Thursday 18 December 2014

Vatican's bank chiefs probed over laundering

Terence O'Neill in Rome

Published 01/10/2010 | 05:00

ITALIAN prosecutors questioned the Vatican bank's two top officials yesterday as part of a money-laundering probe that resulted in the seizure of £19m (€22m) from one of its accounts.

Chairman Ettore Gotti Tedeschi and director general Paolo Cipriani spent about four hours at the prosecutor's office a week after authorities seized the account as a precaution.

The chairman said the allegations resulted from a "misunderstanding" that he hoped would be cleared up.

The Vatican has stood by the two men and insisted that its bank, officially known as the Institute for Religious Works, was in the process of trying to comply with international norms to fight money laundering and terrorist financing.

The Vatican bank's finances have long been shrouded in secrecy. Most famously, it was implicated in a scandal over the collapse of the Banco Ambrosiano in the 1980s in one of Italy's largest fraud cases. Roberto Calvi, head of Ambrosiano, was found hanging in London in 1982 in mysterious circumstances.

Banco Ambrosiano collapsed after the disappearance of $1.3bn (€0.95bn) in loans the bank made to several dummy companies in Latin America.

The Ambrosiano scandal and other cases, including alleged bribes passed on to Italian politicians via Vatican bank accounts, were outlined in depth in the 2009 book 'Vatican SpA', based on a treasure trove of documents left behind by a former Vatican bank official.

Author Gianluigi Nuzzi said this week that the Vatican had undergone a shift in trying to come clean following past scandals and seemed legitimately intent on reforming.

Irregularities

The Bank of Italy, which tipped off financial police about possible irregularities in the Vatican bank account, is headed by respected former Goldman Sachs managing director Mario Draghi. For more than a decade, it was headed by Antonio Fazio, who was forced to resign in 2005 amid a scandal.

Mr Nuzzi said Mr Fazio had long looked the other way concerning Vatican bank finances. He suggested that with an international crackdown on offshore tax havens, Mr Draghi is doing the Vatican no such favours.

In the current investigation, financial police seized the money on September 21 from a Vatican bank account at the Rome branch of Credito Artigiano Spa, after the bank informed the Bank of Italy about possible violations of anti-money laundering norms. Most was destined for JP Morgan in Frankfurt, with the remainder going to Banca del Fucino.

Irish Independent

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