THIS IS A TALE of extortion, loan-sharking, drug-dealing, murder, and mayhem, all laced with political and financial intrigue, reaching from a Lower East Side bar in New York across Europe, Asia and Latin America. The plot which concerns an alleged counterfeit stock deal between the Mafia and the church is worthy of Robert Ludlum, but this book is factual not fictional, based "on the recollections, files and records" of Detective Sergeant Joseph J. Coffey Jr., of the New York City police force, as well as "on wiretaps and electronic surveillance done under court order in the United States and the Federal Republic of Germany, and on reports, records and documents" of various law enforcement agencies.

Although the two central characters are quintessentially American -- Sergeant Joseph Coffey, a dedicated policeman, and Vincent Rizzo, a brutal Mafioso -- the supporting cast are international: forgers, swindlers, smugglers, and thugs from Austria, England, Germany, Italy, Latin America, and the United States, an aging French cardinal, a pair of shabby Italian monsignori, assorted American FBI agents and West German police, and, in the background, Michele Sindona, the notorious Italian financier, Archbishop Paul Marcinkus -- the American who heads the Vatican's bank and was Sindona's close associate -- and even John Connally and Richard Nixon.

The story is absorbing. Hammer writes smoothly, and his pitting Coffey's dogged determination against Rizzo's evil cunning provides the stuff of authentic human drama. But its drama does not blot out this book's serious problems. First, of all, the title is misleading. The Vatican is not the focus of the book. Indeed, though mentioned early on, the Vatican becomes crucial to the plot only in the final third of the volume. The book's scope is much more sweeping, revealing a myriad of Mafia crimes.

Unfortunately, the publishers have chosen to hype an alleged Vatican tie-in. The Vatican Connection's dust jacket proclaims in large print: "The Astonishing Account of a Billion- Dollar Counterfeit Stock Deal Between the Mafia and the Church," an assertion echoed in a recent full-page ad in The New York Times Book Review announcing an "explosive report on the Church's mysterious involvement with the underworld." Those claims may sell copies, but they grossly inflate -- and distort -- the book.

In fairness to Hammer, he and Coffey have publicly said that they show only the involvement of a few Vatican officials, not of the Vatican itself. That claim is far more modest, but I think the evidence with which Hammer supports even that lesser claim is inconclusive. I shall make my argument later in this review. My immediate criticism is that Holt is sailing this book under false colors.

Many authors have stories about how publishers' publicity agents have twisted their work. But Hammer is a veteran journalist, author of at least seven other books, and he was scarred by the publicity surrounding an earlier volume on Lucky Luciano. Even if he did not agree to what Holt has said, he has been negligent in not demanding truth in advertising and in packaging. (Happily, the general accuracy of his descriptions of the Mafia's activities have been corroborated by the former head of the Department of Justice's Organized Crime Strike Force in The Wall Street Journal and by Sergeant Coffey, who has appeared on occasion with Hammer to provide his own recollections.)

Insofar as the Vatican is concerned, the complex plot begins with efforts of an Austrian and a German swindler to persuade the Mafia to forgive them their debts in return for participation in a larger scheme. Leopold Ledl, the chief con man, claims that Cardinal Eugene Tisserant approached him in early 1971 and flatly asked him to sell to the Vatican, at 65W on the dollar, $950 million worth of forged stocks and bonds. "First-class securities, of course," Hammer quotes Tisserant as saying, "in large American companies." Half would go into the Vatican's bank to repair its damaged balance sheets; the other half would bolster the sagging finances of the Bank of Italy.

Ledl, according to his own account, put together a team of Europeans to run the caper and invited Rizzo and his friends to provide the forged securities. At first, the Mafiosi were skeptical, but an offer, typed on the stationery of the Vatican's Sacred Congregation for the Religious and signed with an illegible signature with no name typed below it, convinced them to join.

The initial consignment, due in July, 1971, was for $14.5 million. The Mafia's representatives insisted on payment in hard currency, not lire. Ledl says he left the Mafia's people outside the Vatican and went to Tisserant's office to make the exchange. His story is that a mysterious archbishop in that office said he did not have that much cash except in lire and and sent the swindlers to a rendezvous at a monastery outside Turin; then, when that assignation failed to produce the funds, to another in Milan. At this point, the operation, which the head of the Justice Department's Organized Crime Strike Force aptly described as a "Keystone Kops Caper," unraveled. News that several Italian bankers had learned of the swindle frightened the conspirators; the Austrian police arrested Ledl for other crimes; and the plotters dipped their hands into the $14.5 million of stocks and bonds.

Saying that they have heard that Archbishop Marcinkus wanted them to market part of the securities to test the venture, some of Ledl's team tried to dispose of several millions in Swiss and Italian banks. In each case, the banks checked with Interpol, found that the securities were not stolen, and accepted them. But also in each instance -- though in one only because of a very wary clerk -- the banks sent the stocks and bonds to the United States to be carefully examined. The fraud quickly became obvious. And, back in the United States, the man who did the forging was murdered.

