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The son of impoverished Lithuanian parents who immigrated to Cicero, Ill., Archbishop Marcinkus had enjoyed a steady rise in the Vatican hierarchy before the scandal broke. After taking a degree in canon law at Rome's Pontifical Gregorian University, Marcinkus joined the Vatican's State Secretariat in 1952 and soon caught the eye of Archbishop Giovanni Battista Montini, who was to become Pope Paul VI in 1963. The new Pontiff made the tall (6 ft. 3 in.), burly American cleric part of an intimate circle of papal advisers. In 1964 the Pontiff selected Marcinkus, a born organizer, to be his advanceman for trips abroad. During the visit of Paul VI to Manila in 1970, the athletic Marcinkus helped to subdue a Bolivian artist disguised as a priest who tried to stab the Pope. Paul VI put him in charge of the Vatican bank in 1969. Last year John Paul II gave Marcinkus the task of running Vatican City's administration; with the new job came the title of archbishop and the prospect that Marcinkus would some day become a Cardinal.
Noting the pending investigations, Marcinkus has declined to discuss the Ambrosiano affair in detail. After contacts with top Vatican officials and conversations with Marcinkus, TIME Correspondent Wilton Wynn reports that the Vatican claims its relationship with Calvi and Banco Ambrosiano involved only normal banking operations. As for Marcinkus, he is still at his Vatican bank post, expressing confidence that the storm will pass. Says he: "The old archbishop is tranquil. His conscience is clear."
Whether Marcinkus has good reason for such tranquillity may not be immediately known. The investigation to determine just what Calvi did with the huge sums his banks borrowed and to figure out who is liable for the losses that resulted is likely to last for weeks. But the outlines of the scandal have already begun to emerge.
Calvi began spinning his web in 1971, shortly after he became director-general of Banco Ambrosiano. An employee of the bank for 24 years, Calvi was determined to transform it into a major international financial institution from a relatively small regional bank with strong religious overtones (until ten years ago, would-be shareholders had to present baptismal certificates to prove their Catholicism). One of his initial steps was to form a Luxembourg holding company, Compendium, which later became Banco Ambrosiano Holding. The advantage of a foreign subsidiary: it is not subject to Italy's banking regulations. Calvi's next moves were to use the Luxembourg holding company to set up banks in Switzerland, the Bahamas, Peru and Nicaragua, and companies in Panama, Luxembourg and Liechtenstein.
Under local laws, the Panamanian firms could be started with as little as $10,000 in capital, but could be used to borrow far greater sums on world financial markets. Calvi launched at least a dozen such "shell" companies in Panama, listing employees of his Bahamas bank, including the switchboard operator, as directors and officers.