Propaganda Due: A Strange and Terrible Journey Into the Heart of the Deep State Part IV

Welcome to the fourth installment in my examination of the notorious Italian Masonic lodge known Propaganda Due, or simply P2 for short. Over the years the lodge has been linked to a host of intrigues, including terror campaigns (in both Italy and abroad), drug trafficking, and political assassination as well as having extensive ties with the US intelligence community (and some with their Soviet counterparts as well). P2 was not merely a "state-within-a-state," as is often charged, but a wide reaching, clandestine organization that influenced the deep states of both Italy and numerous US client states across Europe and Latin America.

With the first installment of this series I primarily focused on P2's Venerable Grand Master, the former Blackshirt and SS man Licio Gelli. With the second installment I moved along to the likely role P2 played in a host of terrorist bombings that rocked Italy during a period referred to as the "Years of Lead" as well as P2's ties the notorious right wing terror network known as Aginter Press. With the third and most recent installment I began to consider the role P2 played in what is often referred to as the "Great Vatican banking scandal." Primarily I focused on the backgrounds of the three major players in the scandal, Bishop Paul Marcinkus, and financiers Michele Sindona and Roberto Calvi. All three men have been suspected of belonging to P2 at one time or another and it is definitively known as that these charges against Sindona and Calvi are true. It has also been conclusively proven that Sindona had extensive ties to the Mafia, especially the Genovese and Gambino families. It is highly probable that Calvi (and even Marcinkus) also had such ties.

Bishop Paul Marcinkus

When last we left off, things had begun to go a little sour for Michele Sindona (who was sometimes known as "The Shark" by associates) shortly after he acquired Franklin National Bank, a large US bank.

"... a huge hole appeared in Franklin National Bank, a financial institution that Sindona bought in 1972, as result the Shark's fraudulent removals. The appearance of the hole seemed inexplicable. Franklin National was the 18th largest bank in the United States and one of the healthiest, with assets of $3.3 billion. But Sindona within two years managed into the empty Long Island institution of its coffers. The U.S. government, fearing the collapse of the Long Island bank could have serious repercussions throughout the country, provided Sindona with unlimited funds to keep the banks solvent. Between September and October 1974, over $1 billion flowed from the Federal Reserve into Franklin. Such efforts proved to be of no avail. On October 8, Franklin National collapsed, causing losses of over $2 billion to the Federal Deposit Insurance Company. It was the biggest bank failure in American history and the first since the Great Depression.

"Combing the ashes of the Franklin National, U.S. officials discovered that Sindona had pilfered $45 million from the bank on the eve of its demise – an amount that he squandered in his attempts to manipulate foreign currency speculations and to shore-up the losses in his Italian operations."

(The Vatican Exposed, Paul L. Williams, pgs. 142-143)

It was all for naught, however. Sindona's financial empire began to rapidly unwind. By 1976 he was facing charges in Italy and beginning to wear out his welcome in these United States. Over the years interesting theories have been put forward as to where the money Sindona siphoned out of Franklin National ended up. One of the most compelling involves arms.

"In 1972, the democratic congress to cut off funds for President Nixon's war in Central America. Nixon engaged Sindona to acquire control of the Franklin National Bank. Two years later it collapse.

"The courts determined Sindona and Nixon had siphoned off large sums of the bank's money to Somoza and other dictators in Central America to suppress the revolution of the poor there. The Patrimony of the Holy See took a $40 million hit when the Franklin Bank went under to the extent the IOR had guaranteed the transactions."

(Murder in the Vatican, Lucien Gregoire, pg. 352)

Sindona

This researcher has been unable to turn enough confirmation to definitively endorse Gregoire's above claim but certainly Sindona had forged close ties with both Nicaraguan dictator Somoza and Nixon by this time. And there is certainly compelling evidence that Sindona's successor, Roberto Calvi, would contribute funds to Somoza and host of other ring wing Latin American dictatorships. On that note, consider:

"Throughout the 1970s the Vatican bank had established close ties with Banco Ambrosiano in Milan, where Calvi remained as the chief executive officer. Bishop Marcinkus sat on the board of one of Ambrosiano's subsidiary branches in the Bahamas. Banco Ambrosiano was a Catholic bank, a financial firm for Catholic families and Catholic charities, where no one could own more than 5% of the stock. For this reason, it represented a perfect laundry for P-2 and the Mafia. But two problems remain to be solved. First was the problem of gaining control of the bank without arousing unnecessary suspicion among the directors. Second was the challenge of getting vast amounts of money out of the Milan bank without arousing the attention of criminal investigators.

