Tag: Vatican Bank
VATICAN CITY—The Vatican took another step toward making its finances more transparent Tuesday, signing a deal with U.S. regulators under which each side will share information about financial transactions with the aim of rooting out money laundering and other illicit dealings.
The deal announced by the Vatican marks the latest move by the world’s smallest state in response to international pressure to better police the Holy See’s finances, which for decades were considered opaque.
The efforts began in earnest in 2010 in the wake of an investigation by Italian prosecutors into whether the Vatican bank had violated Italy’s money-laundering laws—an allegation the Vatican denies.
Measures so far have included laws against money laundering and terrorist financing; regulation that helps bring to justice anyone who commits financial misdeeds on Vatican territory; and the creation of the watchdog, or Financial Information Authority.
Under the new agreement, the FIA and the U.S. Treasury Department’s Financial Crimes Enforcement Network—which is headed by Jennifer Shasky Calvery—will be able to share information about financial transactions in their respective territories, the Vatican statement said.
The FIA is discussing similar agreements with about 20 other countries, and Vatican officials hope the U.S. deal will help pave the way.
“This is another step forward in the process that the Vatican initiated in 2010 and shows that we take this seriously,” FIA director René Bruelhart said in an interview.
The Vatican’s financial watchdog was created in 2011 as part of a regulatory overhaul announced by the former Pope Benedict XVI in late 2010.
For the Vatican, which has long cherished its culture of confidentiality, the effort to open up financial dealings to outside scrutiny hasn’t been easy.
Months after the FIA was created, for example, Vatican officials rewrote the Holy See’s financial laws. They kept the financial intelligence functions of the FIA intact, but left the details of its supervisory functions to be defined by subsequent regulation—which has yet to be completed.
The changes were criticized by some at the Vatican, including in documents that leaked out into the Italian press, creating some embarrassment for the Holy See.
Because the FIA’s role is mainly focused on financial intelligence, its U.S. counterpart is the Financial Crimes Enforcement Network, not the Securities and Exchange Commission, according to a person who worked on Tuesday’s agreement.
The Vatican is also still undergoing evaluation by Moneyval, a committee of financial experts backed by the 47-nation Council of Europe, as part of its bid to persuade foreign lenders and their regulators that Vatican financial institutions are transparent.
Last July, Moneval gave the Vatican a mixed report card. It said the Vatican had come a long way, but warned that the Holy See regulators still lacked the power to oversee the flow of money within its borders.
(ANSA) – Rome, April 10 – Italian police on Wednesday seized assets worth some 10 million euros from a former boss in the Magliana Gang that ruled Rome’s criminal underground in the 1970s and ’80s.
Ex-Magliana Gang chieftain Ernesto Diotallevi was also implicated, but acquitted, in the case of Roberto Calvi, the Italian banker found hanging under London’s Blackfriars Bridge in 1982 in mysterious circumstances.
Italian prosecutors have claimed he was murdered after failing to pay back the Mafia, but no convictions have been made.
Diotallevi was arrested last July with 10 others, including a priest, on suspicion of fraud and money laundering. He has since been indicted on those charges.
The unnamed priest is thought to have been behind a bank transfer to an anonymous account opened by the Institute for Works of Religion – commonly known as the Vatican Bank – at a Rome branch of Italy’s biggest bank Unicredit.
Calvi worked closely with the Vatican Bank, earning the nickname ‘God’s Banker’.
Diotallevi, Sardinian wheeler-dealer Flavio Carboni and ex-Mafia financial wizard Pippo Calo’ were acquitted in an appeals trial over the Calvi murder in May 2010 but prosecutors appealed to the supreme Court of Cassation. The Magliana gang was the most feared criminal organization in Rome from the mid 70s to the mid 1980s, not just for the robberies and murders it committed but also for its links with the Mafia, freemasonry and right-wing extremists.
The progress report by the Moneyval monitoring committee will also look at the Vatican’s implementation of all recommendations, not just the “key recommendations” in its July 2012 report.
