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JGR/Wilson, Ambassador William
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135839710
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JGR/Wilson, Ambassador William
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Records of the Office of Counsel to the President (Reagan Administration)
John Roberts' Subject Files
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Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual collections.
Collection: Roberts, John G.: Files
Folder Title: JGR/Wilson, Ambassador William
Box: 57
To see more digitized collections visit:
https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories visit:
https://reaganlibrary.gov/document-collection
Contact a reference archivist at: [email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
National Archives Catalogue: https://catalog.archives.gov/
U.S. Envoy to Vatican Is Reportedly Chastis
Wilson's Alleged Intervention in 2 International Cases Comes Under Cr
By RONALD J. OSTROW and DON A. SCHANCHE, Times Staff Writers
WASHINGTON-Ambassador
Despite Starr's letter, Wilson
Page 6, PartI/
to the Vatican William A. Wilson
invited Marcinkus to breakfast in
has been chastised by the Justice
his Rome villa when Smith and his
Department and has alarmed his
wife, Jean, were guests there in
Monday, July
superiors at the State Department
November, 1982. Smith was on the
because of his personal interven-
final leg of an extensive foreign trip
1984
tion in two highly sensitive and
devoted primarily to drug enforce-
widely publicized international
ment and refugee issues.
LA. Tines
criminal investigations, Adminis-
As recently as May, Wilson per-
tration officials say.
sisted in his efforts to discover the
Wilson is a close friend of Presi-
status of any U.S. interest in Mar-
dent Reagan. And the nature of the
cinkus by telephoning FBI Director
two cases-those of fugitive finan-
William H. Webster about the case
cier Marc Rich and Vatican banker
on a special secure telephone line in
Archbishop Paul C. Marcinkus-
the U.S. Embassy in Rome, sources
has raised fears among Adminis-
say.
tration officials that his actions
In the interview in his Rome
could be viewed as an improper use
office, Wilson said he had trouble
of his position and thus become an
recalling the letter to Smith. "I
embarrassment.
can't remember the reason behind
Administration sources say Wil-
the letter," he said. "I can't even
son's actions are being examined by
remember writing the letter."
the State Department's Bureau of
Similarly, he said he did not
European Affairs, but department
recall Starr's characterization of
spokesmen declined to discuss the
the letter to Smith as inappropriate.
inquiry.
"I don't remember receiving a
letter from Ken Starr," he said.
Letter to Smith
"Maybe I did. So, I don't have any
In the Marcinkus case, Adminis-
comment on that."
tration officials said that in 1982,
Wilson said he invited Marcinkus
Wilson wrote a letter on the arch-
to breakfast when the Smiths were
bishop's behalf to Atty. Gen. Wil-
visiting because "it just seemed an
liam French Smith, Wilson's long-
appropriate time to get them to-
time friend and fellow member of
gether. Both (Smith and Marcink-
Reagan's "kitchen cabinet" of close
us) play tennis and golf. They
advisers. Wilson, a Bel Air devel-
discussed those issues. I don't recall
oper and rancher, has been co-
them discussing any substantive
trustee of the legal trust that has
issues, however."
managed Reagan's private assets
since 1973.
'A Long Shave'
At the time he wrote the letter,
Another official familiar with the
Wilson was the President's unpaid
breakfast said aides to the attorney
personal envoy to the Holy See.
general learned in advance that
Wilson had invited Marcinkus and
suggested that Smith "take a long
time shaving" that morning rather
than make contact with Marcinkus.
Instead, the official said, Smith did
a "drop by" and only exchanged
greetings with Marcinkus rather.
than carry on any lengthy conver-
sation.
Smith's aides were determined
that "the attorney general was not
to get involved in the entire mat-
ter," the official recalled.
Wilson said, in response to a
question, that he had not asked
Smith to do anything for Marcinkus
during the breakfast or later.
As for the phone call to Webster
from the embassy, he said: "That's
personal. I prefer not to answer."
Asked if Marcinkus had asked
him to make the call, Wilson said:
"I don't want to talk about that
Los Angeles Times
telephone call. I had a special
Reagan
for
to the Vatican last January and the
to comment on
Senate confirmed him in March as
Wilson's letter to Smith or his
the United States established full
response. Smith, responding
diplomatic relations with the Vati-
through a spokesman, also refused
can.
comment on any aspect of the
Wilson, in an interview in Rome,
matter, as did FBI Director Web-
said he could not remember writing
ster on the phone call from Wilson.
the letter. Further, he drew a
Wilson's involvement in the case
distinction between the time he
of financier Marc Rich also drew a
was Reagan's representative and
warning, this time in a cable from
his time as ambassador, noting that
Lawrence S. Eagleburger, then
he was not a paid employee of the
undersecretary of state, on Dec. 12,
government in 1982.
1983. Rich, once a New York-based
commodities trader, renounced his
'Letters of Patronage'
U.S. citizenship and went to Swit-
The American-born Marcinkus
zerland, then was indicted in the
has come under scrutiny by Italian
biggest tax evasion case in history,
authorities over his and the Vatican
along with charges of racketeering
bank's involvement in events that
and fraud.
led in 1982 to the collapse of the
Eagleburger's cable said: "Our
$1.2-billion Banco Ambrosiano in
legal advisors and the Justice De-
what became Italy's largest bank
partment are all extremely nervous
scandal. Marcinkus, as president of
about any involvement at all on
the Vatican bank, issued "letters of
your part in this case."
patronage" to Ambrosiano Presi-
Meets Swiss Official
dent Roberto Calvi that Calvi re-
portedly used in some of his com-
Even so, Wilson met with a
plex dealings that went sour.
Swiss official, Mathias Kraft, short-
Wilson apparently was seeking
ly afterward to discuss the matter.
to determine the status of any U.S.
Kraft is deputy director for inter-
inquiries in the case, and to vouch
national law at the Foreign Minis-
for Marcinkus' good character, a
try in Geneva.
source said. Wilson wrote the letter
Wilson, in the interview, side-
after widespread news reports here
stepped questions about why he
and abroad raised questions about
went ahead with the meeting, the
whether Marcinkus, a friend of
nature of his interest in the Marc
Wilson, would be removed from his
Rich case and details of his discus-
Vatican bank post and prosecuted
sion with Kraft. "After it was all
by Italian authorities in connection
over, I reported in full to Larry
with the Ambrosiano scandal.
Eagleburger," he said.
Federal law enforcement offi-
Eagleburger, now president of
cials indicate that the U.S. govern-
Kissinger Associates, former Sec-
ment has a current interest in
retary of State Henry A. Kissin-
Marcinkus in connection with a
ger's consulting firm, declined to
money-laundering investigation
comment. A source familiar with
being conducted under the super-
Eagleburger's dealings with Wil-
vision of the U.S. attorney's office
son on the Rich case said Wilson
in Brooklyn. Officials there, how-
reportedly became involved after
ever, flatly refused to comment.
an acquaintance, a Swiss lawyer,
Marcinkus remains under investi-
said he knew someone Wilson
gation by a Milan court for fraud in
ought to meet.
connection with the collapse of
Wilson took him up on the offer
Banco Ambrosiano.
of an introduction, and the person
turned out to be a lawyer repre-
Faith in Marcinkus
senting Rich, who asked Wilson to
In Wilson's letter, which by-
passed usual Justice Department
intercede for his client, the source
screening processes because of
said.
Wilson's friendship with Smith, he
expressed his firm faith in Mar-
Sources close to the investiga-
cinkus, according to one official
tion and prosecution of the Rich
familiar with the correspondence.
matter, which is being conducted
"The letter struck me as very odd,
by U.S. Atty. Rudolph Giuliani in
and it put everybody in a very
awkward position," the official
said.
New York, said no attempts to
Wilson's letter drew a rebuke
intervene in the case by Wilson
from Kenneth W. Starr, then coun-
have reached Giuliani's office.
selor to the attorney general and
Times staff writers Robert C.
now a judge on the U.S. Court of
Toth and Oswald Johnston contrib-
Appeals here. Administration
uted to this report.
sources say Starr wrote to Wilson
that his contact with the attorney
general in connection with the
Marcinkus matter had been inap-
propriate.
the foolish and dangerous position of undertating
eral money would still be cut off for private agen-
Was
the growing commitment of developing countries
cies that use other funds-not government funds
The
to deal with their population problems.
-to provide voluntary abortion services or refer-
Soul
Mindful that the Mexico City conference will be
rals. This would end the major source of funding
held just before the Republican National Conven-
for certain international agencies that are among
tion, the administration has been trying to placate
the most effective providers of family 'planning
the most extreme elements in its anti-abortion
services in developing countries.
constituency. That's not easy. Federal law has
Thanks to the efforts of a determined minority,
long forbidden the use of U.S. aid for abortion pro-
federal money no longer pays for abortions in this
What
grams in other countries, but some right-to-life
country. But state and private aid ensure that al-
courages
send unde
groups have been pressing for curbs on all U.S.
most all women have this choice available to them.
opposes
population aid.
Other countries do not have these alternative
contribute
An earlier draft-prepared by the White House
channels of support available. It is offensive for the
for Prever
rather than by the State Department, as would
United States to attempt to deny to citizens of
the Comb:
normally be the case-was justifiably criticized for
other countries an option that-with the support
torials, "H
suggesting that population growth in the Third
of the majority of Americans-is available to its
Go?," July
Chaos," Jua
World could best be checked by a dose of free en-
own citizens.
By The
terprise and faster exploitation of natural re-
The tragedy of the administration's effort to un-
nition of
sources. This analysis looks all the more fatuous in
dermine birth control programs is that it will re-
light of the World Bank's new report pointing out
sult in higher infant and maternal mortality.
the unprecedented pressures of the population ex-
Family planning not only reduces illegal abortions,
plosion in developing countries and the dire conse-
which are common in developing countries. It also
quences for their economic and social develop-
results in fewer infant deaths and in healthier
Sen. Ala
ment.
mothers and children. That ought to be an out-
Salvadorar
The revised draft leaves this general analysis
come favored by any administration.
right to be
the United
gee ["We
to Stay,"
were refr
The Washington Post, Monday, July 16, 1984, Page Al0
moved to
cepting"
Questions for the Ambassador
The Po
proper La
and his
human
T
HE CASE OF Ambassador to the Vatican Wil-
do this after having been specifically warned that
leave his
liam A. Wilson, a political appointee and close
his conduct was out of bounds?
cal care,
friend of the president, becomes more complicat-
On another occasion, he intervened with the
human ri
ed. Why and to what extent did he become person-
Swiss government in the case of an American
come to
life? Shou
ally involved in two criminal investigations involv-
fugitive, a commodities trader indicted here in
upon the
ing financial fraud? Why was he given an exception
the nation's largest tax evasion case. Earlier the
every per
to the general rule that ambassadors must resign
State Department had urged him not to get in-
peacefully
corporate directorships when they assume office?
volved.
person is
On two occasions, Mr. Wilson tried to obtain in-
Then there is the matter of corporate director-
Are not a
tional and
formation from high officials of the Justice De-
ships. State Department regulations require am-
quiremen
partment about a rumored investigation of Arch-
bassadors to relinquish these private positions ex-
tion of ou
bishop Paul Marcinkus. The archbishop, Amer-
cept in extraordinary circumstances. Mr. Wilson
We da
ican-born head of the Vatican bank, is under in-
was granted an exception-the Senate Foreign
keep ped
vestigation in Italy in connection with the collapse
Relations Committee was advised of it before he
of one of that country's largest banks, and is said
was confirmed-allowing him to continue to serve
Monun
by sources in the U.S. government to be the sub-
on two boards, even though he does not appear to
ject of inquiries concerning a money laundering
qualify on any of the three grounds listed in the
I enjoy
scheme here. The initial request on behalf of the
regulations. The Department could cite no other
on the S
archbishop drew a strong letter from a Justice
ambassador given this privilege. Mr. Wilson is said
zine, July
Department official, who counseled that such in-
to have resigned from one directorship and to ac-
Howev
tervention in a criminal matter was "inappropri-
cept no fees from the other.
that the
ate"-whether it came while Mr. Wilson served
Mr. Wilson is no longer a private citizen. He is a
structure
as the president's unpaid personal representative
public servant with an obligation to avoid even the
claims,
1886.
to the Vatican or after he was confirmed as am-
appearance of impropriety. Does the realize how
bassador in March.
