Italian authorities began an investigation on Tuesday of the Vatican Bank's chairman, Ettore Gotti Tedeschi, along with another unnamed executive at the bank, for suspected violations of a 2007 Italian law intended to fight money laundering. Both the Vatican Secretariat of State and the mayor of Rome expressed surprise at the allegations, and declared their confidence in the bank's leadership.
On September 15, civil authorities seized an amount of $30 million deposited by the Vatican's bank, known as the Institute for the Works of Religion (IOR), at the private Italian bank Credito Artigiano SpA. Authorities say the Vatican's bank has not complied with Italian laws requiring the disclosure of information about account holders and beneficiaries.
The Financial Information Unit of the Banca d'Italia—the Italian equivalent of the U.S. Federal Reserve—intervened and suspended two transactions between Credito Artigiano and the IOR, which was intending to send several million dollars to the German branch of J.P. Morgan in Frankfurt, and to the Banca del Fucino in central Italy.
IOR chairman Tedeschi told the Italian news agency ADN KRONOS that he had “strived, together with the General Director … to confront all the problems for which I am being investigated today.” He added that he has been working “full-time to solve them” since his appointment to head the bank.
Last fall, investigators began looking into accounts of the IOR at Italy's biggest bank, Unicredit.The Italian news agency ANSA reported investigators' concerns at that time regarding some checks and bank drafts issuing from IOR accounts.
One unnamed judicial source told Italian reporters on Sept. 21 that the Banca d'Italia was acting with “excessive zeal” in interpreting the 2007 law on account disclosures. Among other rules, the norm requires banks to clearly state who the beneficiary is of financial transactions. The judicial official said that, in the Vatican bank's case, the information is “hardly a secret,” since all of the IOR's financial transactions are currently intended to cover the Vatican's persistent budget deficit.
“We might be looking at a clerical error here, but we still have to wait for the official judiciary decision,” the anonymous source also told reporters.
In a communique issued on Sept. 21, the Vatican Secretariat of State said that the IOR's “clear desire for full transparency” was “well known,” having been “demonstrated many times by the authorities of the Holy See.” The statement responded to investigators' concerns, noting that the IOR had worked to develop good relations with international regulatory bodies as well as the Bank of Italy.
“The Holy See, therefore, is perplexed and astonished by the initiative of the Prosecutor of Rome, especially since the information necessary is already available from the relevant offices of the Bank of Italy,” the Secretariat of State responded. The communique also noted that “analogous operations” comparable to those of the IOR were “going on concurrently with other Italian institutions of credit.”
The mayor of Rome, Gianni Alemanno, also expressed surprise, along with his “solidarity with the President of the IOR,” saying he was well-acquainted with the “personal and professional moral virtues of Ettore Gotti Tedeschi. He said he hoped the circumstances of the investigation, which left him “completely perplexed,” would soon be clarified by Italian authorities.