Meanwhile, by 1971, according to Hammer's report, rumors were circulating in 1971 in European banking circles that the Vatican would finance some of its operations with forged American securities. Joseph Coffey's investigation--for much of the time in conjunction with the Organized Crime Strike Force-- continued, and in 1973 Rizzo went to federal prison, though not for any crime connected to the alleged Vatican swindle. Coffey was angered, however, by the Department of Justice's refusal to follow up other leads. The department never pursued a clerical linkage. And the Vatican showed no interest in investigating the matter itself.

This synopsis does not do justice to the rich detail Hammer has amassed; but, as he concedes, nothing in the book directly supports a claim that the Vatican was officially involved. I have mentioned that I also think the evidence is inconclusive even on Hammer's more modest claim of involvement by a few Vatican officials acting on their own authority. Let me explain.

At the outset, there are serious problems about who are the Vatican officials supposedly playing roles in the conspiracy. First is the mysterious archbishop; but, because Hammer never identifies him or hints of his identity, one can say nothing about him except: (1) He was not Marcinkus, because he was not at the time of the caper or of Ledl's "confession" an archbishop; furthermore, at one point the mysterious archbishop promises Marcinkus' cooperation, hardly necessary if he were Marcinkus; and (2) He was not a regular official of the Congregation for the Religious, the office where the letter supposedly originated, because at the time that congregation had no archbishops working for it; (3) He could, however, have been a consultant to that office or employed elsewhere -- or not at all -- in the Holy See.

The second character whom Hammer lists is a priest identified only as an assistant of Cardinal Tisserant. Since Hammer says no thing more about him, neither can I.

Third is Monsignor Alberto Barbieri, one of Ledl's supposed contacts in the Vatican whom Hammer describes as a "journalist and lecturer for the Vatican's publishing house, Edizione Paoline," and who was later, Hammer also says, defrocked. Alas, the monsignor's name is not included in the Annuario Pontificio for 1971 (or 1970 or 1972), which is the Vatican's own listing of those who work for it. Nor is the Edizione Paoline "the Vatican's publishing house." It is, rather, the agency of a small religious order. Religious orders, large or small, do not speak for the Vatican; and, as recent papal difficulties with the Jesuits show, they sometimes don't even speak to the Vatican.

The fourth character is Monsignor Mario Fornasari, whom Hammer calls "a noted Vatican lawyer." His name is also missing from the Annuario, even from among the consultants to the many tribunals around the Holy See. That he might have been trained in canon law and argued before eccleasiastical courts for private litigants is entirely possible, but neither would make him a Vatican official.

It is also quite possible that Barbieri and Fornasari wandered in and out of Vatican offices. Most of these, including the Congregation for the Religious, are located in Rome, outside of Vatican City. Access is seldom a problem for laity. For clerics it is almost automatic.

The fifth character, Cardinal Tisserant, was in fact a Vatican official. He had earned fame as a Biblical scholar and after being made a cardinal in 1936 had become a man of influnce in the Vatican. In 1971, however, he was in semi-retirement and, to his regret, outside the informal as well as formal structures of power, though still the Vatican's librarian and head of several commissions dealing its archives. He was not then associated with the Congregation for the Religious, though earlier he had been one of the board of 30 cardinals who oversee its work. In any event, those boards seldom meet and rarely exercise any control. (Every cardinal is assigned to a half-dozen such boards, and, if resident in Rome, perhaps to a dozen.)

Tisserant was still dean of the College of Cardinals, but outside of conclaves for the election of a pope that is a ceremonial position. His principal office of power was a thing of the past: He had been prefect of the Congregation for Oriental Churches. John XXIII, however, had squeezed him out of that post a decade earlier. Hammer says that Tisserant was "still actively running the Society for the Propagation of the Faith and disburing funds to the church's foreign missions." That is an egregious error. An Armenian, Cardinal Gregory Agagianian, had been in charge of Propaganda Fide for 10 years. And, as far as I can discover, he had never headed that post.

At the time of the supposed discussion with Ledl in 1971, Tisserant was 87. He was not senile, but neither was he mentally alert at all times. Always outspoken, he had in his declining years become a notorious teller of secrets, some of which he invented on the spot and all of which he communicated in a loud voice, a propensity that alcohol fueled. Tisserant was surely an eccentric; but he was as apt a candidate for a secret conspiracy as Pope Paul VI for the presidency of Planned Parenthood.

It is, of course, possible that on a cloudy day Tisserant voiced just the sort of fantasy Ledl reported. It is extraordinarily unlikely, however, that any intelligent person who knew him would have gone along, even if that person had no compunctions about law or morality.

Moreover, the only source for the conversation in which Tisserant allegedly suggested the criminal transaction was Ledl, a notorious swindler and convicted felon, trying to bargain with authorities -- and, perhaps indirectly, with the Mafia--for leniency. By then, Tisserant was conveniently dead. (See below for potential witnesses at a second conversation.) Indeed, except for a few Delphic remarks among the Mafiosi, taped by police, Hammer presents Ledl as the principal, if not the sole, witness for involvement of anyone working for the Vatican.

