Vatican Bank Lifts Veil with Reporters" Tour

By Philip Pullella
Reuters
June 28, 2012

http://in.reuters.com/article/2012/06/28/vatican-bank-idINL6E8HSBSU20120628

* Vatican hopes to make "white list" of financial transparency

* Its bank has been mired in scandal in the past

* Director says bank now compliant, clean, and open

By Philip Pullella

VATICAN CITY, June 28 (Reuters) - The Vatican bank, attempting to project a new image of transparency ahead of a decision by EU financial authorities next month, lifted its veil of secrecy on Thursday by allowing journalists to visit the institution for the first time.

The tour came one month after the bank's president, Ettore Gotti Tedeschi, was ousted by the board of the bank, in a move he said was aimed at stopping his efforts to make the bank more transparent. The Vatican said he was just a bad manager.

It also followed allegations by Italian magistrates that the bank may have been involved in money laundering, which the Vatican denies.

"We have nothing to hide," said Paolo Cipriani, director-general of the bank, officially known as the Institute for Works of Religion (IOR).

"I want to deflate the legend once and for all: There are no numbered accounts and there are no links to offshore banks," he said.

Using slides in the bank's conference room, decorated with a fresco of the Madonna on the ceiling, Cipriani said the bank had put into effect measures to comply with international standards on combating money laundering and financing of terrorism.

"We have developed an anti-money laundering mentality here," he said. "We block any transaction that is even slightly suspicious."

Next month, the Vatican will face the judgment of MONEYVAL, a Council of Europe monitoring mechanism that rates states on their effectiveness to fight money laundering and terrorism financing and comply with international standards.

In 2010 the Vatican drafted new financial transparency laws and set up internal regulations. The move is an attempt to make the "white list" of the Paris-based Financial Action Task Force (FATF), a body that lists states according to their compliance with those standards.

The tiny city-state's bank, however, has been in upheaval since May 24, when Gotti Tedeschi was ousted by the board.

Both Gotti Tedeschi and Cipriani are under investigation by Rome magistrates in a probe that began in 2010 when they froze 23 million euros ($33 million) th e IOR held in two Italian banks.

Cipriani said the bank did nothing wrong and was merely carrying out "normal operations" by transferring its own funds between its own accounts in Italy and Germany. The money was released in June 2011, but the investigation is continuing.

The Vatican bank, housed in the 15th-century Tower of Nicholas V, provides financial services to Catholic institutions such as charities and orders of priests and nuns.

The IOR's most infamous entanglement with scandal involved the fraudulent collapse 30 years ago of the Banco Ambrosiano, of which the Vatican bank held a small stake. Ambrosiano chairman was mysteriously founded hanged under Blackfriars Bridge in London shortly after the collapse. (Reporting By Philip Pullella; Editing by Myra MacDonald)