Bernardino Nogara
Encyclopedia
Pope Pius XI
Pope Pius XI , born Ambrogio Damiano Achille Ratti, was Pope from 6 February 1922, and sovereign of Vatican City from its creation as an independent state on 11 February 1929 until his death on 10 February 1939...
and retained by Pope Pius XII
Pope Pius XII
The Venerable Pope Pius XII , born Eugenio Maria Giuseppe Giovanni Pacelli , reigned as Pope, head of the Catholic Church and sovereign of Vatican City State, from 2 March 1939 until his death in 1958....
as the first Director of the Special Administration of the Holy See
Special Administration of the Holy See
The Special Administration of the Holy See was an office of the Curia of the Roman Catholic Church from 1929 to 1967. It was established by Pope Pius XI on 7 June 1929 to manage the ₤it...
. According to historian John F. Pollard
John F. Pollard
Dr John F. Pollard a British historian, a fellow of Trinity Hall, Cambridge, a fellow of the Royal Historical Society and Emeritus Professor of Modern European History at Anglia Polytechnic University...
, Nogara laid "the foundations" for "one of the biggest pillars for the Vatican's post-Second World War financial strength."
Nogara's career was characterized by an "ability to move fluidly in the highest circles of industry and politics as well as the Church". In his role as Director of the Special Administration, Nogara made large investments in many of the largest companies in Europe, personally becoming a board member of a "mind-boggling" number of firms, and appointing directors to many others.
Though a Catholic with several close relatives in the Holy Orders, Nogara insisted that his investments remain unrestricted by religious or doctrinal considerations. Under Pius XI, Nogara made large investments in firms contrary to Catholic social teaching
Catholic social teaching
Catholic social teaching is a body of doctrine developed by the Catholic Church on matters of poverty and wealth, economics, social organization and the role of the state...
and made direct loans to Mussolini's government prior to Mussolini's 1935 invasion of Ethiopia
Second Italo-Abyssinian War
The Second Italo–Abyssinian War was a colonial war that started in October 1935 and ended in May 1936. The war was fought between the armed forces of the Kingdom of Italy and the armed forces of the Ethiopian Empire...
. Under Pius XII, Nogara routinely invested in firms that profited from and enabled the war effort of the Axis powers
Axis Powers
The Axis powers , also known as the Axis alliance, Axis nations, Axis countries, or just the Axis, was an alignment of great powers during the mid-20th century that fought World War II against the Allies. It began in 1936 with treaties of friendship between Germany and Italy and between Germany and...
during World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
. Though these investments were hidden from the Allies (with whom Nogara also transacted), through the use of holding companies
Holding company
A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow...
and offshore banking centers
Offshore bank
An offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction that provides financial and legal advantages. These advantages typically include:...
, under Nogara "like water finding a downhill path, Vatican money found its way to the grisly side of the Holocaust
The Holocaust
The Holocaust , also known as the Shoah , was the genocide of approximately six million European Jews and millions of others during World War II, a programme of systematic state-sponsored murder by Nazi...
".
Early financial career
Nogara was trained as an engineerEngineer
An engineer is a professional practitioner of engineering, concerned with applying scientific knowledge, mathematics and ingenuity to develop solutions for technical problems. Engineers design materials, structures, machines and systems while considering the limitations imposed by practicality,...
at the Politecnico di Milano university in Milan
Milan
Milan is the second-largest city in Italy and the capital city of the region of Lombardy and of the province of Milan. The city proper has a population of about 1.3 million, while its urban area, roughly coinciding with its administrative province and the bordering Province of Monza and Brianza ,...
. He managed mining
Mining
Mining is the extraction of valuable minerals or other geological materials from the earth, from an ore body, vein or seam. The term also includes the removal of soil. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, rock...
projects in Wales
Wales
Wales is a country that is part of the United Kingdom and the island of Great Britain, bordered by England to its east and the Atlantic Ocean and Irish Sea to its west. It has a population of three million, and a total area of 20,779 km²...
(where he learned fluent English
English language
English is a West Germanic language that arose in the Anglo-Saxon kingdoms of England and spread into what was to become south-east Scotland under the influence of the Anglian medieval kingdom of Northumbria...
), Bulgaria
Bulgaria
Bulgaria , officially the Republic of Bulgaria , is a parliamentary democracy within a unitary constitutional republic in Southeast Europe. The country borders Romania to the north, Serbia and Macedonia to the west, Greece and Turkey to the south, as well as the Black Sea to the east...
, and the Ottoman Empire
Ottoman Empire
The Ottoman EmpireIt was usually referred to as the "Ottoman Empire", the "Turkish Empire", the "Ottoman Caliphate" or more commonly "Turkey" by its contemporaries...
