If this is the issue, many questions can be raised.
Was the Financial Intelligence Authority asked for collaboration? And, given that the financial intelligence activities are under the obligation of official secrecy did the investigators ascertain whether the Financial Intelligence Authority did or was doing some intelligence activity?
If the Financial Intelligence Authority already worked on the issue, and sources say that it was, there could be devastating consequences for the credibility of the Vatican Financial system.
There are many serious perplexities raised over the suspension of Tommaso Di Ruzza, director of the Financial Intelligence Authority. The suspension is unusual, and, according to Vatican sources, it was decreed without giving any notice to René Bruelhart, the president of the Authority.
In the end, the scenario is not favorable to the Holy See and shows that this is not merely a financial scandal.
The role of the Vatican Financial Intelligence Authority
The Vatican Financial Intelligence Authority (AIF) played a crucial role in building the Holy See's international credibility in countering financial crimes, especially under the direction of Di Ruzza.
As the Holy See is a global player, the international and multilateral fields were privileged. However, AIF also strengthened some deteriorated "special" relation, like the bilateral relation with Italy. Proof of it is the memorandum of understanding the Vatican Financial Intelligence signed with the Bank of Italy. The memorandum was signed by AIF president Bruelhard and Di Ruzza and by the Bank of Italy's Governor Ignazio Visco along with the then chief of the Bank of Italy's oversight department Carmelo Barbagallo. It is not usual that the Bank of Italy's governor in person signs a memorandum. It was a sign that there was an operative and institutional arrangement for the mutual interest of both the Vatican and Italy.
The Vatican Intelligence Authority is recognized as a trusted partner both in its functions of oversight and intelligence.
According to the latest AIF annual report, the AIF signed 56 memoranda of understanding with counterparts in financial information and eight memoranda with counterparts in the oversight. Beyond the Italian Unit for Financial Information and Bank of Italy, AIF signed memoranda with the US Office of the Controller of Currency, with the German central bank and many financial intelligence units.
The exchange of information with financial intelligence units from all over the world show that the AIF is a trusted interlocutor. The figures of the latest AIF report number 473 exchanges of information with other financial intelligence units. The AIF also forwarded 158 spontaneous communication of information to competent authorities and received 15 spontaneous communication of information.
This work is based on relations of trust, characterized by the secrecy needed for intelligence investigation. There is also the need for a well-designed juridical system, on which the Holy See has been working over the last several years.
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Given all of these data, is it possible that the Financial Intelligence Authority underestimated a real estate investment while working on the interest of the government, that is, the Secretariat of State? The foreign counterparts and international organizations have severe doubts about that, and they are also concerned since the autonomy and independence of the Vatican financial watchdog can be at risk.
There are also some nerves within the Financial Intelligence Authority.. The acts of seizure took place without giving any notice to the Board of Directors. Among the board members, there are people with indisputable international credit, like Juan Zarate, who served as an anti-terrorism advisor to the US president; and the Italian Maria Bianca Farina, that chairs the Italian Post Service.
In addition to that, the financial intelligence authority was surprised by the publication of the leaked note of the Vatican police, which signaled the people suspended. The release of names and pictures of the people, while an investigation is ongoing, was considered by many in the Vatican disproportioned and damage to the reputation and the dignity of the people involved. An op-ed with no byline published by Vatican News announced that there would be lawsuits for that.
On the eve of the upcoming Moneyval report on the Holy See, which is to be out in spring 2020, it is normal that international observers are surprised that the Financial Intelligence Authority became a target.
How the crisis broke
The so-called financial scandal thus turned into an institutional crisis within the Vatican, which also touches the secretariat of State.