Ouster of Vatican Bank Chief Takes Strange Twist

By Nicole Winfield
Associated Press
June 7, 2012

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Italian authorities seized a private document meant for Pope Benedict XVI when they raided the home of the Vatican's recently ousted bank chief, a lawyer said Thursday, adding a potentially problematic legal twist in an already controversial case.

Italian paramilitary police raided Ettore Gotti Tedeschi's Piacenza home on Tuesday as part of a corruption investigation into Italy's state-controlled aerospace and engineering giant Finmeccanica. Gotti Tedeschi is a longtime friend of Finmeccanica's current chief who is under investigation in the probe.

During the raid, prosecutors seized a detailed memorandum Gotti Tedeschi prepared for Benedict concerning his May 24 ouster as president of the Vatican bank. Attorney Fabio Palazzo stressed Thursday that the documents were seized and that Gotti Tedeschi didn't hand them over voluntarily.

The seizure poses potentially thorny legal issues, since Gotti Tedeschi was until recently an official of a sovereign state — the Vatican — and as such enjoys some immunity in Italy. The Vatican spokesman, the Rev. Federico Lombardi, said the Holy See was aware of the seizure but was waiting to clarify what Holy See-related documents were taken. Only after such an analysis would the Vatican consider any possible action, he said.

The raid was the latest upheaval in one of the most convulsive few weeks in the Holy See's recent history.

The Vatican is currently hunting down the sources of leaked documents alleging corruption, internal intrigue and political infighting within the highest echelons of the Catholic Church's governance that have been published in a new book. Already the pope's butler has been arrested in the case, accused of keeping papal documents in his Vatican City apartment.

Gotti Tedeschi's ouster was another jolt to the normally staid affairs of the Vatican. The board of the bank, known as the Institute for Religious Works, took a unanimous vote of no-confidence May 24, accusing him of failing to do his job and impeding the Vatican's efforts to be more transparent in its financial dealings.

The ouster was unprecedentedly harsh — in none of the public communiques was Gotti Tedeschi thanked for his service, as would be protocol. Instead, the board secretary issued a scathing memo listing all Gotti Tedeschi's failures, leaving the bank's ultimate leadership — five cardinals including the Vatican secretary of state — little choice but to take note and appoint an interim president.

Gotti Tedeschi, close to Benedict and, at least until recently the secretary of state Cardinal Tarcisio Bertone, has been silent about his ouster. But his lawyer confirmed Thursday that the memo that was seized contained "elements useful to strike back against the accusations that were made against him" by the board.

Gotti Tedeschi was named president of the Vatican bank, known by its Italian acronym IOR, in 2009, tapped by Bertone to help rid the bank of its reputation as a scandal-plagued tax haven and help get the Vatican on the so-called "white list" of countries that share financial information to crack down on tax evasion.

A critical step in that process is just weeks away with a Council of Europe committee deciding in early July on whether the Vatican has complied with dozens of anti-money-laundering measures. The upheavals of recent weeks have certainly clouded the Vatican's chances.

Gotti Tedeschi and the IOR's general manager were placed under investigation in 2010 by Rome prosecutors for alleged violations of Italy's anti-money laundering norms in conducting a routine transaction from an IOR account at an Italian bank. Prosecutors seized some ˆ23 million ($28.97 million) from the account but eventually returned it after the Vatican passed an anti-money laundering law that went into effect last year.

Gotti Tedeschi has long called the investigation the result of a misunderstanding. He angered many in the Vatican for failing to assert his immunity as a Vatican official when he voluntarily answered Rome prosecutors' questions about the transfer.

He enjoys no such immunity concerning the Finmeccanica probe, and Naples investigators raided his home in that context. But they called in Rome prosecutors in charge of the IOR money laundering probe after coming across the Vatican documentation during the search. ___ Follow Nicole Winfield at www.twitter.com/nwinfield