The
very unwise it is for an ambassador to get involved
own bad
Mr. Wilson also tried to arrange a personal
in a criminal investigation? Does he comprehend
1884, as
meeting between Attorney General William
the possibility of conflict of interest when an em-
on July
French Smith and Archbishop Marcinkus in Rome.
ployee of the government continues to hold a high
Statue
The attorney general wisely limited it to a quick
position in a private corporation? Does he intend to
exchange of pleasantries. Why would Mr. Wilson
offer an explanation of his conduct?
Washing
Lnt
bauorm
communee
un-
une,
and
national
party
Rare Ruling Let U.S. Envoy
U.S.
Remain on Corporate Boards
By LESLIE MAITLAND WERNER
Ambassador to Vaticar
Special to The New York Times
WASHINGTON, July 11 - William
A. Wilson, Ambassador to the Vatican,
was permitted to retain positions on the
boards of two corporations when be
Was Allowed to Remair
was raised to that rank in January, ac-
cording to State Department officials.
The State Department was unable to
provide any other example of an am-
bassador who had been granted such
on 2 Corporate Boards
an exception from the general policy
requiring ambassadors to step down
from directorships in profit-making
companies.
with laws and regulations governing
"conflicts of interest."
The corporations are Pennzoil and
Mr. Davis, acting chief counsel for
Earle M. Jorgensen, a California steel
the Ethics Office, said Mr. Wilson's
maker.
financial interest in the two companies
Policy on Directorships
was not pertinent to the decision allow-
Mr. Wilson. a longtime friend of
ing him to serve on their boards of di-
rectors.
President Reagan who served for
Associated Prems
many years as a trustee of his finances,
William A. Wilson
Role in Investigations
has also been the focus of recent ques-
Mr. Wilson became the focus of ques-
tions about his attempts to intercede in
On Personal Visit to U.S.
tions here when it was disclosed in The
two international criminal investiga-
Los Angeles Times that he had tried to
Alan D. Romberg, a State Depart-
tions.
intervene in two international criminal
ment spokesman, declined in a regular
investigations.
On the issue of the directorships, a
briefing yesterday to comment on Mr.
In one case, according to an official
State Department official said there is
Wilson's activities. He said be believed
who saw the correspondence, Mr. Wil-
a written policy covering the question
Mr. Wilson was now in this country on a
son wrote to Attorney General William
whether an ambassador may serve on
personal visit, but that be knew of no
French Smith inquiring as to whether
a corporate board but said he could not
plans for Mr. Wilson to speak with Gov-
the Justice Department was investigat-
ernment officials while he is in the
make the policy public today.
ing Archbishop Paul C. Marcinkus, the
United States.
Vatican's banker.
The aim of the general policy requir-
Robert G. Harper, manager of media
Archbishop Marcinkus was then
ing an ambassador to give up a direc-
relations for Pennzoil, said today that
under scrutiny by Italian officials in
torship. be said, is to guard against pos-
Mr. Wilson was in Houston, attending a
connection with the 1982 collapse of the
sible conflicts of interest. The official
meeting of the board of directors. He
Italian Banco Ambrosiano.
said be did not know why an exception
said Mr. Wilson had been named to the
According to the official, Mr. Wilson
had been granted to Mr. Wilson.
board in April 1983.
also advised Mr. Smith, a friend, that
"Mr. Harper said he had relayed a re-
The State Department could not pro-
quest to Mr. Wilson that he return a
an extensive Vatican investigation had
vide any examples of other such cases,
call seeking his comments. Mr. Wilson
cleared the Archbishop of any wrong-
either under the Reagan Administra-
doing.
did not do SO.
tion or in previous years. But an official
According to Mr. Wilson's financial
In a reply from a Justice Department
official, said to have been written with
disclosure form, his wife, Elizabeth,
Mr. Smith's Mr. Wilson was told It
Continued on Page A8, Column 1
has three accounts of Pennzoil stock,
would be inappropriate for Mr. Smith
each described as worth more than
to reply to such an inquiry.
Continued From Page Al
$250,000.
The standard disclosure forms do not
Visit to Rome
said this should not be taken to mea
require officials to list the exact
Nonetheless, the source said, Mr.
that such an exception was neve
amount of their holdings, but to check
Wilson, acting without Mr. Smith's per-
granted before.
off the range in which they fall. The
mission, subsequently arranged for the
The Senate Foreign Relations Con
highest category is for amounts worth
American-born Archibishop, a friend
more than $250,000.
mittee, which held bearings on th
of Mr. Wilson, to meet the Attorney
Two of the Pennzoil accounts are de-
nomination, was advised of the excep
General while Mr. Smith was staying
scribed as part of trust assets. Two are
with Mr. Wilson during a visit to Rome.
tion in a letter in January from the O:,
fice of Government Ethics. The letter
listed as providing dividends worth be,
Other sources familiar with Mr. Will-
tween $50,000 and $100,000; the third is
son's activities said he had also been in-
apparently attracted no public atten-
listed a providing more than $100,000 in
volved in discussions regarding a fugi-
tion at the time.
dividends.
tive financier, Marc Rich, who is under
The letter, addressed to Senator
indictment by the office of Rudolph W.
Member of Kitchen Cabinet'
Charles H. Percy, the Illinois Republi-
Giuliani, the United States Attorney in
can who beads the committee, said,
The disclosure form also shows Mr.
"While the State Department has a
Wilson, a member of the President's
"kitchen cabinet," as holding between
Manhattan, on oil fraud and tax eva-
general policy against the retention of
$100,000 and $250,000 worth of stock in
sion charges.
for-profit corporate directorships, they
Earle M. Jorgensen.
Lawrence S. Eagleburger, then
have, in accordance with an exception
In 1982, the company attracted public
Under Secretary of State who has since
in their policy, determined that Mr.
attention when it was disclosed that it
retired, sent a cablegram to Mr. Wilson
Wilson may, on an uncompensated
had given Attorney General Smith a
last December warning him against
basis, retain his directorships.
$50,000 severance payment when be
becoming involved.
According to an aide of the Foreign
stepped down as an independent mem-
According to a source familiar with
Relations Committee, Mr. Wilson's
ber of the board of directors. Mr. Smith
the cable, Mr. Eagleburger said, "Our
membership on the corporate boards
contended the payment was legal and
legal advisers and the Justice Depart-
was "not troubling" to the committee
proper but returned the money to avoid
ment are all extremely nervous about
because "it was O.K. 'd by State and the
an appearance of impropriety.
any involvement at all on your part in
Office of Ethics.'
In the letter to Mr. Percy regarding
this case."
Gary Davis, acting chief counsel of
Mr. Wilson's directorships, the Ethics
Subsequently, however, Mr. Wilson
the Office of Government Ethics, said
Office's director, David H. Martin, said
met a Swiss official regarding the case
Mr. Wilson had been permitted to re-
be had reviewed the financial disclo-
and was introduced to a lawyer repre-
tain the positions because, it was deter-
sure report and had "obtained advice
senting Mr. Rich.
mined, his corporate functions would
from the Department of State concern-
A source familiar with the situation
not interfere with his duties as Ambas-
ing any possible conflict" in Mr. Will-
said Mr. Wilson later gave a full ac-
sador and also because he was not re-
son's retaining the posts.
count of his discussions regarding the
celving any compensation from the
Mr. Martin noted that the exception
case to Mr. Eagleburger and that Mr.
concerns.
granted by the State Department would
Eagleburger "considered his explana-
The ethics office, created by the
be reviewed at the end of the first quar-
tion of the events adequate."
Ethics in Government Act of 1978,
ter of 1985 to guarantee that Mr. Will-
Swiss Government Disturbed
monitors compliance with Federal
son's outside activities were not affect-
Mr. Giuliani said Mr. Wilson had not
ethics programs and regulations.
= ing his abilities to carry out his ambas-
been in contact with him or anyone in
Mr. Wilson's financial disclosure
sadorial functions.
his office concerning the case. Efforts
form shows substantial holdings in
The letter concluded that Mr. Wilson
by Mr. Giuliani to obtain records on
both Pennzoll and Earle M. Jorgensen.
was believed to be "in compliance"
Mr. Rich's Swiss-based company have
disturbed the Swiss Government,
which has strict corporate secrecy
laws.
Archbishop Paul C. Marcinkus, right, the bead of the Vatican Bank, with
Camillo Cibin, chief of the Vatican Security Service, during Pope John Paul
II's general audience yesterday in SL Peter's Square. William A. Wilson,
the U.S. Ambassador to the Vatican, was reported to have once asked Attor-
ney General William French Smith whether the Justice Department was
conducting an investigation of the Archbishop.
Another source familiar with Mr.
Eagleburger's discussions with Mr.
Wilson said the Under Secretary had
admonished Mr. Wilson on another oc.
staff would monitor the situation.
casion, after Mr. Wilson had met with
Federal law enforcement authorities
Libyan officials who were trying to
said Archbishop Marcinkus was under
"develop him as a contact" for re-
scrutiny by the United States Customs
newed relations with the United States.
Service as part of an investigation into
The source said Mr. Eagleburger
dealings involving Michele Sindona,
had told Mr. Wilson that the Libyans
the Italian financier. Mr. Sindona is
had tried to use a number of American
serving a 25-year prison term on a
diplomats for that purpose and had ad-
fraud conviction stemming from the
vised him not to participate in further
collapse of the Franklin National Bank
discussions with them.
on Long Island.
In regard to Mr. Wilson's reported ef-
Dennis Murphy, a spokesman for
forts to intervene in the two criminal
Customs, declined to comment on the
cases, a committee alde to the Senate
inquiry.
Foreign Relations Committee said its
Archbishop and Sindona
A source familiar with Mr. Wilson's
actions regarding Archbishop Marcin-
kus said the case had troubled the Jus-
tice Department because of press re-
ports linking the Archbishop to Mr. Sin-
dona.
"The Justice Department was not in-
vestigating Mr. Marcinkus at the time,
but our concern was his alleged link to
the Sindona case, and we considered it
a matter of prudence that the Attorney
General not be involved in any way,"
the source said.
