It is a very clear message. The majority of the leaked documents recently published in the book Sua Santità (His Holiness) by Gianluigi Nuzzi discredit Benedict XVI’s secretary Msgr. Georg Gaenswein and the Secretary of State, Card. Tarcisio Bertone. So, the Pope renews his trust in his closest collaborators, the ones that work in silence. It is a clear signal of change in the Holy See’s communication strategy, reached in a crescendo: first, on Tuesday morning, Federico Lombardi, director of the Holy See Press Office, invited journalists not to be manipulated, since many of the stories published in newspapers fall «outside reality»; on Tuesday afternoon, an interview to Angelo Becciu –substitute (deputy) to the Secretary of State – was published on the Holy See newspaper L’Osservatore Romano. In the interview. Becciu asked journalists to reach «a higher moral standard», and criticized partisan narratives of events; finally, on Wednesday morning, for the first time the Pope talked openly and clearly about the Vatileaks scandal. The Church is not whispering anymore, and there are few things left to interpretation. On the other hand, there are things to take note of.

Paolo Gabriele’s arrest

Paolo Gabriele’s arrest – the Pope’s butler is accused to be in possession and have leaked Papal and Holy See private documents – is just one piece of a puzzle that risks to become hard to manage.  It is not because the Vatican investigators may eventually conclude that there are many people who can be blamed for the situation, perhaps including some cardinals.  The issue lies with a persistent «gang of malcontents» within the Vatican.  It is not a big gang, but it is entrenched in key posts and can count on loyal and silent employees in every corner of the Rome Curia. The close linkages between elements inside and outside the Vatican complicates things even further. Some claim that the masonry had a role in this «scandal», but a masonry working for the good of the Church, in order to save the Church from Card. Bertone.  Yet, attacking Bertone means attacking Benedict XVI and his gentile revolution, which has very much changed the face of the Curial leadership. Attacking Bertone also means attacking the Secretariat of State’s credibility, and this could be dangerous: the Secretariat of State handles relations with foreign countries, and its international image has been damaged. According to Pastor Bonus – the pastoral constitution that outlines the organization of the Roman Curia – the Secretariat of State must also coordinate the Curial offices. However, on the recent past– particularly since the end of the Second Vatican Council – the Secretary of State’s coordination role has lost ground, and his diplomatic profile risen. No surprise that diplomats are unhappy: they suffer from their internal loss of influence, even when they have maintained important relations with elements outside the Church.  If one is to look for a point of contact with the masons or with those hostile to the Church, one should look there.

The inquiry

The inquiry that led to Paolo Gabriele’s arrest started long time ago. The inquiry has been described as an obscurantist Vatican initiative. In fact, the Holy See is acting as every State would, if its head had private papers stolen. The papers are stolen, so the person who stole them needs to be arrested and punished. It is a principle of justice that deals with the right to privacy. It is a crucial matter. Ever since the first leaked documents were published in the Italian newspaper il Fatto Quotidiano and were shown in Gianluigi Nuzzi’s tv program Gli intoccabili (The untouchables), it was evident that most of them were stolen directly from the desk of the Pope. Some did not even had any marking’s from  the Secretariat of State, which means that they came directly from the Pope.

The Vatican Gendarme Corps started its inquiry right after the first publication of the documents. In March, a commission of three cardinals – Herranz, Tomko, and De Giorgi – is appointed by the Pope to investigate the leaks. It was widely known – inside the Vatican – that someone had passed papers out of the Vatican Walls, and that Gianluigi Nuzzi was writing a new book. The strategy is to stay put until the publication of the book. It is a risk. But Vatican enquirers need to be able to charge someone with a crime: as long as the documents were quoted in journals, but not actually reproduced, allegations of wrongdoing could be denied. But, once the documents are published, there is proof of a crime to charge someone with. The possible motives are yet to be determined.

As soon as the book by Gianluigi Nuzzi is published, the Holy See is ready to respond. Informal meetings are called to consider whether or not to take legal action, and a decision to do so is taken. Lombardi states that the publication of the document is «a criminal act» implying that legal action is forthcoming. Everything is now clear, since that kind of document can only come from the Papal apartment.

