Roberto Calvi - The Banco Ambrosiano Scandal

The Banco Ambrosiano Scandal

Roberto Calvi was the chairman of Italy's second largest private bank, Banco Ambrosiano when it went bankrupt in 1982. In 1978, the Bank of Italy had produced a report on the Banco Ambrosiano, which found that several billion lire had been exported illegally,which led to criminal investigations. In 1981, Calvi was tried, given a four-year suspended sentence and fined $19.8 million for tranferring $27 million out of the country in violation of Italian currency laws. He was released on bail pending appeal and kept his position at the bank. During his short spell in jail he attempted suicide. Calvi's family maintains that he had been manipulated by others and was innocent of crimes attributed to him.

The controversy surrounding Calvi's dealings at Banco Ambrosiano echoed a previous scandal in 1974, when the Holy See lost an estimated $30 million upon the collapse of the Franklin National Bank, which was owned by the Sicilian-born financier Michele Sindona. Bad loans and foreign currency transactions had led to the collapse of the bank, and Sindona later died in prison after drinking coffee laced with cyanide.

On 5 June 1982, two weeks before the collapse of Banco Ambrosiano, Calvi had written a letter of warning to Pope John Paul II, stating that such a forthcoming event would “provoke a catastrophe of unimaginable proportions in which the Church will suffer the gravest damage." Banco Ambrosiano collapsed in June 1982 following the discovery of debts (according to various sources) of between 700 million and 1.5 billion US dollars. Much of the money had been siphoned off via the Vatican Bank (strictly named the Istituto per le Opere Religiose or Institute for Works of Religion), which was Banco Ambrosiano's main shareholder.

In 1984, the Vatican Bank agreed to pay US$224 million to the 120 creditors of the failed Banco Ambrosiano as a “recognition of moral involvement” in the bank's collapse.