Money Laundering Mess Vexes Vatican
By Paul Springer
The Vatican added money troubles to its other public relations problems recently when Italian regulators froze about $30 million in a money laundering inquiry into the Institute for Works of Religion (IWR), sometimes erroneously referred to as “the Vatican bank.”
The IWR is a private bank that reports to a committee of cardinals, but its assets are not technically property of the Vatican.
The bank has been suspected of possessing some associations that sound like something out of “The Da Vinci Code”, Time Magazine reports:
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.
In any case, the matter is just one more event in a series of inquiries the Vatican doesn’t need, as The Christian Science Monitor sees it:
Italy’s Guardia di Finanza police have also been investigating allegations that the Vatican bank has been involved in money laundering for at least a year.
In December, a respected Italian news magazine, Panorama, reported that officials were probing the bank for suspected money laundering via one or more accounts held at a branch of Italy’s largest bank, Unicredit.
Prosecutors have not explained whether that investigation is linked to the one announced Tuesday.
The current rhubarb involves Bank of Italy claims that transfers involving the $30 million did not identify beneficiaries and specify use of the funds, but the Vatican maintains the matter is a “misunderstanding.”
Now The Financial Times has learned that IWR attorney Vincenzo Scordamaglia says the bank will take action to reclaim the funds:
Papal observers said they could not recall a case of the Vatican, a sovereign state, seeking redress through the Italian judicial system and that the move reflected its sensitivity over the issue.
An unnamed Italian banking official offered an alternate explanation for the misunderstanding currently at issue:
The official says he believes the bank was “testing the Bank of Italy to see if they were serious about these anti-money-laundering norms”.
Indeed, the Lord works in mysterious ways.
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