Dark Mysteries of the Vatican

CHAPTER 10

Spooks and Rats

Six decades after the end of World War II, a class-action lawsuit filed in federal court in San Francisco claimed that “atrocities carried out by the Nazi puppet government of Ante (Anton) Pavelic, head of the ‘ Catholic State of Croatia,’” had been done with the complicity of Vatican officials. “The Pavelic regime was typical of political movements that sprang up throughout Europe and had the support of so-called ‘Clerical Fascism,’-an amalgam of orthodox Roman Catholic doctrine, anti-Semitism, and authoritarian politics. These groups enjoyed assistance of both the government in Italy under Mussolini, Nazi Germany’s ‘Ausland’ department, which assisted like-minded movements” beyond Germany, and some Catholic clergy in and out of the Vatican.

“In Croatia, Pavelic’s terrorists received critical funding in 1939 from Mussolini, and with the help of Archbishop A. Stepinac, to establish the Croat Separatist Movement and eventually seize power.” Under Ustashi, [the secret police] a reign of terror fell “upon Jews, Orthodox Serbs who refused to convert to Catholicism, and political dissidents. Pavelic’s government operated death camps, and extorted a fortune in gold and other valuables, much from Jews who were shipped to work in extermination camps in Germany. The Ustashi had the support of the Catholic Church (Archbishop Stepanic was the group’s official “chaplain,” he gave his blessing to the Pavelic regime), and especially the Croatian Franciscans. The San Francisco lawsuit charged that the Catholic order ‘engaged in far ranging crimes including genocide [and] funding the reestablishment of the Croatian Nazi movement in South America in the 1950s.’”

The involvement of Croatian Catholics in creating an escape route for Nazis after the war was documented by American intelligence agents. Their records were preserved in the archives of the postwar Central Intelligence Agency. One of these declassified files was that of a priest, Krunoslav Stjepan Draganovic. It noted that he was born in Brcko, Bosnia. “Ordained a priest, he served in Sarajevo from 1930 to 1932. During this period he came in direct contact with Dr. Ivan Saric, the Catholic Archbishop of Bosnia.” The CIA file noted that the archbishop was “perhaps the most rabid opponent of the Orthodox Serbs and the Yugoslav Royal family, which is of Serbian origin, and a vociferous champion of the Independent State of Greater Croatia (which would include all of Croatia, Dalmatia, Bosnia and Hercegovina).”

“It was under the auspices of Archbishop Saric that he [Draganovic] was sent to Rome in 1932 to attend the Instituto Orientale Ponteficio… He obtained his doctorate in 1935 and returned to Sarajevo, where he acted as secretary to Archbishop Saric from 1935 through 1940. In February 1941 he taught Ecclesiastical History at the University of Zagreb, Croatia.

“There were conflicting reports regarding subject’s [Draganovic] activities during the period from April 1941 to August 1943. According to some accounts, shortly after the Independent State of Croatia was established in April 1941 by Ante Pavelic,…via support and approval of Nazi Germany, Subject became a leading figure in the Office for Colonization,…engaged in claiming the property of Orthodox Serbs in Bosnia, Hercegovina, and Croatia” in order to distribute the property to the Ustashas (military units). “Other reports identified him as a member of a committee that forcibly converted thousands of Serbians from the Serbian Orthodox to the Roman Catholic Church. (As a result of opposition to such forcible conversions, several hundred thousand Serbs living on the territory of the Independent Croatian State reportedly died at the hands of the Ustasha… This resulted in many Serbs, and even many Croats who were opposed to such inhuman methods, joining the Partisan guerrilla units to fight both the Germans and the Croat State.)…

“Many Serbs living outside Yugoslavia accused [Draganovic] of being personally responsible for the deaths of more than 10,000 Serbs from Croatia, killed by the Ustashas as a part of their drive to exterminate the Serbs living in Croatia.”

The CIA file noted, “Subject has denied these charges, as well as the charge that he was Military Chaplain of the Domobran and Ustasha military units… According to his own statements, Subject was instrumental in setting up a Croat-Slovene Committee for the Relief of Slovene Refugees in Zagreb in the fall of 1941, and became president of the Committee. Subject evidently became involved in mid- 1943 in a feud with Eugen (aka [illegible]) Kvaternik, a major figure in the Government of Croatia and a close associate of…Ante Pavelic, the head of the Croatian State. He called Kvternik ‘a madman and a lunatic.’ This resulted in his ‘being kicked upstairs,’ which is to say, in August 1943 he went to Italy to represent the Croatian Red Cross on a mission to secure the release from camps or otherwise help Yugoslav internees. His sponsor was the…Archbishop of Zagreb. He returned to Zagreb at the end of 1943, but returned to Rome in January 1944, and was still in Italy when the Croatian State collapsed in mid-1945 at about the same time as the war ended in Europe.