Mr. Wilson, who was serving as
President Reagan's personal envoy to
the Vatican at the time, thereafter in-
vited the Archbishop to breakfast at his
residence in Rome while Mr. Smith
was there as a house guest in Novem-
ber 1982. The official familiar with the
case said that Mr. Smith did meet
Archbishop Marcinkus at Mr. Wilson's
residence but that no matters of sub-
stance were discussed.
"As a matter of politeness, the Attor-
ney General just dropped by to say
belio, but be decided not to attend the
breakfast,' the official said.
To
Date
John 7/12 Time 5:00
WHILE YOU WERE OUT
M
ann Constable
of
Time magazine
Phone
861-4025 -
Area Code
Number
Extension
TELEPHONED
CALLED TO SEE YOU
P WILL PLEASE CALL CALL AGAIN
WANTS TO SEE YOU
URGENT
RETURNED YOUR CALL
Message re: letter to
Wm. Wilson
concerning
marcinkes
matter.
Mailin Operator
Fitzwater ala
AMPAD EFFICIENCY® Pressofi 23-020
cste
ate House News Summary
Wednesday, July 11, 1984 -- B-3
NETWORK NEWS SUMMARY FOR TUESDAY EVENING, July 10, 1984
AMBASSADOR WILSON
CBS's Rita Braver: Administration sources acknowledge Vatican
Ambassador Wilson has been rebuffed after intervening in
delicate international criminal cases. Wilson is a close friend of
President Reagan's. In one case, Wilson was trying to help an
old friend, Vatican banker Archbishop Paul Marcinkus.
Marcinkus was involved in a major Italian bank scandal, and on
his behalf, when he was the President's personal envoy to the
Vatican, Wilson wrote a letter to another old friend, Attorney
General Smith, asking whether Marcinkus was also under
investigation by the FBI. In July of 1982, an aide to Smith
rebuffed Wilson, writing, "The Department of Justice can't
respond to a formal request for such information." But Wilson
kept trying. As recently as last May, the FBI confirms, Wilson,
then officially ambassador, called FBI Director Webster to ask
about Marcinkus. There is no word on what Webster told
Wilson. Government sources say the FBI is not investigating
Marcinkus, but the Customs Service is. The State Department
was deluged with questions about Wilson today. (Reporter: "You
can't even address them?" Alan Romberg: "I'm not going to
address it.") There was no comment on the Marcinkus case, nor
would officials discuss an unauthorized meeting Wilson allegedly
held with a Swiss official to discuss Mark Rich, a U.S.
commodities dealer indicted in a massive tax evasion case.
Wilson, in the U.S., would not take reporters' calls. President
Reagan is standing by his old friend. Nevertheless, White
House officials are reviewing Wilson's activities to be sure there
are no other actions that could be embarrassing to President
Reagan.
(ABC-3, CBS-2)
24
Los Angeles Times
DATE: 7/9/84
PAGE:
6
U.S. Envoy to Vatican Is
Reportedly Chastised
Wilson's Alleged Intervention in 2 International Cases Comes
Under Criticism
By RONALD J. OSTROW and DON A. SCHANCHE, Times Staff Writers
WASHINGTON-Ambassador
Reagan named Wilson ambassador
to the Vatican William A. Wilson
to the Vatican last January and the
has been chastised by the Justice
Senate confirmed him in March as
Department and has alarmed his
the United States established full
superiors at the State Department
diplomatic relations with the Vati-
because of his personal interven-
can.
tion in two highly sensitive and
Wilson, in an interview in Rome,
widely publicized international
said he could not remember writing
criminal investigations, Adminis-
the letter. Further, he drew a
tration officials say.
distinction between the time he
Wilson is a close friend of Presi-
was Reagan's representative and
dent Reagan. And the nature of the
his time as ambassador, noting that
two cases-those of fugitive finan-
he was not a paid employee of the
cier Marc Rich and Vatican banker
government in 1982.
Archbishop Paul C. Marcinkus-
has raised fears among Adminis-
Letters of Patromage'
tration officials that his actions
The American-born Marcinkus
could be viewed as an improper use
has come under scrutiny by Italian
of his position and thus become an
authorities over his and the Vatican
embarrassment.
bank's involvement in events that
Administration sources say Wil-
led in 1982 to the collapse of the
son's actions are being examined by
$1.2-billion Banco Ambrosiano in
the State Department's Bureau of
what became Italy's largest bank
European Affairs, but department
scandal. Marcinkus, as president of
spokesmen declined to discuss the
the Vatican bank, issued "letters of
inquiry.
patronage" to Ambrosiano Presi-
dent Roberto Calvi that Calvi re-
Letter to Smith
portedly used in some of his com-
In the Marcinkus case, Adminis-
plex dealings that went sour.
tration officials said that in 1982,
Wilson apparently was seeking
Wilson wrote a letter on the arch-
to determine the status of any U.S.
bishop's behalf to Atty. Gen. Wil-
inquiries in the case, and to vouch
liam French Smith, Wilson's long-
for Marcinkus' good character, a
time friend and fellow member of
source said. Wilson wrote the letter
Reagan's "kitchen cabinet" of close
after widespread news reports here
advisers. Wilson, a Bel Air devel-
and abroad raised questions about
pper and rancher, has been co-
whether Marcinkus, a friend of
trustee of the legal trust that has
Wilson, would be removed from his
managed Reagan's private assets
Vatican bank post and prosecuted
since 1973.
by Italian authorities in connection
At the time he wrote the letter,
with the Ambrosiano scandal.
Wilson was the President's unpaid
Federal law enforcement offi-
personal envoy to the Holy See.
cials indicate that the U.S. govern-
ment has a current interest in
Marcinkus in connection with a
money-laundering investigation
DOJ-1883-06
being conducted under the super-
22
vision of the U.S. attorney's office
in Brooklyn. Officials there, how-
ever, flatly refused to comment.
Cont.
Marcinkus remains under investi-
'A Long Shave'
gation by a Milan court for fraud in
Another official familiar with the
Eagleburger, now president of
connection with the collapse of
breakfast said aides to the attorney
Kissinger Associates, former Sec-
Banco Ambrosiano.
general learned in advance that
retary of State Henry A. Kissin-
Wilson had invited Marcinkus and
ger's consulting firm, declined to
Faith in Marcinkus
suggested that Smith "take a long
comment. A source familiar with
In Wilson's letter, which by-
time shaving" that morning rather
Eagleburger's dealings with Wil-
bassed usual Justice Department
than make contact with Marcinkus.
son on the Rich case said Wilson
Instead, the official said, Smith did
reportedly became involved after
creening processes because of
a "drop by" and only exchanged
an acquaintance, a Swiss lawyer,
Tison's friendship with Smith, he
greetings with Marcinkus rather
said he knew someone Wilson
supressed his firm faith in Mar-
cinkus, according to one official
than carry on any lengthy conver-
ought to meet.
sation.
Wilson took him up on the offer
Tamiliar with the correspondence.
"The letter struck me as very odd,
Smith's aides were determined
of an introduction, and the person
turned out to be a lawyer repre-
and it put everybody in a very
that "the attorney general was not
awkward position," the official
to get involved in the entire mat-
senting Rich, who asked Wilson to
said.
ter," the official recalled.
intercede for his client, the source
Wilson's letter drew a rebuke
Wilson said, in response to a
said.
from Kenneth W. Starr, then coun-
question, that he had not asked
selor to the attorney general and
Smith to do anything for Marcinkus
Sources close to the investiga-
now a judge on the U.S. Court of
during the breakfast or later.
tion and prosecution of the Rich
Appeals here. Administration
As for the phone call to Webster
matter, which is being conducted
from the embassy, he said: "That's
by U.S. Atty. Rudolph Giuliani in
sources say Starr wrote to Wilson
that his contact with the attorney
personal. I prefer not to answer."
New York, said no attempts to
Asked if Marcinkus had asked
general in connection with the
intervene in the case by Wilson
him to make the call, Wilson said:
have reached Giuliani's office.
Marcinkus matter had been inap-
"I don't want to talk about that
propriate.
telephone call. I had a special
Times staff writers Robert C.
reason for using the secure phone.
Toth and Oswald Johnston contrib-
Why should I discuss what I said on
uted to this report.
Despite Starr's letter, Wilson
a secure telephone?"
invited Marcinkus to breakfast in
Starr declined to comment on
his Rome villa when Smith and his
Wilson's letter to Smith or his
wife, Jean, were guests there in
response. Smith, responding
November, 1982. Smith was on the
through a spokesman, also refused
final leg of an extensive foreign trip
comment on any aspect of the
devoted primarily to drug enforce-
matter, as did FBI Director Web-
ment and refugee issues.
ster on the phone call from Wilson.
As recently as May, Wilson per-
Wilson's involvement in the case
sisted in his efforts to discover the
of financier Marc Rich also drew a
status of any U.S. interest in Mar-
warning, this time in a cable from
cinkus by telephoning FBI Director
Lawrence S. Eagleburger, then
William H. Webster about the case
undersecretary of state, on Dec. 12,
on a special secure telephone line in
1983. Rich, once a New York-based
the U.S. Embassy in Rome, sources
commodities trader, renounced his
say.
U.S. citizenship and went to Swit-
In the interview in his Rome
zerland, then was indicted in the
office, Wilson said he had trouble
biggest tax evasion case in history,
recalling the letter to Smith. "I
along with charges of racketeering
can't remember the reason behind
and fraud.
the letter," he said. "I can't even
Eagleburger's cable said: "Our
remember writing the letter."
legal advisors and the Justice De-
Similarly, he said he did not
partment are all extremely nervous
recall Starr's characterization of
about any involvement at all on
the letter to Smith as inappropriate.
your part in this case."
"I don't remember receiving a
letter from Ken Starr." he said.
Meets Swiss Official
"Maybe I did. So, I don't have any
comment on that."
Even so, Wilson met with a
Wilson said he invited Marcinkus
Swiss official, Mathias Kraft, short-
to breakfast when the Smiths were
ly afterward to discuss the matter.
visiting because "it just seemed an
Kraft is deputy director for inter-
appropriate time to get them to-
national law at the Foreign Minis-
gether. Both (Smith and Marcink-
try in Geneva.
us) play tennis and golf. They
Wilson, in the interview, side-
discussed those issues. I don't recall
stepped questions about why he
them discussing any substantive
went ahead with the meeting, the
issues, however."
nature of his interest in the Marc
Rich case and details of his discus-
sion with Kraft. "After it was all
over, I reported in full to Larry
Eagleburger," he said.
DATE: 7-13-84
The Washington Post
PAGE:
AZ
U.S. Envoy to Vatican
Got Special Exemption
By Mary Thornton
the Senate Foreign Relations Com-
Washington Post Staff Writer
mittee, which handled Wilson's con-
William A. Wilson, President
firmation hearing, and the Office of
Reagan's close friend and ambas-
Government Ethics of the exemp-
sador to the Vatican, was granted a
tion before Wilson was confirmed.
special exemption from State De-
Wilson could not be reached for
partment rules after his nomination
comment yesterday. On Wednes-
to allow him to continue serving as
day, he attended a meeting of the
a director of two companies.
Pennzoil board in Houston.
