The Vatican bank is checking the account of every client including Holy See employees, its new chief said yesterday, in a campaign to root out any money-laundering at an institution which has been prone to scandals for decades.
A willingness to contest anyone who is involved in improper activities
Ernst von Freyberg’s predecessor was dismissed for poor management, and the Vatican’s financial watchdog said last week it is now investigating six possible attempts to use the Holy See to launder money in 2012.
In an interview published in Corriere della Sera yesterday, Freyberg said the Institute for Works and Religion (IOR) – the bank’s formal name – was reviewing each of 18,900 clients to verify their right to an account and uncover any suspi-cious aspects.
The IOR was combing through about 1,000 accounts a month, he said, to pinpoint owners and anyone who has signa-ture authority.
“This is a system of zero tolerance: No suspect transactions, no improper clients and a willingness to contest anyone who is involved in improper activities, even if they are our own employees,” he said.
The bank mainly handles funds for Vatican departments, Roman Catholic charities and orders of priests and nuns worldwide but has been used improperly by third parties in recent years.
The Vatican is trying to meet international standards on fighting terrorism financing, money laundering and tax evasion, but the European anti-money laundering committee, Moneyval, said in July that the IOR still had some way to go.
The Vatican has pledged to make changes and consequently will present a progress report on the Moneyval recommendations next December.
The IOR has hired the US-based Promontory Financial Group as a regulatory consultant and the Vatican has signed a memo of understanding with world-known FinCen, the US agency that tracks suspicious financial transactions.
Freyberg said the bank made a profit of €86.6 million in 2012, up from an average of €69 million annually in the previous three years. This is believed to be the first time profit figures were given.
The bank’s profits are used to help fund Church activities.
Freyberg was appointed Chief of the Vatican bank in February to replace Ettore Gotti Tedeschi, who was fired in May, last year. Gotti Tedeschi said he was dismissed because he wanted more transparency but the bank’s board, made up of international financial experts, said he had neglected basic manage-ment responsibilities.
His abrupt departure, along with the arrest of Pope Benedict’s butler for stealing confidential papal documents, came during a leaks scandal that shook the Vatican last year and perhaps contributed to Pope Benedict’s decision to resign in March.
The Vatican has been trying to shed its image as a murky financial center since 1982, when Roberto Calvi, known as 'God's Banker,' was found hanging from London's Blackfriars Bridge. Calvi was head of Banco Ambrosiano, then Italy's largest private bank, which was part-owned by the Vatican and collapsed in a fraudulent bankruptcy.