“He continued to represent the Croatian Red Cross, but was also regarded as an unofficial Charge d’affairs of the Croatian State at the Vatican. Thus, when the Croatian State collapsed, he was in the ideal position to help the many Ustasha who fled Yugoslavia, and as Secretary of an organization known as the ‘Confraternite Croata’ in Italy he issued identity papers with false names to many Croats, primarily Ustasha who were considered to be war criminals, and is the individual most responsible for making it possible for the Ustasha to emigrate overseas, primarily to Argentina, but also to Chile, Venezuela, Australia, Canada and even the United States…

“He [Draganovic] was alleged to have provided some German Nazi war criminals with identity cards with false Croatian names, thus enabling the Nazis to emigrate from Europe and avoid standing trial in Germany… Subject’s activities in Rome were conducted from the Ecclesiastical College of San Girolamo degli Illirici,…a college sponsored by the Vatican and used by young Croatian Catholic priests as their home in Rome while pursuing various courses of study. It also became the sponsor of the San Girolamo Asylum for the Ustasha and other Croat emigres in Rome…

“Subject claimed credit for helping in the release of more than 10,000 Yugoslav internees in Italy during 1943, 1944 and early 1945. In 1949, he went to Argentina in the company of the late Ante Pavelic, but he returned to Rome shortly thereafter. In 1950 he was known to be using a Diplomatic Passport, issued by the Vatican.” “The Vatican steadfastly denied involvement in any of this, including the acquisition of Ustashi gold and other pilfered assets.”

With the end of World War II in sight, the Vatican became the hub of traffic in counterfeit identity papers, forged travel documents, passports, and money to assist Nazis and collaborators seeking to escape capture by the Allies. Rome also became the start of a conduit to freedom for ex-Nazis and known anticommunists deemed potentially valuable in a postwar confrontation that was expected to arise between a godless empire ruled from the Kremlin in Moscow and the nations of Christendom.

To what extent Pope Pius XII and the Vatican bureaucracy were involved in the exodus of high-and low-level Nazis and other wanted men remains sealed in the secret archives. As a result, documenting the escape mechanism and route has been left to historians, investigative authors, and Jewish organizations that track down war criminals. To varying degrees, they have all found pointers to the Vatican.

“When it became apparent that war criminals Klaus Barbie, Adolf Eichmann, Heinrich Mueller, Franz Stangl, and a whole list of others had escaped,” the central figure in aiding them was Bishop Alois Hudal. The Rector of the Pontificio Santa Maria dell’Anima, he had “served as Commissioner for the Episcopate for German-speaking Catholics in Italy, as well as Father Confessor to Rome ’s large German community.” Born in Graz, Austria, in 1885, he studied theology (1904-08) and was ordained to the priesthood In 1911, he earned a doctorate in Theology in Graz and entered the Teutonic College of Santa Maria dell’Anima (Anima) in Rome where he was a chaplain (1911-13) and took courses in the Old Testament at the Biblical Institute. In World War I he served as an assistant military chaplain and published his sermons to the soldiers, Soldatenpredigten, in which he expressed the idea that “loyalty to the flag is loyalty to God.” In 1923 he was nominated as rector of Anima. In 1930 he was appointed a consultant to the Holy Office. In 1937, he published a book titled The Foundations of National Socialism, in which he gave enthusiastic endorsement of Hitler. When Pope Pius XI and future Pope Pius XII (Eugenio Pacelli) expressed disapproval of the book, they broke off all contacts with Hudal. Having once been a popular and influential guest in the Vatican, he suddenly found himself in isolation in the Anima College while Mussolini became Hitler’s World War II ally.

Still in the post of rector at Anima when the war ended, Hudal was suddenly thrust into a position to provide assistance to war refugees in detainment camps because of an agreement by the Allies to a request by Pope Pius XII. His Holiness had asked that a representative of the Vatican be allowed to render “normal religious assistance to Catholic prisoners as well as to exercise that mission of charity proper to the Church by bringing some comfort to those in affliction.” The permission was conveyed to the Vatican by President Franklin Roosevelt’s “Personal Representative to the Pope.” A few weeks later, the Vatican asked that a representative be permitted to visit “the German speaking civil internees in Italy.” The request named the Holy See’s “Spiritual Director of the German people resident in Italy,” Bishop Hudal.

