Photo: AP/Wide World Photos Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters. One day in July 1944, as the Second World War raged throughout Europe, General William “Wild Bill” Donovan was ushered into an ornate chamber in Vatican City for an audience with Pope Pius XII. Donovan bowed his head reverently as the pontiff intoned a ceremonial prayer in Latin and decorated him with the Grand Cross of the Order of Saint Sylvester, the oldest and most prestigious of papal knighthoods. This award has been given to only 100 other men in history, who “by feat of arms, or writings, or outstanding deeds, have spread the Faith, and have safeguarded and cham-pioned the Church.” Although a papal citation of this sort rarely, if ever, states why a person is inducted into the “Golden Mili-tia,” there can be no doubt that Donovan earned his knighthood by virtue of the services he rendered to the Catholic hierarchy in World War II, during which he served as chief of the Office of Strategic Services (OSS), the wartime predecessor to the Central Intelligence Agency (CIA). In 1941, the year before the OSS was officially constituted, Donovan forged a close alliance with Father Felix Morlion, founder of a European Catholic intelligence service known as Pro Deo. When the Germans overran western Europe, Donovan helped Morlion move his base of operations from Lisbon to New York. From then on, Pro Deo was financed by Donovan, who believed that such an expenditure would result in valuable insight into the secret affairs of the Vatican, then a neutral enclave in the midst of fascist Rome. When the Allies liberated Rome in 1944, Mor-lion re-established his spy network in the Vatican; fromthere he helped the OSS obtain confidential reports provided by apostolic dele-gates in the Far East, which included information about strategic bombing targets in Japan. Pope Pius’ decoration of Wild Bill Donovan marked the beginning of a long-standing, intimate relation-ship between the Vatican and U.S. intelligence that continues to the present day. For centuries the Vatican has been a prime target of foreign espionage. One of the world’s greatest repositories of raw intelligence, it is a spy’s gold mine. Ecclesiastical, political and economic informa-tion filters in every day from thousands of priests, bishops and papal nuncios, who report regularly from every corner of the globe to the Office of the Papal Secretariat. So rich was this source of data that shortly after the war, the CIA created a special unit in its counterintelligence section to tap it and monitor developments within the Holy See. But the CIA’s interest in the Catholic church is not limited to intelligence gathering. The Vatican, with its immense wealth and political influence, has in recent years become a key force in global politics, particularly with Catholicism playing such a pivotal role in Eastern Europe and Latin America. Unbeknownst to most Catholics, the Vatican, which carefully maintains an apolitical image, not only has a foreign office and a diplomatic corps, but also has a foreign policy. And with Polish Communists embrac-ing Catholicism and Latin American Catholics embracing communism, the U.S. government and particularly the CIA have recently taken a much greater interest in Vatican foreign policy. A year-long Mother Jones investigation has revealed a number of unlikely channels—both overt and covert—which the agency uses to bring its influence to bear upon that policy. Since World War II, the CIA has: subsidized a Catholic lay organization that served as the political slugging arm of the pope and the Vatican throughout the Cold War; penetrated the American section of one of the wealthiest and most powerful Vatican orders; passed money to a large number of priests and bishops — some of whom became witting agents in CIA covert operations; employed undercover operatives to lobby members of the Curia (the Vatican government) and spy on liberal churchmen on the pope’s staff who challenged the political assumptions of the United States; prepared intelligence briefings that accurately pre-dicted the rise of liberation theology; and collaborated with right-wing Catholic groups to coun-ter the actions of progressive clerics in Latin America. It was in this last regard that the CIA supported factions within the Catholic church that were instrumental in pro-moting and electing the current pope, John Paul II, whose Polish nationalism and anti-Communist credentials, they thought, would make him a perfect vehicle for U.S. foreign policy. John Paul’s recent trip to Nicaragua could not have been matched by any American’s for the contri-bution it made to President Reagan’s Central American initiative. And hopes are high in Washington, D.C., that the pope’s forth-coming trip to Poland, where 90 percent of the people are Catholic, will re1 spark the anti-Soviet upris-ing so vital to Reagan’s plans for Eastern Europe. Dark Knight of the Soul Every year in late June a bizarre ritual takes place in Rome. Men and women fly in from all over the world to participate in a cere-mony that has been performed for centuries. Next year, the assembled might find CIA director William Casey in their midst. And Casey could well be accompanied by former Secretary of State Alexander Haig. If they make the journey, Casey and Haig will join a gathering of the world’s Catholic elite on St. John’s Day. Dressed in scarlet uniforms and black capes, brandishing swords and waving flags emblazoned with the eight-pointed Maltese cross, these Catholic brothers and sisters will, in an atmosphere of pomp and circumstance befitting a coronation, swear allegiance to the defense of the Holy Mother Church. Casey and Haig are both members of the Knights of Malta, a legendary Vatican order dating back to the Crusades, when the “warrior monks” served as the mili-tary arm of the Catholic church. The knights, in their latter-day incarnation