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	Inquiry into Vatican Finances Widesn By Rachel Donadio St. Louis Post-Dispatch September 24, 2010 http://www.stltoday.com/news/national/article_e1ba6e6a-df27-5af0-9d74-49ff0b29804f.html As an inquiry into its murky finances looked poised to widen, the Vatican swiftly went on the defensive Thursday, saying that the seizure of $30 million from a Vatican bank account and the judicial investigation of the bank's two top officials were the result of a misunderstanding. On Tuesday, Italian officials announced an inquiry into the Vatican bank's top officials for having failed to explain adequately the origins of $30 million transferred from one of its accounts in a Rome bank. Magistrates opened the investigation based on an alert from the Bank of Italy, the nation's central bank. The authorities said they had seized the $30 million preventively but have not pressed charges against the Vatican bank's chairman, Ettore Gotti Tedeschi, or its director general, Paolo Cipriani. Like the clerical sexual abuse crisis that has troubled the Roman Catholic Church in recent months, the financial inquiry appeared to open another front in a quiet war between church and state in Europe — or perhaps signaled the further waning of an era in which the Vatican was seen as untouchable. The inquiry is the first in which the Bank of Italy has treated the Vatican bank like any other foreign bank operating in Italy, in enforcing 2007 European Union anti-money-laundering laws that require banks to provide detailed information about the origins of the money they transfer. In an uncharacteristically quick and direct response, on Thursday the Vatican published both a front-page article in its newspaper, L'Osservatore Romano, and submitted a letter to The Financial Times, essentially saying that Italian monetary officials had overreacted to a technicality. "The current problem was caused by a misunderstanding (now being examined) between the IOR and the bank which received the transfer order," the Vatican spokesman, the Rev. Federico Lombardi, wrote in the letter to The Financial Times. The IOR is the Italian acronym for the Institute for Religious Works, the formal name of the Vatican bank. The response seemed aimed at showing a new face of the Vatican bank, a private entity that manages money from charitable institutions and has long operated behind a veil of secrecy. In the early 1980s, the Vatican bank refused to cooperate with the authorities investigating it in the mysterious collapse of Italy's Banco Ambrosiano. Lombardi said that the Vatican was working "with great commitment to ensure the absolute transparency" of the Vatican bank's activities and its "compliance for the norms and procedures" to achieve its goal of entering the Organization for Economic Cooperation and Development's so-called white list of countries with good ratings for transparency and against money laundering. As a sovereign state outside the European Union, the Holy See has been in talks with the Bank of Italy and other civil authorities to determine how it can adhere to European directives against money laundering, the Vatican said. Officials said that the Holy See had until Dec. 31 to reach an agreement on the issue. If it does not, observers said the Vatican bank ran the risk of being seen as a tax shelter.
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