"Calvi solved both problems with help of his friend Bishop Paul Marcinkus and the Vatican Bank. He began to loan huge sums of Ambrosiano's money to eight 'dummy' corporations. To give these corporations and aura of legitimacy, the loans were diverted to the Vatican Bank (causing Ambrosiano bank directors to believe that the corporations were concerns of Holy Mother Church). Six of these corporations were in Panama: Astolfine S. A., United Trading Corporation, Erin S. A., Bellatrix S. A., Belrose, S. A., and Starfield S. A. The seventh firm – Manic S. A.  – was located in Luxembourg; the eighth – Nordeurop Establishment in Liechtenstein. These corporations used the borrowed millions to accomplish the following objectives:  (1) to increase the personal wealth of Calvi and his Mafia cohort; (2) to fund the nefarious operations of Licio Gelli; and (3) to purchase shares of Ambrosiano stock. When asked for collateral for  the loans, the Panamanian companies simply posted the Ambrosiano stock they had purchased along with statements of inflated assets and projections of future profits from exports."

(The Vatican Exposed, Paul L. Williams, pgs. 165-166)

And what were these "nefarious operations of Licio Gelli"? Here is one example:

"... Calvi was ostensibly in Buenos Aires to discuss with Argentine authorities the opening of a local Banco Ambrosiano branch. In fact, Calvi, Gelli...  invited the entire naval general staff to dinner. At the end of the meal the admirals asked how they might finance the purchase of fifty AM39 Exocet missiles for their naval aviation. Each Exocet  cost $1 million, so the admirals were talking about a $50 million package. As Exocets  were manufactured in Italy under license from the French firm of Aerospatiale, Calvi  was able to provide an easy answer. He arranged for financing which, as no record of it was uncovered in the Ambrosiano accounts, one supposes was routed through the United Trading network."

(Their Kingdom Come, Robert Hutchison, pg. 251)

Calvi would develop a curious knack for appearing in war torn nations on the verge of toppling right wing dictatorship looking to open branches of Banco Ambrosiano. This is not what many would consider prudent financial sense though some have suggested that Calvi was looking to make money off of either warring faction when he made such moves.

"... Calvi had opened a branch of his empire in Managua in September 1977. The bank was called Ambrosiano Group Banco Comercial. It's official function was 'conducting international commercial transactions.' Its actual function was to move from the Nassau branch, with director Bishop Paul Marcinkus' approval, a large amount of the evidence that would reveal the fraudulent and criminal devices used in the share  pushing/acquisition of the Milan parent bank. Nicaragua removed the evidence  even farther from the eyes of the Bank of Italy. As always there was a price to be paid. Gelli had smoothed the way with introductions to Nicaragua's dictator Anastasio Somoza. After several million dollars had been dropped into the dictator's pocket, he announced that it would be an excellent ideal for Calvi to open a branch in his country. One of the side benefits for Calvi was the acquisition of a Nicaraguan diplomatic passport, something he retained to the end of his life.

"Calvi and Gelli appraised the political situation in Nicaragua with its growing possibility of Sandinistan rebel role in the not too distant future. These men, who had carried both Fascist and Partisan membership papers during the Second World War, had not changed a lifetime's habit of being double-faced or, in banking terms, prudent. Calvi gave equally large amounts of money to the rebels – some went to buy grain, someone to buy arms.

"Early in 1979 the left-wing takeover of Nicaragua became a reality. Like many left-wing takeovers before, this one promptly nationalized all foreign banks – with one exception: the Ambrosiano Group Banco Comercial continued to trade under Roberto Calvi. Even left-wing idealists, it would seem, have a price."

(In God's Name, David Yallop, pg. 265)

Calvi

Indeed. But there is much dispute over how much assistance Calvi actually gave to the Sandinistas. It would seem that the overwhelming amount of his largess went to the Somoza regime. After the dictator was removed, the rebels had difficulties finding funds in Calvi's bank.

"It is the thesis of Avro Manhattan, the bank scandal transactions which occurred before the fall of Somoza (July 1979) were funneled to Somoza to halt the Sandinistas impending takeover of Nicaragua.

"Manhattan was on firm ground in thinking this way.

"For March 14, 1979 through July 14, 1979, the Patrimony – the Vatican's central bank – transferred $383 million under the guise of 'loans' to shell companies in the Ambrosiano  branch in Managua Nicaragua. The related notes were in the name of the IOR.

"By mid-August the Sandinistas had seized manufactured plants, banks and other facilities that had supported Somoza. Among these was the Ambrosiano branch in Managua. The balance in the shell company accounts the Vatican had loaned $383 million was 'zero.' "

(Murder in the Vatican, Lucien Gregoire, pg. 355)

The Patrimony of the Holy See (top) is the actual Vatican central bank and not the IOR (bottom) as is commonly claimed 

It would seem that up the very Ambrosiano made funds available to Somoza's withering army. Gregoire goes on the speculate that after the dictator was deposed the funds were looted by members of his security forces to use to fund what would eventually become known as the Contras.

