In a desperate attempt to pre-empt the findings of an investigation by Italian authorities, the Vatican has rushed through new procedures which it claims will make its notoriously opaque banking activities “more transparent”.
In September, Italian prosecutors announced that they had put Mr. Gotti Tedeschi chairman of the Vatican’s bank and the bank’s director general under investigation for alleged noncompliance with Italy’s anti-money-laundering rules. They also impounded 23 million euros of the bank’s cash.
Now the Vatican has announced with great fanfare that it has created a watchdog to supervise financial transactions and new laws against financial crimes.
“This is a very important step in a long path towards transparency and legality,” said Father Federico Lombardi, the Vatican’s spokesman – as though honesty was something that Vatican had to strive for and ultimately be forced into.
The new so-called Authority for Financial Information claims that it will monitor all Vatican institutions — including its bank, pharmacy and supermarket — for possible crimes including terrorism financing, stock-market violations and insider trading, according to an apostolic letter published on the Vatican’s website.
The Authority will be able to investigate and prosecute violators “in accordance with Vatican law”. This is the same “Vatican law” that permitted the cover-up of thousands of crimes committed by paedophile priests. It is the law that is answerable to no-one but the pope and can be interpreted in any way that suits the Holy See’s purpose. No-one who is prosecuted under canon law goes to prison; mostly they just have to say a few “Hail Marys” to absolve themselves.
The new watchdog is claimed to be “autonomous” – so autonomous, in fact, that all its members will be personally appointed by the Pope.
The whole thing stinks, but once again the Vatican puts up a smokescreen and flim-flams its way out of trouble and everyone just sits back and believes — because the pope says so — that the problem has been addressed and solved. Will the Italian prosecutors be taken in by this blatant attempt to deflect attention from the Vatican’s almost-certainly illegal money-making activities?
According to a person close to the probe, as part of the investigation into the Vatican Bank’s unregulated activities, Italian prosecutors are trying to determine whether the bank’s clients used it to transfer funds to Italy from Vatican City, which is outside the jurisdiction of Italian financial regulators.
For years, the Vatican Bank has transferred funds to its accounts at other banks on behalf of its clients without fully disclosing who those clients are. It was because of this that suspicions arose that mafia money was being laundered through the bank. In 2007, however, Italy introduced tougher disclosure laws, requiring banks to list the names of people who receive funds from Vatican bank accounts and the reason for the transaction.