The Vatican last year promised to redouble its efforts to reform its scandal-plagued bank and overhaul financial legislation following an Italian inquiry into alleged money laundering.
In that report, the Vatican scored satisfactory ratings in nine out of 16 key recommendations and unsatisfactory ratings in the remaining seven.
The report stressed in particular the importance of independent supervision of the Vatican’s bank, the Institute for Religious Works or IOR.
The Vatican bank has a troubled history including in the 1970s and 1980s when it was accused of helping to launder money for the Sicilian mafia.
After Italian prosecutors launched another inquiry in 2011, then pope Benedict XVI created a new financial authority to reform the bank.
The authority aims to put the Vatican on a “white list” of countries that cooperate with efforts against money laundering drawn up by the Organisation of Economic Cooperation and Development (OECD).
Nothing so defines the mystery and suspicion that lies at the heart of the Catholic church than the Vatican Bank. For all its secrecy and lack of transparency, you might think St Peter had set it up himself. In reality it was set up in 1942. Today it symbolises one of the core practical challenges for any incoming Pope.
Since the bank’s foundation, it has seen suicide, unexplained death, allegations of money laundering for the Mafia, and seen priests and several of its own directors investigated by US and Italian fraud and organised crime police.
When I was based here in the late 1970s, an American archbishop led the Vatican Bank, Paul Marcinkus. I met him several times. He exuded an eery air of arrogance and self satisfaction.
As far back as 1973, Marcinkus was questioned by a US federal prosecutor – William Aronwald, and the head of the US organised crime and racketeering section of the US Department of Justice. As head of the Vatican Bank, the US authorities wanted to know what Marcinkus knew about fake bonds totalling $14.5m, which had been delivered to the Vatican Bank in 1971. They had uncovered a demand on Vatican headed notepaper for $990m of the stuff.
A freelance journalist, Mino Pecorelli, whom I had met and talked to about the bank, and who had been investigating Marcinkus himself, was found dead in mysterious circumstances in 1979.
It was at this point that the US authorities gave up on the bank, having failed to penetrate its extreme secrecy. But then in 1982, the body of Roberto Calvi, head of the collapsed Banco Ambrosiano, was found hanging from London’s Blackfriars Bridge. Once again the Vatican Bank and Marcinkus were in the frame. It transpired that surprisingly this grand cleric had been an overseas director of the bank located in an office in the Bahamas. Italian police tracked activity involving Banco Ambrosiano to both the Mafia and a masonic lodge in Italy. The Vatican Bank denied any involvement but still paid out $25om to Banco Ambrosiano’s creditors.
Marsinkus died seven years ago, his secrets went to the grave with him.
Ironically, it was the birth of the euro, and Italy’s decision to join in 1999, that forced the Vatican Bank’s hand. They had to join too. Assorted EU officials have described the intense difficulty in persuading the bank to comply with EU anti-money laundering regulations.
The truth is that during the Cold War the Vatican Bank had proved a convenient conduit for laundering money to anti-communist movements beyond the Iron Curtain. There was a culture of international permissiveness where the bank was concerned.
It was only in 2009 that the Vatican Bank finally signed up to the jurisdiction of the European Court of Justice for the settling of disputes involving their compliance with EU rules. The bank’s director told reporters that it did so in order to be able to continue issuing euros emblazoned with the image of the Pope.
But the trouble with the bank continued. The Bank of Italy this year put a block on Deutsche Bank Italy from managing any financial activities on behalf of the Vatican Bank. This was because the Vatican had failed to meet another deadline for signing further compliance agreements with Brussels.
Interestingly, one of Pope Benedict’s last acts was to remove the bank’s Italian director and replace him with an outsider – a German aristocrat. The previous incumbent had come under huge pressure after a case with the Italian authorities in which 20m euros had been impounded by magistrates concerned with its origins. The cash has now been released.
