Italian police seize $30M from Vatican in probe

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By Associated Press

VATICAN CITY (AP) — Italian authorities seized $30 million from a Vatican bank account Tuesday and said they have begun investigating top officials of the Vatican bank in connection with a money-laundering probe.
The Vatican said it was “perplexed and surprised” by the investigation.
Italian financial police seized the money as a precaution and prosecutors placed the Vatican bank’s chairman and director general under investigation for alleged mistakes linked to violations of Italy’s anti-laundering laws, news reports said.
The investigation is not the first trouble for the bank — formally known as the Institute for Works of Religion. In the 1980s, it was involved in a major scandal that resulted in a banker, dubbed “God’s Banker” because of his close ties to the Vatican, being found hanging from Blackfriars Bridge in London.
The Vatican expressed full trust in the chairman of the bank, Ettore Gotti Tedeschi, and his director-general, identified by the Vatican directory as Paolo Cipriani. It said the bank had 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.
Gotti Tedeschi told state-run RAI television that he was “humiliated and mortified” by news of the probe, which he said had arrived just as he was implementing new transparency procedures at the bank.
News reports circulated more than a year ago that Italian investigators were scrutinizing millions of euros worth of Vatican bank transactions to see if they violated money-laundering regulations.
In Tuesday’s case, police seized the money from a Vatican bank account at the Rome branch of Credito Artigiano Spa, according to news agencies ANSA and Apcom. The bulk of the money, €20 million ($26 million), 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 alleged omissions in financial transactions.
Prosecutors declined requests seeking confirmation of the reports.
Gotti Tedeschi was named chairman of the bank 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, Gotti Tedeschi frequently speaks out on the need for more morality in financing and is a very public cheerleader of Pope Benedict XVI’s finance-minded encyclical “Charity in Truth.”
“It’s not difficult to show that applied ethics produces more wealth,” he wrote in a July piece for the Vatican newspaper L’Osservatore Romano. “Ethical behavior means lower costs — just thinking about control measures alone — and allows for more value thanks to transparency and trust, which alone produce more certainty and fewer risks.”
News of the investigation came just after Benedict wrapped up a difficult trip to Britain and as the Vatican still reels from the fallout of the clergy sex abuse scandal.
The Vatican bank, located in a tower just inside the gates of Vatican City, isn’t a typical bank. Its stated mission is to manage assets placed in its care that are destined for religious works or works of charity. But it also manages ATMs inside Vatican City and the pension system for the Vatican’s thousands of employees.
The bank is not open to the public. Depositors are usually limited to Vatican employees, religious orders and people who transfer money for the pope’s charities.
Its leadership is composed of five cardinals, one of whom is the Vatican’s secretary of state. But the day-to-day operations are headed by Gotti Tedeschi and the bank’s oversight council.