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THEIR KINGDOM COME -- INSIDE THE SECRET WORLD OF OPUS DEI |
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12. The Matesa Scandal
OPUS DEI'S FIRST REPORTED USE OF PILLERIA IN FINANCIAL MATTERS involved the Matesa scandal. As a result of fraud a large sum of money disappeared, never to be traced, and two bankers directly or indirectly involved in Matesa's operations lost their lives. Publicly, Opus Dei denied it was involved with Matesa, but privately members were reported to have joked about the operation, inferring that the movement's coffers were enriched by the misdealings. Two things can be said for certain: Spanish ratepayers were ultimately handed the bill; and the person who took the blame for the scandal eventually received a royal pardon. His name was Juan Vila Reyes. He was one of the first graduates of IESE (the Instituto de Estudios Superiores de la Empresa), Opus Dei's prestigious business administration school in Barcelona. In July 1956, Vila Reyes founded a technical support company for the textile industry. He called it Maquinaria Textil del Norte de Espana Sociedad Anonima, which he shortened to Matesa. During the late 1950s, 'technology' and 'technocracy' had become buzz words in Spain. Vila Reyes was quick to see that a corporation dealing in 'hi-tech' and directed by outward-looking 'technocrats' offered high potential in a country that was hungry for export successes. He doted Matesa with a capital of $80,000, only a small portion of which was paid in, against the issue of 200,000 shares, held in majority by himself as managing director. His brother Fernando, their sister Blanca, and brother-in-law Manuel Salvat Dalmau were the other shareholders. The next step was to learn how to become a technocrat. And so in October 1958 he signed up for IESE's top management programme. At this point he was not even a co-operator of Opus Dei, although his brother-in-law and sister were supernumeranes. A slight digression is necessary to understand what follows. Opus Dei's success was and remains dependent upon its ability to recruit new members. Recruitment, however, is not a word that Opus Dei likes. It maintains that people are not recruited into the Work at all. Rather, they ask to join in recognition of a God-given vocation that guides them to dedicate their lives to the apostolate. Nevertheless, in spite of efforts to keep the troops fully committed, a constant erosion of members due to natural causes or disillusionment requires expansion-minded Opus Dei actively to seek new members. It has over the decades developed a recruiting structure which is surprisingly efficient. Not just anyone is targeted, nor accepted. Rather like a tennis dub, 'new members might ask to join. But they have to be compatible with the dub's aims. If they're only interested in chess or learning to rumba, they would be out of place and therefore there is no sense in accepting them,' a member commented. A dossier prepared by former numerary John Roche examines Opus Dei's recruiting procedures in some detail. A certain awareness of Opus Dei vocabulary, however, is necessary. 'Proselytism' is synonymous with 'recruiting', even if the targets are fellow Catholics. 'Winning vocations', means 'bringing in new members'. In his analysis, Roche states:
The IESE to which Vila Reyes was admitted in 1958 had been founded that same year by two numeraries as an extension of their apostolate. They obtained a grant of $50,000 from the Banco Popular Espanol. IESE was attached to the University of Navarra and later aligned its syllabus with the Harvard Business School, with which it became associated. Some of Opus Dei's best cadres have over the years been formed at IESE, but also many of Spain's top business executives. But it had a hidden objective. Upon graduation, students became tracked in their professional careers -- and assisted if deemed appropriate -- so that directly or indirectly they became associated with the Work. Some slipped away, of course, but most willingly and even enthusiastically participated in the process without thought as to whether they were being used. It was all very convivial, with nothing so crude as pressure ever being applied; after all, they were encouraged to believe that they belonged to an elite executive club. One early graduate, for example, was Spain's future ambassador to Moscow, Juan Antonio Samaranch, who, when he became head of the international Olympic movement in the 1980s, transformed it into a vast money-spinning enterprise, according to the 'Christian and scientific principles' he learned at the IESE. And then there were the ambitious few, aware of what Opus Dei expected of them, who played the game to the hilt, exploiting the contacts it gave them. Vila Reyes was one of these. The contacts acquired by Vila Reyes during his year at the IESE enabled him to accelerate Matesa's development. After graduation, he retained as legal counsel Jose Luis Villar Palasi, a multilingual attorney with offices in Madrid. Villar Palasi was closely