But talk to anyone in this town, and no-one is convinced that a bank, designed to hold the donations and gifts of the faithful, is yet complying with the highest spiritual and temporal aspirations of Catholic worshippers.
Argentine Cardinal Jorge Mario Bergoglio’s election on March 13 is a triple first. He’s the first pope from the Americas. He’s the first Pope Francis. He’s the first pope to be a Jesuit, an order suppressed by Pope Cement XIV and an order held in suspicion by many other popes. He’s also a rarity as the first pope in centuries who should give pause to elitists, financial oligarchs, and self-serving politicians.
Life sometimes imitates art, and this is one of those times. The actual events surrounding the pope’s election are as astonishing as my fictional conspiracies.
A Pope Resigns
Pope Benedict XVI, 85, was no doubt weary when he announced he would retire at the end of February and make way for the election of a new pope. It was a rare act and hadn’t happened in centuries. Many other popes had been old and ill, yet they didn’t resign; their papacies ended with their deaths.
What was different this time?
The Catholic Church has been under siege by demons of its own design. It’s plagued with sexual and financial scandals. A recent scandal known as Vatileaks revealed that the pope’s former butler leaked embarrassing papal documents to an Italian journalist.
In Rome, a scandal was heating up about male prostitutes blackmailing gay priests. Pope Benedict XVI received a 300 page report in December about the possible blackmail. This came on the heels of more than a decade of revelations about other sexual and financial scandals.
A Cardinal’s Sex Scandal
The final blow to Pope Benedict XVI may have come from Britain. Catherine Deveney of the Observer broke a story about the highest placed Catholic in the United Kingdom, Scotland’s supposedly celibate Cardinal Keith O’Brien, the archbishop of St. Andrews and Edinburgh.
Three priests and one former priest gave sworn signed statements in a complaint they made to the papal nuncio detailing allegations of O’Brien’s abuse of authority and inappropriate sexual advances. As Deveney pointed out, the issue isn’t homosexuality; it’s hypocrisy. O’Brien stepped down shortly after the scandal became public.
The papal nuncio received the complaints on or about February 8 or 9, and Pope Benedict XVI, former head of the Vatican department that investigated internal sexual misconduct, announced his resignation on February 11.
A Favored Cardinal Falls from Grace
Pope Benedict XVI’s resignation paved the way for a papal election, but it in no way assured the election of Jesuit Cardinal Bergoglio.
Cardinal Angelo Scola, archbishop of Milan, appeared to be the favorite candidate. He was close to the just-resigned pope. Of the 115 electoral votes, Cardinal Scola had already sewn up around 50 votes before the conclave. On March 12, the Washington Post reported he was a “safe pick” for the new pope.
But just hours before the conclave, anti-mafia investigators swooped into Cardinal Scola’s diocese. Allegations of conspiracy and corruption hit the Italian newspapers just as foreign cardinals, previously unaware of the scandal, assembled to contemplate their votes.
Pope Francis I: An Inspired Choice
Cardinal Bergoglio was well liked prior to the conclave, even if he wasn’t the frontrunner. The dashing of Cardinal Scola’s chances certainly helped Bergoglio.
After winning the election, Cardinal Bergoglio took the name Pope Francis I in honor of the humble comforter of the poor, St. Francis of Assisi. He wants a church that is poor and a church that is for the poor. It’s an extraordinary position in a church administered by many cardinals who are fond of the kind of luxury and power that Jesus Christ eschewed.
Pope Francis I remarked that the Holy Spirit had inspired the events surrounding his election:
It was he who inspired the decision of Benedict XVI for the good of the Church. It was he who inspired the choice of the cardinals.
However it came about, the Vatican is now ruled by a Jesuit pope committed to helping the powerless and the poor, and his election was apparently made possible by the downfall of the privileged and the greedy.
