God's Bankers: A History of Money and Power at the Vatican

by Gerald Posner

  20 MONEYVAL conducts extensive compliance checks in the central banks of EU member countries, and then monitors them regularly, particularly focusing on whether the banks meet a number of EU conventions: the 1980 Co-operation Group to Combat Drug Abuse and Illicit Trafficking in Drugs; the 1990 Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds of Crime (ETS 141); the subsequent anti-money-laundering “Strasbourg Convention; the 2003 update to the Strasbourg Convention; the 2005 adoption of the Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism (CETS 198); and the 2009 Conference of the Parties to the Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism (CETS 198).

  21 In reference to the IOR attempt to move forward on FATF compliance, journalist Nicole Winfield wrote, “Prosecutors, though, aren’t buying any of it.” Winfield, “Prosecutors Doubt Vatican Money-Laundering Pledges.”

  22 Amadeu Altafaj, the spokesman for the European Commissioner for Economic and Monetary Affairs, told reporters that the draft discussions set the groundwork for a substantive, new Vatican law. Amadeu Attafaj quoted in Sarah Paulsworth, “Vatican to implement EU financial crimes legislation by end of year,” Jurist, October 30, 2010. For a detailed overview of the European Union’s Financial Crimes statutes, see online at http://ec.europa.eu/internal_market/company/financial-crime/index_en.htm

  23 Unnamed FATF official interviewed in Winfield, “Prosecutors Doubt Vatican Money-Laundering Pledges.” Author interview with former Papal advisor/assistant, identity withheld at their request, in Rome, September 2013; Dinmore, “Sicily Probe Adds to Vatican Bank Pressure.”

  24 Lai, Finanze vaticane, 100, 160; see also Andrea Tornielli, “The Vatican’s Temptation to Exit the Euro,” “Vatican Insider,” La Stampa, July 24, 2012; and “Influential Prelate Said Vatican Should Drop Euro, Author Reports,” Catholic World News, July 25, 2012. The author requested to interview Archbishop Viganò through the Vatican press office where it went unanswered.

  25 Tornielli, “The Vatican’s Temptation to Exit the Euro.”

  26 Author interview with former Papal advisor/assistant, identity withheld at their request, in Rome, September 2013.

  27 Reprinted in full in Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism, Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, The Holy See (Including Vatican City State) (MONEYVAL), July 4, 2012, 12; see also Rachel Donadio, “The Vatican Creates a Financial Watchdog,” The New York Times, December 30, 2010.

  28 Press accounts sometimes confuse the names, using them interchangeably, or as if they are two separate entities. Reuters’ Philip Pullella and Andrea Tornielli, respected Vaticanisti, use FIA as the abbreviation to refer to this financial watchdog unit set up in the Pope’s motu propio (so does The New York Times). The Vatican, however, cites it on its own website as AIF, the initials used in this book. Also, the Autorità di Informazione Finanziaria has its own webpage. In the English translation provided by the Vatican, the unit is called the Financial Intelligence Authority. This book follows the names and initials as used by the Vatican.

  See Tornielli at http://vaticaninsider.lastampa.it/en/the-vatican/detail/articolo/vaticano-vatican-finanza-finance-financia-19443/; Pullella at http://www.reuters.com/article/2011/01/19/us-vatican-bank-watchdog-idUSTRE70I39020110119; the AIF website at http://www.vatican.va/roman_curia/institutions_connected/aif/index.htm; and the Vatican’s English translation of the name at http://w2.vatican.va/content/francesco/en/motu_proprio/documents/papa-francesco-motu-proprio_20131115_statuto-aif.html. See also the AIF’s website in English at http://www.aif.va/ENG/Statuto.aspx

  29 Tully, “This Pope Means Business,” Fortune.

  30 It is online at http://www.vatican.va/holy_father/benedict_xvi/motu_proprio/documents/hf_ben-xvi_motu-proprio_20101230_attivita-illegali_en.html.