linked to Opus Dei, though the Work asserts that he was never a member nor even a co-operator. [2] In 1962, the Minister of Commerce, Opus Dei numerary Alberto Ullastres, appointed Villar Palasi as his under-secretary. This meant that for the next six years Vila Reyes never looked back. A multitude of doors opened for his 'hi-tech' company whose only sophisticated technology was its telex machine and an electric typewriter. Matesa acquired -- one is not quite sure how -- a French patent for an industrial loom. The patent cost all of $12,000. [3] The loom was known as the Iwer, no doubt after its inventor. Vila Reyes hyped its technical novelties. He said it was revolutionary because, shuttleless, it could weave virtually any type of material from silk to fibreglass. A prototype was shown at the 1959 Milan Industrial Fair, where it aroused modest interest. Villar Palasi introduced his client to Laureano Lopez Rodo. They became friends. Lopez Rodo introduced him to the Opusian banker Juan Jose Espinosa San Martin, who in July 1965 took over from Mariano Navarro-Rubio as Minister of Finance. Navarro-Rubio was named Governor of the Bank of Spain. With the Iwer patent and an IESE diploma, Vila Reyes was able to obtain sufficient credit to build an assembly plant in Pamplona. In Barcelona, Matesa installed a research department that employed several hundred technicians. Then began the search for export markets. While the fabulous Iwer was being presented to potential buyers in the US, Latin America and Europe, Lopez Rodo introduced Spain's first Five-Year Economic Development Plan. An important aspect of the plan was the stimulus it gave exporters by introducing a mix of fiscal enticements and state subsidies. Matesa was said to have an 'export vocation'. Juan Vila Reyes went to the state trough and came back with warehousing loans, discounting for its bills of exchange, and a revolving credit to help finance its export orders. It was a game. Against the outlay of state funds, Vila Reyes sent donations to IESE, the University of Navarra, and some of the Work's educational projects abroad. But Spain was still in the grips of foreign exchange controls. Rather than exporting the fabulous Iwer, a subsequent public enquiry revealed that Matesa apparently exported much of its state funding. Vila Reyes set up a maze of foreign convenience companies, many of them in the Swiss canton of Fribourg, lenient in its taxation of locally domiciled holding companies. Finance minister Espinosa San Martin had excellent contacts with the Giscard d'Estaing family in Paris, and with Prince Jean de Broglie, a co-founder of the Giscardian Independent Republican party. Valery Giscard d'Estaing was elected to the French National Assembly in 1956, the year that Matesa was founded. In January 1962, General de Gaulle appointed Giscard as his minister of finance. Though replaced in 1966, he remained in the wings of the Elysee Palace, waiting to serve as a future president of the Fifth Republic. Prince Jean de Broglie was the man who kept Giscard's political agenda up to date. Senator and member of the National Assembly's foreign affairs committee, he was a successful financier, with extensive contacts in the right-wing pan-European movement. In 1967, Giscard d'Estaing sent Jean de Broglie on a mission to Madrid. The exact nature of the mission is not known. But during de Broglie's stay in the Spanish capital, he was introduced to Juan Vila Reyes. Whatever the reason for the Madrid meeting, when de Broglie returned to Paris he gave instructions to an assistant, Raoul de Leon, to create for Matesa a holding company in Luxemburg, Sodetex S.A., with a paid-in capital of 1 million French francs ($170,000). The capital was transferred to a Sodetex account in Luxemburg by Brelic S.A., Fribourg, a Matesa subsidiary. Chairman of Sodetex was Prince Jean de Broglie, and Robert Leclerc, the head and principal shareholder of Banque de l'Harpe (which became Banque Leclerc) in Geneva, was one of the board members. By June 1968, Matesa's capital had increased to $2.4 million. Now a multinational enterprise, it was touted as a showcase of the new Spain's entrepreneurial spirit. But sales of the Iwer loom were never what they were purported to be. It was a delicate machine, over-priced and, plagued by production problems, delivery was uncertain. In Spain, purchasers of the loom could be counted on the fingers of one hand. Sales abroad were overstated. A consignment of Iwer looms, supposedly destined for New York, was found abandoned on the docks of Barcelona. The head of customs who uncovered the fraud, Victor Castro Sanmartin, was an Opus Dei member. [4] He probably did not realize the significance of Matesa for the financial arm of Opus Dei, given the institute's penchant for internal secrecy hat was every bit as strong as its external secrecy, and he filed a detailed report with his superior, the Minister of Finance. A copy of that report landed on the desk of Manuel Fraga Iribarne, the Minister of Information. Fraga was the senior Falange member in the