Who took the documents out? Memores Domini – lay women at the service of the Pope – are excluded; the two secretaries of the Pope, msgrs Georg Gaenswein and Alfred Xuereb, are also excluded; the circle inexorably draws around Paolo Gabriele.

Gabriele – his lawyers maintained and Father Lombardi confirmed– wants to collaborate with the magistrates, and this will broad the scope of the investigation. Paolo Gabriele is not “the” guilty party. He is just part of a sophisticated operation, that involves many among the Curial second lines (i.e. those “grey eminences” that never lose their posts) and among those who once had positions of power but no longer do. The legacy of the 27 years of John Paul II’s Pontificate has been particularly heavy for Benedict XVI. Those who managed power during the last years of John Paul II’s Pontificate, while the Pope was ill, have sought to keep it.

It was – several voices in the Vatican corridors say – the powerful secretary of Karol Wojtya, Stanislao Dziwisz (now cardinal and archbishop of Cracow) who recommended Paolo Gabriele – even if Dziwisz now pointed out that Gabriele did not work for John Paul II. Gabriele began his service in the Papal apartment as second assistant about a decade ago. When Angelo Gugel – the previous butler – retired, Gabriele inherited the position and a house in the Vatican. Dziwisz – who did not want to leave Rome – still kept some influence, in part because he had Wojtyla’s private papers and documents. The late Pope in his will had asked Dziwisz to burn his private papers. But the archbishop of Cracow said that he kept the papers.

Rings of a long chain

We need to look back in time, to Karol Wojtyla’s Pontificate. John Paul II gave great visibility to the Church, and made of it a strong institution in diplomacy. His words, his free style, breaking conventions, tilted the balance of power between states. His first international trip was to Mexico, in 1979. There, the priests could not even wear a habit , and were not allowed to have properties of their own. His second international trip was to Poland, his homeland. There, communism put religion aside and promoted a state atheism that is evident even in public housing construction projects, built by the government, where no provisions are made for places of worship. Things would change in these two countries, and so it will happen in the several countries John Paul II will be visiting during his Pontificate.

It is the Cold War era, and the Church is immersed in intense but behind the scenes diplomatic relations. Notwithstanding John Paul II’s criticism of Western consumerism («We like the singer, not the song», will be the revealing headline of U.S. newspapers during the first John Paul II’s visit to the United States), diplomatic relations deepen and are strengthened with Western countries, in order to counter Communism.

It can seem self-serving, but the mission of the Church is also to protect her communities, and that is why during those times the struggle against Communism is a priority. So, the Church sent money to Solidarnosc, the Catholic Union that is going to change Poland; the Church established diplomatic ties with Ronald Reagan’s U.S. administration; the Church protected its communities even by establishing a dialogue with dictatorial regimes – in fact, you make an agreement with whom you do not trust. Augusto Pinochet’s case is very telling. Pinochet is the dictator of Chile, and he claims himself to be Catholic. In 1986, when he was the victim of a shooting, Pinochet ascribed to the Virgin Mary his survival, and proof of it – he said – was the profile of the Virgin etched by the bullets on his Mercedes. Chilean bishops did not think it was as Pinochet said. On the contrary, many of them were against him. Fortunately, there is a Papal nuncio to deflect confrontations, and his name is Angelo Sodano. At the same time, the military junta sent the nuncio several complaints about bishops and priests with strong political views.

When – in 1987 – John Paul II goes to visit Chile and leans out from the balcony of the presidential house of La Moneda, a hand ushers Pinochet to the side of the Pope. John Paul II – annoyed at what had happened – adds to his program a meeting with the Chilean opposition. Sodano’s considered the Chilean military junta  «a transitory dictatorship». Even now that everything has passed, Sodano is uncomfortable when reminded about relations with Pinochet. Back in 1993, Sodano – already ascended to the post of Secretary of State – wrote to Pinochet that he held for him the highest consideration. Even this is transitory.

