Vatican and Money. the Moneyval Earthquake Isn't over

By Sandro Magister
Chiesa
August 3, 2012

http://chiesa.espresso.repubblica.it/articolo/1350302?eng=y

ROME, August 3, 2012 – Very few have read it, and it isn't even in bookstores yet, with its five hundred pages of text and annexes. But the report that Moneyval published in the middle of July about the Vatican and finance has marked an historic watershed.

For the first time, the Holy See has submitted its institutions and laws to the judgment of an international external auditor. For the first time, it has allowed itself to be graded and given its homework by a secular authority. In a matter, like God and Mammon, in which it has greatly sinned.

It is an event, that marked by the report from Moneyval, that once again requires a rewriting of the conventional profile of Pope Benedict XVI.

The professor of theology has shown himself in this affair to be a man of unyielding command. He gave the order that in the financial field, everything should be made transparent and exemplary, even at the cost of detonating within the walls of the Vatican conflicts of unprecedented harshness. And this is what has happened.

Moneyval has recognized this: the Vatican "has come a long way in a very short period of time." It was at the rear of the pack when it joined the race, but after just two years it has succeeded in pulling into tenth place among the twenty-nine states subjected to the periodic judgment of the task force of the Council of Europe that measures the capacities of each state in opposing the circulation of illicit money. Right behind Germany and Italy. And with nine positive marks out of sixteen in the "core and key" matters that decide the final score.

Two Vatican institutions were under special observation, and the Moneyval report dedicated the largest number of pro and con observations to these: the Institute for Works of Religion, IOR, the Vatican "bank," and the Financial Information Authority, AIF, the branch of investigation and control with which the Holy See was required to equip itself.

At the Vatican, they are expecting dramatic developments for both of these at the end of the summer.

For the IOR, the new president will be appointed, after its board last May 24 removed Ettore Gotti Tedeschi from this position, publicly accusing him of manifest incapacity to perform his role.

Gotti Tedeschi identifies the real reason for his brutal dismissal in his irreparable conflicts with the management of the "bank," and even more so with secretary of state Cardinal Tarcisio Bertone, concerning two issues.

The first is the attempted acquisition of the San Raffaele hospital in Milan, stubbornly backed by Bertone and finally abandoned in part because of the strenuous opposition with the then president of the IOR.

The second issue is that of the variations introduced last winter by the secretariat of state to Vatican law no. 127 of December 30, 2010, against the laundering of illicit money: variations that according to Cardinal Attilio Nicora, the president of the AIF, marked "a step backward" with respect to the initial text, and that according to Gotti Tedeschi would lead to rejection on the part of Moneyval.

In reality, the rejection did not take place. Instead, the evaluations in the report by Moneyval of the IOR and of the passages of the new law 127 concerning it are largely positive.

The main corrections that the IOR would have to introduce, in the judgment of Moneyval, are a more stringent and selective verification of the profile of clients and of the correctness of cash flows, especially from and to countries outside of Europe with meager controls over financial irregularities.

The new law 127, as a whole, was also judged positively by Moneyval. If there has been a step backward, the report states, this concerns precisely the Financial Information Authority, whose powers of inspection over all the Vatican offices was stronger in the previous version of the law.

But after agreeing with Cardinal Nicora in this, the inspectors of Moneyval advanced two criticisms against him.

The first is that of not yet having undertaken any concrete act of investigation and supervision in his power, much less over the IOR, and therefore of not yet having given proof of the effective capacities of the institution he heads.

The second is that of embodying a conflict of interests, as president of the AIF and member of the commission of cardinals of the IOR, and therefore as supervisor and supervised at the same time.

It is expected that at the end of the summer Nicora will leave the second of the two positions. And thus Bertone, who is the president of this commission of cardinals, will have one less adversary.

This commentary was published in "L'Espresso" no. 32 of 2012, on newsstands as of August 3, on the opinion page entitled "Settimo cielo" entrusted to Sandro Magister.

To the considerations contained in it can be added these others.