cabinet, opposed to the influence wielded by the Opus Dei technocrats. The Falange had been watching Matesa's growth and wanted revenge after its humiliation by the Opus Dei technocrats in the 1957 cabinet reshuffle. The surviving Falange ministers saw in Castro Sanmartin's report an opportunity to break Opus Dei's hold over key government portfolios. In the summer of 1969 the Falange unleashed a press campaign that hinted Matesa's foreign orders were a ruse to qualify for export credits. Matesa's Luxemburg subsidiary, Sodetex, was planning to launch a 15 million Swiss franc ($3.6 million) debenture issue through Banque Leclerc in Geneva. But the anti-Matesa press campaign finally spread to the foreign media and in August 1969 the debenture offering was cancelled. The negative publicity also killed, according to Vila Reyes, outstanding orders for the Iwer loom. Until then Franco ignored the scandal. When the Falange Movement minister Jose Solis Ruiz personally complained to him that the Opus Dei ministers were not 'perfect gentlemen', the Caudillo remarked curtly: 'What have you got against the Opus? Because while they work you just fuck about.' [5] By September 1969 the brouhaha over Matesa had become too much for even Franco. He was particularly infuriated by the foreign publicity. Vila Reyes and his brother were arrested. Investigators quickly found the company insolvent. But Matesa had acquired $180 million in government export financing. Where had the money gone? Espinosa San Martin and Fausto Garda Monco, another Opus Dei banker who replaced Alberto Ullastres in 1965 as minister of commerce, did not have an answer. They resigned. Nevertheless Franco was not appeased, though ironically he did not direct his anger against Opus Dei. He was upset with the two Falange ministers Fraga and Solis as they had permitted the media to reflect the reality of Spain in the 1960s -- a country that was 'politically stagnant, economically monopolistic and socially unjust.' [6] Rumours abounded of a ministerial bloodletting. It was widely believed that Opus Dei's influence in government was on the wane and that Franco, fed up with the intrigues, would remove the technocrats altogether. But Franco had grown tired of the Falange and instead it was the technocrats who triumphed. Madrid was stunned when state television interrupted its evening programme on 29 October 1969 to announce the new cabinet. Of the nineteen ministers, ten were Opus Dei members or co-operators. They were led by Lopez Rodo (Economic Development), Gregorio Lopez Bravo (Foreign Affairs), Enrique Fontana Codina (Commerce) and Alfredo Sanchez Bella (Information and Tourism). Of the remainder, five were said to be close to Opus, among them Jose Luis Villar Palasi (Education and Science) and Alberto Monreal Luque (Finance). Three others were known to work with Opus Dei. That left only the Prime Minister, Luis Carrero Blanco, and everyone knew where his sympathies lay. Lopez Rodo was portrayed as the architect of this velvet 'coup d'etat'. Although Carrero Blanco was prime minister, it was really Lopez Rodo's government. But others said that the new king maker was Luis Valls Taberner, a monk-like and enigmatic Opus Dei numerary who was Banco Popular Espanol's deputy chairman. Valls Taberner and Lopez Rodo lived in the same Opus Dei residence in Madrid. The new government named a commission of enquiry. It found that most of the missing loot had been transferred abroad. It also disclosed that Matesa's network of foreign companies had made some grants to the University of Navarra, and one relatively small contribution to President Nixon's re-election campaign. Other monies were paid to Vila Reyes's alma mater in Barcelona, the IESE. Not mentioned in the commission's report, and vehemently denied by an Opusian vocal, were rumours that substantial indirect payments had been made to Opus Dei through its 'auxiliary societies'. A spokesman stated: 'Opus Dei received no donations whatever from Matesa. Vila Reyes did make some personal donations over several years to the IESE business school. These totalled 2 million pesetas (£12,000) and were well documented. The charge that he gave 2,400 million pesetas (£14 million) to various Opus Dei institutions in Spain, Peru and the United States is absolutely false.' [7] The denial is an interesting example of Opus Dei's bending the truth. It began with, 'It is important to note that Juan Vila Reyes ... and his legal adviser, Jose Luis Villar Palasi, were not members of Opus Dei ...' This may have been true, but Juan Vila's sister and brother-in-law were both members of Opus Dei and shareholders of Matesa. Moreover the Opus Dei denial neglected to mention that another Opus Dei supernumerary, Angel de las Cuevas, undersecretary of industry in the Finance Ministry and deputy chairman of the Banco de Credito Industrial, the state bank that accorded the export financing to Matesa, was charged with complicity in the fraudulent scheme. Perhaps more telling, a former Opus Dei budget director confirmed privately that 'my office