The diplomats

Sodano’s way of thinking and acting comes from the diplomats’ school. It is the education of those formed in the Ecclesiastical Accademy and in the shadow of the Ostpolitik of Cardinal Agostino Casaroli, Secretary of State towards the end of Paul VI’s and the first decade of John Paul II’s pontificates. The Academy taught that diplomacy should be a sort of «martyrdom of patience»: ecclesiastical diplomats should talk with everybody, even putting aside differences, or even if the starting point of the dialogue is far from the religious truth, in order to gain some concession. This gives birth to a Church that is very active diplomatically, and this is why she breeds many «high level» diplomats during those years. A pupil of Card. Sodano is Leonardo Sandri: he will be appointed Papal nuncio to Mexico and then substitute (deputy) to the Secretary of State, at the time when Sodano himself is Secretary. Also Giovan Battista Re is formed in the confines of the Secretariat of State, and later will be created cardinal and appointed prefect of the Congregation of Bishops. So is Achille Silvestrini, prefect of the Congregation for the Oriental Churches in the nineties, an esteemed and controversial figure. And Crescenzio Sepe – now archbishop of Naples, who at first was responsible of the Information Office, and ascended to prefect of the Congregation for the Evangelization of Peoples.

Sodano is appointed Secretary of State in 1990, replacing Casaroli. The world has changed. The Berlin Wall fell, the Cold War ended, there is no longer a need to fight Communism. The world is now different. No one puts religions aside, and the Holy See is invited, repeatedly, to enhance its participation in the United Nations by becoming a member state, and not just a permanent observer. The Holy See declined, in order not to risk its neutrality. John Paul II carries on with his guiding mission, but his voice is increasingly set aside. No one listens to him when he speaks against the NATO intervention in Yugoslavia. And no one will listen to the Church when he condemned the Second Gulf War, after 9/11. John Paul II becomes definitely aware that the world has changed during his last trip to Poland: he sees that the enthusiasm for him and for the Church has diminished. The blocks of the Cold War are gone, and the multilateral world acknowledge religions’ right to exist. But this right is conceived mostly in terms of tolerance: religious freedom is confused with freedom of worship, the freedom to profess a faith is confused with freedom of expression. But, even if the world has changed, the Vatican Ostpolitik – based on a sort of Westphalian epistemology that is outmoded– remains always the same: they hope for concessions from the countries’ administration, and they seek behind the scenes agreements, since that is the diplomacy Vatican diplomats learned.

Two teams contending: diplomats and Cdf

One should maybe look to the diplomats’ environment to identify the members of the “Gang of Malcontents”. What is now evident is that the attack to the Pope comes from inside the Church, and that it takes advantage of forces against the Church that are also willing to stir trouble from the outside. The heart of the matter is the Holy See’s sovereignty, and everybody seems to be aware of it. It is at the heart of the matter when the letters by Msgr. Viganò – former number 2 of the Vatican City State administration – are leaked, since they are presented and discussed by the media as if the Church were a multinational on Italian territory. It is a key point in the discussion about the financial transparency and the anti-money laundering law, and it concerns the reform of the Vatican Law n. 127 – (the “old” law practically does not consider the Holy See a State: there is no hint to official privileges and immunities; the Holy See governmental bodies are not involved in ensuring transparency, there is just an Authority for Financial Information – as if in Italy or other countries there would just be the Financial Intelligence Unit to oversee transparency of the institutes of credit, and there would not be the Guardia di Finanza; there is no mention of the peculiarities of the Holy See/Vatican City State).

These are intersecting issues. They involve people that some would consider above any possible suspicion. There are Vatican rumors about a cupola, a group of people that meets once a month in Cardinal Sodano’s office as dean of the College of Cardinals, the first dean to have an office for that post in the recent history of the Church. Sodano very much wanted this multi-million euro office for himself, after he had been replaced as Secretary of State.

Here it becomes evident that, during this Papacy, the «bite and devour» that the Pope censored in a letter to bishops in 2009 has nevertheless been going on. At the beginning of  2006, Sodano knows that his time as Secretary of State is coming to an end. He wants to place his men in key posts. He was one of the first promoters of an immediate beatification of John Paul II – he wanted it to be by acclamation right after his death, in order to move the historical assessment on the Pontificate at least 50 years forward. He did not succeed: Benedict XVI waives the five year waiting period after the death of a candidate, but requests a traditional canonical process.