Wilson, a wealthy California
Tom Powell, a Pennzoil spokes-
rancher and real estate developer
man, said that Wilson has been on
who was a member of Reagan's
the board since April, 1983, and
"Kitchen Cabinet" and co-trustee of
that he owns or controls 327,787
the legal trust that manages the
shares of stock worth about $1.78
president's assets, was confirmed
million.
as ambassador in March. He had
Wilson's financial disclosure
served since 1981 as Reagan's spe-
form, on file with the ethics office,
cial envoy to the Vatican.
shows three holdings of Jorgensen
State Department spokesman
stock in his wife's name, each worth
Alan Romberg confirmed yesterday
more than $250,000. The disclo-
that Wilson was granted an exemp-
sure forms indicate only wide
tion to allow him to continue to
ranges in the value of assets, not
serve on the board of directors of
specific amounts.
Earle M. Jorgensen Co., a California
It was reported earlier this week
steel manufacturer, and Pennzoil
that Wilson was reprimanded in late
Co. Wilson resigned from the Jor-
1982 by a high-level Justice Depart-
gensen board shortly after his con-
ment official after he wrote a letter
firmation. After his confirmation,
to Attorney General William French
Wilson stopped receiving directors'
Smith about Archbishop Paul Mar-
fees from both companies.
cinkus, a Vatican banker under in-
Romberg said the exemption re-
vestigation by Italian authorities in
lated to a set of May, 1981, depart-
connection with the $1.2 billion col-
ment guidelines stating that, as a
lapse of the Banco Ambrosiano.
general rule, "persons appointed to
positions requiring Senate confir-
Justice Department sources said
mation must resign from director-
that, despite the reprimand, Wilson
ship positions in for-profit corpora-
later tried to set up a breakfast
tions, even when no compensation
meeting between Smith and Mar-
is received."
cinkus, who are friends of Wilson.
The guidelines provide for ex-
Marcinkus is under investigation
emptions "in appropriate cases" and
by the U.S. Customs Service, ac-
list examples, such as a directorship
cording to federal sources.
of an inactive corporation or of a
family-held real estate venture. Ex-
emptions also are possible "in un-
usual circumstances, on consider-
ation of the particular facts and cir-
cumstances of the case."
Romberg, citing the Privacy Act
as a possible consideration, would
not say what factors led to the ex-
emption in Wilson's case. He could
not provide any examples of exemp-
tions granted to other ambassadors.
:
The State Department informed
Memorandum
Subject
Date
Wilson Letter Conveying Request From
August 3, 1982
Archbishop Marcinkus
To
The Attorney General
From
John Roberts or
William Wilson, Presidential Envoy to the Vatican, has
written conveying a request from Archbishop Marcinkus to
review the contents of his FBI file or a summary of it.
Marcinkus heads a Vatican bank, the Institute per le Opere
di Religione. A book to be published in the fall, "The
Vatican Connection, " by Richard Hammer, supposedly will contain
conversations allegedly held between Marcinkus and certain
crime figures as well as between Marcinkus and EBI agents.
Marcinkus has told Wilson that these conversations never took
place, and has asked Wilson to make a request through you to
review the FBI files for any relevant information they micht
contain concerning conversations between FBI agents and himself.
(Marcinkus does recall one interview, during which FBI agents
questioned him about the operation of the Vatican bank.) Wilson
has asked that we respond directly to Marcinkus and not
go through him, because the matter should be confidential
between Marcinkus and Justice.
The Director's office at the FBI advises that the only
way for Marcinkus to obtain access to his file is to file an
FOIA/Privacy Act request, with his notarized signature.
Depending on the size and contents of the file, normal processing
time would be 90 days to 6 months.
It would seem that the next step for us would be to
inform Mr. Wilson that we cannot respond to an informal request
to review files, but that Marcinkus must submit a statutory
request under the FOIA and Privacy Act. If you agree I will
draft a letter to Wilson along these lines.
8/3/82
I agree wid this recomence ndation
HWS
8/4/82
At agree.
1/18
OF T AE
TO WASHING
July 15, 1982
Honorable William French Smith
Attorney General of the United States
Washington, D.C.
Subject:
The Vatican Connection
Z8.HV 49 11 770
Dear Bill:
Just a few days before I departed Rome to return to
the United States, I had a meeting with Archbishop Marcinkus who
had asked me to come to his office to discuss a matter which is of
serious concern to him. By way of background and memory refresher,
I am enclosing an eight-page paper which was handed to me in London
last week, which outlines in general the charges against Sindona
who, as you may remember, is now serving time in prison in the United
States for his complicity in the failure of the Franklin National Bank of
New York. This paper purports to implicate the Vatican bank and Arch-
bishop Marcinkus with Sindona, but subsequent to the imprisonment of
Sindona, Marcinkus has been given additional responsibilities in the
Vatican by Pope John Paul II. This does not provide proof of Marcinkus'
innocence, however, it does indicate that as a result of the Vatican's
investigation of the matter, Marcinkus was apparently not found guilty
of any misdeeds.
More lately, as you will recall, a Mr. Calvi was found
hanging from the Black Friars Bridge in London at about the same time
that the Banco di Ambrosiana of Italy is being accused by the Italian
government through the Bank of Italy of illegal currency exportation
and making loans to Latin American subsidiary banks without sufficient
security or collateral. Since the Vatican owns approximately 1.5% of
July 15, 1982
Page 2
the common stock of Banco di Ambrosiana and since Marcinkus served
on the board of directors of the Latin American holding company based
in Nassau, there are now new accusations that Marcinkus is, again,
involved in some illegal banking transactions. By innuendo and, possi-
bly, even by association the attempt is being made to, again, associate
him with drugs and other illegal activities. It is my personal opinion
and certainly my sincere hope that Marcinkus will, again, survive this
one. And if he does, I would hope that he, as manager of the fiscal
assets of the Vatican, would see fit to make investments in more con-
servative ventures such as is the policy under Herb Gordon at the Uni-
versity. So much for the background.
The letter to me dated July 6th, together with its enclosures,
relates to a book to be called "The Vatican Connection," which I understand
is to be published in the fall of 1982 by Holt, Rhinehart and Winston. The
Archbishop told me that it is his understanding that the book will contain
many transcripts of wiretapped telephone conversations allegedly between
Marcinkus and others, some of whom are alleged to be connected to the
Mafia and other illegal operations. I was also told that portions of the
book include conversations allegedly held between members of the FBI and
Marcinkus which, again, he says were conversations that were never in
fact held. He does refer, however, to a meeting in his office with three
representatives of the FBI some years ago who came to ask questions con-
cerning the operation of the Vatican bank. He tells me that he told them
he would be happy to help them in any way possible and at the time gave
them all of the information that he had at hand.
He has given me the enclosed letter and its attachments
with the request that I discuss this matter with you and that through you
a request be made to review the FBI files for any information they might
contain concerning discussions between the FBI agents and Marcinkus on
these matters. If you could supply him with a summary of what the files
contain, I am sure it would be helpful to him and appreciated by both him
and myself. In this regard, I think it would be well if you or the depart-
ment would communicate directly with him instead of through me since I
would prefer not to be involved in the matter which I think should be held
in confidentiality between the department and Archbishop Marcinkus.
July 15, 1982
Page 3
In summary, he is very concerned that the book, when
it is published, will contain large amounts of untrue material concern-
ing him, and even though he is thinking of filing a significant lawsuit
in the event he feels he has a sound basis, it would be much better for
the Vatican and everyone concerned if the book were not published at all
if it does contain false information. This is a matter between Marcinkus
and the publishers however. Since Robert Wagner, the ex-mayor of New
York and an attorney, was my predecessor in the post which I now hold
in Rome, I have suggested to Marcinkus that he discuss this matter with
Wagner.
It was a pleasure to be with you the other night and I look
forward to seeing you next week.
With kindest regards, I am,
Yours sincerely,
Bill
William A. Wilson
WAW: sf
W. A. Wilson
10475 Bellagio Rd.
Los Angeles, Ca. 90077
ISTITUTO
PER LE
CITTA DEL VATICANO , July 6th, 1982.
OPERE DI RELIGIONE
Mr. William Wilson
Personal Envoy of the President
of the United States of America to the Holy See
Via di Porta Pinciana 4
00187 Roma
Dear Mr. Wilson:
Following up on our conversation of some days ago, I am
enclosing some material concerning the case covered by
Richard Hammer in his book "The Vatican Connection", which
I understand should be published in the fall of 1982.
Thanking you in advance for your interest in the matter,
and with every best wish, I am,
Sincerely yours,
&
+Paul C. Marcinkus
Enclo.
110 cignate.
Mitoring General
Mayton, C.20530
just 9, 1982
Honorable William A. Wilson
Personal Envoy of the President
of the United States to the Vatican
10475 Bellagio Poad
Los Angeles, California 90077
Dear Mr. Ambassador:
The Attorney General has asked me to respond to your
letter of July 15 to him. In that letter you conveyed
a request from Archbishop Marcinkus to review Federal
Bureau of Investigation files for information they might
contain concerning discussions between FBI agents and
himself.
After examining the question I must inform you that
the Department of Justice cannot respond to an informal
request for such information. Access to files of this
sort can only be obtained -- if at all -- pursuant to a
formal request made by the individual himself under the
Freedom of Information Act and/or the Privacy Act of 1974.
I am sorry that we cannot be more directly responsive
to your letter, but I am certain you will appreciate the
need to comply with formal procedures in such a sensitive
area.
If I can be of any further assistance in this regard
please do not hesitate to call upon me.
Respectfully,
John Robert
John G. Roberts, Jr.
Special Assistant to
the Attorney General
August 12, 1982
The Honorable William French Smith
Attorney General
Office of the Attorney General
Washington, D.C.
Dear Bill:
Thank you for your letter of August 6 responding to both
of my letters; one regarding Archbishop Marcinkus and the other re-
garding Mr. Sadri. I have already heard from Mr. John Roberts con-
cerning the matter of Archbishop Marcinkus and I will pass along to
the Archbishop the information which was contained in Mr. Roberts'
letter.
I assume that Mr. Sadri will be hearing directly from the
INS, which I think would be more appropriate than keeping me in that
particular loop.
Since Betty and I will be here in Los Angeles most of the
time between now and the end of September, I hope we will have the
pleasure of seeing you and Jean out here very soon.
With kindest personal regards, I am,
Yours sincerely,
Bill
William A. Wilson
WAW: sf
August 12, 1982
Mr. John G. Roberts, Jr.
Special Assistant to the
Attorney General
Office of the Attorney General
Washingto, D.C. 20530
Dear Mr. Roberts:
Thank you very Mindly for your letter of August
9th responding to the request made by Archbishop Marcinkus through
me to the Attorney General. I understand completely the explanation
that you have given in your letter as to the availability to the files
on a particular case and I think by way of explanation to the Arch-
bishop, I will pass this information along to him. Since he is an
American by birth and is very familiar with the procedures in the
United States, I am sure that he will understand.
Thank you kindly for your assistance.
Yours very truly,
wawels
William A. Wilson
WAW: sf
of $300 Whon or so The "II ren' suicide
Critics in the Curia dislike Msgr. Mar-
Vatican Vortex
las: month of Banco Ambrosiano's presi-
cinkus in part because of his gruff American
dent. Roberto Calvi, has added 10 the mys
style. They distrust him because in the early
tery surrounding the (ase Bill the Vatican's
1970s he brought in as an investment adviser
involvement in the scandal is only the most
to the Vatican Bank Michel Sindona, the
Pope John Paul Deals
visible of a lengthening list of papal prob
Italian financier who was later implicated in
leins that make John Paul less than adored
the collapse of New York's Franklin Na-
With Rising Turmoil
within the Vatican's walls.
tional Bank and jailed in the U.S.
