Here are a few excerpts from a book I recently read, "God's Bankers: A History of Money and Power at the Vatican," by Gerald Posner.
Sextus IV had an inspired idea: apply them to souls stuck in Purgatory. Any Catholic could pay so that souls trapped in Purgatory could get on a fast track to Heaven. The assurance that money alone could cut the afterlife in Purgatory was such a powerful inducement that many families sent their life savings to Rome. So much money flooded to Sextus that he was able to build the Sistine Chapel.
Alexander VI—the Spanish Borgia whose Papacy was marked by nepotism and brutal infighting for power—created an indulgence for simply reciting the Rosary in public. The new sales pitch promised the faithful that a generous contribution multiplied the Rosary’s prayer power. Each Pontiff understood that tax revenues from the Papal States paid most of the day-to-day bills, while indulgences paid for everything else. The church overlooked the widespread corruption and graft inherent in collecting so much cash and instead grew ever more dependent on indulgences. And as they got ever easier to buy and promised more forgiveness, they became wildly popular among ordinary Catholics.
Historians credit Johann Tetzel, a popular sixteenth-century Dominican priest and dispenser of indulgences, with the first advertising jingle: “As soon as the coin in the coffer rings, a soul from Purgatory springs.”
The three-article financial convention—the Conciliazione—granted “ecclesiastical corporations” a tax exemption. It also compensated the Vatican for the confiscation of the Papal States with 750 million lire in cash and a billion lire in government bonds that paid 5 percent interest. The settlement—worth about $1.3 billion in 2014 dollars—was approximately a third of Italy’s entire annual budget and an enormous windfall for the cash-starved church. The Vatican wanted double that, but Mussolini persuaded the Pope and his negotiators that the government was itself in precarious shape. It could ill afford anything more. As an extra inducement, Italy agreed to pay the meager salaries of all 25,000 parish priests in the country.
“Italy has been given back to God,” the Pope told the Vatican newspaper L’Osservatore Romano, “and God to Italy.” The church threw its full power behind the fascists. The Vatican disbanded its influential Partito Popolare Italiano and exiled its leader from Italy. Italian bishops swore an oath of allegiance to the fascist government and clerics were prohibited from encouraging the faithful to oppose it. Priests began offering prayers at Sunday Masses for Mussolini and for fascism. Some clergy joined the National Fascist Party and a few even served as officers.
The Lateran Pacts converted Mussolini into a hero for devout Italians. Many homes soon had a picture of Il Duce hanging next to one of the Pope or a crucifix.96 Even Hitler hailed the church for “making its peace with Fascism.” The influential Cardinal Merry del Val said Mussolini was “visibly protected by God.”
And there was a special accommodation for the Kirchensteuer, the church tax on German Catholics that had been in effect since 1919. The church often had trouble getting the faithful to pay it voluntarily, so the Third Reich agreed to collect the 8 to 10 percent tariff through automatic payroll deductions of Catholic wage earners. It was the first time that any country had agreed to provide the Vatican a share of government-collected tax money. It uniquely tied the church to the Third Reich.
In return, the Vatican gave Hitler the formal endorsement he wanted. Article 16 of the Reichskonkordat required German bishops and cardinals to swear an oath of loyalty to the Third Reich. It was a dramatic reversal from 1932 when a German bishops’ conference had banned membership in the Nazi Party and forbade anyone wearing a swastika from receiving the sacraments. The agreement also decreed that a “special prayer . . . for the welfare of the German Reich” be inserted into every Sunday and Holy Day Mass.
The question of who would be the next Pope made its way even to Hitler. An unidentified intelligence source inside the Vatican approached the Gestapo with a tantalizing offer: the election could be fixed for 3 million gold reichsmarks. Once the secret tariff was paid, the Germans could pick the cardinal they wanted and he would win on the first ballot. Only a handful of top Nazis were let in on the secret proposal, and it ignited a furious debate at the highest level of the Third Reich. Hitler was tempted to approve the bribe but at the last moment he passed, worried the offer was too good to be true and might be a setup to embarrass the Nazis.