  31 Dinmore, “The Vatican: A Murky See.”

  Bertone lobbied that the AIF chief be a friend of his, Professor Giovanni Maria Flick. But Benedict wanted to have a cleric, not a layman, at the helm. So Nicora was the compromise.

  32 Nicora’s fellow directors were Marcello Condemi, an economics law professor at Rome’s Marconi University; Claudio Bianchi, an accounting professor at Rome’s La Sapienza University; Professor Giuseppe Dalla Torre del Tempio di Sanguinetto, the rector of Rome’s LUMSA university; and Cesare Testa, head of the department that manages the funds responsible for the salaries of priests in Italy. Philip Pullella, “Vatican Names Board of New Financial Authority,” Reuters, Vatican City, January 19, 2011.

  33 “Fr. Lombardi’s Note Concerning the Motu Proprio,” Vatican City, Vatican Information Service, December 30, 2010.

  34 Ibid.

  35 Email message from Jeffrey Owens, cited in Donadio, “The Vatican Creates a Financial Watchdog.”

  36 Gianluigi Nuzzi quoted in ibid.

  37 Donadio, “The Vatican Creates a Financial Watchdog.”

  Chapter 37: The Powerbroker

  1 Tom Kington, “Vatican Leaks: No Respite for Pope Benedict as More Documents Published,” The Guardian, June 3, 2012; “Secrets of the Vatican,” Frontline, PBS, February 2014.

  2 “Vatican Diary / The strange case of the new prelate of the IOR,” La Repubblica, July 30, 2012.

  3 Author interview with Joan Lewis, February 10, 2014. “When the dust settles, the most obvious beneficiary of these moves would seem to be Italian Cardinal Tarcisio Bertone, the Secretary of State,” wrote the National Catholic Reporter’s John Allen. John L. Allen Jr., “A Triptych on Benedict’s Papacy, and Hints of What Lies Beyond,” National Catholic Reporter, May 23, 2011.

  4 Rocco Palmo, “Vatiwar: For the Italians, Retreat Week Becomes ‘Fight Club’ ” Whispers in the Loggia, February 23, 2013; Palmo, “ ‘Super-Nuncio,’ Rome-Bound?,” Whispers in the Loggia, July 13, 2011; Marco Tosatti, “A Tsunami of Italian Prelates in the Roman Curia,” “Vatican Insider,” La Stampa, July 18, 2011.

  5 Andrea Tornielli, “Clash Between Cardinals Over the Cattolica University,” “Vatican Insider,” La Stampa, May 26, 2011; see also Nuzzi, Ratzinger Was Afraid, 140–44; “God’s Bankers,” The Economist, July 7, 2012.

  6 “Mario Cal: The Mysterious Suicide That Has Rocked the Vatican,” The Independent (UK), October 3, 2011.

  7 Gotti Tedeschi quoted in Nuzzi, Ratzinger Was Afraid, 145, see also 144–49; Sandro Magister, “No Glorious Sunset for Cardinal Bertone,” L’Espresso, February 2, 2012; Kington, “Vatican Leaks.” See also “God’s Bankers,” The Economist. Giuseppe Rotelli, a prominent lawyer and government official, led a group of investors who subsequently bought the hospital for nearly $500 million.

  8 Kington, “Vatican Leaks.”

  9 Edward Pentin, “Naming of New Cardinals Prompts Speculation About New Pope,” Newsmax, January 10, 2012, http://www.newsmax.com/EdwardPentin/Cardinals-Pope-Benedict-Successor/2012/01/10/id/423629.

  10 Nicole Winfield, “22 Cardinals Join Club to Elect Pope’s Successor,” Associated Press, February 18, 2012.

  11 “Pope Butler Arrested, Vatileaks Tip of Iceberg: Dirt-Digging Cardinals Positioning Selves to Become Pope,” http://specialguests.com/guests/viewnews.cgi?id=EFFlkuZVuZvDkOhDaO&style=Full%20Article.

  12 Kington, “Vatican Leaks.”

  13 Unnamed Vatican analyst interviewed in ibid.

  14 Author interview with Joan Lewis, February 10, 2014.

  15 Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism, Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, The Holy See (Including Vatican City State) (MONEYVAL), July 4, 2012, 5.