Pupe John Paul is feuding with the 28,000-
The longer allegations of financial irregu-
And Budget Problems
member Society of Jesus, whose social phi-
larities continue, the more doubt accumu-
losophy and political actions are too unor-
lates about the probity of the church itself
thodox for him and whose priests appear to
and about John Paul's leadership. "Though
be getting out of the control of local bish-
I wouldn't say we are yet at this point," ob-
Bank Scandal. Strike Threat
ops.
serves one student of the church, "the Ref-
Ban on Political Jobs
ormation started with questions like this-
And Fight With Jesuits
So far, the pope appears to hold the ad-
who was paying money to Rome and for
what purpose
Mar His Image Abroad
vantage over the Jesuits He has placed his
The key appears to lie in Banco Ambro-
own men in temporary charge of the society
since the physical incapacitation of the or-
siano. Bank of Italy officials investigating
the ties between the Vatican Bank and
Shades of the Reformation
der's governor-general. Pedro Arrupe. And
Banco Ambrosiano insist the Vatican Bank's
he has banned Jesuits and other priests
7-29-82
from holding political office (an order that
backing of Ambrosiano loans could prove
By JONATHAN SPIVAK
forced the Rev. Robert Drinan to resign
binding. While the central bank has no di-
Staff Reporter of JOURNAL
from Congress). But the election of a new
rect regulatory authority over the Vatican,
it believes international action could be
VATICAN While Pope John Paul
governor-general next year will put to the
taken to recover the funds. "We will be
II journeys around the world to the adora-
test the pope's continued ability to control
the intellectually independent Jesults.
studying legal steps," an Italian government
tion of the multitudes, some nasty problems
are arising for him here in the heart of the
"Many Jesuits in the U.S. were displeased"
source says.
Holy See.
with the political ban, says the Rev. Charles
Potential Liability
John Paul, who presides over a tiny, in-
O'Neill, the director of the Jesuit History In-
The circumstances surrounding the Vati-
dependent state of only 730 residents. is
stitute in the Vatican.
can Bank's backing of the loans remain a
learning the hard way about the hazards of
Then there is the Vatican strike threat.
mystery. But if the Vatican Bank is held lia-
governing His religious authority doesn't
The low-paid employees, some of whom re-
ble for the defaulted loans because of credit
shield him from unsavory financial scan-
ceive as little as $200 a month. are an em-
assurances issued by Msgr. Marcinkus. the
dals, serious budgetary problems. strike
barrassment to the pope. Even the Swiss
financial repercussions for the pope will be
threats by resentful workers. bitter conflicts
Guards threatened a strike soon after the at-
serious. The Vatican Bank provides financ-
with powerful lieutenants and even mount
tempted assassination of the pope. They
ing for many Vatican activities.
ing ideological objections to his unbending
cited the extra pressures placed on them.
Banco Ambrosiano's defaults could run
orthodoxy.
The pope's reluctance to meet the work.
as high as $1.4 billion, the Bank of Italy
"The pope is awakening to a tremendous
ers' demands, because of the Vatican finan-
says. "It's impossible for the Vatican Bank
tension in the Vatican,' observes Prof.
cial pinch, contrasts with his recent ringing
to pay (such a sum)." one Vatican finance
Franco Ferrarotti, a sociologist at the Uni-
defense of the rights of labor. propounded in
specialist says. He says the Vatican Bank's
versity of Rome.
an encyclical on work. The labor dispute
assets are probably not much more than
It remains to be seen whether these prob-
also indicates the changing position of the
$300 million.
lems will ultimately tarnish his papacy,
pope within the Vatican. "For the first time
More immediately. the Vatican Bank
which SO far has been at least a glittering
in history. the Vatican has developed a
trade-union movement." Rome's Prof. Fer-
problems compound the pope's already se-
media success (one Jesuit leader here calls
vere budgetary problem of financing Vati-
the Polish-born pope "the world's most fa-
rarotti observes. "It's a serious blow to the
can City. John Paul has appointed a com-
mous personality"). But churchmen pri-
paternalistic role of the pope."
mittee of 15 cardinals to study the difficul-
vately agree that the disputes within the
The intellectual qualities of the pope's
ties, but little information has been re-
Vatican's walls could foreshadow serious
theological pronouncements are also being
leased.
difficulties outside.
questioned with increasing frequency. He
The overall Vatican budget this year will
A Different Drummer
has clearly not enunclated new doctrine in
exceed $75 million, with a deficit anticipated
Ever since his installation as the first
his four years. and some critics contend that
of $20 million, Vatican sources say. Vatican
non-Italian pope in four centuries, John Paul
he displays a simplified view of the church's
expenses include the growing $10-million-a-
has marched to a different drummer than
role that is out of date in the modern
year payroll costs of the Curia but exclude
have other popes. One high-ranking church-
world.
the world-wide activities of the church.
man says he watched in amazement that
"His thinking is based on the monolithic
At budget time every November the pope
day as John Paul grasped a ceremonial hal-
church of Poland," one Catholic editor here
is asked to cover the deficit in the Vatican
berd and waved it to and fro on the papal
says. "But this doesn't fit the role of the
operations from his personal funds. These
throne instead of holding it rigidly at his
church in any other country. even the Third
are composed of 80% of the investment
side in the traditional way. "From that mo-
World." The pope's stern social morality-
earnings of the Vatican Bank (the remain-
ment. I knew things would be different."
particularly his refusal to loosen the bans on
ing 20% are distributed directly to the
this churchman recounts. Just how differ-
artificial birth control and premarital sex-
poor): the investment earnings on the
ent, he didn't imagine.
has put him at odds with liberals and
pope's own $75 million portfolio: and direct
Except for his predecessor, John Paul I.
youths, whom the church is trying to at-
1
contributions from Catholics around the
whose papacy lasted only a matter of
tract.
world. The pope's contribution rose from
months. until his death, the Italian popes
But papal positions don't appear to have
$2.8 million in 1971 to $16 million last
have risen through the administrative hier-
any practical effect on the actions of most
year.
archy of the Vatican Curia. But John Paul II
Catholics. Studies show that Catholics con-
has largely turned his back on this mam-
tinue to rely on birth control about as much
Worry About Contributions
moth bureaucracy.
as others do, with social and economic class
Currently, churchmen are concerned that
This policy has proved to be both his
being a far greater determining factor than
public contributions from abroad to the
strength and his weakness. By ignoring the
religious affiliation. The pope's authoritar-
pope's fund will fall because of adverse pub-
day-to-day work of the church, the pope has
ian statements may fill the desires of the
licity about the Vatican. They note that U.S.
remained free to roam the world on his tri-
young for a strong father figure, one Jesult
Catholic contributions appear to have de-
umphal tours. But Vatican administrators
leader says. but the statements fail to an-
clined already-partly because the pope's
complain that they lack the authority to get
swer their Intellectual needs. "They want to
hard line ideologically offends many liberals
the work of the church done for him.
know if it is possible to be a Christian with
and partiy as reaction to scandals in the
Vacancies remain unfilled, and long.
out following all the precepts of the church,"
Chicago Archdiocese relating to the use of
standing projects. such as the codification of
this Jesuit remarks.
church funds by the late John Cardinal
church law. remain unfinished. "We are suf-
When John Paul was first elected in the
Cody.
fering from overcentralization." one cardi-
fall of 1978, some members of the Italian Cu-
Pressure has also developed within the
nal complains. "Too many things have to
ria muttered that the choice was a mistake.
Curia to curb the activities of the Vatican
come to the pope."
They contended that an outsider could never
Bank. The 15-member Committee of Cardi-
Ambrosiano Affair
master the subtleties of Vatican politics,
nals has proposed a policy that would re-
which had been their preserve for centuries.
strict the bank to making interest-bearing
On the other hand, Pope John Paul risks
Now, these anti-John Paul forces are becom-
investments only. It now has holdings in
dangerous dependence on a few aides he has
ing increasingly vocal, though most clerics
gold securities and currencies. "The Idea of
entrusted with certain authority. Despite the
still refuse to speak for the record.
the cardinals is to stay away from all specu-
deep suspicion and opposition of the Vatican
bureaucracy, Archbishop Paul Marcinkus
Discrediting the Pope
lation." a Vatican source says. The Ambro-
siano affair could speed the adoption of this
from Cicero, III., was placed in charge of all
"They hope to exploit John Paul's close
policy.
civil functions of the Vatican, including the
ties with Msgr. Marcinkus to discredit the
Other reforms in Vatican finance are also
Vatican Bank.
pope," one student of Vatican politics says.
likely to be hastened by the pope's present
Msgr. Marcinkus thus became a central
Msgr. Marcinkus is much more than a Vati-
financial fix.
figure in Pope John Paul's current difficul-
can administrator; he is the close confidant
Many of the Vatican activities, such as
ties, as the monsignor has involved the Vati-
of the pope and arranges and accompanies
the radio station and the newspaper, are ex-
can Bank in the questionable financial deal-
the pontiff on his trips abroad.
pected to be placed under separate corpo-
1/2
ings and defaulted loans of Banco Ambro-
So far, John Paul shows no signs of wa-
rate organizations and asked to carry their
siano. Italy's largest private bank.
vering in his support of the monsignor. The
own weight financially. The Vatican's con-
The Ambrosiano affair, being investi-
monsignor cryptically says only. This
tributions to hospitals and churches in
gated by Italy's central bank, could entail a
could go on for a long time if people want
Rome, including even its own St. Peter's,
Vatican Bank llability far beyond its assets
it to." He refers apparently to criticism
would be reduced And a "consolidated bal-
and expenses would be made public for the
first time.
Vatican sources say the pope himself has
been the strongest moving force behind this
policy of public disclosure. But he has met
stern opposition from some of the same Indi-
viduals in the Curia who have opposed him
for ignoring their bureaucratic privileges. In
the Vatican. as elsewhere, money is power.
"There are 64 administrative chiefs here,
and each one wants more authority," one
Vatican specialist says.
WALL ST. JOURNAL 8-6-82
ganized crime and racketeering section, and
Vatican Bank's Marcinkus Was Queried
with FBI agent Richard Tammaro. In the
Vatican they met first with a top Vatican of
ficial and then later they were able to meet
In U.S. Counterfeiting Case 9 Years Ago
with Archbishop Marcinkus about the Inves-
tigation, Mr. Aronwald recalled.
"He was very cordial, and we were all
By JANE MAYER
large sums of money." But no investigation.
very frank and business-like," recalled Mr.
Staff Reporter of THE WALL STREET JOURNAL
he added, "can answer all the questions
Aronwaid, who said the meeting lasted
NEW YORK - Archbishop Paul Mar-
you'd like."
about two hours. "He categorically denied
cinkus. the president of the Vatican bank
The investigation moved from the wire-
any knowledge of the counterfelting scheme.
currently under investigation by Italian au-
tap in the Lower Manhattan bar 10 a wire
He said he knew of some of the people men-
thorities probing the Banco Ambrosiano at
tap In a Munich hotel room, where Mr.