But the Vatican had a unique power to influence events compared to the Allies. As the head of the world’s then largest religion, Pius wielded a moral authority far beyond the scope of any Western government. The church counted millions of loyal worshippers inside Nazi Germany and the occupied countries. They had become accustomed to Popes setting policy on critical and often divisive issues. Catholics dominated the leadership of every puppet government allied with the Nazis. Many devout Catholics maintained their faith at the same time they worked at concentration camps and ran the Third Reich’s bureaucracy of mass murder. Some priests were involved in both fascist politics and the civilian slaughter. The Pope’s passive behavior did nothing to disabuse them of that contradiction. In an era in which the faithful were more likely to follow Pontifical decrees, an unequivocal declaration from Pius that it was a mortal sin for any Catholic to aid in the killing of Jews might have dealt a serious blow to Hitler’s Final Solution.
The Vatican is the only European nation that denies historians general access to its archives.
What is undeniable is that the Vatican’s stakes in Generali, RAS, Fondiaria, and other insurance firms provided a high rate of return in part because some of the profits were from the escheatment and nonpayment of life insurance and annuities to Jewish policyholders. Since the Vatican itself was not a direct insurer, however, it was never included in any postwar restitution paid by the insurers to the victims. After the war, the U.S. military office in charge of Operation Safehaven—the Allied program to retrieve plundered assets and illegally obtained profits—admitted that when it came to the Italian insurers and their strategic partners, “we know absolutely nothing.”
Sindona did more than just help his friend Paul VI by contributing to political referendums. That same May, a French cardinal, Jean Daniélou, was found dead in the apartment of a twenty-four-year-old nightclub stripper whose husband had a criminal record as a pimp. Police discovered that the cardinal, appointed by Paul VI five years earlier, had about $10,000 in cash on him. The Pope sent a clandestine message to Sindona to ask if his French business contacts might prevent the story from becoming a scandal. Sindona called on banking colleagues who evidently convinced the Parisian detectives that their dossier was best kept secret.
Wojtyla also seemed glum, simply staring at his food. More than once he had told his Polish colleague Wyszyński, as well as König, that he did not want to be Pope.
“You simply must face the truth,” König told him. “This is what the Holy Spirit wishes.”
“It’s a mistake,” Wojtyla whispered.
And the police discovered a cache of startling photographs, including embarrassing ones of prominent Italians. The investigators ultimately concluded that Gelli had obtained many of the most salacious pictures from P2’s intelligence members. Most were never used as blackmail, but Gelli seemed a compulsive collector of information that one day might prove useful. One of the photos was of a naked Pope John Paul II sunning himself by a pool. The police did not then know that Gelli had sometimes shown that photo to others, using it as an example of how poor the personal security was around the Pontiff: “If it’s possible to take these pictures of the Pope, imagine how easy it is to shoot him.”
What was not evident to most outsiders was that the Vatican’s reactionary policy about sexual abuse by priests was driven largely by worries over financial ramifications. The Pope’s failure to apologize to victims was the direct result of fear that with thousands of lawsuits filed against dozens of dioceses around the world, plaintiffs would use a Pontifical mea culpa as an “admission against interests” by the church. The Vatican was also concerned that the church’s powerful American branch and its large payouts were setting a bad precedent that might soon have dire consequences for dioceses internationally.
Attorneys retained by the church double-checked to ensure that all 2,864 Catholic dioceses and 412,886 parishes worldwide—even Rome itself—were legally independent from the Vatican and that any financial fallout from the sex abuse litigation would not affect the city-state. Putting all the pressure on the individual dioceses had predictable consequences. After a large 1985 jury award, insurance companies in the United States began excluding coverage for sex abuse from their liability policies. That meant many dioceses had to self-insure when it came to the costs of litigating and settling abuse cases.
In 2005, a Mexican bishop said that donating money to the church “purified” it. Some Vaticanologists thought that was a not subtle pitch to get narco-traffickers to be more generous with their religious contributions. A Mexican monsignor addressed the matter more directly: “It is immaterial where the donations from drug trafficking originate and it’s not up to us to investigate the source of the money.” Such donations are called narco limosnas (narco-alms) in Mexico. No money laundering laws are violated so long as the Mexican clerics do not kick some of the cash back to the traffickers. But the U.S. Drug Enforcement Administration believes the Mexican church’s willingness not to ask questions about large cash gifts is a significant reason why the Catholic church’s wealth there has multiplied in recent years.
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