as the Sovereign Military Order of Malta (SMOM), are a historical anomaly. Although the order has no land mass other than a small headquarters in Rome, this unique papal entity holds the status of nation-state. It mints coins, prints stamps, has its own constitution and issues license plates and passports to an accredited diplomatic corps. The grand master of the order, Fra Angelo de Moj ana di Cologna, holds a rank in the church equal to a cardinal and is recognized as a sovereign chief of state by 41 nations with which the SMOM exchanges ambassadors. But the real power of the order lies with the lay mem-bers, who are active on five continents. Nobility forms the backbone of the SMOM; more than 40 percent of its 10,000 constituents are related to Europe’s oldest and most powerful Catholic families. Wealth is a de facto prerequi-site for a knightly candidate, and each must pass through a rigorous screening. Protestants, Jews, Muslims and di-vorced or separated Catholics are ineligible. “The eight-pointed white cross stands out everywhere as a symbol of charity toward mankind and as a comfort and consolation to the sick and the poor,” says Cyril Tou-manoff, official historian of the SMOM. In recent years its members have carried on the Hospitaler tradition of the original knights by supporting international health care and relief efforts. They proudly offer aid to the needy regardless of race, creed or religious affiliation. But the needy aided by certain SMOM members in the late ’40s were some of the 50,000 Nazi war criminals who, with the assistance of the International Red Cross, were furnished fake Vatican passports and, in some cases, cleri-cal robes, and were smuggled on Bishop Alois Hudal’s “underground railroad” to South America. Among those was Klaus Barbie, the “butcher of Lyons.” In 1948, the SMOM gave one of its highest awards of honor, the Gran Croci al Merito con Placca, to General Reinhard Gehlen, Adolf Hitler’s chief anti-Soviet spy. (Only three other people received this award.) Gehlen, who was not a Catholic, was touted as a formidable ally in the holy crusade against godless Marxism. After the war he and his well-developed spy apparatus—staffed largely by ex-Nazis—joined the fledgling CIA. Eventually, hundreds more Nazis ended up on the U.S. government’s payroll. Among them was Klaus Barbie. “The CIA very early on made a decision that Nazis were more valuable as allies and agents than as war criminals,” > says Victor Marchetti, an ex-CIA officer who was raised a Catholic. Marchetti is disturbed by the role of the CIA and his church in perpetuating the Nazi outrage. “It gets a little crazy,” he said, “when you let one thing [anticommunism] take over to the extent that you forgive everything else.” The SMOM had given a different prestigious award in 1946 to another high-level CIA operative, James Jesus Angleton. “It had to do with counterintelligence,” An-gleton told Mother Jones, when asked why he was chosen for such a distinction. During World War II, Angleton was head of the Rome station of the OSS. Later, on his return to Washington, he ran what was tantamount to the “Vat-ican desk” for the CIA. According to Angleton, the agency does not have a Vatican desk. Nor does it have an Israel desk, for that matter, yet Angleton also covered that area. The extreme sensitivity associated with Israel and the Vat-ican required that work relating to them be buried among Angleton’s counterintelligence staff, which was well-suited for such assignments. During the early years of the Cold War, Angleton organ-ized an elaborate spy network that enabled the CIA to obtain intelligence reports sent to the Vatican by papal nuncios stationed behind the Iron Curtain and in other “denied” areas. This was, at the time, one of the few means available to the CIA of penetrating the Eastern Bloc. According to previously classified State Department memoranda, Angleton rec-ommended that the CIA fund Catholic Action, an Italian lay organization headed by Luigi Gedda, a prominent right-wing ideo-logue who had also been honored by the knights. Gedda was a key operative in an effort undertaken by the CIA and the Vatican to “barricade the Reds” in the 1948 Italian elections. Only weeks before the election, it appeared the Italian Communist party would prevail. The CIA and the Vatican both feared the Communists might win unless drastic measures were taken. At the behest of Pope Pius XII, Gedda mobilized a huge propaganda machine. More than 18,000 “civic commit-tees” were formed to get out the anti-Communist vote. The Christian Democrats scored a decisive victory. Catholic Action is credited with turning the tables. Catholic Action continued to be a dominant factor in Italian politics throughout the Cold War. It had great influence on trade unions and youth groups in Italy-groups that were heavily sub-sidized by the CIA, then un-der the leadership of Alien Dulles. Christian Demo-cratic politicians and church figures were also among the beneficiaries of the CIA.’s largess, which exceeded $20 million per year in the 1950s. The agency provided “proj-ect money” to numerous priests and bishops, usually in the form of contributions to their favorite charities. Often, these prelates were unaware of the true source of these funds. “We would consider people of this sort as our allies,” recalls Victor Marchetti, “even though they may not consider themselves in any way allied with us.” Amazing Grace The American section of the Sovereign Military Order of Malta has about 1,000 members, including 300 “dames.” They represent the vanguard of American Catholicism, the point at which the Vatican and the U.S. ruling elite intersect. “The Knights of Malta comprise what is perhaps the most exclusive club on earth,” Stephen Birmingharn, the social historian, has written. “They are more than the Catholic aristocracy, they] can pick up a telephone and chat with the pope.”