Prosecutor questions Vatican bank officials for 4 hours in money-laundering probeBy Nicole Winfield, AP
Thursday, September 30, 2010
Vatican bank chief questioned in probe
ROME — Italian prosecutors questioned the Vatican bank’s two top officials on Thursday as part of a money-laundering probe that resulted in the seizure of €23 million ($30 million) from a Vatican bank account.
Chairman Ettore Gotti Tedeschi and the director general Paolo Cipriani spent about four hours at the prosecutor’s office Thursday, a week after Italian authorities seized the account as a precaution.
The chairman told reporters as he left the courthouse that the allegations resulted from a “misunderstanding” that he hoped would be cleared up. He said the men had asked to be interrogated.
The prosecutor in the case was not in his office for comment; he has made no public statements since the probe was launched.
The Vatican has stood by Gotti Tedeschi and Cipriani and has insisted that its bank, officially known as the Institute for Religious Works, was actually in the process of trying to come into compliance with international norms to fight money laundering and terrorist financing.
The Vatican bank’s finances have long been shrouded in secrecy. Most famously, it was implicated in a scandal over the collapse of the Banco Ambrosiano in the 1980s in one of Italy’s largest fraud cases. Roberto Calvi, the head of Banco Ambrosiano, was found hanging from Blackfriars Bridge in London in 1982 in circumstances that remain mysterious.
Banco Ambrosiano collapsed following the disappearance of $1.3 billion in loans the bank had made to several dummy companies in Latin America. The Vatican had provided letters of credit for the loans.
While denying any wrongdoing, the Vatican bank agreed to pay $250 million to Ambrosiano’s creditors.
The Ambrosiano scandal and other cases of shady dealings, including alleged bribes passed onto Italian politicians via Vatican bank accounts, were outlined in depth in the 2009 book “Vatican SpA,” based on a treasure trove of documents left behind by a former Vatican bank official.
“Vatican SpA” author Gianluigi Nuzzi said this week that the Vatican had undergone a shift in trying to come clean following the scandals of the past and seemed legitimately intent on reforming. He said the investigation launched by prosecutors could merely have been a “warning shot” from the Bank of Italy to get its finances in line.
The Bank of Italy, which tipped off financial police to possible irregularities in the Vatican bank account, is currently headed by the respected former Goldman Sachs managing director Mario Draghi. For over a decade, it was headed by Antonio Fazio, who was forced to resign in 2005 amid a scandal.
Nuzzi said Fazio, a Catholic with ties to the Vatican, had long looked the other way concerning Vatican bank finances. He suggested that with a new international crackdown on offshore tax havens, Draghi is doing the Vatican no such favors.
In the current investigation, financial police seized the money Sept. 21 from a Vatican bank account at the Rome branch of Credito Artigiano Spa, after the bank informed the Bank of Italy about possible violations of anti-money laundering norms. The bulk of the money, €20 million ($26 million), was destined for JP Morgan in Frankfurt, with the remainder going to Banca del Fucino.
The Vatican bank reportedly neglected to inform financial authorities where the money had come from.
Tags: Criminal Investigations, Europe, Italy, Money Laundering, Rome, Western Europe