Congressional hearings were held to examine how a person like Frankel executed a colossal, multi-state Ponzi scheme. It mostly focused on lax insurance regulations, any Vatican connection was ignored. This brings us to a crucial document. Five state insurance commissioners filed in federal court a suit titled Dale, Pope, Laken, Fisher and Pickens versus Colagiovanni, Collins, Corbally, Endurance Investments Ltd.; The Holy See a/k/a Vatican CityState and Monitor Eccleiasticus Foundation [MEF]7. The suit -- which I quote at length to present the insurance regulators' compelling case in depth as well as provide a better sense of operations in the Vatican, alleges under RICO statutes that between "at least 1990 and 1999, Martin Frankel assisted by Defendants and others, devised and implemented a scheme to defraud insurance companies by acquiring them while concealing Frankel's involvement, of misappropriating the companies assets and laundering the ill-gotten gains. Through this scheme, seven insurance companies were defrauded of more than $200 million [under RICO potential penalties total $600 million]. The defendants participated in activities that furthered and facilitated Frankel's fraudulent scheme."
Himself Jewish, Frankel decided that the Catholic Church would provide ideal cover as well as support for his operations, and he sought out helpful church members. It proved remarkably easy. After American prosecutor, friend of President Reagan, and devout Catholic Thomas Bolan received a letter through Thomas Corbally8 from "Rosse" [Frankel's cover name] outlining his plan in terms as innocuous as could be managed considering the plan's breathtaking nature, Bolan "traveled to the Vatican and, with Colagiovanni9, proposed the plan to Bishop Francesco Salerno in a meeting at the Vatican. At that time Salerno was the Secretary of the Prefecture for the Economic Affairs of the Holy See..... [and] was also on the board of MEF. The parties discussed the proposal, informing Salerno specifically that "Rosse' would be the source of the funds, and would retain control of the $50 million even after it was donated to the Vatican Foundation. On August 18, 1998, Salerno approved the plan, saying it was "a good idea.'.... Afterwords the [Vatican] Secretary of State had misgivings..... Under a new plan [that better covered the Holy See's complicity], Frankel would form St. Francis of Assisi Foundation to Serve and Help the Poor and Alleviate Suffering [a shell charity actually used to purchase insurance companies] [that] would be able to state that it was funded by the Vatican, so that St. Francis..... In actuality [it] would be funded entirely from looted funds held in Frankel's Swiss bank account. Colagiovanni then agreed to allow MEF, the Vatican-related organization of which he was President, to be held out as the "settler' of St. Francis..... MEF was used to create the impression that the funding for [St. Francis] had come from the Vatican."
The suit lists others who knew of the plan. They include Giovianni Battista Cardinal Re, who as Sostituto head of the First Section of the Vatican Secretariat of State was the 3rd highest ranking official in the Holy See. Pio Cardinal Laghi, former Vatican Ambassador to the U. S. and head of the Congregation for Catholic Education in the Vatican who, after receiving a $100,000 hospital donation from Frankel, was warned not to directly thank "Rosse" and therefore sent a less indicting modified letter instead. Archbishop Alberto Trcarico, Nunzio Apostolico a disposizione in the Second section of the Vatican's Secretariat of State. And Father Giovanni D'Ecole, Capi Uffico in the First section of the Vatican's Secretariat of State who visited Frankel in Connecticut and accepted a donation for his charitable order.