Then, Sodano presses for the appointment of a successor to Card. Camillo Ruini, then president of the Italian Bishops’ conference. Vatican chats tells that Sodano asks Msgr. Paolo Romeo – then Papal nuncio to Italy, now cardinal and archbishop of Palermo – to send a letter to all the Italian bishops (except Ruini) to indicate who they would prefer as successor of Ruini. Unsurprisingly, someone informs Ruini. Also to be expected, Ruini refers the issue to the Pope. And, naturally, the Pope confirms Ruini as president of the Italian Bishops Conference donec aliter provideatur. He also calls Paolo Romeo for consultations. Romeo leaves the meeting anguished. But it is Sodano that is left shaking.

The news that Sodano will be replaced takes place in June of 2006. To do away with tensions, the Pope announces the substitution will come into effect in September. The new Secretary of State will be Tarcisio Bertone, archbishop of Genoa. Sodano does not waste time. He sends Msgr. Piero Pioppo, then his personal secretary, to Genoa in order to convince Bertone not to accept the new post. But Bertone stands firm, he is faithful to Benedict XVI. There is a summer of interregnum, and Sodano makes his last appointments: Piero Pioppo is appointed as prelate of the I.O.R., a position that had remained vacant for years and that represents a sort of link between the (lay) board of Superintendence and the college of cardinals of the Institute. Then, in September, when the replacement takes effect, Sodano refuses to vacate his office quarters, waiting for his new office as dean to be restructured. After one year, he moves to his new office. The officers of the Secretary of State are still on his side.

The Pope’s Regensburg speech takes place during the 2006 trip to Germany, and it is a diplomatic earthquake. It is the «swansong» of Sodano’s era. Benedict XVI had already began to change the art of diplomacy. The all-is-good Casaroli’s Ostpolitik does not work anymore: the Berlin Wall fell, and with it the traditional enemies of the Church have left the scene. There are no more Communists, and if there are, they struggle among themselves. On the other hand, the Western world is thriving, and Vatican diplomats feel they are among friends. In the name of the struggle against Communism, many relationships had been established. There is, among the Vatican top officials, a mistaken sense of victory. Centesimus Annus, one of the social encyclicals by John Paul II, is a result of an internal debate: how much does the Social Doctrine of the Church apply to the modern world? A «middle way» prevails: it is not overtly critical of the Western World and liberalism, but at the same time it reaffirms the positions of the Social Doctrine of the Church.

In the mean time, the diplomats’ careers are advancing, they are a closely knitted group – even if a book, Via col Vento in Vaticano, published at the end of the nineties, insinuates a subtle war between two factions. They have strengthened their ties in a thousand battles, when they needed to save a community, a diplomatic relation, and this had to be done without taking into consideration more deeply rooted truths. During the war, the Church must promote peace. And truth is maybe a goal too big to achieve.

But there is another team being trained, and it is the team of the Congregation for the Doctrine of the Faith. The leader of the Cdf team is Joseph Ratzinger, since 1983. Step by step, the Cdf assumed the «Ratzinger’s method». It suffices to read his biography to understand that Ratzinger loves to harmonize positions, not to impose his own point of view. And this is why the decisions of the Congregation for the Doctrine of the Faith do not just censure a position, but go on to note those aspects of a criticized book, theology or ideas which are good. Few may remember, but there are two Cdf statements on the Theology of Liberation,  the first one pars destruens and the second one pars construens of a dialectic process. Nothing is demonized completely.

When prefect of the Cdf, and even earlier, as archbishop of Munich and as a theologian, Joseph Ratzinger warned that pragmatism and ideological struggles had taken the place of faith in Jesus. It is Joseph Ratzinger’s constant worry. In his theological works, he always shed the light on the «Jesus issue». For years, he thinks about a historical  biography of Jesus based on the Gospel, which he will publish after his election as Pope. He is also always worried and aware of the need to harmonize different positions, a concern that he takes from the theology of history of Saint Bonaventure –the topic of his postdoctoral dissertation.