. While in Istambul, he was appointed representative to the Italian Banca Commerciale and then the Italian representative to an international committee overseeing the Ottoman empire's debt and the Italian delegation to the economic committee at the Versailles Peace Conference in 1919, after which he remained on the permanent reparations committee. He was later appointed to manage the industry section of the Inter-Allied Commission that enacted the Dawes Plan
Dawes Plan
The Dawes Plan was an attempt in 1924, following World War I for the Triple Entente to collect war reparations debt from Germany...
in Berlin.
Within the Banca Commerciale Italiana
Banca Commerciale Italiana
Banca Commerciale Italiana, founded in 1894, was once one of the largest banks in Italy. In 1999 it merged with a banking group consisting of Cassa di Risparmio delle Provincie Lombarde and Banco Ambroveneto, the former Banco Ambrosiano, which had merged in 1998. On 1 January 2003, the group's...
, Italy's largest private bank, he became a member of the board of directors and later the vice-president. He was also a member of the board of Comofin.
Nogara's dealings with the Vatican began in 1914, when he purchased a variety of bonds on behalf of Pope Benedict XV
Pope Benedict XV
Pope Benedict XV , born Giacomo Paolo Giovanni Battista della Chiesa, reigned as Pope from 3 September 1914 to 22 January 1922...
.
Appointment
The Vatican finances were on the verge of bankruptcy prior to being bolstered by $92.1 million (750 million lireLire
Lire is a French literary magazine covering both French and foreign literature. It was founded in 1975 by Jean-Louis Servan-Schreiber and Bernard Pivot.-External links:*...
cash and another 1 billion lire in Italian government bonds) the Vatican received as a consequence of the Lateran treaties
Lateran treaties
The Lateran Treaty is one of the Lateran Pacts of 1929 or Lateran Accords, three agreements made in 1929 between the Kingdom of Italy and the Holy See, ratified June 7, 1929, ending the "Roman Question"...
in 1929.
In 1929, Pope Pius XI
Pope Pius XI
Pope Pius XI , born Ambrogio Damiano Achille Ratti, was Pope from 6 February 1922, and sovereign of Vatican City from its creation as an independent state on 11 February 1929 until his death on 10 February 1939...
, a family friend, appointed Nogara director of the Special Administration of the Holy See
Special Administration of the Holy See
The Special Administration of the Holy See was an office of the Curia of the Roman Catholic Church from 1929 to 1967. It was established by Pope Pius XI on 7 June 1929 to manage the ₤it...
, charged with the financial dealings of the Vatican. In theory, the director of the Special Administration reported to a three cardinal committee—which included Eugenio Pacelli
Pope Pius XII
The Venerable Pope Pius XII , born Eugenio Maria Giuseppe Giovanni Pacelli , reigned as Pope, head of the Catholic Church and sovereign of Vatican City State, from 2 March 1939 until his death in 1958....
and Pietro Gasparri
Pietro Gasparri
Pietro Gasparri was a Roman Catholic archbishop, diplomat and politician in the Roman Curia and signatory of the Lateran Pacts.- Biography :...
; in practice, Nogara reported directly to the pope, meeting with him more frequently than any official in the Curia, with the exception of the Cardinal Secretary of State
Cardinal Secretary of State
The Cardinal Secretary of State—officially Secretary of State of His Holiness The Pope—presides over the Holy See, usually known as the "Vatican", Secretariat of State, which is the oldest and most important dicastery of the Roman Curia...
. The Special Administration was independent of the other two Vatican financial offices, although Nogara may have exercised considerable influences over the other branches of Vatican finances as well.
Nogara accepted Pius XI's appointment on one condition: that he would not "be restricted by religious or doctrinal considerations". Nogara's promotion was just one of many where Pius XI favored other natives of Lombardy with promotions within the Roman Curia. At the time, one of his brothers, Bartolomeo, was the superintendent of the Vatican museums, two were archbishops, one was the rector of an Apulia
Apulia
Apulia is a region in Southern Italy bordering the Adriatic Sea in the east, the Ionian Sea to the southeast, and the Strait of Òtranto and Gulf of Taranto in the south. Its most southern portion, known as Salento peninsula, forms a high heel on the "boot" of Italy. The region comprises , and...
n seminary, and his sister was a mother superior
Abbess
An abbess is the female superior, or mother superior, of a community of nuns, often an abbey....
.