The suit continues. "Frankel was also interested in securing the involvement of the [IOR], popularly known as the "Vatican Bank' [controlled at the time by Cardinal Sodano]. As a Vatican entity, the IOR is beyond the reach of regulatory scrutiny other than the Vatican's own supervision..... Colagiovanni assured Frankel that any fund or donation given to the MEF would fall under the protection of the "very strict confidentiality and secrecy' laws that apply to any entity linked to the IOR. The IOR was involved in a number of ways in Frankel's scheme." After explaining how the MEF's IOR account was used by Frankel et al. the commissioners claim that "as part of the scheme, Frankel had Colagiovanni obtain a letter from the IOR [which after checking his credit with Frankel's Swiss banker was issued by Salerno] confirming MEF's "uninterruptible relation' with IOR, which was signed by the IOR's director, Dr. Lelio Scaletti and by another IOR official, Dr. Anthony Chiminello. This letter was used to bolster MEF's and St. Francis' credibility with insurance regulators and others. For example, when lawyers and officials connected with one of the insurance companies Frankel targeted questioned the Vatican's connection to St. Francis, the IOR letter was presented as proof of the association..... Once the Vatican connection was in place, Frankel established St. Francis as a British Virgin Islands trust. The St Francis documents were backdated to August 10, 1998..... in part to coincide with astrological events Frankel considered favorable..... [the Vatican] knew, threw Colagiovanni, that Frankel was to be the source of any funds allegedly contributed to either foundations. It knew, through Colagiovanni, that Frankel controlled St. Francis, even though Jacobs, Bolan and Collins were listed as members of the Board of Trustees. Colagiovanni's position within the Vatican was an essential element of the scheme because it gave a patina of legitimacy to St. Francis, and Colagiovanni used his position in furtherance of the scheme. High-ranking officials of the Vatican authorized or ratified the plan whereby MEF would be used as a conduit for the flow of Frankel's money to St. Francis to purchase U. S. insurance companies, while St. Francis claimed a "Vatican tie.' Colagiovanni had actual authority to act as the Vatican's agent in connection with Frankel's scheme by virtue of his position as a member of the Curia [and] as a prelate auditor emeritus..... high ranking officials with the power to bind the Vatican in financial matters were aware of, did not object to, and explicitly or tacitly approved Frankel's plan..... Because of the involvement of these high-ranking officials, Colagiovanni had the Vatican's actual authority to assist Frankel in his scheme." The commissioners detail Colagiovanni's intimate physical connections with a willing Vatican, and continue that high-ranking "Vatican officials -- including Re and Caccialvillan -- knew of, and failed to repudiate, certain of Colagiovanni's misrepresentations, when presented with the opportunity to do so. This refusal to repudiate or comment was in complete contrast to the Vatican's efforts to distance itself from Colagiovanni, MEF and St. Francis in June 1999, after the Frankel scandal drew the attention of the international media..... When presented with Sandifur's pointed inquiries about MEF's and St. Francis' funding clearly premised on misrepresentations, Re did not deny that the Vatican had given $190 million to MEF for St. Francis, a fact which Re knew was false..... His silence..... enabled the scheme to continue. [After doing much the same thing] Cacciavillan agreed to forward to Colagiovanni or someone more familiar with the scheme any future inquiries about the MEF, St. Francis or about the Vatican's connections to either..... In 1998 and 1999, Colagiovanni, MEF and the Vatican knowingly conducted, participated in, controlled, manipulated, or directed the enterprises' affairs through a pattern of racketeering consisting of violations of the federal mail and wire fraud statutes, in violation of 18 U. S. C. 1962(c)."
At best Catholics laity and clergy involved with the Frankel project appear to have been financially and ethically slack and opportunistic. As Fortune Magazine "s Behar (1999) excellent summary explains, Frankel requested "that the Vatican front for him as a money launderer in return for a 10% cut of the funds (looted from U.S. insurance companies) [using the remaining 90%] to buy progressively larger insurers..... Given Bolan's extensive credentials as a prosecutor and judicial adviser, Rosse's letter should have set off all kinds of alarms". But, as the agreed percentages illustrate, the driving motive behind Catholic complicity was probably criminal, because as FM continues, "[MEF] would provide [Frankel] with just the kind of immaculate connection he needed to cover his tracks; meanwhile the Church itself could sit back at a safe distance--eyes wide shut--and gather the promised millions skimmed from Frankel's nascent empire. There was just one catch: Doing so would require lies and false affidavits, not only from Frankel but from Rome as well." Court TV (www.crimelibrary.com/notorious-murders/classics/frankel) likewise observes that there "was something for everyone in this arrangement: Frankel had purchased the "immaculate" connection that should keep the regulatory community from looking too closely at his insurance empire and the church would benefit from a safe distance in the fruits of Frankel's crooked dealings. It was almost too clever". As per standard Vatican procedures, aside from their brief denial of guilt, the church not responded to the suit, or attempted to publicly present exonerating evidence.
