Vatican City, Nov 26, 2019 / 04:00 am
In December, the Holy See is due to send a report to Moneyval, the Council of Europe’s anti-money laundering watchdog, giving an update on its progress implementing the agency’s recommendations to improve Vatican financial standards.
The report is likely to make for bleak reading in Strasbourg, but even more grim writing in the Vatican.
In 2012, the Vatican agreed to comply with a set of “recommendations” from Moneyval, incorporating them into internal policies. The two bodies have issued periodic updates on the Vatican’s progress.
After recent media coverage on Vatican financial scandals, it seems clear that Moneyval will be looking this year to see whether internal policies and regulatory agreements are being treated as mere “recommendations” inside some Vatican departments.
In the last month, CNA has reported a series of allegations concerning two major Vatican investments arranged by the Secretariat of State. The first involves the Secretariat's purchase of a London property earmarked for development into luxury apartments. Senior Vatican sources say some $200 million used to finance the purchase came from money borrowed from Swiss banks, one of which - BSI - has since been closed by FINMA, the Swiss banking authority, for systematic violations of money laundering safeguards.
Of more immediate concern to Moneyval is likely to be the reported attempt by then-sostituto at the Secretariat of State, Cardinal Angelo Becciu, to disguise the loans on Vatican ledgers, despite internal regulations prohibiting the practice. Also of interest to the watchdog will likely be that no action was taken as a result; CNA has reported that the attempt to zero-out the loans against the value of the London investment was detected by then-Prefect for the Economy, Cardinal George Pell, who reported the matter to the Vatican’s Council for the Economy which “noted” the incident but took no action.
Pell was also reportedly given a “reprimand” by Becciu for prying into the Secretariat’s dealings with BSI, according to senior officials at the Vatican’s Prefecture for the Economy.
Moneyval might also be interested to look into the management of the Secretariat’s U.K. registered holding company for the property, London 60 SA Ltd. Two of the company’s directors, Msgr. Mauro Carlino and Dr. Caterina Sansone, are officials at the Secretariat of State and are currently suspended, after being targeted in raids carried out at both the AIF and the Secretariat of State by the Vatican gendarmes on Oct. 1.
Another director at London 60 SA Ltd. who might attract the attention of money laundering authorities is an architect and real estate developer named Luciano Capaldo - initially registered by the Secretariat of State with civil authorities in London as a “Vatican citizen.”
Through his company Imvest, which was raided by Italian financial authorities last year, Capaldo is linked to, among others, Giampiero Nattino, an Italian banker investigated by both Italian and Vatican authorities for money laundering and market manipulation through accounts at APSA, the Vatican’s central reserve bank.
Moneyval will almost certainly be hoping to read a full account of a 50 million euro loan made by APSA to the Secretariat of State to partially fund their purchase of a bankrupt hospital. APSA later wrote off 30 million of that loan, and blamed the write-off for its failure to record an annual profit for the first time in its history.
Leaving aside the circumstances of the hospital itself, which reportedly involve the disappearance of shoe boxes full of cash, along with millions in bogus invoices, links to a Congolese oil company and suggestions of good, old-fashioned nepotism, the APSA loan was made - again over the objections of Cardinal Pell - against specific policies put in place at the behest of Moneyval.
Following a 2012 on-site inspection, APSA agreed to cease granting loans for commercial ventures, like the Secretariat’s for-profit purchase of the hospital.