Vatican Bank Head Ousted as Holy See Fights Sandal
By Jean-Louis de la Vaissiere (AFP) – 4 hours ago
VATICAN CITY — The Vatican Bank ousted its president on Thursday after
he failed to clean up the image of an institution that has come to
symbolise the opacity and scandal gripping the Holy See's
Ettore Gotti Tedeschi was forced to resign "for failing to carry out duties of primary importance," the Holy See said in a statement.
The president was ousted in the wake of a series of financial scandals
as the Vatican tries to clean up its image and put a stop to a leak of
"The board passed a unanimous no-confidence vote against the
president... and believes the action is important to maintain the
vitality" of the bank, the Vatican said, as internal divisions over transparency came to a head.
Gotti Tedeschi, an expert on financial ethics, was put in charge of the
bank -- also known as the Institute for Religious Works (IOR) -- in
2009, in an effort on the part of the Vatican to rid the institution of
Moneyval, the Council of Europe's experts on anti-money laundering, is
due to rule at the beginning of July on the whether the Holy See has
managed to clean up its act and meet international monetary standards.
But the former head of Spanish bank Santander's Italian operations
tasked with bringing transparency to the bank came under suspicion in
2010 when he was investigated as part of an inquiry by magistrates into
Gotti Tedeschi, 67, was accused of violating laws set up in 2007 that
tightened rules on disclosure of financial operations to the Italian
central bank in a bid to stamp out money laundering.
He was more recently also suspected of leaking documents and accused in some quarters of serving his own interests.
The board said it would seek a president who could "help the institute
establish efficient and extensive relations between it and the financial
community based on mutual respect of accepted international banking
For now, Deputy President Ronaldo Hermann Schmitz will take over the reigns.
Gotti Tedeschi's exit comes at a tense time for the Vatican, which has
had to deal over the past months with a series of leaks of sensitive
documents and accusations of corruption and fraud splashed over the
In the wake of the 2010 scandal -- which saw an Italian court
temporarily seize 23 million euros ($33 million) from the IOR -- Pope
Benedict XVI created a new financial authority to "prevent and oppose
illegal financial activity."
The aim was to get the Vatican on to the "white list" of financially
virtuous countries, but internal tensions sprang up after the Secretary
of State Tarcisio Bertone pushed for the new transparency law to be
It is not the first time that the IOR, which administers accounts held
by religious orders, cardinals, bishops, priests and nuns, has made the
In 1982 IOR was caught up in one of Italy's biggest fraud cases when
Milan's Banco Ambrosiano -- of which it was the main shareholder --
Banco Ambrosiano's chairman Roberto Calvi, known as "God's Banker"
because of his ties with the Vatican, was found hanging from a London
Director of Vatican Bank resigns under pressure
By Alessandro Speciale
Religion News Service, Updated: Thursday, May 24, 3:11 PM
VATICAN CITY — In an unprecedented move, the board of the Vatican Bank
on Thursday (May 24) forced its president, Ettore Gotti Tedeschi, to
According to a Vatican statement, the bank’s supervisory council
unanimously passed a no-confidence motion in Gotti Tedeschi for his
“failure to fulfill various primary functions of his office.” Carl A.
Anderson, the supreme knight of the U.S.-based Knights of Columbus, is
one of the council’s four members.
The Vatican’s chief spokesman, the Rev. Federico Lombardi, declined to give more details on the reasons for the dismissal, but analysts
say the move should be read in the context of an internal Vatican
struggle over controversial new rules for financial transparency.
Since 2010, Gotti Tedeschi, together with the bank’s director
general, Paolo Cipriani, has been under investigation for alleged money
In the past, the Vatican Bank, which operates under the protection of
the Vatican’s status as a sovereign nation, has been often accused of
involvement in shady financial operations, such as money laundering for
Italian politicians and even mafia bosses.
According to Giuseppe Di Taranto, professor of finance with LUISS
University in Rome, in recent years “Pope Benedict XVI has spearheaded
an effort to bring more transparency to the Vatican,” seeking its entry
into an international list of financially transparent countries.
A key step in this direction was the creation of an independent
financial watchdog in December 2010. But according to internal Vatican
documents leaked in recent months to the Italian press, the watchdog
panel’s effective powers have been at the center of a heated Vatican
A senior Vatican source quoted by the Italian news agency ANSA said
this so-called “Vatileaks” scandal was one of the reasons that led to
Gotti Tedeschi’s ousting.
In a statement, the Vatican Bank — officially known as the Institute for
Works of Religion — said it hoped to find a new president who would
“rebuild relationships between the Institute and the financial
community, based on mutual respect of internationally accepted banking
A cardinal’s commission overseeing the bank’s activities, headed by the
Vatican Secretary of State Cardinal Tarcisio Bertone, will meet tomorrow
to discuss the bank’s “future steps.”
An outspoken economist, Gotti Tedeschi had been at the helm of the
Vatican Bank since 2009. His provocative analyses of the global economic
crisis often appeared in the pages of L’Osservatore Romano, the
Vatican’s semiofficial newspaper.
According to Di Taranto, even if the precise reasons for Gotti
Tedeschi’s dismissal remain unclear, to comply with European standards “there is a need for a further modernization and restructuring” of the Vatican Bank. “After all, the Vatican is a very rich country.”
May 24, 2012 - 22:10
Vatican bank sacks president in no-confidence vote
By Philip Pullella
VATICAN CITY (Reuters) - The president of the Vatican bank has been
ousted by the board of directors, the Vatican said on Thursday, blaming
him for a deterioration in standards of governance.