As for Marcinkus, a sixth character and certainly a high Vatican official -- though not, as Hammer asserts, the highest ranking American in the Vatican -- the book offers no direct evidence involving him. The conspirators "hear" second or third hand about Marcinkus' intentions. Ledl reports that the mysterious archbishop promises that Marcinkus will provide the money for the forgeries. Hammer indicates that two members of Ledl's team were also present but Hammer adds that police were never able to interrogate one of them and offers no independent corroboration from the other. Still, what those possible witnesses could offer about Marcinkus would only be hearsay. On the other hand, they might be able to confirm or contradict Ledl's story of an attempted transfer of securities in Tisserant's office, since Ledl says they accompanied him there.

Thus the most that can be said about the evidence presented here is that: (1) Ledl convinced others that the Vatican was supporting the caper and persuaded -- duped? -- Mafiosi into providing him with $14.5 million in forged securities, some of which his friends tried to market; (2) Hammer says two monsignors who were not Vatican offi cials (Barbieri and Fornasari) worked with Ledl; (3) Tisserant might have made the sort of offer that Ledl relates, but it is extremely unlikely that anyone in the Vatican would have cooperated -- out of fear of Tisserant's blabbing if not of God and/or the pope--or that anyone at all who knew him would have taken him seriously; (4) Archbishop Marcinkus was a friend of Michele Sindona, and that was a bad thing for Marcinkus, the Vatican, and all Catholics.

Ledl's account raises other problems. First, there is the letter on the stationery of the Congregation of the Religious. To put anything in writing except in case of dire necessity is unItalian, unRoman, and decidedly uncurial. In itself, this objection is not crucial, but it doesn't fit what I have seen as the typical pattern of curial behavior. That the letter exists I agree; that it is authentic I doubt. Vatican stationery is only slightly more difficult to obtain than access.

A more important question is why anyone would want to pay 65W on the dollar for forged securities. Although I hardly qualify as a financier, I would think that 10W on the dollar would be expensive. But, whatever price might be "fair," what would be the profit in paying that much money? It would be dangerous to sell the securities on a stock exchange; thus the most likely uses would be, as Hammer implies, either passively to bolster balance sheets or more actively to serve as collateral for loans. But: (1) to pay $617.5 million in cash to flesh out balance sheets seems exceedingly dear; and (2) no institution would loan -- even the Vatican -- the full value of securities; it would also charge interest on whatever it loaned. It would have been much cheaper and safer to borrow directly from the Mafia and pay its "vigorish" than to put up 65W on the dollar for collateral that could never be redeemed and also pay interest on any loan that paper secured.

The dangers of such a scheme's being discovered are real, as shown by what happened. In interviews while in American prison for violating U.S. banking laws, Sindona has described Marcinkus as "naive" and ignorant of banking. He would have to have been totally insensitive to bankers' great professional caution to have thought the deal would succeed. Perhaps he was that ignorant. No one can make a case for him as shrewd. But absent any direct evidence of his involvement, his ignorance is irrelevant.

Sindona certainly had the the chutzpah to try such a gigantic swindle, and he might have somehow been involved in this scam, but there is no clear evidence here that he was -- hints as well as general remarks abial out Marcinkus' involvement with Sindona, to be sure. But hints do not hard evidence make, nor does a general association reveal criminal collusion in a particular transaction, especially when the associate is not shown to have participated in the crime.

In sum, as a general account of organized crime, the book is fascinating. But it is not the book Holt's advertisement has described. Moreover, I find unconvincing Hammer's more modest thesis about Vatican officials acting on their own. He simply did not do his homework on the alleged clerical conspirators. He does not explain the advantage in paying out $617.5 million in cash for $950 million in forged securities. And he does not connect general associations, such as Marcinkus' with Sindona, to specific actions relevant to this scheme.

The Vatican itself, however, must bear a large degree of responsiblity for that inconclusiveness. Had the Curia in 1971, 1972, or later not taken the typical governmental attitude toward possible scandal -- actually secular governments tend to stonewall; the Vatican prefers to insabbiare, to bury in sand -- and fully cooperated with American authorities, or had it conducted a thorough, public investigation of its own, it might have been able to give the lie to such claims as those Holt has advertised. The best it can get now is a Scotch verdict.

Furthermore, any comprehensive examination of the Vatican's financial structure would have set off alarm bells that might well have saved the Church from its current ugly scandals involving the Banco Ambrosiano. As long as that system operates in secret and without any sense of responsibility, either to prelates, priests, nuns, laity, or the rest of the world, it inevitably raises suspicions that lend credence even to wild accusations. Mark, 9:42,* should have provided the Vatican with adequate incentive to light a lamp under its own basket.

*And whosoever shall offend one of these little ones that believe in me, it is better for him that a millstone were hanged about his neck, and he were cast into the sea.