The argument can be made that the suit by five state insurance commissioners against the Holy See -- and in effect against JP II since he is the person ultimately responsible for all activities within his domain -- qualifies as one of if not the most extraordinary and disturbing documents in U. S. and Catholic legal history. If verified the scandal arguably matches the American sex abuse scandal. Despite the involvement of state officials, and coverage of the affair by qualified journalists, the case and even the suit has received unsettling little coverage from news sources, to the point that the suit is essentially unknown to all but a few Americans, and has initiated no discernible activity by the Federal government in its relations with the Papacy, or the commentary of politicians.
Taking an overall view of events over the decades, note the repeating patterns. The Frankel scheme incorporated the same modis operandi utilized in the Ambrosiano scam, high Vatican officials writing questionable letters of patronage to back ill conceived loans in collaboration with high rolling criminals. The schemes of Calvi, Frankel and Sindona were increasingly grandiose and bound to explode in the face of themselves and the church. When exposed Sindona, Calvi and Frankel desperately led officials on international manhunts. According to Behar (1999) the law firm of one of the players cited in the suit, Bolan (but not himself he claims), represented Sindona in his case.
The standard response of the church to queries and legal actions over criminal relationships and activities has been to either ignore the charges, or issue rote denials of culpability, sometimes associated with pleas that they were the ethical and financial victims of criminals, or naively unaware of the criminal intent of their associates. Those involved in making or supporting charges are frequently denounced as unjustifiably anti-Catholic by Catholics, and the Church is portrayed as a victim. Handling of questions is almost invariably reactive rather than proactive. In no case has the church offered a detailed explanation of why the church is innocent or a victim in the specific affairs detailed above. In The National Catholic Reporter Allen (2002) slighted the Frankel affair as well as the WW II and pedophile suits against the Vatican by titling his column "Lawyers Target the Holy See" and stating that despite "the fact that the Holy See is a sovereign state and hence theoretically immune from being sued in the courts of other nations, that of course doesn't stop enterprising lawyers from trying" as though it was a matter pushed by aggressive attorneys who should cease their misguided harassment of the Holy See. Allen's report included no expression of concern over possible victims or clerical guilt. Nor has the Vatican opened its files of accounts to outside investigations by journalists or law enforcement agencies that could either clear them of guilt, or establish culpability. Instead, the Holy See has stoutly defended and exploited its sovereign status in all respects, maintaining tight secrecy and prevented authorities from arresting suspects either in or outside the Vatican. To date there has been no major effort to break through the Vatican's legal sovereignty barrier, although recent attempts have been making the Vatican nervous (www.timesonline.co.uk/tol/comment/faith/article7094310.ece, www.washingtonpost.com/wp-dyn/content/article/2010/06/28/AR2010062805003.html, Anonymous 2005, Cooperman 2005)10.
1. Hitler paid his annual Catholic tax until the end.
2. Immobaliare owned Paramount Studios, where The Godfather was shot at this time.
3. For example, in Kessler's (1972) otherwise sober WSJ account of the Sindona party in Rome it was reported that "Mr. Sindona himself relishes anonymity..... On those rare occasions when he has met privately with a journalist, he has confounded the interviewer by skillfully making a dozen or so tiny paper boats while rapidly fielding some questions, parrying others, and declining to answer still others."
4. Membership in a Masonic lodge is a grievous violation of Catholic canon law.
5. In an unusual act of political sanity the 1972 Nixon campaign declined a $1 million dollar donation from Sindona, as revealed by post Watergate investigations. That Sindona made such an offer exposes both how big and how delusional his schemes were.
6. In The Godfather III the Michael Corelone character is a vehicle to present a somewhat sanitized variation on the Michele Sindona persona. In the film Corelone tries to finally become legitimate by investing in "International Immobilaire" in association with corrupt Vatican clerics, some of whom are murdered. No factual portrayal of the life of Sindona or Marcinkus has been produced. In TGIII the Frederick Keinzig character is a much altered stand in for Roberto Calvi. The more realistic God's Banker news.bbc.co.uk/2/hi/
entertainment/18625998.stm was widely distributed only in Italy, where the publicity may have assisted in the attempt to legally solve his violent death as mentioned in the text.