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Lessons from the Vatican-bank scandal

Rich Church, Poor Church, by Malachi Martin. New York: G. P. Putnam's Sons. 253 pp. $16.95. Like other scandals -- especially those involving lots of money and a major church -- the tangled affairs of the Vatican, Michele Sindona, and the Banco Ambrosiano will probably fuel speculation for years to come. Few people outside the Vatican's inner circles will probably ever have access to all that happened.

A brief summary of what is public knowledge is that in 1969 Sindona, by then a well-known financial genius, was given complete control of the Vatican's foreign investments. Since the Vatican's gold reserve is worth more than $3 billion and it has an estimated $11 billion in stocks, the assets at Sindona's disposal had to be substantial. Using his own business connections as well as the Vatican's, Sindona engaged in currency speculation and manipulation as well as less savory activities. Besides the Vatican, which lost an estimated $1 billion, one of Sindona's major victims was the Franklin National Bank, whose collapse was one of the largest bank failures in United States history. In 1980 Sindona was found guilty in the US of 68 counts of misappropriation of funds, perjury, and fraud. He is currently serving a 25-year sentence.

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Since 1980, further allegations have been made in connection with the scandal and his other operations in Italy. Recently Sindona was extradited to Italy for, among other things, questioning about the collapse of the Banco Ambrosiano, which was brought on by its dealings with Sindona, and possibly to face a trial on murder conspiracy charges. The Pope's recent strong stand against the Mafia -- with which Sindona is said to have been involved -- takes on a deeper meaning when one realizes that the church's affairs were in the hands of someone with alleged Mafia connections.

A detailed and excellent account of Sindona's personal rise to power and the financial dealings that led to his downfall was published last year by Franklin Watts (``St. Peter's Banker: Michele Sindona,'' by Luigi DiFonzo, $15.95). Malachi Martin's book focuses more on the Vatican side.

A former Jesuit professor at the Pontifical Biblical Institute in Rome, Dr. Martin served in the Vatican under Pope John XXIII. He has written many books and articles on the church. And he gets to a key question fairly early in the book:

``Men of the caliber of Pope Paul VI [and other prominent figures in the church] . . . all were in positions where the prime success of their work depended on accurate evaluation of other human beings; why did none of them, before it was too late, realize Sindona's fatal flaws? The fact is none of them did.''

To help the reader understand the roots of the scandal, Dr. Martin outlines the development of the Vatican from the early days of Christianity, though the bulk of the discussion covers events since 1870, including the pivotal moment in the 1920s when the Pope and Mussolini worked out an agreement that established Vatican City as a political entity separate from Italy.

Before Sindona, the Vatican's key financial manager was layman Bernardino Nogara, whose prime motivation was the temporal advancement of his church, not himself. Given the extraordinary growth of the Vatican's business undertakings during his tenure, there was surprisingly little corruption. After Nogara's passing in 1958, the agencies he oversaw continued without unified management until Pope Paul VI restructured them in August 1967 to centralize control. This opened the door to Sindona.

Besides describing the steps that led to disaster, Dr. Martin offers a detailed plan for restructuring the Vatican financial operation. His design is to provide more oversight and less possibility for unbridled ambition. This section will be of particular interest to Roman Catholics. But it -- along with the rest of the book -- is written with a broader audience in mind.

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Certainly he has been daring in offering this plan, and he accompanies it with statements of his own strong commitment to his faith. Yet in the process of reporting on the Vatican's troubles, he has raised important questions that deserve consideration. Perhaps the focal one in this context is this: Given a need for churches to build up sufficient reserves to sustain themselves during hard times, when does temporal power reach such a level that it erodes or even corrupts the spiritual goals of Christians?

Although Dr. Martin doesn't offer a truly definitive answer, perhaps it is enough that he has asked the question. No doubt there are plenty of people touched by the Sindona affair who wish it had been asked much sooner.

Dr. Dunbar holds a PhD in religious education from New York University.

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