  16 Resolution CM/Res (2011) 5, on the participation of the Holy See (including the Vatican City State) in the mutual evaluation processes and procedures of the Committee of Experts on the Evaluation of Anti-
Money Laundering Measures and the Financing of Terrorism (MONEYVAL) (Adopted by the Committee of Ministers on 6 April 2011 at the 1111th meeting of the Ministers’ Deputies).

  17 Gaia Pianigiani, “Vatican: Visitors Must Declare Cash,” The New York Times, April 1, 2011.

  18 Avi Jorisch, “The Vatican Bank: The Most Secret Bank in the World,” Forbes, June 26, 2012.

  19 Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism, (MONEYVAL), 5.

  20 The Moneyval team included: legal evaluator William Gilmore, a professor of International Criminal Law at the University of Edinburgh and a Moneyval Legal Scientific Expert; two financial examiners, Philipp Roeser, head of Liechtenstein’s regulatory Financial Market Authority, and Andrew Strijker, a Moneyval Financial Scientific Expert; two law enforcement evaluators, Boudewijn Verhelst, the Deputy Director of Belgium’s Financial Intelligence Unit and a Moneyval Law Enforcement Scientific Expert, as well as Vladimir Nechaev, a senior member of Moneyval Russian Federation. General team members included John Ringguth, Moneyval Executive Secretary, and John Baker, a Moneyval Secretariat director.

  21 Fr. Alexander Lucie-Smith, “Italy Is Now ‘in the Abyss’—and the Vatican Will Not Escape This Disaster,” Catholic Herald, November 11, 2011.

  22 Besides the IOR, the Moneyval team met with representatives from the Prefecture for Economic Affairs, Secretariat of State, the Juridical Offices, the Governorate, the Administration of the Patrimony of the Apostolic See (APSA), the Gendarmerie, and the recently formed Financial Intelligence Authority (AIF). For a complete list of all the people the Moneyval team met with during their visits to the Vatican, see Annex 1 to Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism, (MONEYVAL).

  23 John Ringguth quoted in Elisabetta Povoledo, “Report Sees Flaws in Workings of the Vatican Bank,” The New York Times, July 19, 2012, B9.

  24 Avi Jorisch, “The Vatican Bank: The Most Secret Bank in the World.”

  25 Sanya Khetani, “A Vatican Whistleblower Was Transferred After Exposing Catholic Corruption,” Business Insider, January 26, 2012; Philip Pullella, “Corruption Scandal Shakes Vatican as Internal Letters Leaked,” Reuters, January 26, 2012.

  See also: http://www.businessinsider.com/carlo-maria-vigano-vatican-corruption-2012-1#ixzz2sx6CZwyO.

  26 An article in Il Giornale in March 2011 accused Viganò of being a reactionary who was upset with the reforms in the church. The opposite was in fact true.

  27 Nuzzi, Ratzinger Was Afraid, 54–55, 67–69.

  28 Viganò letter to Bertone, quoted in Nuzzi, Ratzinger Was Afraid, 57.

  29 Viganò letter to Pope Benedict, March 27, 2011, quoted in Nuzzi, Ratzinger Was Afraid, 58, and reproduced in the original Italian at 244. See also Pullella, “Corruption Scandal Shakes Vatican.”

  30 Nuzzi, “Ratzinger Was Afraid,” 58.

  31 Viganò letter to Pope Benedict, quoted in Nuzzi, Ratzinger Was Afraid, 58-62.

  32 Ibid., 61. Pullella, “Corruption Scandal Shakes Vatican.” See also Sandro Magister, “Vatican Diary/Viganò, the Untouchable,” L’Espresso, January 26, 2012.

