According to the article below, Italian authorities have seized $30 million from Vatican accounts and placed the bank's president and chief executive under investigation. The probe centers on two money transfers that allegedly didn't include all the information required by Italy's anti-money-laundering laws. I sincerely hope that it turns out to be a tempest in a teapot.
. . . June
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Vatican Bank Scandal amid Italian Money-Laundering Probe
Yahoo! News:
When news first broke on Tuesday that Italian prosecutors were investigating the Vatican Bank for violations of anti-money-laundering regulations, the story seemed to be that the bank had returned to its old ways.
Reports in the press referenced the Vatican's connection to a 1980s financial scandal in which Italy's second largest bank, Banco Ambrosiano, went spectacularly bankrupt, collapsing under $1.3 billion of debt amid allegations of involvement by the Mafia and Masonic lodges. 'The Vatican Bank has a very negative image,' says Philip Willan, author of The Last Supper, a book about the death of the Banco Ambrosiano's chairman, who was found hanging under a London bridge, his pockets stuffed with rocks and thousands of dollars in cash. 'Every time there's a whiff of scandal, all the papers dig out their files.'
The Vatican Bank, a private bank that manages assets for religious orders and funds for Catholic charities, is estimated to hold assets worth $5 billion. In this latest scandal, Italian authorities have seized $30 million from Vatican accounts and placed the bank's president, Ettore Gotti Tedeschi, and chief executive, Paolo Cipriani, under investigation. The probe centers on two money transfers - $26 million to JPMorgan Frankfurt and $4 million to Italy's Banca del Fucino - that allegedly didn't include all the information required by Italy's anti-money-laundering laws. According to Italian reports, prosecutors are trying to find out for whom the money was destined and the identity of the sender.
The Vatican Bank denies any wrongdoing and puts the missing information down to a "procedural error."
But the very fact the investigation exists at all is an indication that the days of Vatican secrecy - at least when it comes to banking - could soon be over. The worst of the bank's excesses came at the height of the Cold War, says Willan, when the Catholic Church was consumed by the threat of the Soviet Union. In a sharply divided world, the Holy See found itself on the same side as the Mafia, whose Sicilian vote-buying operations propped up the Christian Democrats against the communists. Meanwhile, the Vatican's sovereign status and tight-lipped policies offered Italians an offshore bank they could walk to, ideal for funneling funds to resistance groups in Eastern Europe or Central America, or otherwise moving money out of the country. "The feeling was that anything was justified if it was being done to combat communism," says Willan.
The bank's dealings got so complicated that it's not clear if even the Vatican knew what was going on. In the investigation following the collapse of Banco Ambrosiano, the Vatican said it was surprised to find out it was the failed bank's largest shareholder. The Vatican Bank's then president, Archbishop Paul Marcinkus, avoided trial by claiming diplomatic immunity, and though it denied any misconduct, the Vatican agreed to pay $250 million to Banco Ambrosiano's creditors.
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