission for the Vatican City State 1981-90; Titular Archbishop of Orta 1981-2006; died Sun City, Arizona 20 February 2006.

"All I can say, it was a heck of a lot of money." Thus Archbishop Paul Marcinkus, wreathed in smoke in his study-like office just off the courtyard of Sixtus V, fending off an inquisitive reporter in the wake of the largest and most embarrassing scandal in the Vatican's history. The money in question amounted to around $1.3bn. It was the sum that vanished with the collapse of Banco Ambrosiano in that summer of 1982, lost in a constellation of tiny shell companies scattered across Europe and Central and Latin America - all of them controlled by the IOR, the Vatican's bank, of which Marcinkus was president.

In the two millennia of the Church's existence, there have surely been few more extraordinary prelates than this Chicago-born son of an immigrant Lithuanian window-cleaner. In his four decades in Rome, the chain-smoking Marcinkus was variously student of canon law, papal bodyguard, Vatican banker, formidable golfer, and finally virtual prisoner in the tiny territory of the Holy See, the object of an arrest warrant issued by the Italian authorities investigating the gigantic Ambrosiano fraud. It was the biggest bank failure of its era, and at its centre was Paul Marcinkus.

He grew up in the 1920s and 1930s on the western edge of Chicago, in Cicero, whose more noted products of the era included Al Capone. Marcinkus however didn't take up crime (or at least, his critics would say, not until later). Instead, to the considerable astonishment of his peers, the gifted student athlete opted for the Church.

In 1950 he went to study at the Gregorian College in Rome. A summer stint at the Vatican's Secretariat of State so impressed his superiors that Marcinkus he was taken on full-time. There, crucially, he caught the eye of then Archbishop Giovanni Battista Montini. In 1963, Montini was elected Pope Paul VI, and Marcinkus - six foot three in his socks and infinitely more streetwise than the average Vatican functionary - quickly assumed the role of bodyguard and general fixer on papal trips. On a 1970 visit to the Philippines he is credited with saving the Pope's life from a would-be assassin. The following year saw a more surprising appointment. "Il Gorilla", as Marcinkus was called, was named president of the Istituto per le Opere di Religione, more commonly known as the Vatican Bank.

Why was he chosen? His drive and personality surely played a part, as did his contacts - Marcinkus was a good friend of David Kennedy, chairman of Chicago's then premier financial institution, the Continental Illinois Bank (itself to collapse years later, in an entirely separate scandal). These attributes must have made him an attractive candidate for the IOR at a moment when the Vatican needed to raise money on a global scale to pay for its expanding mission abroad and growing bureaucracy at home.

This hulking bear of a man, with his gregarious, no-nonsense manner, seemed a perfect choice. "You can't run the Church on Hail Marys," Marcinkus famously once said. Visiting American businessmen and other potential benefactors sought him out. Often a round of golf with the archbishop on the Acqua Santa course out by the ancient Appian Way was the highlight of their stay.

But the enterprising archbishop had an unhappy choice of Italian friends. The first was Michele Sindona, a Sicilian financier with Mafia links to whom the IOR entrusted much of its investment policy - only for Sindona's empire to collapse in the mid-1970s. Then came Roberto Calvi, president of Ambrosiano, Italy's largest private bank, and part of Milan's old Catholic establishment.

It is hard to imagine the interaction of Calvi, furtive, devious and eternally suspicious, with the blunt, back-slapping American archbishop. But interaction there was. Ambrosiano was built on a mountain of debt, and in a bewilderingly complicated series of transactions, that debt was ultimately lodged in a set of foreign "nameplate" companies which the Vatican controlled and - by virtue of its name - effectively guaranteed.

But in 1981 Calvi was sent to prison for currency offences, and his precarious scheme unravelled. In a last desperate bid to find the money, Ambrosiano representatives went to the Vatican, arguing that not only did it have a moral obligation to help; if it did not, the Church would find itself at the centre of a massive scandal. Marcinkus, however, turned them down. So be it, he told them, adding wryly of Calvi, "This is what you get for helping a friend."

The scandal duly erupted. Ambrosiano collapsed, and on 18 June 1982 Calvi, "God's Banker", was found hanged beneath Blackfriars Bridge in London. Soon Marcinkus himself was a wanted man. In 1984, the Holy See was forced to pay $250m as its part in a settlement with Ambrosiano's creditors, but for years afterwards the Italian authorities sought his extradition.

To this day the extent of Marcinkus's guilt is unclear. He maintained he was innocent, that his only crime was to have been duped by a friend. Others insist however he was in the conspiracy up to his ears. Arguing for the former theory is his utter lack of financial training and experience. On the other hand, his critics point out, he had sat for a decade on the board of Cisalpine Bank, Ambrosiano's subsidiary in the Bahamas and a key cog in the fraud. Perhaps the truth lay somewhere in between: that Marcinkus suspected wrongdoing but turned a blind eye to it, in his desire to bring extra revenues to the Church.

His Vatican career was effectively over. The debacle cost Marcinkus a promotion to Cardinal, a rank to which by dint of his other position of Pro-President, or Governor, of the tiny city state, he would otherwise have been automatically entitled. Instead he returned to the United States in 1990, to spend his remaining years as a working priest.

After a brief spell in his old home town of Chicago, he settled in Sun City, a suburb of Phoenix, Arizona. About the episode which had given him worldwide notoriety, he practised until the end that special omertà found only in the Mafia, the Soviet-era Kremlin and the highest reaches of the Catholic Church. He was, he said in a faxed reply to a would-be television interviewer 10 months before his death, simply "too old to re-enter the fray".

Thus Paul Marcinkus went to his grave with his secrets intact. It is unlikely they will ever be revealed.

Rupert Cornwell