Describing this as a “very peculiar request,” Mark Aarons and John Loftus, authors of Unholy Trinity, found it “astonishing that the Holy See singled out the most notorious pro-Nazi Bishop in Rome for this extremely sensitive mission, when it was well known that these ‘civilian’ camps were teeming with fugitive Nazis who had discarded uniforms and were hiding among legitimate fugitives.”

As the existence of a bishop in Rome who was able to aid displaced persons became known throughout refugee camps, word spread among ex-Nazis that he was sympathetic to their plight, and that Hudal had the means to facilitate their escape. Among documentation he could supply were a Vatican identity card and Red Cross papers, along with travel passes and visas.

According to Nazi hunter Simon Wiesenthal, the rat line that Bishop Hudal ran facilitated escapes for Adolf Eichmann, chief architect of the “final solution of the Jewish problem” by extermination in death camps; Franz Stangl, commandant of the Treblinka camp; Alois Brunner, deputy commandant of Sobibor; Gustav Wagner, deputy commandant of Sobibor; and Walter Rauff, a friend of Hudal, who had been an ambitious SS officer who oversaw a development program for mobile gas vans.

In Gitta Sereny’s book Into That Darkness: An Examination of Conscience, based on seventy hours of interviews with Franz Stangl, he described “how Bishop Hudal had been expecting Stangl…and that he was arranging passports, an exit visa, and work permits for South America. Hudal arranged Stangl’s sleeping quarters, transportation, via by car, plane, and ship and seemed to have ample money for…bribes and emergencies that might arise.” Stangl and other “Nazi fugitives could obtain an identity card from Hudal and apply to the office of the International Red Cross for a passport. If, however, a fugitive Nazi had functioned in some capacity in the murder of Jews, then an intermediary would be sent to the Red Cross office to obtain the needed documents, because there were dozens of Jews in the office every day… The danger was acute that a Jewish survivor might recognize a former concentration camp official… Once fugitives had obtained new identification, they could safely venture to a soup kitchen run by the Vatican, Red Cross, or the United Nations Rehabilitation and Relief Association,” then mingle with other refugees and move around Rome until time came for them to begin a circuitous route to a foreign destination, usually in South America and primarily in Argentina.

Regarding the rat line, Bishop Hudal and Father Draganovic, the official Vatican historian, Father Robert Graham, asserted, “Just because he’s [Draganovic] a priest doesn’t mean he represents the Vatican. It was his own operation. He’s not the Vatican.”

In October 1946, a Treasury Department official, Pearson Bigelow, informed the department’s director of monetary research that pro-Nazi Croatian fascists had removed valuables worth $240 million at current rates from Yugoslavia at the end of the war. The declassified document, dated October 21, 1946, said, “Approximately 200 million Swiss francs was originally held in the Vatican for safe-keeping.”

Other documents established that Bigelow received reliable information from the OSS on Nazi wealth held in specific Swiss bank accounts. The Bigelow memo quoted a “reliable source in Italy ” “as saying the Ustasha organization, the Nazi-installed government of Croatia during the war, had removed 350 million Swiss francs from Yugoslavian funds it had confiscated. The memo said 150 million Swiss francs were impounded by British authorities at the Austria-Swiss border and the balance was held in the Vatican,…and that rumors said that a considerable portion of Vatican-held money was sent to Spain and Argentina through a Vatican pipeline.”

Fifty years later after a conference in London on the topic of Nazi gold that might have gone to the Vatican bank, “the Vatican’s chief spokesman, Joaquin Navarro-Valls,…commented, “As far as gold taken by Nazis in Croatia, research in the Vatican archives confirms that there is no existence of documents relating to this, thus ruling out any supposed transaction on the part of the Holy See.”

Steadfastly denying reports that it had stored money and gold for Croatian fascists after World War II, the Vatican said it had no plans to open its archives for the period, and that a search of the archives confirmed no documents existed relating to any “supposed” gold transaction “on the part of the Holy See.”

“A lawsuit was filed in Federal Court in San Francisco in November 1999. The plaintiffs were concentration camp survivors of Serb, Ukrainian, Jewish, background and their relatives, as well as organizations representing over 300,000 Holocaust victims and their heirs. The plaintiffs sought an accounting and restitution of gold in the Ustasha Treasury that, according to the U.S. State Department was illicitly transferred to the Vatican, the Franciscan Order and other banks after the end of the war. Defendants included the Vatican Bank and Franciscan Order. These defendants combined to conceal assets looted by the Croatian Nazis from concentration camp victims, Serbs, Jews, Roma [gypises] and others between 1941 and 1945.”