The board unanimously passed a no-confidence vote in Italian Ettore
Gotti Tedeschi for failing to carry out "various fundamentally important
functions of his office", the Vatican statement said.
The bank will seek a new president who can "re-establish full and
effective relations between the Institute and the financial community,
based on mutual respect of internationally accepted banking standards", it said.
The Vatican bank, founded in 1942 by Pope Pius XII, has been in the
spotlight since September 2010 when Italian investigators froze 23
million euros ($33 million) of its funds in Italian banks after opening
an investigation into possible money-laundering.
Gotti Tedeschi told Reuters that he had been ousted because the bank did not like his honest way of doing things.
"I don't want to speak or give interviews, I have paid for my transparency," he said.
The Vatican recently adopted new financial transparency laws and set up
internal regulations to make sure its bank and all other departments
adhere to international regulations and standards, and cooperate with
But in January Italian newspapers published leaked internal letters that
appeared to show a conflict among top Vatican officials about just how
transparent the bank should be about dealings that took place before it
enacted its new laws.
In response to the money-laundering probe the bank, officially known as
the Institute for Works of Religion, said it did nothing wrong and was
just transferring the funds between its own accounts. The money was
released in June 2011, but the investigation is continuing.
In March, the U.S. State Department for the first time put the
Vatican on its list of countries considered vulnerable to money
That decision dealt a blow to the Vatican's bid to be included in the
European Commission's "white list" of states which comply with
international standards against tax fraud and money-laundering. A
decision on its inclusion is expected next month.
(Additional reporting by Paolo Biondi,; writing by Gavin Jones; editing by Pravin Char)
Vatican City could be hub for money laundering, says U.S.
March 8, 2012
- Pope Benedict XVI introduced anti-money laundering legislation last
year, but it is not yet known how effective that has been -
enforcement chiefs have for the first time identified the Vatican as a
possible centre for money laundering from criminal activity.
The report by the American State Department’s International Narcotics
Control Strategy lists the Holy See as one of 68 countries including
Yemen, Algeria and North Korea, describing it as a ‘country of concern’
for money laundering or other financial crimes.
Officials said they had placed the Vatican on its watch list because of
the ‘huge amount of cash’ that flows into the tiny city state and also
because it was still unclear how effective anti money laundering
legislation introduced last year by Pope Benedict XVI had been.
The news comes just weeks after a series of leaked documents from
within the Vatican and which were dubbed ‘Vatileaks’, revealed
allegations of corruption and money laundering within the Holy See and
which forced officials into issuing a series of denials.
The documents said that despite Pope Benedict signing a new anti
money laundering law to make it more difficult for illegal funds to be
recycled through Vatican accounts, there was a massive loophole which
made it impossible to take action against any offence committed before
its introduction on 1 April 2011.
Prosecutors in Rome are currently investigating two transfers
totalling 23 million Euros from the Vatican Bank, or the Institute of
Religious Works to give it its proper name, to two smaller banks.
The transactions took place in September 2010 and as a result the head
of the Vatican Bank, Ettore Gotti Tedeschi and his chief executive Paolo
Cipriani, were placed under official investigation by Rome prosecutors
and the 23 million Euro was also seized as part of the investigation.
Officials were tipped off about the two suspicious transactions by the
Bank of Italy, as the Vatican Bank was said to have ‘failed to disclose
fully’ all the information it was supposed to regarding the transactions
as per international banking laws.
Investigators involved in the case said they have met with ‘a deafening
silence’ as they try to get to the bottom of the case, with requests for
information being constantly dodged – at the time the Vatican said it
was ‘perplexed and astonished’ at the allegation and gave its full
backing to Gotti Tedeschi and Cipriani.
Today author Gianluigi Nuzzi, who wrote a best selling book on financial
scandals at the Holy See called ‘Vatican Spa’ said:’This news is
inevitable and the Vatican really needs to follow international rules
and ensure that it is transparent when it comes to banking transactions.
‘The Vatican says that it is but it is still not on the
internationally recognised white list of countries and until it is there
will always be suspicion surrounding its financial activities. I
understand inspectors were at the Vatican a few months ago and would not
be surprised if the State Department’s announcement was connected to
‘There are ongoing investigations against the Vatican Bank but every
time prosecutors try and ask a question they are met with at best half
answers or at worst and more often the case, complete silence.’
It also emerged last month that prosecutors in Rome have also placed
four priests under investigation were aged 37, 49 and 62, with the
oldest being Father Evaldo Biasini, 85, who has been given the nickname
‘Father Cashpoint’ by detectives.
He is alleged to have laundered hundreds of thousands of Euros belonging
to a corrupt businessman through accounts he opened for him at the
Vatican Bank and was allowed to ‘keep a percentage’ of the money as
While another of the priests is said to have acted as a guarantee for
the transfer of 300,000 Euro to an account in Rome by a woman identified
as ‘Maria Rossi’ which later turned out to be a false name.
It is not the first time that the Vatican Bank has been linked to money
laundering and criminal activities – in 1982 it was involved in a huge
international scandal when its then governor, larger than life American
Archbishop Paul Marcinkus, was indicted over his involvement with the
collapse of Italy’s then largest private bank, Banco Ambrosiano.
Ambrosiano’s chairman Roberto Calvi, was found hanged under London’s
Blackfriars Bridge, with bundles of cash and bricks in his pockets and
at the time his death was recorded as suicide but prosecutors in Rome
later said he had been murdered by the Mafia after a bungled money
laundering attempt through the Vatican Bank.
Calvi, was known as God’s Banker because of his ties to the Vatican and
was also known to Marcinkus but the cleric refused to answer questions
always claiming diplomatic immunity and he died six years ago taking the
secrets of what he knew to the grave.