Tuesday, 21 September 2010

Vatican Bank Officials Under Investigation

by NPR Staff and Wires

Vatican bank Chairman Ettore Gotti Tedeschi
Emanuela De Meo/AFP/Getty Images Vatican bank Chairman Ettore Gotti Tedeschi has taught financial ethics at Milan's Catholic University and frequently speaks out on the need for more morality in financing.
September 21, 2010
Just when the Catholic Church didn't need another scandal, Italian magistrates have frozen $30 million from the Vatican bank and are investigating top bank officials for alleged violations of European money laundering rules.

The Vatican said Tuesday it was "perplexed and surprised" and expressed full trust in bank Chairman Ettore Gotti Tedeschi and director-general Paolo Cipriani.

Italian financial police seized the money as a precaution from a Vatican bank account being held at the Rome branch of Credito Artigiano SpA following two recent suspicious transfers. News reports said the bulk of the money was destined for JP Morgan in Frankfurt, with the remainder going to Banca del Fucino.
According to the reports, the Vatican bank had neglected to communicate to financial authorities where the money had come from. The reports stressed that Gotti Tedeschi wasn't being investigated for laundering money himself, but for a series of omissions in financial transactions.

Prosecutors declined requests seeking confirmation of the reports.

Church officials said Tuesday that the Vatican has been working for some time to make its finances more transparent to comply with anti-terrorism and anti-money-laundering regulations.

"The Holy See is perplexed and surprised by the initiatives of the Rome prosecutors, considering the data necessary is already available at the Bank of Italy," it said in a statement.

The bank, officially known as the Institute for Religious Works, manages funds for the Vatican and for religious groups around the world.

Gotti Tedeschi was named chairman a year ago after serving as the head of Italian operations for Spain's Banco Santander. A member of the conservative religious movement Opus Dei, he has taught financial ethics at Milan's Catholic University. In the book Money and Heaven, Gotti Tedeschi explored capitalism and Catholic values.

In 1982, the Vatican bank became embroiled in a major scandal over the fraudulent bankruptcy of Banco Ambrosiano, whose president, Roberto Calvi, was found hanged from Blackfriars Bridge in London.
Last year, a U.S. appeals court dismissed a lawsuit against the Vatican bank filed by Holocaust survivors from Croatia, Ukraine and Yugoslavia, who alleged it had accepted millions of dollars of their valuables stolen by Nazi sympathizers.

The court said the bank was immune from such a lawsuit under the 1976 Foreign Sovereign Immunities Act, which generally protects foreign countries from being sued in U.S. courts.

NPR's Sylvia Poggioli contributed to this report from Rome.