Ask a devout, theologically literate Roman Catholic to describe the institution of the church, and you’re likely to be told that it was founded by Jesus Christ at the moment he gave his disciple Peter the “keys to the kingdom of heaven” and vowed that “whatever you bind on earth will be bound in heaven.” This made Peter the head of the universal church, empowered to administer the sacraments, spread the Gospel, save souls and forgive sins until Christ’s return, as well as to pronounce with infallible authority on matters of Christian faith and morals. Christ also promised Peter that “the gates of hell shall not prevail” against the church — meaning that no matter how corrupt the institution might appear at any given moment of history, it will never be so consumed by evil that it ceases to be capable of fulfilling its God-appointed tasks.
Ask an informed historian or journalist about the history of the church — especially the Vatican and the papacy — and you are likely to hear a different story. On this telling, the church from the beginning has been an all-too-human institution that often follows a logic of self-interest, placing the good of its members ahead of those outside it, and the good of those in positions of ecclesiastical power ahead of the good of everyone else. To a greater or lesser extent, this has been true of most institutions throughout history, though it has been a particular problem in the 2,000-year history of the church, with its lack of democratic accountability and deep roots in the corruption-prone political culture of the Italian peninsula. The result has been a tension — and sometimes a blatant contradiction — between the church’s exalted claims for itself and its behavior.
Think of medieval popes waging the Crusades — raising armies, sacking cities and conquering territory — in the name of Jesus Christ. Or prelates torturing apostates and heretics during the Inquisition. Or Pope Pius V expelling Jews from the Papal States in 1569. Or Pope Pius XI signing the Reichskonkordat with Hitler, which, in return for winning a measure of freedom for German Catholics under the Nazis, assured silence from the Holy See over the forced sterilization of 400,000 people and then only the faintest of objections to the Holocaust. Or more recently, bishops and other church officials concealing widespread and repeated child sexual abuse by priests.
All of these and many other well-known acts of complicity with the ways of the world are touched on in Gerald Posner’s new book, but its main subject is a somewhat more arcane form of corruption. “God’s Bankers” provides an exhaustive history of financial machinations at the center of the church in Rome, from the final decades of the 19th century down to Pope Francis’ sincere but as yet inconclusive efforts to reform the church’s labyrinthine bureaucracy (the Curia) and the Vatican Bank (named Istituto per le Opere di Religione, or Institute for the Works of Religion, also known as the I.O.R.).
That the Vatican has a bank at all is surprising when taking in the long view of church history. During the Middle Ages, the papacy developed into an aristocratic and feudal institution dependent for much of its income on rents and taxes collected in the Papal States of central Italy. This came to an abrupt end with the final unification of Italy in 1870, which deprived the church of its lands and feudal income, leading to several decades of acute financial insecurity.
Popes of this period — Pius IX, Leo XIII, Pius X, Benedict XV, Pius XI — publicly denounced lending money at interest (usury) while at the same time accepting massive loans from the Rothschilds and making their own interest-bearing loans to Italian Catholics. Beginning with Bernardino Nogara, appointed by Pius XI in 1929, the church also empowered a series of often shady financial advisers to engage in financial wheeling and dealing around the globe. “So long as the balance sheets showed surpluses,” Posner writes, “Pius and his chief advisers were pleased.” That pattern would continue through the rest of the 20th century.
Posner does an impressive job of explaining how Nogara guided the church through the economic minefields of the Depression, World War II and the immediate postwar years using a combination of shrewdly diversified investments and morally suspect (and to this day still murky) financial deals. (Pope Pius XII founded the Vatican Bank in 1942 at Nogara’s suggestion.)
From there Posner weaves an extraordinarily intricate tale of intrigue, corruption and organized criminality — much of it familiar to journalists who cover the Vatican, though not widely known among more casual church watchers — from Pius XII down to Benedict XVI. These were years when the Vatican moved beyond the last vestiges of feudal restraint to become “a savvy international holding company with its own central bank” and a “maze of offshore holding companies” that were used as sprawling money-laundering operations for the Mafia and lucrative slush funds for Italian politicians.
Posner’s gifts as a reporter and storyteller are most vividly displayed in a series of lurid chapters on the American archbishop Paul Marcinkus, the arch-Machiavellian who ran the Vatican Bank from 1971 to 1989. Notorious for declaring that “you can’t run the church on Hail Marys,” Marcinkus ended up implicated in several sensational scandals. The biggest by far was the collapse of Italy’s largest private bank, Banco Ambrosiano, in 1982 — an event preceded by mob hits on a string of investigators looking into corruption in the Italian banking industry and followed by the spectacular (and still unsolved) murder of Ambrosiano’s chairman Roberto Calvi, who was found hanging from scaffolding beneath Blackfriars Bridge in London shortly after news of the bank’s implosion began to break. (Although the Vatican Bank was eventually absolved of legal culpability in Ambrosiano’s collapse, it did concede “moral involvement” and agreed to pay its creditors the enormous sum of $244 million.)
In one of his biggest scoops, Posner reveals that while Marcinkus was running his shell game at the Vatican Bank, he also served as a spy for the State Department, providing the American government with “personal details” about John Paul II, and even encouraging the pope “at the behest of embassy officials . . . to publicly endorse American positions on a broad range of political issues, including: the war on drugs; the guerrilla fighting in El Salvador; bigger defense budgets; the Soviet invasion of Afghanistan; and even Reagan’s ambitious missile defense shield.”
The cumulative effect of Posner’s detective work is an acute sensation of disgust — along with a mix of admiration for and skepticism about Pope Francis’ efforts to reform the Vatican Bank and its curial enablers. Pope Benedict, too, attempted to bring the bank into conformity with the European Union’s stringent money-laundering and transparency statutes. But the effort failed. With the Holy See engulfed in a maelstrom of scandals in early 2013 — the pope’s personal butler leaked a huge cache of embarrassing documents to the Italian press, and a 300-page report exposed a “ ‘gay network’ of ranking clerics” that indulges in “regular sex parties” and exerts “ ‘undue influence’ in the Curia” — Benedict became the first pope in nearly 600 years to resign.
So far, Francis is proving to be a far more effective institutional reformer, with an aggressive, hands-on approach that seems to be yielding positive results. The question is whether it will make a real, lasting difference. Posner, ending on a hopeful note, seems to think it might. One wonders whether he would have been wiser to conclude by recalling the cynical motto that’s been heard to echo through the halls of the Vatican bureaucracy down through the centuries: Popes come and go, but the Curia goes on forever.
A History of Money and Power at the Vatican
By Gerald Posner
Illustrated. 732 pp. Simon & Schuster. $32.