This is not a bad theory. During this time period, during the Carter administration, funding had been cut off to Nicaragua after years of Somoza's brutal rule. This upset many within the American national security apparatus whom considered Somoza to be integral to the containment of communism in Latin America. It was the old domino theory, in other words, that held that one communist regime in Latin America would lead to another and another until the United States was totally isolated.

Somoza

After Somoza was deposed the US intelligence community began funneling millions to the remnants of his army and other right wing forces in Central America in what would eventually become known as the Iran-Contra scandal. The Vatican played a crucial role in the funding of these operations.

It is quite possible that Calvi, prudent business man that he was, had opted to hedge his bets and support the Sandinistas up to a certain point. Unfortunately for Calvi, he likely did this with monies procured from individuals who were far more driven by ideology than profits. This may have been one factor in Calvi's faith on Blackfriars Bridge. But more on that in the next installment.

After the Banco Ambrosiano branch was closed in Nicaragua Calvi seems to have moved this operation to Peru. From this branch funds continued to flow to what would become known as the Contras.

"After the Sandinistas seized the Nicaraguan branch, Ambrosiano opened a branch in Peru. From this point on the scandal money – $970 million – was deposited in the IOR by the Lima bank and then loaned to the Panamanian and European offshore shell companies.

"Of this, $444 million was transferred to a Panamanian affiliate of the First International Bank of Houston. The related IOR notes were issued to shell companies operating throughout Central America...

"Let us step back a bit. On the eve of the Sandinistas' takeover, a plane disguised with Red Cross markings flew into Managua and rescued two hundred of Somoza's National Guardsmen and flew them to a CIA compound in Miami. On October 16, 1979, they were flown to a CIA training camp in Honduras bordering Nicaragua.

"There are other Contra groups operating in Central America. Yet, these are what we are speaking when we say 'Contras' – remnants of Somoza's army trained by the CIA with a mission to contain the Sandinistas within Nicaragua and possibly destroy them altogether...

"On October 16, 1979 – a year to the day John Paul II took office and the same day on which the Contras were flown into Honduras by the CIA – the Lima branch made a deposit of $134 million in the IOR which 'loaned' it through the Patrimony of the Holy See to a Panamanian shell company United Trading Corporation. It was followed by another $330 million to the other Panamanian shells. It disappeared and no one has ever found out what happened to it.

"The Lima branch deposited another $463 million in the account of the IOR and the Patrimony which 'loaned' it to shell companies in Liechtenstein and Luxembourg. This money was partially recovered by the courts that tried the case in the 1980s...

"The courts determined the money that disappeared in Nicaragua and Panama was drawn down in cash – not wired to banks and investment houses; they were not able to determine what happened to it.

"One could speculate private men – Calvi, Gelli and Sindona – drew the money in Nicaraguan currency – Cordoba – and laundered it through the local black market for a fraction of its face value. This makes no sense when they could have run all the money through the Ambrosiano Nassau  or other 'offshore' branches. It would have been readily available in European currencies with no risk at all.

"Of the $463 million wired to Liechtenstein and Luxembourg $215 million was recovered. $248 million had been drawn down in cash and the courts were unable to determine what happened to it.

"The courts charged that the shell companies the Vatican 'loaned' the $1.3 billion were actually owned by the Vatican.

"Generally, this could not be proved because of immunity of the Holy See from Italian courts provided under the Lateran Treaty. Yet, the courts did prove Ambrosiano created the shell 'United Trading Company' in 1970 and the IOR had acquired all its shares in 1974.

"On the other hand, the same courts determined that a half-dozen of the Panamanian shells, including Astolfine, Erin and Fisalma, had been created by the CIA for espionage activities in connection with the Cold War. This may have been linked to – reasonable but not proved – CIA Director George Bush who was the chairman of the First International Bank of Houston at the time of the bank scandal."

(Murder in the Vatican, Lucien Gregoire, pgs. 356-358)

Bush I may have played a role in these shenanigans while serving chairman of the First International Bank of Houston

In other words the Vatican, in collaboration with the CIA (and possibly the Mafia), was channeling funds to the Contras and other Central American "freedom fighters." Some of these funds were also reportedly being funneled to the Polish Solidarity movement that was gaining momentum around this time. Calvi and Banco Ambrosiano were the chief instruments for these transfers. Previously Calvi's role had likely been played by Michele Sindona, who also backed Somoza and many of the South American Condor nations in the mid-1970s when US aid began to dry up in the wake of Watergate.

And it was Gelli and the P2 network that brought all of these players --the Vatican, the mob, the Italian deep state, the US intelligence community, and these Latin American dictatorships --together. Or at least in part. Certainly P2 was not the only such right wing network with similar ties. The World Anti-Communist League (WACL) featured many of the same players but also had extensive affiliates throughout Asia and the Middle East. More on the WACL network and its ties to drug trafficking, terrorism and assassinations can be found here.