Ratzinger’s team

There is more. Benedict XVI makes of the struggle against the old guard of the Church a sort of moral battle. One of the very first decisions he makes as a Pope is on access to seminaries: the instruction – issued by the Congregation for the Doctrine of the Faith – is criticized, since it denies access to seminaries to anyone who has in any way, even superficially, supported a «gay culture» or a gender culture. Benedict XVI, wants to form true and well-rounded priests, and he also maybe wants to avoid even the opportunity of a gay lobby, believed to be an old undercurrent in some Church circles.  Several times he censured and condemned priestly careerism. One of his strongest denunciations is in 2009, as he celebrates a mass to ordain five bishops.  Among them are Pietro Parolin and Gabriele Caccia, numbers 3 and 4 of the Secretariat of State, faithful to Angelo Sodano, who are appointed bishops and respectively sent as Papal nuncios to Venezuela and Lebanon. It is Benedict XVI’s quiet revolution: the Pope waits for members of the old guard to end their terms in office, and then he replaces them with people he trusts.

In addition to Bertone, the team of Benedict XVI slowly, but inexorably, takes hold of the Curia: William Levada replaces Ratzinger as prefect of the Congregation for the Doctrine of the Faith; Ivan Dìas is appointed prefect of the Congregation for the Evangelization of Peoples; Malcolm Ranjuth – now archbishop of Colombo -  is appointed secretary of the Congregation for Divine Worship. With Bertone, Dias, and the new foreign minister Giovanni Lajolo (who afterwards was appointed as number one of the Vatican City State administration, and has since retired), the Church’s international politics will be less passive and more interventionist, less «realist» and more «Wilsonian»,  along the great ideological battle lines that influence laws, customs, and coexistence among peoples. In Italy, in Spain, and in the West, the principles that Benedict XVI defines as «non-negotiable» are life, the family, and education. In the Islamic countries, the key issue is religious liberty. The same goes for China. There the new course of Vatican geopolitics was reinforced by the naming as cardinal – a firm decision taken by Benedict XVI against the judgment of Sodano and his followers – of the combative bishop of Hong Kong, Joseph Zen Ze-kiun.

This Papal line – that dates back to the very beginning of the Pontificate – is confirmed by the last consistory and even by the most recent choices of Benedict XVI. Diplomacy must be rooted in law, and law in truth. Since his first message for the World Day of Peace (In truth, peace) to the appointment as Papal nuncio to Ireland of Charles J. Brown, a non diplomat that previously served in the Congregation for the Doctrine of the Faith, Benedict has changed the face of the Church and of its diplomacy, making them more concrete and Jesus-oriented.

Diplomats are marginalized, and unhappy. In the mean time, new Benedict XVI’s men take important posts in the Roman Curia: in 2010, Marc Ouellet is appointed prefect of the Congregation of Bishops. He was one the Canadian editors of the Communio magazine, of which Ratzinger is one of the founders, and in Canada he faces the so-called revolution tranquille, the progressive Canadian secularization. Now he seems to be one of the candidates to be the new prefect of the Congregation for the Doctrine of the Faith. Joao Braz de Aviz is appointed as Prefect of the Congregation for Religious orders, replacing Franc Rodé – who, as Sodano, was considered one of the protectors of the Legionaries of Christ, the Congregation that Benedict XVI wants cleaned up and reformed after the scandals involving its founder Marcial Maciel.  A Curia and a College of Cardinals enriched with able jurists, confirming a «more law, less diplomacy» approach. In fact, Benedict XVI clearly affirmed in the letter to the Catholics of Ireland in 2010 that underappreciating canon law is one of the reasons why the Church is rotten.

Within the Curia, a guerrilla warfare is being waged.

Old stories, new problems

This guerrilla is also fed from some «missteps». Leonardo Sandri is moved from his post as substitute at the Secretariat of State and replaced with Msgr. Filoni. Filoni – who had previously served as Papal nuncio to the Philippines and in Iraq – is a pupil of Cardinal Bertone, and seemed to be the right man at the right place. If Sandri was the focus of too much gossiping and was too close to the old establishment to be a trusted man, Filoni seems to be the opposite.