  33 Giacomo Galeazzi, “Vatican, the New Appointments,” “Vatican Insider,” La Stampa, February 11, 2011.

  34 They were ex-Secretary of State, Angelo Sodano; the former chair of the Congregation of Bishops, Giovanni Battista Re; Raffaele Farina, head of the Vatican Library;, and Agostino Cacciavillan, who had been the ambassador to the U.S. for eight years. See Nuzzi, Ratzinger Was Afraid, 70.

  35 Nuzzi, Ratzinger Was Afraid, 71–72. Also Author interview with former Papal advisor/assistant, identity withheld at their request, in Rome, September 2013.

  Chapter 38: The Butler

  1 Sandro Magister, “No Glorious Sunset for Cardinal Bertone,” L’Espresso, February 2, 2012.

  2 Author interviews, Rome, September 2013.

  3 John Hooper, “Gentleman of his Holiness and his Prostitutes Stun Vatican: Papal Usher Linked to Gay Prostitution,” The Guardian (London), March 5, 2010.

  4 Kertzer, The Pope and Mussolini, Kindle edition, locations1712–1832 of 10577.

  5 Author interview with Peter K. Murphy, January 31, 2014.

  6 Marinelli used the pseudonym “The Millenaria”; taken from the Latin millenarius, it refers literally to a society or religious movement “containing a thousand.” Because of that name, critics initially thought a group wrote the book. It was published the following year, 2000, in the U.S. under the title Shroud of Secrecy: The Story of Corruption Within the Vatican (Toronto: Key Porter, 2000).

  7 Millenari, Shroud of Secrecy, 110–11.

  8 Alessandra Stanley, “Tell-All Book Creates Furor at Vatican,” The New York Times, July 17, 1998.

  9 Francis quoted in Daniel Burke, “Pope Francis: ‘Gay Lobby’ Exists Inside Vatican,” CNN, June 11, 2013.

  10 Francis quoted in Rachel Donadio, “On Gay Priests, Pope Francis Asks, ‘Who Am I to Judge?,’ ” The New York Times, July 29, 2013.

  11 Lizzy Davies, “Swiss Guard Veteran Claims Existence of ‘Gay Network’ at the Vatican,” The Guardian, January 20, 2014.

  12 John Follian and Gretchen Achilles, City of Secrets: The Truth Behind the Murders at the Vatican (New York: William Morrow, 2003); John L. Allen Jr., “Power and Secrecy Feed Conspiracy Theories in Vatican City,” National Catholic Reporter, July 31, 1998; Barbie Latza Nadeau, “Vatican Murder Mystery: Was it a Gay Love Triangle,” The Daily Beast, November 14, 2011. See also Nuzzi, Ratzinger Was Afraid, 116.

  13 Christina Boyle and Stephen Rex Brown, “Report: Vatican Owns Building That Houses Cardinals and Europe’s Biggest Gay Bathhouse,” New York Daily News, March 11, 2013.

  14 David Badash, “Catholic Church Threatens Lawsuits: We Sell ‘Erotica,’ Not Pornography!,” The New Civil Rights Movement, November 3, 2011, online at http://thenewcivilrightsmovement.com/catholic-church-threatens-lawsuits-we-sell-erotica-not-pornography/news/2011/11/03/29594.

  15 Author interview, Rome, September 2013; Katie McDonough, “The Vatican Plays Landlord to Europe’s Biggest Gay Bathhouse,” Salon, March 12, 2013, online at http://www.salon.com/2013/03/12/the_vatican_plays_landlord_to_europes_biggest_gay_bathhouse/.

  16 Nuzzi, Ratzinger Was Afraid, 8.

  17 Author interview with retired Vatican colleague of Gabriele, September 19, 2013.

  18 Giacomo Galeazzi, “The ‘Family’ That Lives With Benedict XVI,” “Vatican Insider,” La Stampa, May 26, 2012.

  19 Magister, “Vatican Diary/Viganò, the Untouchable.” The Finance and Management Committee that was the focus of particular criticism consisted of Massimo Ponzellini, Pellegrino Capaldo, Carlo Fratta Pasini, and before he became the president of the IOR, Ettore Gotti Tedeschi. See also Nuzzi, Ratzinger Was Afraid, 28-30.

