Mussolini harshly cracked down on the Mafia. Consequently the U. S. military allied with the latter in the states and in Italy during the 1943-45 campaign (Rodney 1977). This, in combination with the long term refusal of J. Edgar Hoover to even acknowledge the existence of organized crime, plus a series of unstable Italian governments, allowed the Mafia to expand operations on an international basis, and more deeply entrench itself into American and especially Italian life at multiple levels (Rodney 1977, Hammer 1982, Arlacchi 1983, Gambetta 1993, Schneider and Schneider 2003).
To outline the case linking criminal elements and the Vatican we start with a1972 Wall Street Journal article (Kessler 1972) that reported that "Michele [mick-ale-e] Sindona, one of Italy's richest and most influential financiers, is preparing to make a substantial increase in his American investments..... described as "Italy's Howard Hughes' because of his wealth and secretive nature.....[He] staged a lavish reception to celebrate his latest venture..... Among those attending were U.S. Ambassador Graham Martin, Rome Mayor Clelio Darada, cabinet minister Giuseppe Lupis and Bishop Paul Marcinkus of Chicago, president of the Vatican's Institute for the Works of Religion, commonly known as the Vatican's bank because it administers the church's vast funds. Bishop Marcinkus' attendance was taken as proof of Mr. Sindona's strong ties with the Roman Catholic Church."
Further linking Sindona to the Vatican is a New York Times article (Farnsworth 1974a) that notes in "1969 Mr. Sindona acquired one third of the shares of Generale Immobiliare2 from the Vatican's Institute for Religious Works, the body that manages the Roman Catholic Church's big investment portfolio. There were rumors at the time that Mr. Sindona had signed the final agreement with Pope Paul VI. Mr. Sindona is also in partnership with the Vatican in the Finabank of Geneva..... He also acquired another property from the Vatican, a company known as Codotte Dacqua, which supplies Rome with water..... Mr. Sindona was a friend of Jocolyn Hambro, managing partner of the Hambros Bank..... This London bank has had close ties with the Vatican for generations." Another 1974 NYT article (Farnsworth 1974b) further observed that as Sindona's "partner in some ventures, he had the Vatican's powerful Institute for Religious Works, the body that manages the Roman Catholic Church's investment portfolio." Numerous other newspaper articles recorded Sindona's ties to the Vatican, citing him as the Holy See's financial partner and/or adviser; Hoffman (1979) noted that Sindona "advised the Holy See and Bishop Marcinkus on how to handle its assets and investments, " the same year Lubasch observed that Sindona's "financial activities reportedly included advising the Vatican," and according to Dionne (1986b) "Sindona had also once served as financial adviser to the Vatican" (also see Lubasch 1980, Anonymous 1981a, Martin 1982, Raab 1982, Suros 1986, Dionne 1986a). But, as he publicly expanded his American interests none of the 1972-74 newspaper articles quoted specifically mentioned Sindona's ties with certain elements described below, although Kessler (1972) referred to SEC concerns about his mysterious financial dealings. Playing a game of global high stakes duplicity that left him chronically on the edge of ruin, Sindona was also mentally borderline3.
In his early years Sindona was recognized as a mathematical and accounting genius, and he worked his way to the top ranks of Italian wealth. The means by which he did so are well documented (Hammer 1982, Martin 1982, Arlacchi 1983, Fonzo 1983, Colby 1987, Tosches 1988, Gambetta 1993, Behar 1999, Schneider and Schneider 2003). Beginning as a wartime black marketer in association with quasi-fascist "Don" Vito Genovese of Murder Inc. as well as U.S. military ally Lucky Lucianco (Rodney 1977), Sindona soon became a leading banker for the Italian Mafia, and then moved to the international scene where he is alleged to have worked with the Italian Inzerillo crime family, related to the American Gambino organization. The FBI and Interpol cited Sindona as attending the famed 1957 Palmero mob conference that rationalized and expanded the international La Cosa Nostra for the heroin trade. Sindona, the "Godfather Banker," was one of the great Mafia criminals of the 20th century.
In the 1960's Sindona, who, with the exception of the 1972 party detailed above, usually avoided publicity, quietly developed ties with major figures in the Republican Party. Sindona also developed closer connections with the Vatican banking complex. Nogara had died leaving the IOR with insufficient guidance. This apparently was one link in a broad pattern of cooperation between two secretive, nondemocratic organizations in deeply corrupt post war Italian society. Initial links were made immediately after the war when organized criminal elements provided critical skills and contacts for operating the ratline. When (never fulfilled) moves were made to strip the Italian church of its tax privileges in the late 1960s, it appears that the Papacy sought out Sindona's assistance. As, according to the Fransworth (1974a) article quoted above, Paul VI probably directly engaged the services of Sindona, who already had major financial dealings with the IOR.
The Catholic Sindona is also alleged to have been a Free Mason, which was infiltrated by the Mafia in Italy (Tanner 1981b, Raab 1982, Fonzo 1983, Suros 1986, Dionne 1986a, Tosches 1988). A 1981 NYT account (Tanner 1981a) covered the historic P-2 Masonic scandal in which lodge "members, according to the police, had sworn ultimate allegiance to their grandmaster rather than the nation. In a report to the government, the Milan magistrates wrote that "[Liccio] Gelli [a hardcore fascist with connections to Juan Peron] had constructed a very real state within a state,' using blackmail, favors, promises of advancement and bribes..... Italy has about 550 Masonic lodges. Membership is estimated at 15,000, including many Roman Catholics. But Flaminio Piccoli, the Secretary of the church-connected Christian Democratic Party, said a few days ago that membership in a Masonic lodge was incompatible with being a Christian Democrat because "the Masons are a force that attacks the church'"4. Raab (1982) reported that Sindona "denied in the [official] interview that he had been a member of P-2. But he conceded that he had "prepared all economic projects' for the lodge in Italy and South American countries..... The panel is investigating whether members of the lodge plotted to take over the Italian government through unconstitutional means." According to Dionne (1986a) "Mr. Sindona was also a financial advisor to the secret Propaganda 2, or P-2, Masonic Lodge, a group of prominent Italians accused of criminal activities and right-wing intrigue in Italy and South America. The discovery of the P-2 Lodge brought down an Italian Government in 1981." According to the accounts cited above the P-2 state within a state was used as an intelligence network to detect, detour or deter those who might interfere with its questionable, potentially revolutionary activities. It was soon banned.
At the lodge Sindona allegedly became close to the Bishop Paul Marcinkus mentioned in the 1972 WSJ article quoted above. The 6' 4" "Gorilla" had become the Popes' personal bodyguard and travel agent (Hoffman 1979, Anonymous 1981b, Reaves and Ettenborough 2003). Possibly at Sindona's request, Paul VI made Marcinkus President of the IOR in 1971 even though as the bishop acknowledged to the press "I have no banking experience." He is also quoted as often saying that "You can't run a church on Hail Marys" (Reaves and Ettenborough 2003).
In order to evade the threatened imposition of taxes upon the church Sindona divested to IOR of its extensive Italians holdings in favor of international investments, severely damaging the Italian economy. Yet the US ambassador to Italy labeled Sindona, who financially advised President Nixon, as "man of the year" in 1974. Meanwhile, the US Justice Department and Interpol caught American citizen Marcinkus dealing in forged securities. Nixon allegedly saw that the matter was not pursued.