Pope Benedict XVI has claimed that he’s resigning the papacy next week because of old age. But according to the major Italian newspaper La Repubblica, the real reason he resigned is because he did not want to deal the repercussions of a secret 300-page Vatican dossier that allegedly found, among other things, an underground network of high-ranking gay clergy, complete with sex parties and shady dealings with the already scandal-ridden Vatican bank. Here’s what we know:
The report sounds menacing. According to La Repubblica, the dossier comes in two volumes, “two folders hard-bound in red” with the header “pontifical secret.”
Pope Benedict asked for the investigation. “The paper said the pope had taken the decision on 17 December that he was going to resign — the day he received a dossier compiled by three cardinals delegated to look into the so-called ‘Vatileaks’ affair,” according to the The Guardian’s translation of the report.
The Vatican has a Velvet Mafia — and the Velvet Mafia is being blackmailed. The dossier alleges that a gay lobby exists within the Church, and has some sort of control on the careers of those in the Vatican. The dossier also alleges that this group isn’t as covert as it thinks — and got blackmailed by people on the outside. “The cardinals were said to have uncovered an underground gay network, whose members organise sexual meetings in several venues in Rome and Vatican City, leaving them prone to blackmail,” reads The Sydney Morning Herald’s translation of the report, and The Guardian adds: “They included a villa outside the Italian capital, a sauna in a Rome suburb, a beauty parlour in the centre, and a former university residence that was in use by a provincial Italian archbishop.” Some important context on this still powerful group:
La Repubblica’s sourcing seems to have been corroborated. So how much of this new scandal should you believe? Well, La Repubblica is not the only publication with an outline of this scandalous dossier. Panorama, an Italian weekly, has a similar report out late this week and according to the AFP, both publications have sources (perhaps the same source) who said the same thing: that the investigation shows transgressions that “revolve around the sixth and seventh commandments” — “Thou shall not commit adultery” and “Thou shall not steal.” It’s assumed in multiple reports that homosexual sex acts fall under the “adultery” umbrella.
The Vatican’s bank sounds fishy. La Repubblica says that the seventh commandment (“Though shall not steal”) has to do with the Institute of Religious Works, the Vatican’s Bank. “The three cardinals continued to work beyond 17 December last year. They came up with the latest events concerning the IOR — here you go to the seventh commandment,” reads the report, according to a rough Google Translation. On February 15, Pope Benedict appointed Ernst von Freyberg, a German lawyer, to head the scandalous bank.
The Vatican’s response isn’t exactly comforting. They Church isn’t flat-out denying the inflammatory allegations from La Repubblica, and they’ve pulled the classic act of neither confirming nor denying. Vatican spokesman Father Ferederico Lombardi said in a statement:
Neither the cardinals’ commission nor I will make comments to confirm or deny the things that are said about this matter. Let each one assume his or her own responsibilities. We shall not be following up on the observations that are made about this.
Pope Benedict’s successor will have a rough first day. If this damning dossier was really a big enough deal to have forced the first papal resignation in 600 years, who gets to deal with it? That undertaking will go to Benedict’s successor. According to La Repubblica, the dossier will stay in a secret papal safe and delivered to Benedict’s successor whenever he is elected — and that isn’t all, La Repubblica said this gay blackmail thing is just the first in a series of articles by the paper.
The Vatican’s bank, the Institute for Works of Religion (the IOR), acquired a sulphurous reputation in the 1970s when its American head, Archbishop Paul Marcinkus, went into business first with Michele Sindona, a Cosa Nostra-linked financier who would end up convicted of bankruptcy and murder, and then Roberto Calvi, who would be found hanged under Blackfriars Bridge in London following the fraudulent collapse of his Banco Ambrosiano.
But the bank’s reputation for skulduggery goes back further, almost to its inception in 1942. According to American intelligence documents cited by the author Ferruccio Pinotti, a group of leading Italian industrialists met in Turin in 1945 to discuss how to conduct the forthcoming war against communism in Italy.
One of their first moves was to deposit a large sum in the Vatican, presumably in the newly-founded Vatican Bank.