Preposterous, you may be saying. Certainly it seems a stretch --and yet Calvi in the infamous letter he allegedly wrote Pope John Paul II shortly before his murder strongly hints at his role in "deep" activities in Poland and Central America.

"Calvi's letter dated June 5th, 1982 to the Pope is rather more than a plea for papal intercession to save his life. Certainly he realises that he is in severe trouble. He also recognises that whatever protection may once have been extended by P2 and by Licio Gelli in particular is no longer available. He has also been cut loose by Marcinkus. Calvi  began by warning the Pope that Banco Ambrosiano was about to collapse, which he said would be a disaster for the church. Then he turned to the 'millions of dollars' which he had devoted to papal projects in South America and Eastern Europe. 'There are many of those who promised me helped me on the condition that I would not talk about activities I conducted on the part of the church – and especially many of those who would like to know if I supplied arms and weapons to some South American regimes to help them combat our common enemies, and if I had supplied economical means to Solidarnosc  and other financing to the countries of the East. Summing up, I asked that all the sums that I gave to the projects of serving political and economic expansion of the church, that the thousands of millions of dollars which I gave to Solidarnosc with the express will of the Vatican and the sums which I have employed to organise the financial centres (banks) and the political power in five South American countries, will be returned to me. These sums would amount to $1.75 billion.' Calvi concluded his epistle by saying that he was seeking 'serenity and merely to live in peace.' The sum that he mentioned as owing to him was close to the $1.3 billion shortfall investigators identified in the books of Banco Ambrosiano."

(Gladio: NATO'S Dagger at the Heart of Europe, Richard Cottrell, pg 228)

John Paul II was apparently unmoved by Calvi's pleas

Perhaps then Gregoire and other Vatican "conspiracy theorists" are not far from the mark as far as the banking scandal is concerned. At this point it is interesting to note that one of Calvi's final moves as head of Banco Ambrosiano before his death involved the notorious Rothschild banking dynasty, a long time bugaboo of the conspiratorial right.

the Rothschild coat of arms

Specifically, Calvi became involved in a shady deal that also included the Zurich branch of the Rothschild banking empire. It concerned an effort Calvi made to gain control the Italian publishing empire known as Rizzoli. In this endeavor he was assisted by fellow P2 member and Sovereign Military Order of Malta initiate Umberto Ortolani, of whom much more will be said in a future installment. For now, consider:

"The next phase of the $260 million Rizzoli deal took place at the end of April, with a $95 million transfer from Banco Ambrosiano Andino to the account of the Zirka Corporation, Monrovia, at Rothschild Bank in Zürich. This money was labeled as a loan to Bellatrix, a Panamanian company. Bellatrix was a child of United Trading. The $95 million for Bellatrix joined another $46.5 million that had been transferred to Rothschild Bank from Ambrosiano Services, Luxembourg, earlier that year, supposedly to purchase a block of 189,000 Rizzoli shares held at Rothschild Bank, at a price twenty times over market value. To these transfers would be added another $8 million, bringing the total amount received by Bellatrix to around $150 million. But there were several anomalies here that only came to light following later investigations. First, although Bellatrix belonged to United Trading, it was Ortolani and Bruno Tassan Din, the Rizzoli managing director, who controlled its operations. Second, Rothschild Bank claimed it had no Bellatrix account on its books. Third, the name of Bellatrix did not appear on Rizzoli's share register."

(Their Kingdom Come, Robert Hutchison, pg. 271)

There are indications that some of this money was siphoned and used to fund some of Gelli's "nefarious operations."

"Bellatrix, a dummy firm in Panama, had been created by Calvi and Marcinkus along with a trinity of P-2 members –Licio Gelli, Umberto Ortolani (who had received the Vatican title of 'Gentleman of His Holiness' from Pope Paul VI) and Bruno Tassan Din, managing director of the huge Rizzoli publishing firm. Bellatrix used a portion of the $184 million it milked from the Ambrosiano cash cow to purchase Exocet missiles for Argentina in its struggle with England over the Falkland Islands. The dummy corporation had received this loan, secured on paper with Ambrosiano stock, with cash capital of less than $10,000..."

(The Vatican Exposed, Paul L. Williams, pg. 166)

Did Calvi, Gelli and company attempt to run a savage burn on the Rothschild so as to procure money for arms for some of their Latin American allies? Certainly there have been rumblings that the Rothschilds played some role in Calvi's death. And at least one murder linked to the Jewish banking dynasty may have played into the Vatican banking scandal. These things along with a series of armed car robberies that unfolded in the mid-1980s and Calvi's bizarre, ritualistic death shall be considered in the next installment. Stay tuned.