Thursday, May 24, 2012

Vatican Bank Head Loses Anchor in Holy See



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 administration.

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 documents.

"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 scandal.

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 money-laundering.

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 standards."

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 Italian press.


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 watered down.

It is not the first time that the IOR, which administers accounts held by religious orders, cardinals, bishops, priests and nuns, has made the headlines.

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 -- collapsed.

Banco Ambrosiano's chairman Roberto Calvi, known as "God's Banker" because of his ties with the Vatican, was found hanging from a London bridge.




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 resign.

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 laundering.

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 power struggle.

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 standards.”

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 foreign authorities.

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 laundering.

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)

Reuters


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