"Noned as being involved in it. but he said he
fair. was questioned nine years ago in con-
Rizzo met with two West German business-
had never heard of Ledl," recalled Mr.
nection with a billion-dollar securities coun-
men who owed him inoney for counterfeited
Aronwald. "He said he viewed his duties as
terfeiting case. federal authorities say.
securities he had given to them. Mr. Aron-
a very solemn obligation. Basically, that
Neither Archbishop Marcinkus nor Vati-
waid said. Mr. Rizzo later made a second
was his story."
can officials could be reached for com-
trip to the same Munich hotel, the Bayer-
Mr. Aronwald and the other U.S. officials
ment.
hofer, where he met with the same two busi-
flew home shortly afterward. with one stop
William I. Aronwald. formerly the attor-
nessmen and threatened to kill them if they
in Vienna to Interview Mr. Ledl. About three
ney In charge of the Justice Department's
didn't pay him. He was later convicted of
months later. on July 11, 1973, nine Ameri-
Organized Crime Strike Force for the South-
threatening bodily harin, New York court
cans and seven Europeans were indicted in
ern District of New York, said yesterday
records show.
connection with the international couterfelt-
that none of the allegations implicating the
Mr. Aronwald said that one of the allega-
ing ring, Including Mr. Ledl. A source close
Vatican bank were ever substantiated. But
tions investigated by the strike force was a
to the Investigation was quoted at the time
members of the strike force actually flew to
claim by one of those charged in the case, a
as saying that "a man of the cloth" inside
the Vatican In April 1973 to question Arch-
convicted Austrian con man named Leopold
the Vatican was suspected as being in-
bishop Marcinkus. who is from Cicero, III.
Ledl. that someone in the Vatican had or-
volved.
He had been head of the Vatican bank since
dered up an initial $14.5 million of the $950
Mr. Aronwald went into private practice
1971.
million in counterfelted securities.
In 1977, and is now a partner in the New
The allegations arose out of an investiga-
Federal authorities were unable to con-
York law firm of Bartels, Pykett and Aron-
tion begun by the district attorney's office
firm this, but did have evidence that an ini-
wald.
in New York into organized crime. The in-
tial batch of counterfeit securities were
The facts related by Mr. Aronwald have
vestigation became codenamed Operation
brought to a monastery outside. of Turin, It.
been authorized by William Lynch, formerly
Fraulein when a legal phone tap placed in a
aly. by several of those later indicted in con-
chief of the Justice Department's organized
Lower Manhattan bar revealed relationships
nection with the case, which began in 1971.
crime and racketeering section, now head of
between Vincent Rizzo, a reputed Mafioso:
The securities were received by an unidenti-
the department's General Services Adminis-
William Benjarnin, a convicted counterfeiter
fied man dressed In a black frock coat and
tration task force.
from Philadelphia, and several German
driving a BMW, Mr. Aronwald said.
Italian prosecutors in Milan are currently
businessinen.
The phony securities were detected by
investigating Archbishop Marcinkus and two
The U.S. attorney's office and the Fed-
the Handelsbank in Zurich, where a transfer
other top officials of the Vatican bank in
eral Bureau of Investigation entered the in-
agent checked their numbers and found that
connection with reports that the bank Issued
vestigation. which incovered a scheme to
they corresponded to a batch of securities
"comfort letters" supporting $1.4 billion In
counterfelt $950 million of American securi-
that hadn't yet been Issued, said Mr. Aron-
loans by the financially troubled Banco Am-
ties, printed under the name of Pan Ameri-
wald. Similarly, the securities were spotted
broslano S.p.A, and Its affilltates to a series
can World Airways. Chrysler Corp., and
as false by the Banco di Roma, said Mr.
of Panama-based companies. According to
American Telephone & Telegraph Co.,
Aronwald.
Italian authoritles, the Panama companies
among others. Some of the securities, ac-
"They couldn't have been very good for-
were nominally owned by the Vatican
cording to allegations investigated by the
geries." said Mr. Aronwaid, "on paper the
bank.
probe, were earmarked for the Vatican
scheme looked great." In actuality. he de-
The Vatican has been silent about the af-
bank-officlally known as Istituto per le
scribed it as being more like "a Keystone
fair but has appointed three lay outsiders to
Opere di Religione-where they were alleg-
Kops caper."
Investigate the Vatican bank's links to
edly to be used as phony collateral for
Nevertheless, back In New York, Investl-
Banco Ambrosiano. But earlier this week,
loans.
gators concerned about the possible links to
the Vatican rejected judicial warrants sent
The Investigation resulted in eight fed-
the Vatican consulted with local church offi-
by Milan prosecutors to the Vatican bank
eral indictments and 18 New York State in-
cials. Mr. Aronwald and then U.S. Attorney
executives. The warrants are a notification
dictments. some of them against European
Whitney North Seymour Jr. met with Ter-
that the men are under investigation.
citizens. All of the Americans pleaded
ence Cardinal Cooke, the Archbishop of New
Banco Ambrosiano's affairs have been
guilty. but several of the Europeans could
York. Mr. Aronwald said Cardinal Cooke
thrown Into turmoil by the default on more
never be extradited to stand trial.
sald he would notify the apostolic delegation
than $400 million in borrowings by its 68%-
No Vatican officials were ever charged
In Washington to see how to proceed. A
owned Luxembourg holding company,
with any crimes during the two-year Investi-
meeting was thus arranged between the
Banco Ambrosiano Holdings S.A. The Bank
gation. which Mr. Aronwald termed "ex-
American Investigators and the Vatican un-
of Italy has appointed three special commis-
dersecretary.
sioners to sort out Banco Ambrosiano's tan-
haustlve."
"I have no doubt that the people who
Cardinal Cooke couldn't be reached for
gled affairs, Including demands that Italian
were Indicted were engaged in a sophistl-
comment last night.
authorities ball out Banco Ambrosiano.
cated conspiracy of major Importance," Mr.
On April 23. 1973, Mr. Aronwald said, he
The Banco Ambrosiano scandal surfaced
Aronwald said. "They planned to use these
flew to the Vatican along with William
in June when Its then-president, Roberto
securities. some of which were earmarked
Lynch, chief of the Justice Department's or-
Calvi, disappeared from his Rome apart-
for the Vatican. to bllk Institutions out of
ment. He was subsequently found hanged in
London, a death that authorities there clas-
sifled as suicide. Mr. Calvi's disappearance
was believed to have been touched off by a
Bank of Italy discovery of the $1.4 billion in
unsecured loans to the Panama-registered
companies.
The Vatican bank officially holds 1.6% of
Banco Ambroslano, Italy's largest private
bank, but there have been reports that the
percentage is actually higher.
The investigation of Archbishop Mar-
cinkus's alleged connection with the Banco
Ambrosiano difficulties has sent tremors
through the U.S. financial community,
where he had extensive contacts. A Wall
Street executive who has done business with
the Vatican bank chief over the years de-
scribed him as a "big, easy-going guy with
good, earthy humor.' The Wall Street exec.
utive added: "He isn't the type of Individ-
ual-to my perception-who would get him-
self entangled."
The arcliblshop has strong political and
financial clout. He has accompanied Pope
John Paul II on official state visits, and
manages a sizable pool of church assets. De-
splte Archblshop Marcinkus's relaxed man-
ner with business associates, officials say
the Vatican bank is surrounded by secrecy
and that It can be difficult to arrange a
meeting with the archbishop.
Marcinkus, mendol alican 1, unk, Days
He Didn't Know of Counterfeiting Scheme
Woll ST. Journel
(
8/11/82
By PAUL BLUSTEIN
he was later given a letter from Mr. Calvi
Stuff Reporter of THE WALL STREET JOURNAL
absolving the Vatican bank of any financial
VATICAN CITY Archbishop Paul Mar-
responsibility for the loans. He did reiterate
cinkus said he "never" knew of the exis-
one of the only statements he has made pub-
tence of a billion-dollar securities counter-
licly since the affair burst into the headlines
feiting scheme until U.S authorities ques-
two months ago: "I've never done anything
tioned him about it nine years ago.
that could be considered, even in the slight-
"I had never heard of any of the names"
est way, fraudulent,' he said.
of the Individuals implicated in the case,
said the American-born archbishop. presi-
Scheme Uncovered
dent of the Istituto perle Opere di Religione,
The Wall Street Journal story to which
the Vatican bank. "There is no possible way
the archbishop responded quoted William 1.
in which we could have been involved."
Aronwald, former head of the Organized
The archbishop was responding to a Wall
Crime Strike Force for the Southern District
Street Journal story published Friday that
of New York, as saying that legal wiretaps
disclosed that Justice
placed in New York and West Germany in
Department investiga-
the early 1970s uncovered a scheme to coun-
tors had questioned
terfeit $950 million of securities in such large
him in 1973 about the
U.S. companies as Pan American World Air-
counterfeiting
ways. Chrysler Corp. and American Tele-
scheme. The story
phone & Telegraph Co. The investigation re-
stated-and
Arch-
sulted in eight federal indictments, 18 New
bishop Marcinkus reit-
York State indictments, and guilty pleas
erated yesterday
from several U.S. citizens charged in the
that allegations con-
case.
cerning Vatican in-
According to the federal indictment. one
volvement were never
of those charged. an Austrian con man
substantiated. The al-
named Leopold Ledl. claimed that a connec-
legations, he said,
tion of his in the Vatican had specifically or-
were evidently made
dered an initial $14.5 million of the bogus se-
by an individual with
curities. Federal law enforcement officers
a criminal record, and
investigated the possibility that these securi-
are "absolutely fan
ties were going to be used as phony collat-
tastic. There is no
eral for loans. They were unable to find
foundation to this in
credible evidence to confirm this allegation,
any way." he asserted
although they obtained evidence that a
In an Interview yesterday at his Vatican
batch of the counterfeit securities was de-
bank office. the archbishop declined to com-
livered to a monastery outside of Turin,
ment on another, more recent matter that
Italy, the indictment shows.
has become the subject of an intense investi-
A book entitled "The Vatican Connec-
gation-the collapse of Banco Ambrosiano
tion." to be published later this month by
S.p.A. of Milan. Banco Ambrosiano was or-
Holt. Rinehart & Winston, reportedly fo-
dered into liquidation last Friday, seven
cuses heavily on a Vatican role in the coun-
weeks after its chairman, Roberto Calvi,
terfeiting scheme. Both the publisher and
was found hanged under a bridge in Lon-
the author, Richard Hammer, decline to dis.
don.
cuss the book's contents in any way. and
Unostentatious Office
Holt Rinehart has taken unusual precautions
Dressed in a short-sleeved black shirt
to ensure that galley proofs don't leave its
and white clerical collar. the tall, barrel-
offices.
chested archbishop appeared relaxed and
However, several people who have had
even jocular at times, filling the air with
access to the galleys say that the book goes
frequent puffs from his pipe. His second-
far beyond the conclusions of the 1971 Jus-
floor Vatican office, accessible only after
tice Department investigation in terms of
clearance by the watchful Swiss Guards, is
Archbishop Marcinkus's alleged role in the
only a few hundred feet from St. Peter's
case.