First of all, the wound of the defenestration of Ettore Gotti Tedeschi is far from being healed.

"Never in the recent history of the Western world has the head of an institution been removed from his position, whatever the reasons, with such brutality. We maintain that Ettore Gotti Tedeschi is a person of the highest integrity who has always put his personal responsibility before unquestioning obedience." This was attested to by leading economists and financial officials, most of them outside of the Catholic Church, including Francesco Giavazzi, Carlo Castellano, Pietro Modiano, Francesco Micheli, and Guido Roberto Vitale, in a letter to "Corriere della Sera" of June 2.

Underway in the Vatican is a real and proper "damnatio memoriae" against the former president of the IOR. Even his name is no longer spoken aloud.

But by doing this, the Vatican authorities are contradicting precisely the two key factors of the operation of transparency set up by Benedict XVI for the Holy See in the field of finance: truth and exemplarity.

Just as the Vatican has opened itself up to the inspection by Moneyval and has accepted that its institutions and actions be made public, so also it is expected that the truth be revealed about the real reasons for the dismissal of Gotti Tedeschi and the conflicts that led to it, rendering justice to his sound arguments and honor to his person.

But above all, it is impossible to see how the "damnatio" of Gotti Tedeschi can be reconciled with the intention of the Holy See to provide a good example for the whole Church in the field of finance.

In the world there are countless dioceses, religious orders, schools, Catholic hospitals that are affected by bad management. Now they no longer have any alibi, after the Vatican has undertaken that work of housecleaning and transparency which has seen its defining moment in the report by Moneyval. Because the path taken by the Holy See now requires all within the Church to do likewise.

But precisely for this reason, it cannot be seen what is exemplary about the behavior adopted by the Vatican authorities against the man called by them to the presidency of the IOR in 2009 and then barbarously defenestrated.

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A second consideration concerns the IOR, in image and in reality.

With respect to just a few years ago, the image of the Vatican "bank" in the media is more positive today, thanks in part to the effective "briefings" held recently by its management with the diplomats accredited to the Holy See and with the journalists who cover the Vatican.

The report by Moneyval is also reassuring from this point of view. It confirms that an intense work of housecleaning and reorganization is being done with the accounts and their owners.

Moneyval has also confirmed that more than forty banks in Europe, in the United States, in Australia, and in Japan have relationships of "correspondence" with the IOR, permitting it to operate all over the world through them.

This does not change the fact that the Italian magistracy is conducting investigations on some financial activity suspected of being illicit, in accounts at the IOR. And the justifications given so far by the officials of the Vatican "bank" have not satisfied the investigating magistrates.

The best known of these investigations, on activity that took place in 2010 involving a total of 23 million euro, originated in the notification made by a bank traditionally "friendly" toward the IOR, the Credito Valtellinese, headed by Giovanni De Censi, who at the time was a member of the supervisory board of the IOR itself, but who since December 31 of that year has no longer been a part of it.

And afterward other banks, including the giant JPMorgan Chase, cut off their relations of correspondence with the IOR, seeing its levels of reliability as inadequate.

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A third consideration concerns the man who led the delegation of the Holy See in Strasbourg, at the plenary meeting of Moneyval last July, and then presented the report to the journalists accredited to the Holy See:

> Briefing by Mons. Ettore Balestrero...

Monsignor Ettore Balestrero, 45, is undersecretary for relations with states, in practice deputy foreign minister.

Born in Genoa and a spiritual disciple of Cardinal Giuseppe Siri, he served as a diplomat in South Korea, Mongolia, and Holland. He has been at the secretariat of state since 2001. He speaks perfect English, in part because his mother is American, from New York. And this mastery of the lingua franca of the financial world – in addition to the competence that he has acquired in the subject in question – allows him to maneuver easily in these international circles.

He called the success of the mission to Moneyval "an important passage of our continuing efforts to marry moral commitments to technical excellence."

In the firmament of the Vatican, his is certainly one of the stars on the rise.