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Authors: Rupert Cornwell
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only two or three times a year, "to discuss ideas and arrangements". He maintains that apart from that first stay in Nassau, he hardly met the banker socially, although Calvi's family dispute this. What is true is that Marcinkus was an ever busier man, and that day-to-day dealings between Ambrosiano and the IOR were left to Mennini and his equally retiring deputy, Pellegrino de Stroebel, chief accountant of the IOR.
The personal relationship between the gregarious, direct Marcinkus and the diffident and elusive Calvi is not easy to visualize. Professionally, however, Calvi had much to recommend him. His bank had three-quarters of a century of links with the Catholic Church in Milan, his discretion was absolute, and his financial skills considerable. However mixed the feelings in the Vatican over the rough and tumble of international finance, it needed to increase its income—and the IOR was an obvious means to this end.
Of all the mysteries of the Eternal Church, few are greater than that of its finances. The sheer geographical extent of the institution is part of the difficulty, but a bigger reason is the Vatican's obsessive secrecy. Clearly its possessions are huge, in terms of land, art and property. But Michelangelo's Pieta cannot be sold off to balance a budget. Like any other state, the Vatican must try to match income to expenditure. But as rising government deficits around the world were there to prove, that task became from the mid-1960s steadily harder. Inflation was rising, and salary increases, not just for the Curia's staff but also the 1,400 predominantly lay workers who enable the Vatican to be administered, had to keep pace. Extended international travel by the Pope, new departments set up after the Second Vatican Council in 1962, more forceful diplomacy and a new sense of international mission, all cost money. To meet these outgoings, and cover a declared budget deficit which by 1980 had reached $25 million, the Vatican must have been forced to rely increasingly on its two sources of undeclared income: St Peter's Pence and the earnings of the IOR. Under Paul VI, however, the former were unable to keep up with the growing demands. It is held that the proceeds of St Peter's Pence fluctuate with the popular appeal of individual Popes. In the reign of John XXIII, with his earthy warmth, they had soared. * But his more detached, introspective successor, especially in the later years of his Papacy, was a less compelling figure. Income, it is said, stagnated. So that left the IOR.
The Institute for Religious Works had been created by personal decree of Pius XII in June 1942, when the war was causing extra problems for the Vatican's financial workings. Its stated purpose was, and is, to manage assets entrusted to it—cash, shares and property — in the interests of the world-wide Church. Completely independent of the APSA and the Prefecture for Economic Affairs of the Holy See
*Only now, with the global appeal of John Paul II, has the trend been reversed. Figures unprecedentedly released in November 1982 showed that in 1981, offerings of $24 million to the Pope, including $15.4 million of "St Peter's Pence", had helped the Vatican to show a general budget surplus of over $4 million. (in effect the Vatican's Finance Ministry), the IOR is theoretically supervised by a panel of five cardinals. In practice, however, Marcinkus had a free hand, reporting only to the Pope himself. Traditionally the IOR has never given the smallest detail of its business, still less published a balance sheet, although that might change after the Calvi debacle. But as a bank it is medium-sized at best. Calvi would describe it as colossal to his few intimates; the more likely truth is that it administers funds of probably no more than $2 billion, half the size of Ambrosiano at its height. Its own assets may not exceed $150 million. The IOR's operations are now computerized. But its visible premises, including an ill-lit banking hall
The personal relationship between the gregarious, direct Marcinkus and the diffident and elusive Calvi is not easy to visualize. Professionally, however, Calvi had much to recommend him. His bank had three-quarters of a century of links with the Catholic Church in Milan, his discretion was absolute, and his financial skills considerable. However mixed the feelings in the Vatican over the rough and tumble of international finance, it needed to increase its income—and the IOR was an obvious means to this end.
Of all the mysteries of the Eternal Church, few are greater than that of its finances. The sheer geographical extent of the institution is part of the difficulty, but a bigger reason is the Vatican's obsessive secrecy. Clearly its possessions are huge, in terms of land, art and property. But Michelangelo's Pieta cannot be sold off to balance a budget. Like any other state, the Vatican must try to match income to expenditure. But as rising government deficits around the world were there to prove, that task became from the mid-1960s steadily harder. Inflation was rising, and salary increases, not just for the Curia's staff but also the 1,400 predominantly lay workers who enable the Vatican to be administered, had to keep pace. Extended international travel by the Pope, new departments set up after the Second Vatican Council in 1962, more forceful diplomacy and a new sense of international mission, all cost money. To meet these outgoings, and cover a declared budget deficit which by 1980 had reached $25 million, the Vatican must have been forced to rely increasingly on its two sources of undeclared income: St Peter's Pence and the earnings of the IOR. Under Paul VI, however, the former were unable to keep up with the growing demands. It is held that the proceeds of St Peter's Pence fluctuate with the popular appeal of individual Popes. In the reign of John XXIII, with his earthy warmth, they had soared. * But his more detached, introspective successor, especially in the later years of his Papacy, was a less compelling figure. Income, it is said, stagnated. So that left the IOR.
The Institute for Religious Works had been created by personal decree of Pius XII in June 1942, when the war was causing extra problems for the Vatican's financial workings. Its stated purpose was, and is, to manage assets entrusted to it—cash, shares and property — in the interests of the world-wide Church. Completely independent of the APSA and the Prefecture for Economic Affairs of the Holy See
*Only now, with the global appeal of John Paul II, has the trend been reversed. Figures unprecedentedly released in November 1982 showed that in 1981, offerings of $24 million to the Pope, including $15.4 million of "St Peter's Pence", had helped the Vatican to show a general budget surplus of over $4 million. (in effect the Vatican's Finance Ministry), the IOR is theoretically supervised by a panel of five cardinals. In practice, however, Marcinkus had a free hand, reporting only to the Pope himself. Traditionally the IOR has never given the smallest detail of its business, still less published a balance sheet, although that might change after the Calvi debacle. But as a bank it is medium-sized at best. Calvi would describe it as colossal to his few intimates; the more likely truth is that it administers funds of probably no more than $2 billion, half the size of Ambrosiano at its height. Its own assets may not exceed $150 million. The IOR's operations are now computerized. But its visible premises, including an ill-lit banking hall
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