Licio Gelli, the former head of the outlawed P2 masonic lodge, which counted ministers, secret service chiefs and other representatives of the Italian elite among its members, now effectively acknowledges that both the Vatican and the CIA were allies in his organisation’s struggle against Marxism.
For example, Cardinal Alfredo Ottaviani, chief doctrinal watchdog at the Holy Office until the mid-1960s, was a friend with whom Gelli dined frequently, despite official Catholic disapproval of freemasonry.
“One might say Cardinal Ottaviani was our spiritual father, because he was from the very far right,” Gelli told me in a recent interview.
“He had a sister who was even more fascist than Mussolini,” Gelli laughed, remaining an unrepentant fascist himself.
He also admits to knowing successive CIA station chiefs in Rome, sometimes taking new arrivals on an introductory tour of the country.
Gelli also said that Marcinkus had participated in the war on communism. “Above all he was there to make money,” the former masonic leader said.
Marcinkus, an American of Lithuanian origin, used to handle security on foreign trips for Pope John Paul, collecting financial contributions from Catholic industrialists in the countries the Pope visited.
It was Calvi, Gelli said, whose Banco Ambrosiano had been squeezed to finance anti-communist operations, including subsidising the Polish trade union, Solidarity.
Roberto Calvi, who earned his nickname for his close ties to the Vatican Bank, was found hanged beneath Blackfriars Bridge amid strong suspicions that he was murdered.
Ayda Suarez Levy, the widow of a Bolivian druglord, claims that Calvi was laundering drug cartel money through an account in Nassau, in the Bahamas, on behalf of South American drug lords.
The Cocaine King sheds new light on Calvi’s death, which remains one of the Vatican’s darkest chapters and most contested mysteries.
Mrs Levy, the widow of Roberto Suarez Gomez, claimed in an interview on Italian television on Monday that Mr Calvi was her husband’s “Italian contact”.
“He said he could vouch for us,” she told Italy’s Channel Seven television.
“He said by vouching for us at such a high level, business would go well for us. I imagine he was talking about cocaine. He was not explicit but I imagine that is what it was about.”
Ms Levy recounted an encounter involving her husband and Gunter Sachs, a multi-millionaire German playboy who was the third husband of Brigitte Bardot.
She said that six months before Calvi’s death, she and her husband met Mr Sachs on a trip to Switzerland and they discussed the Italian banker.
Mr Sachs, who committed suicide in his Swiss chalet last year at the age of 78, reportedly told the Bolivian drug baron: “Calvi is very scared because Pablo Escobar wants his money back from the bank in Nassau.”
The Bahamas bank that he was referring to was an affiliate of Banco Ambrosiano, which was Italy’s biggest private bank when it collapsed in 1982.
It was headed by Mr Calvi, who had close ties to the Vatican’s bank, formally known as the Istituto per le Opere di Religion – the Institute for Religious Works.
The claims made in the book could “completely revolutionise the interpretation of Calvi’s death,” said Philip Willan, the author of “The Last Supper – The Mafia, the Masons and the killing of Roberto Calvi”.
Until now the speculation was that Calvi was murdered by the Cosa Nostra mafia of Sicily, possibly with complicity by Italian politicians or the Vatican itself.
“If Escobar wanted his money back and Calvi was not able to pay it, he would have had a motive to kill Calvi. There is evidence suggesting that Calvi may have had direct links to the laundering of drug money in the Caribbean,” said Mr Willan.
The evidence was enough to persuade the US Customs Service to launch an investigation into the alleged laundering of $34 million through the Bahamas affiliate of the Banco Ambrosiano in the late 1980s.
In 1988 Suarez Gomez, the Bolivian drug trafficker, was given a 15 year prison sentence for drug crimes, but was released in 1996.
By then he had accumulated a huge fortune. His widow recounts in the book how his men produced around two tons of cocaine paste in jungle laboratories in Bolivia each day and then sent it to Escobar’s Medellin cartel.
At the height of its power, the cartel, headed by Escobar, was smuggling 15 tons of cocaine into the US each day.