Square. It is tastefully furnished in an unos-
Yesterday Archbishop Marcinkus said he
tentatious style, more befitting that of a
had received a letter summarizing some of
high-ranking banking executive than of a
the book's main points. Archbishop Mar-
powerful cleric. There is a couch and two
cinkus said that according to the letter one
easy chairs. A crucifix sits atop his dark
point alleged in the book Is that he was to
wooden desk.
receive a $150 million kickback from the
"All my life I have tried to avoid public-
counterfeiting scheme. "That would be nice,
ity." he said, "and I get clobbered now."
wouldn't it?" the archbishop joked.
Referring to press reports that have made
In April 1973, according to Mr. Aronwald,
even his Lithuanian ancestry seem sinister,
a "cordial" Archbishop Marcinkus received
the Cicero, III., native remarked, ") can say
a Justice Department delegation in the Vati-
] have a very difficult time recognizing my.
can. The archbishop "categorically denied
self in some of these descriptions.'
any knowledge" of the counterfeiting
Referring to the business relationship be-
scheme. Mr. Aronwald said.
tween the Vatican bank and Banco Ambro-
Archbishop Marcinkus said yesterday: "]
siano, Archbishop Marcinkus said: "There
never knew that this case existed before the
will be a time when that will be explained."
moment Mr. Aronwald came here." He rat-
The Vatican has appointed a panel of three
tied off the names of some of the men the
laymen to look into the matter.
Journal story cited as implicated in the
scheme. "Vincent Rizzo? William Benja-
Panamanian Companies
min? I never met or talked to them in my
Meanwhile, a high Vatican source sald
life," he said.
yesterday that the Vatican bank doesn't own
a series of mysterious Panamanian compa-
nles that figure centrally in the affair. Those
Panamanian companies, according to Ital-
tan authorities, received about $1.4 billion in
unsecured loans from Banco Ambrosiano
and its foreign affiliates.
"Those Panamanian companies aren't
ours," the Vatican source said.
Italian authorities have said they believe
the Vatican bank owns the Panamanlan
companies, at least nominally. Treasury
Ministry and Bank of Italy officials also
have suggested that the Vatican bank is re-
sponsible for the Ambrostano group's huge
loan exposure because the Vatican bank is-
sued "letters of comfort" to Banco Ambro-
siano's Latin American banking affiliates,
offering 8 moral endorsement of sorts to the
Panamanian borrowers.
Archbishop Marcinkus declined to com.
ment on why the letters of com! rt were is-
sued. what he thinks the loans were used
THE WALL STREET JOURNAL
Friday, August 6, 1982
Vatican Bank's Marcinkus Was Queried
In U.S. Counterfeiting Case 9 Years Ago
By JANE MAYER
large sums of money." But no investigation,
Reportered THE VALL STREET JOURNAL
Le added, "can answer all the questions
NEW YORK Archbishop Paul Mar-
you'd like."
cinkus, the predibat of the Vation bank
The investigation moved from the wire-
currently mader investigation by Italian au-
tap in the Lower Manhattan bar to a wire
thorities L ohing the Banco Ambresiano af-
tap in a Munich hotel room, where Mr.
fair, was questioned nine yours ago in con-
Rizzo met with two West German business-
nection with a billion-dollar securities coun-
men who owed him money for counterfeited
terfeiting case, federal authorities say.
securities he had given to thein, Mr. Aron-
Neither Archbishop Ma. cinkus for Vati-
wald said. Mr. Rizzo later made a second
can citilals could be reached for com-
trip to the same Munich hotel. the Bayer-
ment.
hofer. where he met with the same two busi-
William I. Aronwald, formerly the attor-
messmen and threatened to kill them if they
ney in charge of the Justice Department's
didn't pay him. He was later convicted of
Organized Crime Strike Force for the South-
threatening bodily harm, New York court
ern District of New York, said yesterday
records show.
that none of the allegations implicating the
Mr. Aronwald said that one of the allega-
Vatican bank were ever substantiated. But
tions investigated by the strike force was a
members of the strike force actually flew to
claim by one of those charged in the C2 se. a
the Vatican in April 1373 to question Arch-
convicted Austrian con man nained Leopold
bishop Marcinkus, who is from Cicero, III.
Ledl, that someone in the Vatican had or-
He had been head of the Vatican bank since
dered up an initial $14.5 million of the $950
1971.
million in counterfeited securities.
The allegations arose out of an investiga-
Federal authorities were unable to con-
tion begun by the district attorney's office
firm this, but did have evidence that an ini-
in New York into organized crime. The in-
tial batch of counterfeit securities were
vestigation became codenamed Operation
brought to a monastery outside of Turin, It-
Fraulein when a legal phone tap placed in a
aly, by several of those later indicted in con-
Lower Manhattan bar revealed relationships
nection with the case, which began in 1971.
between Vincent Rizzo, a reputed Mafioso;
The securities were received by an unidenti-
William Benjamin, a convicted counterfeiter
fied man dressed in a black frock coat and
from Philadelphia, and several German
driving a BMW. Mr. Aronwald said.
businessmen.
The phony securities were detected by
The U.S. attorney's office and the Fed-
the Handeisbank in Zurich, where a transfer
eral Bureau of Investigation entered the in-
agent checked their numbers and found that
vestigation. which uncovered a scheme to
they corresponded to a batch of securities
counterfeit $950 million of American securi-
that hadn't yet been issued, said Mr. Aron-
ties. printed under the name of Pan Ameri-
wald. Similarly, the securities were spotted
can World Airways, Chrysler Corp., and
as false by the Banco di Roma, said Mr.
American Telephone & Telegraph Co.,
Aronwald.
among others. Some of the securities, ac-
"They couldn't have been very good for-
cording to allegations investigated by the
geries," said Mr. Aronwald, "on paper the
probe, were earmarked for the Vatican
scheme looked great." In actuality, he de
bank-officially known as Istituto per le
scribed it as being more like "a Keystone
Opere di Religione-where they were alleg-
Kops caper."
1
edly to be used as phony collateral for
Nevertheless, back in New York, investi-
loans
gators concerned about the possible links to
The investigation resulted in eight fed-
the Vatican consulted with local church offi-
eral indictments and 18 New York State in-
cials. Mr. Aronwald and then U.S. Attorney
dictments, some of them against European
Whitney North Seymour Jr. met with Ter-
citizens. All of the Americans pleaded
ence Cardinal Cooke, the Archbishop of New
guilty, but several of the Europeans could
York. Mr. Aronwald said Cardinal Cooke
never be extradited to stand trial.
said he would notify the apostolic delegation
No Vatican officials were ever charged
in Washington to see how to proceed. A
with any crimes during the two-year investi-
meeting was thus arranged between the
gation, which Mr. Aronwald termed "ex-
American investigators and the Vatican un-
haustive."
dersecretary.
"I have no doubt that the people who
Cardinal Cooke couldn't be reached for
were indicted were engaged in a sophisti-
comment last night.
cated conspiracy of major importance." Mr.
On April 23, 1973, Mr. Aronwald said, he
Aronwald said. "They planned to use these
flew to the Vatican along with William
securities, some of which were earmarked
Lynch, chief of the Justice Department's or-
for the Vatican, to bilk institutions out of
Please Turn to Page 6, Column 3
WSJ 8/6/82
ganized crime and racketeering section, and
The Vatican bank officially holds 1.6% of
with FBI agent Richard Tammaro. In the
Banco Ambrosiano, Italy's largest private
Vatican they met first with a top Vatican of-
bank, but there have been reports that the
ficial and then later they were able to meet
with Archbishop Marcinkus about the inves-
percentage is actually higher.
The investigation of Archbishop Mar-
tigation, Mr. Aronwald recalled.
cinkus's alleged connection with the Banco
"He was very cordial, and we were all
Ambrosiano difficulties has sent tremors
very frank and business-like,". recalled Mr.
through the U.S. financial community.
Aronwald, who said the meeting lasted
where he had extensive contacts. A Wall
about two hours. "He categorically denied
Street executive who has done business with
any knowledge of the counterfeiting scheine.
the Vatican bank chief over the years de-
He said he knew of some of the people men-
scribed him as a "big, easy-going guy with
tioned as: Sing involved in it. but he said he
good, earthy Numor." The Wall Street exec-
had never beard of Ledl," recalled Mr.
utive a dded: "He isn't the type of individ-
Arenwald. "He said he viewed his duties as
nal--to my perception-who would get him-
a very solemn obligation. Basically, that
seif enfangled."
was his story."
The archbishop has strong political and
Mr. Aronwald and the other U.S. officials
financial clout. He has accompanied Pope
flew home shortly afterward, with one stop
John Paul II on official state visits, and
in Vienna to interview Mr. Ledl. About three
manages a simible pool of church assets. De-
months later, on July 11, 1973, nine Ameri-
spite Archbishop Marcinkus's relaxed man-
cans and seven Europ were indicted in
ner with business associates, officials say
connection with the international conterfeit-
the Vatican bank is surrounded by secrecy
ing ring, including Mr. Ledl. A source close
and that it can be difficult to arrange a
to the investigation was quoted at the time
meeting with the archbishop.
as saying that "a man of the cloth" inside
the Vatican was suspected as being in-
volved.
Mr. Aronwald went into private practice
in 1977, and is now a partner in the New
York law firm of Partels, Pykett and Aron-
wald.
The facts related by Mr. Aronwald have
been authorized by William Lynch, formerly
chief of the Justice Department's organized
crime and racketeering section, now head of
the department's General Services Adminis-
tration task force.
Italian prosecutors in Milan are currently
investigating Archbishop Marcinkus and two
other top officials of the Vatican bank in
connection with reports that the bank issued
"comfort letters" supporting $1.4 billion in
loans by the financially troubled Banco Am-
brosiano S.p.A, and its affilitates to a series
of Panama-based companies. According to
Italian authorities, the Panama companies
were nominally owned by the Vatican
bank.
The Vatican has been silent about the af-
fair but has appointed three lay outsiders to
investigate the Vatican bank's links to
Banco Ambrosiano. But earlier this week,
the Vatican rejected judicial warrants sent
by Milan prosecutors to the Vatican bank
executives. The warrants are a notification
that the men are under investigation.
Banco Ambrosiano's affairs have been
thrown into turmoil by the default on more
than $400 million in borrowings by its 68%-
owned Luxembourg holding company,
Banco Ambrosiano Holdings S.A. The Bank
of Italy has appointed three special commis-
sioners to sort out Banco Ambrosiano's tan-
gled affairs, Including demands that Italian
authorities ball out Banco Ambrosiano.
The Banco Ambrosiano scandal surfaced
in June when its then-president, Roberto
Calvi, disappeared from his Rome apart-
ment. He was subsequently found hanged in
London, a death that authorities there clas-
sified as suicide. Mr. Calvi's disappearance
was believed to have been touched off by a
Bank of Italy discovery of the $1.4 billion in
unsecured loans to the Panama-registered
companies.