Under Pius XI
Nogara's tenure at the Special Administration came on the heels of the 1929 stock market crash, and its many after-effects in Europe. Nogara immediately restructured the holdings of the Holy See, moving approximately 100 million lire in gold reserves and moving aggressively into real estate as an entrepreneur rather than an arms-length investor. Nogara created many companies, and appointed equally many chief executive officers to firms that still exist today. Grolux, the holding company for the profits of the Special Administration between 1932 and 1935, was housed in LuxembourgLuxembourg
Luxembourg , officially the Grand Duchy of Luxembourg , is a landlocked country in western Europe, bordered by Belgium, France, and Germany. It has two principal regions: the Oesling in the North as part of the Ardennes massif, and the Gutland in the south...
due to its dearth of public disclosure laws.
Nogara became a board member of many Italian firms due to the Vatican's controlling interests, including Assicurazioni Generali
Assicurazioni Generali
Assicurazioni Generali S.p.A. is the largest insurance company in Italy and one of the largest in Europe. It has its headquarters in Trieste...
, Italy's largest insurer (and one of the largest in the world), and Societa Generale Immobiliare
Società Generale Immobiliare
Società Generale Immobiliare was the largest Italian real estate and construction company. It was founded in Turin in 1862 but then moved to Rome in 1870 with the unification of Italy. After moving to Rome, the company became interested in the pastoral land around Rome and ended up buying it. ...
, the largest construction company in Italy (which went on to become one of the largest in the world). The Mafia's interest in these activities is fictionalized in the 1990 movie The Godfather Part III
The Godfather Part III
The Godfather Part III is a 1990 American gangster film written by Mario Puzo and Francis Ford Coppola, and directed by Coppola. It completes the story of Michael Corleone, a Mafia kingpin who tries to legitimize his criminal empire...
.
Nogara was a party to the negotiations on the reorganization of Italy's banks, which followed 1929 legislation bailing out the banks. With this inside information, Nogara knew exactly which industries and firms would benefit from the bailout and purchased large positions in these companies.
Nogara's seat on the boards ensured that he could direct the firm toward the interests of the Vatican and the other equity holders. Nogara, through shrewd investing in stocks, gold
Gold
Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...
, and futures markets, vastly increased the Roman Catholic Church
Roman Catholic Church
The Catholic Church, also known as the Roman Catholic Church, is the world's largest Christian church, with over a billion members. Led by the Pope, it defines its mission as spreading the gospel of Jesus Christ, administering the sacraments and exercising charity...
's financial holdings. By 1935, Nogara had vastly expanded the Vatican treasury in a sum estimated in the hundreds of millions of dollars (the Holy See kept the exact amount confidential).
Nogara was a controversial figure with the Roman Curia
Roman Curia
The Roman Curia is the administrative apparatus of the Holy See and the central governing body of the entire Catholic Church, together with the Pope...
because many of his investments were perceived to violate the church's doctrines. For example, Nogara purchased a controlling share in Istituto Farmacologico Serono di Roma, Italy's largest manufacturer of birth control
Birth control
Birth control is an umbrella term for several techniques and methods used to prevent fertilization or to interrupt pregnancy at various stages. Birth control techniques and methods include contraception , contragestion and abortion...
products. Nogara also invested in Italy's munitions plants and other war industries, including direct loans to Mussolini's
Benito Mussolini
Benito Amilcare Andrea Mussolini was an Italian politician who led the National Fascist Party and is credited with being one of the key figures in the creation of Fascism....
government prior to his invasion of Ethiopia
Second Italo-Abyssinian War
The Second Italo–Abyssinian War was a colonial war that started in October 1935 and ended in May 1936. The war was fought between the armed forces of the Kingdom of Italy and the armed forces of the Ethiopian Empire...
in 1935. However, Nogara was highly regarded by many cardinals for bolstering the church's finances, which had been declining since 1870.
Under Pius XII
After his election in 1939, Pope Pius XIIPope Pius XII
The Venerable Pope Pius XII , born Eugenio Maria Giuseppe Giovanni Pacelli , reigned as Pope, head of the Catholic Church and sovereign of Vatican City State, from 2 March 1939 until his death in 1958....
retained Nogara as the head of the Special Administration. Pius XII met regularly with Nogara, as had his predecessor, keeping a close eye on the investment holding of the Holy See. Pius XII managed Nogara directly, with no intermediaries, and
no notes were taken during their conferences (nor do any documents relating to Nogara exist in the ADSS)! The information from this period of Nogara's tenure is relatively "scanty" (compared to the period 1931-1939, documented by Nogara himself), although much is contained in the US national archives due to Nogara's transactions with New York banks.