“There is one known witness to this alleged Vatican and Franciscan money laundering: former U.S. Army Counterintelligence special agent William Gowen. According to his deposition, Vatican official Fr. Krunoslav Draganovic had admitted to Gowen that he received up to ten truckloads of loot in 1946 at the Franciscan-controlled Croatian Confraternity of San Girolamo in Rome. Gowen also testified that the leader of the treasure convoy, Ustashe Colonel Ivan Babic, boasted to Gowen of using British uniforms and trucks to move the gold from Northern Italy to Rome. As for the Ustasha Treasury’s ultimate destination, Gowen said that it could have gone nowhere but the Vatican Bank…

“According to Gowen, Draganovic…admitted being the mastermind behind the smuggling and deposit of the Ustashe Treasury at the Vatican bank,” and that Draganovic reported directly to Cardinal Giovanni Montini (the future Pope Paul VI).

In January 2006, the Israeli newspaper Haaretz posted an online article in which it used Gowen’s testimony to accuse Cardinal Montini of involvement in the laundering of money for fugitive Nazi war criminals to escape by way of the “rat lines.”

In a speech to a convention of the Serbian Unity Congress in Toronto in October 2000, Jonathan Levy, an attorney for twenty-eight Serbs, Jews, and others “who lost their parents and grandparents to Ustashe terror” in Croatia in World War II said the subject of a class-action lawsuit in federal court in San Francisco against the Vatican Bank and the Franciscan Order was “the immense amount of property, money, gold, land, factories, and other loot stolen by the Ustashe and their Independent State of Croatia between 1941 and 1945.”

Levy asserted, “The Ustashe movement stole immense wealth from its victims. The genocide in Croatia and Bosnia against Serbs was not only the most barbaric of the century but had a profit motive. The war criminals made sure that Serb property was seized right down to the gold teeth and wedding rings of concentration camp victims at Jasneovac. As the war was winding down, the Ustashe financial apparatus was gearing up. Top Ustashe were positioned in Rome and Switzerland, bank accounts were opened with the Swiss National Bank.”

The loot included “gold, silver, jewels, and currency worth tens of millions,” said Levy. “Other Ustashe reached Italy where help from the Franciscan Order was waiting in the form of safe houses, forged papers, and money.” Croatian leader Ante Pavelic “struck a deal with the British, money changed hands, and a killer of 700,000 Serbs, Jews, and Gypsies became an honored guest at the Vatican, was chauffeured around Rome in a car with Vatican diplomatic license plates, and lived safely in his own compound with Ustashe guards attending to his personal security.

“The Ustashe were masters of smuggling, secret codes, and financial dealings… Almost immediately, the Ustashe with the help of their Franciscan and Vatican sponsors,…formulated a bold plan…to fuel a mass migration of war criminals.” Some historians have written that the purpose in aiding the Nazis in escaping was rooted in the desire of men such as Draganovic eventually to organize a force to resist a Soviet takeover of the Balkans.

In opposing the lawsuit, the Vatican asserted that American courts had no jurisdiction to take on the case. Agreeing to that claim, the federal district court in San Francisco dismissed the suit, but the ruling was reversed in 2005 by a decision of the Ninth Circuit Court of Appeals. In December 2007, “the district court dismissed the Vatican Bank, this time on grounds of sovereign immunity,” based on the recognition of the Holy See as an independent state under the Lateran Treaty with Italy. While the plaintiffs again appealed to the Ninth Circuit Court of Appeals, the case against the Franciscans proceeded in the district court.

Although the Franciscan Order had always denied having wartime ties to the Ustashe regime in Croatia, the Order had been accused of acting as the “facilitators and middlemen in moving the contents of the Ustashe Treasury from Croatia to Austria, Italy and finally South America after the war. During the Nazi occupation of Bosnia, the Franciscans were closely involved with the Ustashe regime at a location not far from Medjugorje in Bosnia,” site of a shrine where the Virgin Mary was said to appear.

In a step that dismayed victims of the Ustashe, Pope John Paul II visited Croatia in October 1998 “to announce the beatification of Cardinal Stepinac, elevating him to the last step before a declaration of sainthood. Serbs and others who recalled that Stepinac had given his blessing to Ustashe winced as 400,000 of the faithful gathered at Croatia’s main shrine to the Virgin Mary to hear John Paul II hail Stepinac “as a hero” for his “resistance to Communism and his refusal to separate the Croatian church from the Vatican.”

Never charged with war crimes or formally accused of funneling the purloined treasure into the Vatican bank, Father Kunoslav Draganovic, who came to be known as “the Golden Priest,” spent several years after the war engaged in activities in the Balkans that ranged from dubious to nefarious and returned to Yugoslavia, where he died in 1983.