only received minor contributions from Matesa'. [8] Needless to say, there is a difference between a categorical 'no contributions' and 'minor contributions'. But even this does not represent the full story because the budget director was the first to point out that international transfers did not pass through his office. They were handled by Dr. Rafael Termes Carrero, at the time regional director of Banco Popular Espaiiol in Barcelona. Rafael Termes was very close to Luis Valls, and it was Termes who set up the Andorra by-pass, engineering the acquisition of Credit Andorra, on whose board of directors he sat. Credit Andorra was the principality's largest and most active commercial bank. It was acquired in 1955 with Banco Popular's assistance by an Opus Dei auxiliary company called Esfina. [9] By the late 1950s, with an economic upswing underway, Spain was financing almost half of Opus Dei's world-wide operations, and Andorra -- which had no exchange controls -- acted as one of the staging centres for the exported funds. They were collected there and redirected to the money-market centres where funds were most needed -- in general, Frankfurt, London or Zurich. If money was going to Rome, the Villa Tevere was informed by Madrid in a coded message that, for example, 'fifteen collections left today'. A 'collection' equalled $1,000, so that fifteen collections meant that $15,000 was en route from Credit Andorra to Opus Dei's account with the IOR (the Vatican bank). Opus Dei never disclosed whether it received, directly or indirectly, any payments from Matesa's Luxemburg subsidiary, Sodetex, or from any of Matesa's other foreign affiliates. Sodetex went into liquidation soon after the scandal erupted. Sodetex's role in the disappearance of the $180 million was never investigated. The Spanish receivers claimed that Sodetex owed Matesa only $1 million, a rather paltry sum compared to the $179 million that still remained unaccounted for. The state prosecutors found tracks that led to Andorra for a small amount of the missing money. In October 1967, a special court for exchange control violations found Juan Vila Reyes and one of his employees guilty of illegally exporting $2.5 million through the principality. The money, in bundles of 1,000 peseta notes, was taken by car from Madrid or Barcelona to Andorra where it was deposited with the Credit Andorra. The court concluded that the money went from Andorra to Switzerland. [10] Vila Reyes's recompense was a few months in prison, many more months under house arrest and millions of pesetas in legal fees. He was financially ruined. In May 1975, he was sentenced to three years in prison. But six months later, Franco passed away and Prince Juan Carlos became head of state. One of the future king's first acts was to pardon the champion exporter. For Prince Jean de Broglie the recompense was the Lord's vengeance. In 1974, after long negotiations, he agreed to repay the $1 million which the Spanish liquidators claimed Sodetex owed Matesa. The terms of the agreement stated that the money with interest would be returned in two annual instalments, beginning on 15 November 1975. But when the first instalment fell due, Prince de Broglie reneged. Forty-four days after the due date for the second instalment, Jean de Broglie was gunned down in a Paris street by a professional hitman. In May 1977, Banque Leclerc in Geneva was ordered into liquidation. Days later, the bank's general manager, Frenchman Charles Bouchard, fell into Lake Geneva, not far from his front door, and drowned. According to his widow, he was an excellent swimmer and in good health. Twenty years later, she still maintains that her husband was murdered. One of the lawyers in what became known as l'Affaire de Broglie was Roland Dumas, who served as a foreign minister during Francois Mitterand's presidency. Dumas asked the investigating magistrate handling the de Broglie case to look into the connections between Sodetex and Matesa, which until then had been covered up. Dumas focused on whether the French police report on de Broglie's murder had purposely glossed over the links between the prince and Matesa. 'A more probing investigation would have shown that Matesa was an instrument of Opus Dei, whose tentacles stretch everywhere in western Europe. No investigation of this connection was undertaken in the criminal information [against Matesa's management] opened in Madrid or Luxembourg. The reason no doubt resides in the evident links that exist between Opus Dei and the political party of the Independent Republicans whose principal leaders were the friends of Prince de Broglie,' Dumas told a French journalist. [11] Robert Leclerc was charged in Geneva with fraud in connection with the collapse of his bank. At trial, his attorneys claimed that a stroke had deprived Leclerc of his ability to speak. In spite of remaining mute, he was convicted and served a light sentence in a prison hospital. Released, he miraculously recovered his voice, but never disclosed what had gone wrong inside Banque Leclerc. He died of old