MONEY LAUNDERING SCANDAL ROCKS VATICAN BANK
VATICAN CITY (AP), DECEMBER 13, 2010 (STAR) This is no ordinary bank: The ATMs are in Latin. Priests use a private entrance. A life-size portrait of Pope Benedict XVI hangs on the wall.
Nevertheless, the Institute for Religious Works is a bank, and it is under harsh new scrutiny in a case involving money-laundering allegations that led police to seize euro23 million (P1.31 billion) in Vatican assets in September. Critics say the case shows that the "Vatican Bank" has never shed its penchant for secrecy and scandal.
The Vatican calls the seizure of assets a "misunderstanding" and expresses optimism it will be quickly cleared up. But court documents show that prosecutors say the Vatican Bank deliberately flouted anti-laundering laws "with the aim of hiding the ownership, destination and origin of the capital." The documents also reveal investigators' suspicions that clergy may have acted as fronts for corrupt businessmen and Mafia.
The documents pinpoint two transactions that have not been reported: one in 2009 involving the use of a false name, and another in 2010 in which the Vatican Bank withdrew euro650,000 (P37.55 billion) from an Italian bank account but ignored bank requests to disclose where the money was headed.
The new allegations of financial impropriety could not come at a worse time for the Vatican, already hit by revelations that it sheltered pedophile priests. The corruption probe has given new hope to Holocaust survivors who tried unsuccessfully to sue the United States, alleging that Nazi loot was stored in the Vatican Bank.
Yet the scandal is hardly the first for the centuries-old bank.
In 1986, a Vatican financial adviser died after drinking cyanide-laced coffee in prison. Another was found dangling from a rope under London's Blackfriars Bridge in 1982, his pockets stuffed with money and stones. The incidents blackened the bank's reputation, raised suspicions of ties with the Mafia, and cost the Vatican hundreds of millions of dollars in legal clashes with Italian authorities.
On Sept. 21, financial police seized assets from a Vatican Bank account at the Rome branch of Credito Artigiano SpA. Investigators said the Vatican had failed to furnish information on the origin or destination of the funds as required by Italian law.
The bulk of the money, euro20 million (P1.14 billion), was destined for the American JP Morgan bank branch in Frankfurt, Germany, with the remainder going to Banca del Fucino, an Italian bank.
Prosecutors alleged the Vatican ignored regulations that foreign banks must communicate to Italian financial authorities where their money has come from. All banks have declined to comment.
In another case, financial police in Sicily said in late October that they had uncovered money laundering involving the use of a Vatican Bank account by a priest in Rome whose uncle was convicted of Mafia association.
Authorities say some euro250,000, illegally obtained from the regional government of Sicily for a fish breeding company, was sent to the priest by his father as a "charitable donation," then sent back to Sicily from a Vatican Bank account using a series of home banking operations to make it difficult to trace.
The prosecutors' office stated in court papers last month that while the bank has expressed a "generic and stated will" to conform to international standards, "there is no sign that the institutions of the Catholic church are moving in that direction." It said its investigation had found "exactly the opposite."
Legal waters are murky because of the Vatican's special status as an independent state within Italy. This time, Italian investigators were able to move against the Vatican Bank because the Bank of Italy classifies it as a foreign financial institution operating in Italy.
However, in one of the 1980s scandals, prosecutors could not arrest then-bank head Paul Marcinkus, an American archbishop, because Italy's highest court ruled he had immunity.
----------------------------------------------------------
© Copyright, 2010 by PHILIPPINE HEADLINE NEWS ONLINE
All rights reserved
----------------------------------------------------------
PHILIPPINE HEADLINE NEWS ONLINE [PHNO] WEBSITE
[Non-text portions of this message have been removed]
Follow us on Twitter: http://twitter.com/phnotweet
This is the PHILIPPINE HEADLINE NEWS ONLINE (PHNO) Mailing List.
To stop receiving our news items, please send a blank e-mail addressed to: phno-unsubscribe@yahoogroups.com
Please visit our homepage at: http://www.newsflash.org/
(c) Copyright 2009. All rights reserved.
-------------------------------------------------------------
