Vatican: Bank probe due to misunderstanding, says matter should be clarified soon

By Nicole Winfield, AP
Wednesday, September 22, 2010

Vatican says bank probe fueled by misunderstanding

VATICAN CITY — The Vatican said Wednesday the seizure by police of €23 million ($30 million) from a Vatican bank account and the investigation of two top bank officials was due to a simple misunderstanding that should be clarified quickly.

In a front-page article Wednesday, the Vatican newspaper L’Osservatore Romano also provided details about the investigation, saying it began when the Bank of Italy tipped off authorities to a possible violation of anti-money laundering norms by the Vatican bank.

Italian financial police seized the money as a precaution Tuesday, and Rome prosecutors placed the bank’s chairman, Ettore Gotti Tedeschi, and his director general, Paolo Cipriani, under investigation for alleged mistakes linked to violations of the norms.

L’Osservatore Romano stressed that since the beginning of the year, the Vatican bank — officially known as the Institute for Works of Religion, or IOR — had been working with the Bank of Italy to conform to Italy’s new anti-money laundering norms.

The bank also had supplied documentation in a bid to get on the OECD’s so-called “white list” of banks that cooperate with international norms on money-laundering and terrorism, the newspaper said in an article headlined “IOR’s transparency.”

“It’s easy to realize that the nature and the scope of the operations now under investigation could be clarified quickly and easily,” L’Osservatore wrote. “The inconvenience was caused by a misunderstanding, which is being clarified, between the IOR and the bank that received the transfer order.”

News reports circulated more than a year ago that Italian investigators were scrutinizing millions of euros worth of Vatican bank transactions to see if they violated money-laundering regulations.

In Tuesday’s case, police seized the money from a Vatican bank account at the Rome branch of Credito Artigiano Spa, according to news agencies ANSA and Apcom. The bulk of the money, €20 million ($26 million), was destined for JP Morgan in Frankfurt, with the remainder going to Banca del Fucino.

According to the reports, the Vatican bank had neglected to communicate to financial authorities where the money had come from. The reports stressed that Gotti Tedeschi wasn’t being investigated for laundering money himself but for a series of alleged omissions in the transactions.

L’Osservatore repeated the Vatican’s full trust in Gotti Tedeschi, who took over as head of the bank last year, saying his “integrity and authority are well known in Italian and international finance circles.”

Gotti Tedeschi has said he was “humiliated and mortified” by the probe but that the transfers in question were for perfectly normal transactions.

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