FEB 1 0 1975 "limited" losses in the closures of two banks in and NYTimes Geneva that Mr. Sindona once cotrolled. Pope Paul VI and his finan- cial advisers are known to have turned to Mr. Sindona in the SD DONA ACCUSED nineteen-sixties, when they de- cided to sell 'off some Vatican investments. These assets in- OF ITALIAN BRIBES cluded a sizable interets in an intennatioal real estate com- pany, Societa Generale Im- mobiliare, that owned the Milan Official Investigates Watergate complex in Wash- Charges Financier Paid ington. quit as Bank Director Politicians for Favors Mr. Sindona resigned as di- rector of the New York-based last By PAUL HOF1VIANN September when he was unable Special to The New York Times to fulfill a promise to supply ROME, Feb. 9—Judicial au- up to $50-million to the thorities have 'opened an in- troubled institution. Franklin quiry into allegations that National has since become the Michelle Sindona, the Sicilian- European American Bank. born financier who for some The Italian financier, who was the largest shareholder in time controlled the Franklin the parent company that owned National Bank, bribed Italian Franklin National, is under in- politicians to obtain illegal vestigation by the Internal favors, Milan court sources said Revenue Service for allegedly today. having offered $1-million to the re-election campaign of A deputy state prosecutor, President Nixon in 1972. Guido Viola, yesterday ques- The new inquiry into alleged tioned a Milan lawyer, Raffaele corruption of politicians in was prompted by exposes in two magazines, L'Espresso of Rome and Panorama of Milan. The two publications said that Mr. Sindona had subsi- dized politicians of the Chris- tian Democratic party, Italy's largest party, in an effort to secure favorable administrative • rulings affecting his banking operations. Huge Bribes Charged According to L'Espresso, huge bribes were paid to politi cians in Italian currency and were not recorded in the books of any of the many companies that Mr. Sindona controlled. Panorma alleged that Mr. Sin- dona had regularly paid $1.2,- million to the Christian Demo- cratic party beginning in 1972. Two Associated Press investigative reporters, Michele Sindona Eugenio Scalfaro of L'Espresso and Paolo Panerai of Panorma, have been questioned by judi- Scarpitti, about charges that he cial officials. was a go-between for Mr. Sin- Deputy Premier , leader of the small Re- dona and political figures. publican party, which is allied Prominent politicians are ex- with the Christian Democrats pected to be summoned soon by in the Government, has pub- the Milan official to answer licly stated that when he questions about dealings with served as Treasury minister in 1973 he was subjected to pres- Mr. Sindona in what seems to sures of "every kind" to favor be developing into Italy's latest the Sindona group. Mr. La corruption • scandal. Malfa said the group had also The 54-year-old financier, promised to "do fantastic whose empire of interlocking things for my party." It is thought that the Deputy companies was at one time Premier will be questioned by estimated to be worth $450- the Milan public prosecutor in million, is wanted by Italy on the Sindona case. two arrest warrants charging REMEMBER THE NEEDIEST: fraudulent bankruptcy and re- lated offenses. Now in New York Mr. Sindona is now in New York. [Mr. Sindona could not be reached immediately at his New York hotel for comment on the allegations.] A team of lawyers is repre- senting the financier, who car- ries an Italian passport, in his contacts with investigating magistrates and with former business associates. The Vatican stated 10 days ago that a Roman Catholic Church institution had suffered