But the relationships between Filoni and his old master Bertone worsens. There are rumors – no one would confirm them – that maintain that Filoni wanted to send money to a mission he was very close to, in Taipei, Republic of China (Taiwan). Both Bertone and the Pope asked him not to send this money: if the substitute of the Secretary of State sends money to the Republic of China, this may be considered by the government of the People’s Republic of China an undue intromission, thus complicating the already complex links between Holy See and Beijing. But Filoni sends the money anyway, and the Secretary of State gets a formal diplomatic protest from the People’s Republic of China. The relationship between Bertone and Filoni – is said – deteriorates from there on.

Filoni is nowadays a cardinal and the Prefect of the Congregation for the Evangelization of Peoples, and the Secretariat of State substitute is now Angelo Becciu. Even though he studied at the old diplomatic school, Becciu has a completely different profile. His career makeover came about in Cuba, where – as Papal nuncio – he managed to smoothly navigate the transition of power from Fidel to Raul Castro.

The Secretariat of State has been regenerated, and so the guerrilla has aimed at other targets. The first leak of Vatican documents – a delicate surgical operation – originally takes place with the publication of another book by Gianluigi Nuzzi, Vaticano S.p.A.. Then, in 2010, the scandal of pedophilia breaks out in the headlines of newspapers, and it is also fed from some internal leaks. These are all circumscribed situations, as were the leaks of the first months of 2012. Up until Sua Santità (His Holiness) is finally published. The book – evidently written in a hurry, since it is full of mistakes – is the signal that maybe something got too far out of the program of measured leaks.

Everybody tries to take advantage from this warfare: every single issue – even if does not have anything to do with it – is described as one of the reasons behind this situation. Even the no-confidence vote on the president of I.O.R. Ettore Gotti Tedeschi by its board of Superintendence is linked to Vatileaks. It is not. Many try to explain the no-confidence motion by linking it to the internal debate about the new Vatican anti money laundering law that both Gotti Tedeschi and Card. Nicora defined «a step behind» in the path to transparency.  Nicora is president of the Authority for Financial Information, Aif, and also a member of the Commission of Cardinals in the I.O.R. and of the Pontifical Commission of Vatican City State – these last two also under the Aif.

Cardinal Attilio Nicora seems to be a key person in the passage from the whispering Church to the Church that speak out loud. He – during the first months of 2005, when John Paul II was about to pass away – was asked to outlined a reform of Pastor Bonus, favored by Angelo Sodano himself. The project remained just a draft. Some sources, who wish to remain anonymous, say that the project’s goal was to have a less bureaucratic Curia: the Pontifical Councils would be embodied in the Congregations, and the prefects of the Congregations, together with other trusted cardinals, would be part of a sort of committee for the management of the Church that would take the duties of the first section of the Secretariat of State of His Holiness. So, His Holiness secretariat would disappear as it exists today, and would keep just the diplomatic section. Part of the reform would address Pontifical Universities, which would fall under the umbrella of a single Roman university, and would each take different specializations.

Some observers considered this reform overwhelming. Yet, the reform would have let Angelo Sodano maintain in effect his leadership. Not as Secretary of State, but exercising his weight and his influence as a member of the «management committee» and trying – as Dean of the College of Cardinals – to guide the works of the next Conclave.

None of these scenarios can be officially confirmed: they are based on hearsays gathered from the Vatican corridors. But these stories point to a more complex and diverse scenario than just a struggle between old and new, good and evil, sketched out by the media. Bertone is depicted as the absolute evil. He surely suffers from some oversights and unfortunate choices. He is accused of an overtly personalistic management of the Church. On the other hand, who wouldn’t appoint trusted associates to key positions? And it is Benedict XVI who trusts Bertone. So much that the Pope – several times, and publicly – has renewed his confidence on him.

