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Vatican Bank

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The Vatican Bank is a common name given to the Istituto per le Opere di Religione (IOR) or Institute for Religious Works, the central bank for the Roman Catholic Church located in Vatican City. It is run by a professional bank CEO who reports directly to a committee of cardinals, and ultimately to the Pope (or the Cardinal Camerlengo during an interregnum). The current President is Angelo Caloia. The Vatican Bank was involved in a major political and financial scandal in the 1980s, concerning the 1982 $3.5 billion collapse of Banco Ambrosiano, of which it was its major share-holder. The head of the Vatican Bank from 1971 to 1989, Paul Marcinkus, was indicted in 1982 in Italy as an accessory of the bankruptcy.

Contents

History

The Vatican Bank is a branch of the Roman Curia, the administrative structure of the Roman Catholic Church. It developed into a formal organization in the 19th century out of the informal system of Church finance known as Peter's Pence.

The Vatican Bank went through three periods of major change: post-1870 with the dissolution of the Papal States; in 1929 with the Lateran treaties establishing an independent Vatican City; and following the upheavals of World War II.

When the Lateran Treaty was written, one of its clauses redefined the canon sin of usury, to not mean gains from money lending, but rather simply profiting "exorbitantly". This enabled the Vatican Bank to become a true bank, with all the profitability that implies. Mussolini further gave the new Vatican Bank approximately $80 million to begin with.

The Vatican Bank was a successful and profitable bank. By the 1990s, the Bank had invested somewhere over US$10 billion in foreign companies. Part of what made the Bank so profitable was that it offered certain illegal services; for 5%, the Bank would launder industrialists' money, or money of those well-connected with the Catholic Church. The money laundering scandal leaked out in 1968 due to a change in Italian financial regulations, which would have mandated more transparency. To prevent the scandal that would occur when the public learned that the Vatican Bank (which was supposed to funnel all profits directly and immediately to charity) had in fact retained most of its profits and expanded its operations, Pope Paul VI enlisted Michele Sindona as papal finance advisor to sell off assets and move money overseas to hide the full extent of Vatican wealth. It was Sindona who was chiefly responsible for the massive influx of money when he began laundering the Gambino crime family's heroin monies (taking a 50% cut) through a shell corporation "Mabusi". This laundering was accomplished with the help of another dirty banker, Roberto Calvi, who managed the Banco Ambrosiano. Interestingly, both Calvi and Sindona were members of the P2 Lodge. 'Mark Lombardi: Global Networks''. Mark Lombardi, Robert Carleton Hobbs, Judith Richards; Independent Curators, 2003 (published for the travelling exhibition of his work, "Mark Lombardi Global Networks"). ISBN 0-916-36567-0

When Pope John Paul I became Pope, he learned of the Bank's doing, and instructed Cardinal Jean Villot (papal secretary of state and head of the papal Curia) to investigate the matter thoroughly. Curiously, a month later, after informing Villot that he was going public with the scandal (and firing Villot among others), John Paul I died. John Paul II ignored the matter, and allowed Sindona free play for a number of years after.

Banco Ambrosiano scandal

The Vatican Bank was Banco Ambrosiano's main share-holder. Paul Marcinkus, head of the Vatican Bank from 1971 to 1989, was indicted in Italy in 1982 as an accessory in the $3.5 billion collapse of Banco Ambrosiano, one of the major post-war financial scandals. Banco Ambrosiano was accused of money laundering activities for the mafia and Propaganda Due (aka "P2"), an outlawed masonic lodge, led by neofascist Licio Gelli. P2 and its headmaster Licio Gelli worked with Gladio, the secret NATO anticommunist paramilitary organizations. Marcinkus never came to trial in Italy, where courts ruled that as a Vatican employee he was immune from prosecution. He lived in retirement in Sun City, Arizona (US) until his death on February 21, 2006.

The Vatican Bank refused to admit legal responsibility for the Ambrosiano's downfall but did acknowledge "moral involvement", and paid $241m (£169m) to creditors. As of 2006, investigations are continuing concerning the murder of Ambrosiano's chairman, Roberto Calvi, which, according to Ernest Backes, former #3 of Clearstream, may have been linked to the death of Gérard Soisson, who used to work for Clearstream, a "bank of banks" which practices financial clearing.

Allegations

Several books that appeared during the 1990s were highly critical of the Vatican Bank's historical relations with right-wing governments and especially in the collaborationist regime of the Independent State of Croatia. They engendered initial defensive hostility and controversy. The controversy centers on conclusions drawn from the documentation rather than the documents themselves.

According to a 1998 report issued by the US State Department, the Nazi Croatian treasury was illicitly transferred to the Vatican Bank and other banks after the end of World War II. For its part, the Vatican has repeatedly denied any Franciscan participation in Ustashi crimes or the disappearance of the Croatian Treasury, yet has refused to open its wartime records to substantiate its denial.

The declassification in 1997 of a 1946 memo from US Treasury agent Emerson Bigelow, quoting a "reliable source in Italy", who alerted his superior that Croatian officials had sent 350 million confiscated Swiss francs (CHF) to the Vatican Bank "for safekeeping". On the way some CHF150 million were apparently seized by British authorities at the border between Austria and Switzerland, which brought the secret transfer into the open. "There is no basis in reality to the report," said Vatican spokesman Joaquin Navarro-Valls, as reported in Time magazine [link].

It widely suggested that the Vatican bank has investments in business that could be regarded as contrary to church teaching including armaments trading and contraceptive manufacturing however such allegations do not appear to have been substantiated.

Vatican Bank has been often accused of funding the Solidarity Polish trade-union as well as the Contras, managing US covert funds [#endnote_American].

Legal action

Vatican Bank was accused of financing the ratlines and ODESSA. A class action suit, Emil Alperin et al. v. Vatican Bank et al., was filed in the United States district court in San Francisco on November 15, 1999. The plaintiffs are concentration camp survivors of Serb, Jewish, and Ukrainian background and their relatives as well as organizations representing over 300,000 Holocaust victims. John Loftus, co-author of Unholy Trinity, serves as an expert witness in this case.

Another suit, Levy v. CIA, filed under the US Freedom of Information Act seeking release of US intelligence agency files regarding the alleged Vatican spymaster, Fr. Krunoslav Draganovic. New records on Draganovic were released as a result of that lawsuit in 2001.

The lawsuit was still pending in Federal Court as of 2006.

Role in popular culture

The 1990 film The Godfather, Part III featured machinations in the Vatican Bank as a central element in one of its more conspiracy-oriented plotlines.

References

  1. ↑ 

External links

(The following external links are all critical of the Vatican Bank.)

 

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