age in 1993. In spite of the Matesa setback, Opus Dei continued to develop its financial network outside Spain. The Matesa affair had provided an important lesson. Opus Dei theologians view the world through the tinted spectacles of Christian fundamentalists. They believe that Christ was crucified and rose again to break the stranglehold of evil so that the world might be fashioned anew, according to God's design. For Opus Dei, God's design extends to all mankind. Bearing this in mind, Opus Dei members believe strongly that God spoke to Moses, and also to Escriva de Balaguer, but that money speaks to the world. Opus Dei was out to build an earthly empire to the glory of God. Opus Dei's strategists realized this required a vast amount of capital -- more than any Church body, royal house or banking empire had ever assembled. Just as important, Opus Dei's strategists are not stupid people, enclosed in a world of incense and icons. The Father and his apostles had recruited into the Work some of Spain's brightest lights. By the 1960s, they were doing the same throughout Europe and farther afield, the Work by then being present in almost thirty countries. For the first time, a handful of dedicated people, most of them Spaniards, began to chart how to harness the financial establishment and the monetary system to spread the Good News. They were fashioning a holy conspiracy. Opus Dei has no financial apostolate? Opus Dei undermines its credibility by maintaining that it lives from Divine Providence, as if it received financial manna from Heaven. In this respect a professor at the University of Madrid made me aware of something I have called the 'Law of Financial Hegemony'. 'Opus Dei's hierarchy knows very well that money rules the world and that religious hegemony in a country or a continent is dependent upon obtaining financial hegemony,' affirmed Javier Sainz Moreno. If this is accepted, then much of what transpired on the economic and financial fronts during the next twenty-five years -- from the demise of Matesa to the forced winding up of an Opus Dei auxiliary operation known as the Fundaci6n General Mediterranea -- can be explained by this 'law' when applied to the Work's main apostolate, which, according to Cronica, is to 'fulfil a command of Christ, who tells us, "Go forth into all the world and preach the gospel to all creatures" ... the marvellous seeding of sanctity in all the environments of the world.' [12] Opus Dei's corporate aims, according to Professor Sainz Moreno, were, first, to control the Vatican finances in order to control the Vatican itself, and, second, to achieve the largest degree of financial hegemony wherever possible. But for God's Work to succeed on the scale that Escriva de Balaguer's lieutenants envisaged, a way of generating and deploying stateless capital had to be developed. The most fruitful field for generating odourless capital is international trade. Hidden profits can be easily created through the transfer of goods and services between countries with different fiscal and legal systems. Matesa's foreign transfers had shown that. Physical transfer across frontiers of suitcases stuffed with banknotes was outmoded. New methods were devised through the drafting of international contracts that transferred profits, commissions or brokerage to distant jurisdictions for warehousing. From these warehouses the monies could then be shunted about, putting resources to work where they were most needed. About this time, Opus Dei was becoming one of the largest players in the Eurodollar market -- a market that experienced exponential growth in the 1960s and 1970s. When it moves into a new country, Opus Dei's secular arm concentrates on developing foreign trade outlets -- especially between states where Escriva de Balaguer's children are already well placed in government. Thus when Opus Dei opened a new centre in India in 1993, a Spanish wool merchant was one of the numeraries sent to Delhi with the intention of establishing a trading company for operations between India and Europe. In this light, one understands how important the Matesa experiment was. In a sense, Matesa's demise marked the beginning of a new era of growth. _______________ Notes: 1. John J. Roche, 'Winning Recruits in Opus Dei: A Personal Experience', The Clergy Review No. 10, London, October 1985. 2. Opus Dei UK Information Office. 30 October 1994. 3. Le Vaillant, Op. cit., p. 345 (The sum mentioned is 500,000 pesetas). converted at 42 pesetas to the dollar. 4. Santiago Aroca, 'Opus IV -- The Occult Children -- Politicians, Military, Secret Agents', Tiempo No. 219, Madrid, 21 July 1986. 5. Preston, Op. cit., p. 745n. 6. Ibid., p. 745. 7. William O'Connor, Opus Dei -- An Open Book, Mercier Press, Dublin 1991, p. 139. 8. Francisco Jose de Saralegui, Madrid, 24 February 1995. 9. Ynfante, Op. cit., p. 249. 10. Ibid.. p. 250. 11. Thierry Oberle, L'Opus Dei -- Dieu ou Cesar, J-C. Lattes, Paris 1993, p. 220. 12. 'Freedom and Proselytism', Cronica VIII, 1959 (emphasis added).
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