The Vatican Hiding Behind the Walls

By Sam Allis

"I may be a lousy banker, but at least I'm not in jail," Archbishop Paul Marcinkus, 65, told visitors two years ago, after Italy's biggest bank failure had exploded around him. The Archbishop, who heads the Istituto per le Opere di Religione, commonly known as the Vatican Bank, may not make that claim so confidently in the future. Last week a Milan judge named Marcinkus in an arrest warrant as an "accessory to fraudulent bankruptcy" in connection with the 1982 collapse of the Banco Ambrosiano, then Italy's largest private banking group.

The Vatican Bank was a shareholder in Banco Ambrosiano, and investigators claim that Marcinkus was linked to Ambrosiano President Roberto Calvi's diversion of some $1.3 billion from the bank through ten dummy Panamanian companies. While no evidence of personal gain has ever been alleged, authorities charge that Marcinkus allowed the Vatican Bank to be used by Calvi for his schemes. Marcinkus has strongly denied the accusation, and last Friday the Vatican came to his defense. In an unsigned statement, it expressed "profound astonishment" at the arrest warrants against Marcinkus and two senior officials.

The Vatican Bank scandal had a dramatic opening in June 1982 when Calvi, who was known as "God's banker" because of his Vatican connections, was found hanging from London's Blackfriars Bridge, his pockets stuffed with $13,000 in / various currencies. Later Michele Sindona, the corrupt Italian financier who introduced Calvi to Marcinkus, died in jail after drinking a cup of coffee laced with potassium cyanide.

The Vatican has steadfastly denied responsibility in the Ambrosiano affair. Nonetheless, and against Marcinkus' advice, the Vatican agreed in 1984 to pay $244 million to the bank's creditors as a goodwill gesture. At issue is whether the Vatican Bank owned the dummy companies and thus was involved in the fraud. Marcinkus' defense has reportedly been that his bank just held papers of collateral against them.

Born in Cicero, Ill., of Lithuanian heritage, Marcinkus has been a member of Pope John Paul II's entourage, and for 17 years served as a papal advance man. In 1970 Marcinkus used his 6-ft. 4-in. frame to thwart a knife attack on Pope Paul VI in Manila. The Archbishop was once thought to be on the Vatican fast track, but after the Ambrosiano affair his rapid career advancement came to a stop. He was not named a Cardinal as anticipated and did not rise to become President of Vatican City, another post that he was expected to receive. He has not been the advance man on papal trips since 1982.

The arrest warrant against Marcinkus could lead to a complex standoff between the Vatican and the Italian government. Italian officials cannot enter the Vatican to serve the arrest warrant, much less retrieve their man. Since the Lateran Treaty of 1929, Italy has recognized the 108.7-acre Vatican as a sovereign state. No extradition treaty, however, exists between the two. In 1982, shortly after the Italian Justice Ministry sent Marcinkus a "judicial warning" announcing that he and his two subordinates were under investigation, the Archbishop moved inside Vatican walls. Today he lives simply in a Vatican apartment.

So long as Marcinkus does not venture out of the Vatican, Italian authorities can do little but watch and wait. Nonetheless, they are very serious in their pursuit. "We could have washed our hands of this," says a Justice Ministry spokesman. "But we didn't want to." Last week Italian finance police missed Marcinkus when they went to deliver the warrant at Villa Stritch, home to many American clergy working in the Vatican, where Marcinkus also has a room.

In its statement, the Vatican cited as its defense Article 11 of the Lateran Treaty, which says "central bodies of the Catholic Church are free from every interference on the part of the Italian state." Italian authorities responded by citing Article 22, which obligates the Vatican to turn over fugitives in Vatican City for acts committed on Italian territory that are considered crimes in both states. There are no precedents for such a confrontation between Italy and the Vatican. Even during World War II, when hundreds of Jews and political refugees hid within the Vatican walls, the Fascist government did not try to get them out.

As he waits, Marcinkus may begin to resemble another "prisoner of the Vatican." In 1870 Pope Pius IX locked himself inside the Vatican after the Papal States collapsed and the Italian army entered Rome. He died eight years later, never having set foot outside.

With reporting by Cathy Booth and Judith Harris/Rome