The last year Ettore Bernabei – one of the major exponents of the world in State bodies, since he has been president of the Rai (the Italian national television) – interpreted the pedophilia scandal as the last attack moved from masonry to Catholicism in Italy. Catholics, he explained, were heading Italy’s economic boom during the Sixties. Catholic ideas were the “engine” of this economic boom. Bernabei – by explaining to «pour Cognac down to children» – outlined a sort of war scenario between Masonry and Catholicism, between lay and Catholic finance (but some call it «Finanza Bianca», white finance). The winner of this war seemed to be the exponents of lay finance. Ettore Gotti Tedeschi – a banker who proclaims himself as a true Catholic and at the same time is a follower of laissez-faire theories – is now the president of the I.O.R., even if one could notice that recently Benedict XVI instituted the Authority for Financial Information to control several Vatican and Holy See bodies, included the I.O.R.; Giulio Tremonti is the Italian Minister of Economy: he was one of the engineers of Otto per mille and he devotes himself to appear faithful of the Church. In the past, he theorized the need of a tax cut, then he wrote a book (La paura e la speranza) to underline – on the contrary – that the person comes before the numbers. Among the great bankers, the last exponent left of the so-called “Finanza Bianca” is Giovanni Bazoli, president of Intesa San Paolo and friend of Romano Prodi, former Italian Prime Minister: Prodi brought Italy into “euro area” and then criticized Fazio for doubting the economic keeping of Italy. While Cesare Geronzi – who had been for years at the top of Bank of Rome and of the Unicredit Bank, with good Vatican relationships reinforced even by sponsoring the World Youth Day in Cologne in 2005 – is now out of the games. Geronzi was one of the first to abandon Antonio Fazio when the former governor was put under investigation. Today, Fazio’s thesis about preservation of the Italian bank system are shared by the people who succeeded him. It is too late.

The reinforcement of Italian banking system was one of the key points of the Fazio’s economic job. He felt the risk that the possible indiscriminate takeover of Italian banks by big international banks would eventually let fall the “architecture” of Italian economy, made up by the little credit institution promoted by don Luigi Sturzo. The system gave birth to several credit institutions: Banche Popolari (Popular banks), Casse di risparmio (mutual savings banks) and Casse Rurali. All of these institutions were attentive to the small companies and anchored to the real economy.

Let’s make some step behind, and see what the financial scenario was before the Fazio’s case. During the spring of 1999, two Public Exchange Offers are launched: the first one is launched by Unicredit Bank to Banca Commerciale Italiana, the second one is launched by San Paolo Imi toward the Bank of Rome. The Bank of Italy do not reject the offers. But nor Unicredit, nor Intesa San Paolo preventively informed Bank of Italy of the offer. According to the regulations – estabilished by the then governor Antonio Fazio together with the Cicr (the government interministerial committee for credit and savings) and become part of the regulations – if one want to control the majority stake of one bank has to inform bank of Italy at least seven days before the board of administration of the bank would eventually meet and launch the offer. Since none of the two banks has followed this rule, the Public Exchange Offers failed. «Fazio uses the supervision as an instrument of power», critics complain.

Then, the Cirio and Parmalat cases are brought to light. Since the manager involved in the cracks are Catholics, a scenario of “Catholic managers” helped and sustained by “Catholic bankers” is easily outlined. Even bank of Italy has to weather the storm, since it is accused that its vigilance failed. The trials will eventually absolve all the banks involved, proving that Bank of Italy correctly carried out its job. But, in the midst of the trials, many newspapers trace back the network of friendships of Calisto Tanzi, the head of Parmalat, and underline that he is very close to Opus Dei and to the circles of Finanza Bianca. Yet, just a few remember that Ettore Gotti Tedeschi was briefly part of the Parmalat Trial: he was who that enlisted Parmalat in the stock exchange, and he seated in the Parmalat board for about one year.