The immediate concern for Nogara upon the outbreak of World War II was that the Vatican assets in the various Allied and Axis countries not be seized or frozen. Nogara's "cloaked real estate companies" continued to operate throughout Europe, in Allied and Axis controlled territory, for the entire war. Although Germany otherwise had a policy of blocking funds that might reach Allied countries, the Vatican—which had, and used, an account at the Reichsbank
Reichsbank
The Reichsbank was the central bank of Germany from 1876 until 1945. It was founded on 1 January 1876 . The Reichsbank was a privately owned central bank of Prussia, under close control by the Reich government. Its first president was Hermann von Dechend...
—was excluded and enjoyed relative freedom.
Nogara arranged the Vatican purchase of Profima, a Swiss property owner, into a full-fledged holding company, by 1938 "being able to participate in all forms of commercial, industrial, property and financial enterprises". It was through Profima, and other similarly organized holding companies, that the Vatican was able to purchase blacklisted companies, such as Banco Sudameris (blacklisted by both the US and Great Britain for its financing of the Axis war effort). There are reasons other than profit why Nogara may have been interested in Sudameris—for example, he helped found the bank prior to World War I—but it was without question that the purchase could only have produced a large return if Axis won the war.
Although Harold Tiltmann, the American envoy, bypassed Nogara and warned the Cardinal Secretary of State against the purchase of Sudameris, once the Vatican went ahead with the purchase in 1941 it "left no stone unturned" in its quest to get the company removed from the Allied blacklists, petitioning nearly every relevant government in the world. According to Phayer, the confrontation over the delisting of Sudameris "boiled down to two views of fascism. For the Vatican, which had done business with the fascists during the prewar days, Sudameris was 'business as usual".
Similarly, Nogara bought shares in Italian insurer La Fondiaria for the Vatican in 1940, acting on a tip that Mussolini's government would soon nationalize many Italian assets of English insurer Norwich Union
Norwich Union
Norwich Union was the name given to insurance company Aviva's British arm before June 2009. It was originally established in 1797. It is the biggest life insurance provider in the United Kingdom, and has a strong position in motor insurance...
and hand them over to Fondiaria. Even at the time the purchase was controversial because only two months earlier the insurer had made clear its fascist sympathies by firing all of its Jewish employees. While the Allies would not have required the Vatican to sell its assets in Fondiaria if they had been acquired before the war, had they learned of this mid-war transaction, they would have blocked all the banking accounts of the Holy See in New York as well as its business interests in the United States and Great Britain. According to Phayer, both Nogara and Pius XII were well aware that their covert purchase of Fondiara amounted a "betrayal of trust" of their agreements with the Allied powers.
Fondiaria would go on to collaborate with the Nazi expropriation of Eastern European insurance companies, both directly and indirectly (by working with collaborating re-insurers to pool risk). According to Phayer, "like water finding a downhill path, Vatican money found its way to the grisly side of the Holocaust". Phayer cites Nogara's timely purchases of firms about to benefit from fascist and Nazi expropriation as proof that Nogara "knew which way the wind was blowing". Another firm that Nogara invested the Vatican heavily in, Assicurazioni Generali
Assicurazioni Generali
Assicurazioni Generali S.p.A. is the largest insurance company in Italy and one of the largest in Europe. It has its headquarters in Trieste...
, was the prime beneficiary of the fact that "fascist countries were about to remake the European insurance industry" at the expense of the European Jewry.
In 1941, Nogara made a substantial investment in Iberian mining operations, which yielded tungsten carbonate (the "high tech metal of the conflict"), the same year that Germany's invasion of Russia cut off their previous supply of Russian metals. According to Phayer, "the conclusion is unavoidable: Nogara indirectly trafficked in the arms race and did so knowing that any resulting profit would be derived from stolen property". As the US would have blocked the transaction had they known it was for tungsten mining, the Vatican labeled the funds as earmarked for "food exports".
In 1954, he was succeeded as director of the Special Administration of the Holy See by Henri de Maillardoz, a director of Credit Suisse
Credit Suisse
The Credit Suisse Group AG is a Swiss multinational financial services company headquartered in Zurich, with more than 250 branches in Switzerland and operations in more than 50 countries.-History:...
.
Diary
Nogara kept a diary recording his audiences with Pius XI from 1931 to 1939, which remains unpublished. The diary is supplemented by a variety of papers in the Nogara Archives (AFNAFN
AFN is a three-letter acronym that may refer to:* Alaska Federation of Natives* American Forces Network* Ancestral File Number* Assembly of First Nations* AFN Ltd was the company that owned the British car maker Frazer Nash from 1926 to 1957....
), which provide detailed information about the finances of the Vatican and Nogara's involvement.