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Vatican Bank Being Investigated for Money Laundering

[1]Com­ment: For many years, we’ve looked at the Vat­i­can Bank–the IOR (Insti­tute for Reli­gious Works.) Long a vehi­cle for the financ­ing of fas­cism and crim­i­nal under­tak­ings, the insti­tu­tion has FINALLY come under inves­ti­ga­tion for mon­ey laun­der­ing. (The Vat­i­can Bank was dis­cussed at length in AFA #18.) [2]

“Vat­i­can Bank ‘Inves­ti­gat­ed over Mon­ey Laun­der­ing”; BBC News; 9/21/2010. [3]

The head of the Vat­i­can Bank, Ettore Got­ti Tedeschi, is under inves­ti­ga­tion as part of a mon­ey-laun­der­ing inquiry, police sources say.

Pros­e­cu­tors also seized 23m euros ($30m; £19m) from the bank’s accounts with anoth­er small­er insti­tu­tion.

The inquiry was launched after two sus­pi­cious trans­ac­tions were report­ed to tax police in Rome.

The Vat­i­can said it was “per­plexed and aston­ished”, and expressed full con­fi­dence in Mr Tedeschi.

The Vat­i­can Bank, known offi­cial­ly as the Insti­tute for Reli­gious Works (IOR), was cre­at­ed dur­ing World War II to admin­is­ter accounts held by reli­gious orders, car­di­nals, bish­ops and priests.
Police inter­ven­tion

Rome mag­is­trates are look­ing into claims that Mr Got­ti Tedeschi and the bank’s chief exec­u­tive Pao­lo Cipri­ani vio­lat­ed laws that require banks to dis­close infor­ma­tion on finan­cial oper­a­tions.

The BBC’s David Wil­ley in Rome says the Bank of Italy’s finan­cial intel­li­gence unit tipped off Italy’s tax police last week, after two sus­pi­cious trans­ac­tions were report­ed between the Vat­i­can Bank and two dif­fer­ent Ital­ian banks.

The tax police seized 23m euros that the Vat­i­can Bank had tried to trans­fer from a small Ital­ian bank called Cred­i­to Arti­giana­to.

Some 20m euros was des­tined for JP Mor­gan in Frank­furt, with the remain­der going to anoth­er Ital­ian bank, Ban­ca del Fuci­no.

Reports say the Vat­i­can Bank had failed to inform the finan­cial author­i­ties where the mon­ey had come from.
Past scan­dal

In a state­ment, the Vat­i­can strong­ly defend­ed its record.

“The Holy See is per­plexed and aston­ished by the ini­tia­tives of the Rome pros­e­cu­tors, con­sid­er­ing the data nec­es­sary is already avail­able at the Bank of Italy,” the state­ment said.

And the Vat­i­can also gave its back­ing to the two offi­cials under inves­ti­ga­tion.

“The Holy See wants to express the max­i­mum con­fi­dence in the pres­i­dent and in the chief exec­u­tive of the IOR,” it said.

Mr Got­ti Tedeschi, who is an expert on finan­cial ethics, has been in charge of the bank for a year. He was for­mer­ly head of Span­ish bank San­tander’s Ital­ian oper­a­tions.

The Vat­i­can Bank was last mired in scan­dal in 1982 when its gov­er­nor Arch­bish­op Paul Marcinkus was indict­ed over his involve­ment with the col­lapse of what was then Italy’s largest pri­vate bank, Ban­co Ambrosiano.

Although he was nev­er arrest­ed, the fall­out from that scan­dal took a dark­er turn when two of its top exec­u­tives, one of them its chair­man, Rober­to Calvi, were mur­dered.

Calvi, known as God’s Banker because of his close ties to the Vat­i­can, was found hanged under Black­fri­ars Bridge in Lon­don.