In 2005, Consob – the authority that controls Italian stock exchanges – denounces a hidden pact between the Italian raider of Banca Antonveneta. Both Banca Popolare di Lodi (Bpl) and the Dutch Bank Abn Amro are trying to take the Italian Bank over. Officially, Bpl owns the 30 per cent of the sharings of Banca Antonveneta, but – thanks to hidden friends who bought shares on behalf of Bpl – the bank is effectively controlling the 40 per cent of the sharings. Consob suspects that Fiorani eluded the law on the Public Purchase Offer. According to this law, one who gets to control more than 30 per cent of the sharing of a bank must launch a Public Purchase Offer. Bank of Italy inspectors make an investigation on Banca Popolare di Lodi and their report is extremely negative. They send the report to Claudio Clemente, head of the Oversight Services on Credit Institutions of Bank of Italy, and to Giovanni Castaldi. Clemente and Castaldi give a negative opinion on Banca Popolare di Lodi capability to launch a Public Purchase Offer on Antonveneta. Fazio nominates three expert coming from outside Bank of Italy, and they instead give a positive opinion.

The Public Purchase Offer can now be launched. The authorization to the Ppo is not signed by Francesco Frasca, head of Bank of Italy’s Vigiliance – substituted in the mean time as by internal regulations of Bank of Italy – but by Angelo De Mattia. Recently, De Mattia is again on the spot. He is considered by many a man of Geronzi, but he has been for years Fazio’s spokesman in Bank of Italy. Today, De Mattia is now a prominent commentator of economy. While Giulio Tremonti was preparing to hold his speech to the World Day of Savings by giving ethic lessons to I.O.R. account holders in the Vatican, De Mattia animated a debate on the future of the Foundations of Bank Origin. According to Amato-Carli law, the Foundations of bank origin are public holdings, able to manage the majority stake of a bank, but unable to make any banking activity. It is a subtle border. In 2001, Tremonti moved a sort of war to bank foundations, to bring them under a direct public control, in order to nominate the top of the boards and to manage the patrimony of the banks. Tremonti failed, but he did not fully lose the war. He just turned to less laissez-faire oriented position, in opposition to Antonio Fazio. And that’s ironic, since Fazio had always been cautious about free market and its consequences.

From those consequences, Fazio tried to defend the Italian bank system. It is true, he authorizes  to the Public Purchase offer launch by Giampiero Fiorani, head of Bpl. But he authorizes even the Ppos launched by Abn Amro toward Antonveneta and Bilbao Vizcaya toward Banca Nazionale del Lavoro (later, Bnp Paribas will take over to Vizcaya), even if these latter are considered hostile. He does not back Fiorani’s offer for personal interest. Fiorani, on the other hand, keeps Fazio unaware of the illicit part of his manoeuvrings. Fazio explains it when he is called to testify to the trial. On the other hand, Fiorani testifies that Fazio was aware of everything. This discrepancy of testifies would have brought to the Fazio’s condemnation.

Fazio is compelled to resign, and Abn Amro gets from Milan Public Prosecutor the shares of Bpl. But Abn Amro itself is then raided by other international banks and then dismembered. There is more: the Royal Bank of Scotland, a big international bank involved in the dismembering of Abn Amro, fails because of the toxic credits inherited from Abn Amro. The Dutch Bank is then acquired by Grupo Santander, whose board of Italy has among his members Ettore Gotti Tedeschi. In the end, Banca Antonveneta is purchased by Monte dei Paschi di Siena. The “white” (i.e. Christian oriented) fortress of Padua is at the end in the hands of a “red” (i.e. Commonist oriented) fortress. Is it a cross exchange between Masonic lobbies, from the Dutch Abn Amro to the Italian Monte de Paschi? It is even this. But it is just a superficial explanation of this operation. In a few weeks, Grupo Santander gained from Antonveneta 2.5 billion euro.

Antonveneta finally got back to Italy, while everybody now support the need of having Italian bank and institutions to preserve the banking system of Italy. In the midst of an unprecendeted economic crisis, given from an international financial turbulence, the Italian banking system kept his stability thanks to the action of Bank of Italy ruled by Antonio Fazio, and has not the need of Statal interventions (alike Greece). Paradoxically, Fazio was the only one to pay with an exemplar condemnation. Just notice that Francesco Frasca – former head of Bank of Italy oversight, who worked under Fazio’s guidelines – was fully absolved by the trial in Milan, while Fazio was sentenced to 4 year’ imprisonment. This virdict – just a first appearance one – is food for thoughts. Was just Fazio under attack, or was the vision of a catholic-oriented finance under attack?