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| Vatican bank promises sweeping change as senior staff resign | Vatican bank promises sweeping change as senior staff resign |
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| Sweeping changes at the top of the Vatican's scandal-ridden bank were announced on Monday night following the arrest of a senior church official in the latest of a string of scandals to have hit the institution. | Sweeping changes at the top of the Vatican's scandal-ridden bank were announced on Monday night following the arrest of a senior church official in the latest of a string of scandals to have hit the institution. |
| The bank's recently appointed president, Ernst von Freyberg, said its two top officials – the director and deputy director – had both resigned. He thanked them for their "personal dedication" but added: "It is clear today that we need new leadership." | The bank's recently appointed president, Ernst von Freyberg, said its two top officials – the director and deputy director – had both resigned. He thanked them for their "personal dedication" but added: "It is clear today that we need new leadership." |
| The departures came three days after the arrest of an official in another Vatican financial department, Monsignor Nunzio Scarano. The Italian authorities said he was a suspect in two inquiries involving alleged corruption and money laundering respectively. | The departures came three days after the arrest of an official in another Vatican financial department, Monsignor Nunzio Scarano. The Italian authorities said he was a suspect in two inquiries involving alleged corruption and money laundering respectively. |
| Transactions made through Scarano's accounts at the Institute for the Works of Religion (IOR) – popularly known as the Vatican bank – are central to both investigations. The IOR, which does not lend money and is thus not technically a bank, was set up in 1942 to handle the deposits mainly of church organisations and individual clerics. But accounts are known to have been opened for outsiders and the IOR has repeatedly been at the heart of financial scandals, often involving alleged money-laundering. | Transactions made through Scarano's accounts at the Institute for the Works of Religion (IOR) – popularly known as the Vatican bank – are central to both investigations. The IOR, which does not lend money and is thus not technically a bank, was set up in 1942 to handle the deposits mainly of church organisations and individual clerics. But accounts are known to have been opened for outsiders and the IOR has repeatedly been at the heart of financial scandals, often involving alleged money-laundering. |
| A statement said the director, Paolo Cipriani, and his deputy, Massimo Tulli, had offered to step down "in the best interest of the institute and the Holy See." Three years ago, Cipriani was placed under investigation, together with the bank's then-president, for alleged violations of Italy's anti-money-laundering laws. Police seized €23m (£20m) from an IOR account at a Rome bank. But the money was later released and neither Cipriani nor the then-president has since been charged. | |
| In a separate case, the 61-year-old Scarano, who was a banker before he became a priest, was arrested at the same time as a former intelligence officer and a financial broker. They are accused of plotting to bring €20m into Italy from Switzerland, where it had allegedly been stashed away by a family of Neapolitan shipowners seeking to avoid Italian tax. | In a separate case, the 61-year-old Scarano, who was a banker before he became a priest, was arrested at the same time as a former intelligence officer and a financial broker. They are accused of plotting to bring €20m into Italy from Switzerland, where it had allegedly been stashed away by a family of Neapolitan shipowners seeking to avoid Italian tax. |
| Yesterday, Scarano was questioned for three hours by a judge in Rome, who must decide whether to confirm his arrest. Scarano's lawyer, Silverio Sica, acknowledged that the scenario mapped out by prosecutors is true, the Associated Press reported. But he said the defence would contest the corruption accusation on technical grounds. "We cannot deny the facts," Sica said. "But for us, there aren't the technical reasons for the corruption accusation, and we believe that he did this to help out his friends." | |
| Scarano is also under investigation on a money laundering charge, which he has denied. | Scarano is also under investigation on a money laundering charge, which he has denied. |
| Since his election in March, Pope Francis has dropped several hints that the IOR is top of his "hit list" for reform. At the end of last month, he appointed a special commission to investigate the bank, with powers to overrule its client secrecy norms. | Since his election in March, Pope Francis has dropped several hints that the IOR is top of his "hit list" for reform. At the end of last month, he appointed a special commission to investigate the bank, with powers to overrule its client secrecy norms. |
| The IOR said von Freyberg would temporarily take over the job of director. It also announced the appointment of a new acting chief risk officer with the task of overseeing compliance with international regulations and unspecified "special projects". The first occupant of the job will be Antonio Montaresi, an Italian who has had similar responsibilities in various US banks. | The IOR said von Freyberg would temporarily take over the job of director. It also announced the appointment of a new acting chief risk officer with the task of overseeing compliance with international regulations and unspecified "special projects". The first occupant of the job will be Antonio Montaresi, an Italian who has had similar responsibilities in various US banks. |
| The statement said the banking consultancy, Promontory, had been working since May "to strengthen the Institute's anti-money laundering programme". Elizabeth McCaul, CEO of Promontory Europe and former New York Superintendent of Banks, had been asked to act as a special adviser, together with the firm's chief operating officer, Raffaele Cosimo. Their job will be to support the management. | The statement said the banking consultancy, Promontory, had been working since May "to strengthen the Institute's anti-money laundering programme". Elizabeth McCaul, CEO of Promontory Europe and former New York Superintendent of Banks, had been asked to act as a special adviser, together with the firm's chief operating officer, Raffaele Cosimo. Their job will be to support the management. |
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