  20 Nicole Winfield, “Exclusive: Vatican Rewrites Money Launder Law,” Associated Press, January 27, 2012; see also Andrea Tornielli, “The Vatican Anti-Money Laundering Law Has Responded to Moneyval,” “Vatican Insider,” La Stampa, June 21, 2012.

  21 Andrea Gagliarducci, “Holy See and Financial Transparency. The Path to the White List,” Monday Vatican, June 25, 2012.

  22 “Fr. Lombardi: Statement Regarding Italian TV Program,” Vatican Radio, January 26, 2012.

  23 Ibid.

  24 Marco Tosatti, “The Secretariat of Mysteries and the Shadows of Accomplices,” “Vatican Insider,” La Stampa, May 29, 2012.

  25 Ibid; also Nuzzi, Ratzinger Was Afraid, 122.

  26 Andrea Tornielli, “IOR: A Subtle Transparency,” “Vatican Insider,” La Stampa, February 1, 2012; see also John L. Allen Jr., “Yet More Vatican Leaks,” National Catholic Reporter, February 15, 2012.

  27 Nuzzi, Ratzinger Was Afraid, 21, 34.

  28 Ibid., 18, 21, 29, 33. Tom Kington, “Pope’s Butler Arrested After Inquiry into ‘Vatileaks’: Documents Found in Search of Vatican Flat: Journalist Says Source Wanted to Fight ‘Hypocrisy,’ ” The Guardian, May 26, 2012, 34; Barbie Latza Nadeau, �
�VatiLeaks Exposes Internal Memos of the Catholic Church,” The Daily Beast, May 24, 2012.

  29 Magister, “No Glorious Sunset for Cardinal Bertone.”

  30 See generally http://www.vatileaks.com/_blog/Vati_Leaks/post/The_leaked_Vatican_documents/.

  31 John L. Allen Jr., “Roman Notebook: Yet Another Vatican Financial Scandal,” National Catholic Reporter, February 8, 2012.

  32 Francesco Antonio Grana, “Dalla finanza alla sanità: le manovre di Bertone, vero potere nel papato Ratzinger,” Il Fatto Quotidiano, February 23, 2013.

  33 “Holy See Press Office Rejects Unfounded Claims About the IOR and the AIF,” Vatican Information Service, Vatican City, February 9, 2012.

  34 “Vatican Rejects Prelate’s Corruption Allegations,” Associated Press, Vatican City, February 4, 2012.

  35 Stacy Meichtry, “After Centuries of Secrecy, Vatican Vexed by Leaks,” The Wall Street Journal, February 18, 2012.

  36 John L. Allen Jr., “Vatican Abuse Summit: $2.2 Billion and 100,000 Victims in U.S. Alone,” National Catholic Reporter, February 8, 2012; Nuzzi, Ratzinger Was Afraid, 80, citing “Vatican Insider.” The estimate of the total amount paid to victims does not include the amounts in sealed settlements. In those cases, a condition of the victim dropping the case is agreeing not to disclose what the church paid.

  37 “The Catholic Church’s Vatileaks Scandal: A Guide,” The Week, July 27, 2012.

  38 Nick Squires, “Vatileaks: ’20 People Involved in Stealing Documents,’ Says Pope’s Butler,” The Telegraph, September 6, 2012.

  39 Nick Squires, “Vatican Ruled by ‘Omerta’ Code of Silence, Whistle-blower Claims,” The Telegraph, February 23, 2014.

  40 Magister, “No Glorious Sunset for Cardinal Bertone.”

  41 The other cardinals were Salvatore De Giorgi, Julián Herranz, and Jozef Tomko.

  42 Rachel Donadio, “After Pledging Loyalty to Successor, Pope Leaves Vatican,” The New York Times, February 28, 2013; “The Vatican Gendarmerie for a year has intercepted all the curia—Clarification of Panorama; “Lombardi: ‘Checks may have been carried out on two or three individuals’,” “Vatican Insider” and Panorama.it, February 28, 2103.