DATE:
7-10-84
The Washington Post
PAGE:
A-1
Criminal-Case Intervention
U.S. Scolds Envoy to Vatican
By Mary Thornton
lion Banco Ambrosiano. Marcinkus,
:
Meanwhile, federal sources said
Washington Post Staff Writer
who was president of the Vatican
yesterday that although the FBI is
William A. Wilson, ambassador
bank, had issued "letters of patron-
not investigating Marcinkus, the
to the Vatican and a close person-
age" to Roberto Calvi, president of
U.S. Customs Service has an inter-
al friend of President Reagan, has
the Banco Ambrosiano, which Calvi
est in his activities in connection
been admonished by a high-level
reportedly used to obtain large
with a money-laundering investiga-
Justice Department attorney for
loans.
tion. Dennis Murphy, a Customs
personally intervening in an in-
Calvi was found June 18, 1982,
spokesman, refused to comment.
ternational criminal case.
hanged from a bridge over the
Wilson's 1982 letter went direct-
In a second incident, a senior
Thames River in London. The
ly to the attorney general because
official at the State Department
death was ruled a suicide, but a
of their long-time association. It
has cabled Wilson to express con-
British court later overturned the
was written after widespread inter-
cern at his possible involvement
suicide verdict and ordered a new
national news reports raised ques-
in another sensitive criminal case.
inquest into Calvi's death. The sec-
tions about whether Marcinkus
Wilson's role in the cases
ond inquest was inconclusive, ruling
would be removed from his Vatican
of Vatican banker Archbishop
that the cause of death was a mys-
post because of the Ambrosiano
Paul C. Marcinkus and fugitive
tery.
scandal. He remains under inves-
financier Marc Rich was reported
When he wrote the letter to
tigation by an Italian court in con-
Smith, Wilson was Reagan's unpaid
nection with the bank's collapse.
yesterday in the Los Angeles
personal envoy to the Vatican. Wil-
An administration source said the
Times.
son was nominated formally by Rea-
Wilson letter to Smith was strongly
Wilson, a wealthy Los Angeles
gan last January as ambassador to
criticized by Kenneth W. Starr, who
developer and rancher, has been a
the Vatican and confirmed by the
was then counselor to the attorney
long-time member of Reagan's
Senate in March, when full diplo-
general and now is a judge on the
so-called "Kitchen Cabinet" of
matic relations were established be-
U.S. Court of Appeals here. The
close advisers and served for
tween the United States and the
source said a letter signed by Starr
many years as co-trustee of the
Vatican.
was sent to Wilson, warning that his
legal trust that manages the pres-
Wilson did not respond yesterday
contact with the attorney general
ident's financial assets.
to telephone calls from The Wash-
on the Marcinkus matter was "in-
Because of his closeness to
ington Post.
appropriate."
Reagan, administration officials
In an interview with the Los An-
Despite Starr's letter, the source
say they fear that Wilson's ac-
tions could embarrass the pres-
geles Times, Wilson drew a distinc-
said, Wilson invited Marcinkus to a
tion between his activities as Rea-
breakfast in his Rome villa when
ident in an election year.
In the Marcinkus case, admin-
gan's unpaid envoy and his govern-
Smith and his wife, Jean, were
ment service after becoming am-
houseguests there in November
istration sources said Wilson
bassador.
1982. Smith was there to meet with
wrote a letter on Marcinkus' be-
half to Attorney General William
"You must realize that as a per-
Italian authorities on his return
sonal envoy of the president, I was
from a long foreign trip dealing with
French Smith in 1982 to deter-
not a paid employe of the govern-
refugee and drug-enforcement is-
mine whether Marcinkus was un-
ment. I was free to carry on my
sues.
der investigation by U.S. author-
own business as I saw it," he told
An administration source said
ities and to vouch for his good
the newspaper.
aides to Smith immediately became
character.
But according to sources, Wilson
alarmed at the possibility of a
continued at least until last May-
breakfast meeting between Smith
Smith is also a close Reagan
friend and long-time member of
after his confirmation as ambassa-
and Marcinkus, because of alleged
dor to the Vatican-in his efforts to
ties between Marcinkus and Mi-
the "Kitchen Cabinet."
When the letter was written,
:
determine whether Marcinkus is
chele Sindona, the Italian financier
Marcinkus, an American-born
the target of a U.S. investigation.
who was convicted in 1980 of 65
friend of Wilson, was under inves-
At that time, the sources said, he
counts of fraud in connection with
telephoned FBI Director William H.
the collapse of the Franklin Nation-
tigation by Italian authorities for
Webster to. ask about the case.
al Bank. Sindona is serving a 25-
the role that he and the Vatican
bank-known as the Institute for
Dave Divan, a spokesman for the
year prison term in the United
States.
Religious Works-played in
FBI, refused to confirm yesterday
Italy's largest banking scandal:
whether Wilson made such a call.
the 1982 collapse of the $1.2 bil-
-5-
DOJ-1983-04
conrid
Sindona's case was then the sub-
An official familiar with the
ject of ongoing negotiations be-
breakfast said Smith and his aides
tween the Justice Department and
had come to a "concensus" that a
the Italian government, which
full breakfast meeting with Smith
wanted to extradite Sindona to
and Marcinkus present would
Italy, where he has been charged
present an "awkward situation.
with fraudulent bankruptcy, viola-
[Smith] decided not to participate in
tion of Italian banking laws and fal-
the breakfast but to just do a 'drop
sification of company figures.
by,' to shake hands, that sort of
Wilson told the Los Angeles
thing."
Times that he invited Marcinkus to
The Los Angeles Times also re-
y breakfast while the Smiths were
ported that a top State Department
visiting because "it just seemed an
official had tried unsuccessfully to
appropriate time to get them to-
prevent Wilson from becoming in-
gether. Both [Smith and Marcinkus]
volved in the case of financier Marc
play tennis and golf. They discussed
those issues. I don't recall them dis-
Rich, a New York-based commod-
ities trader who renounced U.S. cit-
cussing any substantive issues,
however."
izenship, fled to Switzerland and
was indicted in the nation's largest
tax-evasion case.
According to the newspaper,
then-Undersecretary of State Law-
rence S. Eagleburger cabled Wilson
on Dec. 12, 1983: "Our legal advis-
ers and the Justice Department are
all extremely nervous about any in-
volvement at all on your part in this
case."
The Times said Wilson neverthe-
less met shortly thereafter with a
Swiss foreign ministry official to
discuss the case and later reported
to Eagleburger about his conver-
sation.
Eagleburger could not be
reached yesterday for comment,
and State Department officials re-
fused to comment further on the
matter.
Sources in the office of U.S. At-
torney Rudolph Giuliani in New
York, where the Rich case is being
handled, said that neither Giuliani
nor lawyers working on the case
were made aware of any attempt by
Wilson to intervene.
1
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UNITED PRESS INTERNATIONAL
UP135
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BC-WILSON 7-9
U.S.-VATICAN ENVOY TOLD TO MIND HIS OWN BUSINESS
BY ROBERT MACKAY
WASHINGTON (UPI) -- A HIGH-LEVEL JUSTICE DEPARTMENT ATTORNEY HAS
ADMONISHED WILLIAM WILSON, U.S. AMBASSADOR TO THE VATICAN, FOR TRYING
TO INVOLVE THE ATTORNEY GENERAL IN AN INTERNATIONAL CRIMINAL CASE, RN
OFFICIAL SAID MONDAY.
WILSON, A LONGTIME MEMBER OF PRESIDENT REAGAN'S CALIFORNIA
"KITCHEN CABINET" OF CLOSE ADVISERS, MROTE A LETTER TO ATTORNEY
GENERAL WILLIAM FRENCH SMITH IN 1982 ASKING SMITH TO DETERMINE
WHETHER VATICAN BANKER ARCHBISHOP PAUL MARCINKUS WAS UNDER
INVESTIGATION BY U.S. AUTHORITIES AND TO VOUCH FOR HIS CHARACTER,
SAID THE OFFICIAL FAMILIAR WITH THE COMMUNICATIONS.
AT THE TIME, MARCINKUS -- AN AMERICAN-BORN FRIEND OF WILSON -- WAS
UNDER INVESTIGATION BY ITALIAN AUTHORITIES FOR THE ROLE HE AND THE
VATICAN BANK, THE INSTITUTE FOR RELIGIOUS WORKS, PLAYED IN ITALY'S
LARGEST BANKING SCANDAL -- THE 1982 COLLAPSE OF THE $1.2 BILLION
BANCO AMBROSIANO.
"AMBASSADOR WILSON COMMUNICATED IN WRITING INDICATING THERE HAD
BEEN MISUNDERSTANDINGS ABOUT MR. MARCINKUS AND THAT AN INTERNAL
INVESTIGATION AT THE VATICAN ITSELF HAD BEEN CARRIED OUT AND HAD
EXONERATED MR. MARCINKUS OF ANY WRONGDOING," THE GOVERNMENT OFFICIAL
SAID.
ALTHOUGH THERE WAS NO ONGOING U.S. INVESTIGATION OF MARCINKUS,
"THE DETERMINATION (IN THE JUSTICE DEPARTMENT) WAS MADE THAT R
COMMUNICATION SHOULD GO BACK TO AMBASSADOR WILSON AND INDICATE THAT
ANY MATTERS CONCERNING MR. MARCINKUS WOULD NOT BE AN APPROPRIATE
MATTER FOR THE ATTORNEY GENERAL'S INVOLVEMENT," THE OFFICIAL SAID.
A LETTER STRONGLY CRITICIZING THE WILSON OVERTURE WAS SENT TO THE
AMBASSADOR BY KENNETH STARR, WHO WAS COUNSELOR TO THE ATTORNEY
GENERAL. STARR NOW IS A JUDGE ON THE U.S. COURT OF APPEALS.
"IT WAS SIMPLY A QUESTION OF PROPRIETY OF APPEARANCE," THE
OFFICIAL SAID.
THE LOS ANGELES TIMES ALSO REPORTED THAT A TOP STATE DEPARTMENT
OFFICIAL HAD TRIED UNSUCCESSFULLY TO PREVENT WILSON FROM BECOMING
INVOLVED IN THE CASE OF FINANCIER MARC RICH, A NEW YORK COMMODITIES
TRADER WHO RENOUNCED HIS U.S. CITIZENSHIP, FLED TO SWITZERLAND AND
MAS INDICATED IN THE NATION'S LARGEST TAX EVASION CASE.
ACCORDING TO THE NEWSPAPER, UNDERSECRETARY OF STATE LAWRENCE
EAGLEBURGER CABLED WILSON DEC. 12, 1983: "OUR LEGAL ADVISERS AND THE
JUSTICE DEPARTMENT ARE ALL EXTREMELY NERVOUS ABOUT ANY INVOLVEMENT AT
ALL ON YOUR PART IN THIS CASE."
THE TIMES SAID THAT DESPITE THE CABLE, WILSON MET SHORTLY
AFTERWARD WITH A SWISS FOREIGN MINISTRY OFFICIAL TO DISCUSS THE CASE.
EAGLEBURGER RETIRED LAST MONTH FROM THE FOREIGN SERVICE.
WILSON WAS REAGAN'S UNPAID PERSONAL ENVOY TO THE VATICAN IN 1982.
HE WAS FORMALLY NOMINATED BY REAGAN IN JANUARY WHEN THE UNITED STATES
ESTABLISHED AN EMBASSY AT THE VATICAN. HE WAS CONFIRMED BY THE SENATE
AS AMBASSADOR IN MARCH.
UPI 07-10-84 12:08 RED
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