The raid

The raid carried was about the investigation on Finmeccanica, an Italian industry specialized in products for defense – Gotti Tedeschi is not under investigation himself, but he could be in possession of papers of Finmeccanica that the CEO of Finmeccanica Fernando Orsi (they’re good friends) consigned him. Even if the investigation on Finmeccanica is not of any particular interest for those who cover the Vatican, it became newsworthy that – among the folders seized by the investigators to Gotti Tedeschi – there was a «memorandum »  that the former president of the I.O.R. was drafting to send to Mons. Georg Gaenswein, secretary of Benedict XVI, so it could be delivered directly to the Pope.

I.O.R. folders?

Gotti Tedeschi  was also reported to keep in his house 47 folders from the I.O.R. Some reports say that the folders would contain information about some I.O.R. accounts – especially of politician, as the ex I.O.R. president would have said -  but the Gotti Tedeschi’s lawyer Palazzo denied it. In the correspondence with some Curial officials, Gotti Tedeschi denounced a «plot» against him. Tedeschi described it as a «Judaic-Masonic »  plot . Tedeschi reportedly thought that : Marco Simeon (33 years old, foreign relations account manager and deputy to the relationship with the institutions of the Italian state television, Rai, and ad interim director of Rai Vaticano,which covers the Holy See) and the lawyer Michele Briamonte (from the office of Franzo Grande Stevens) were part of this plot. Within the Gotti Tedeschi’s sight was also Jeffrey Lena, the Holy See lawyer in the United States who recently has come to live in Rome to work on the reform of Vatican law n. 127 against money laundering, and who is now working along with Vatican officials to prepare the documentation for the July 4^thplenary assembly of MONEYVAL – the body of the Council of Europe that evaluates the adherence to the anti-money laundering norms of Council of Europe State members. MONEYVAL advisors will present their report about Holy See compliance to the plenary assembly.  There had been 3 meetings between MONEYVAL advisors and the Holy See – two on site visits of MONEYVAL advisors to the Vatican and a meeting in Strasbourg. All the work of the Holy See’s« financial branch » are in preparation for the 4^th of July meeting.

The efforts of the Holy See for financial transparency

The fact that the Holy See changed law n.127 just one year after its promulgation in order to make it adhere to international standards shows the Holy See’s specific and long term commitment to transparency. Yet, the reform had been particularly resisted by the «architects »  of the «old » law n. 127. Among these architects, Card. Attilio Nicora, president of the Authority of Financial Information, defined the new law as «a step back » . Ettore Gotti Tedeschi was also among the critics. He did not formally take part in the drafting of the old law. But he recommended  Marcello Condemi and Francesco De Pasquale as advisors, who were later appointed member and president, respectively, of the Authority for Financial Information.  They came from the Bank of Italy ranks and .defended wholeheartedly the law.

The old law n. 127 would «justify » Gotti Tedeschi’s decision – questionable, according to several observers – to declare before Italian magistrates about 23 million transferred by the IOR in 2010, although the magistrates did not make a proper international request. Gotti Tedeschi also convinced Paolo Cipriani, general manager of the I.O.R., to go and speak to the Italian magistrates. Cipriani was in favor of Holy See transparency, and at the same time he wanted to protect Holy See sovereignty. With the Guardia di Finanza (the Italian financial police) Cipriani holds informal relationships: anytime he is asked for information, he fulfill the request, except in the cases that would be detrimental to the sovereignty of the Holy See. The Guardia di Finanza once sent him a note to thank him for his quickness and precision in his answers.

A man rebuilding his image

So, there is a whole world in the Holy See that keeps on working, while outside the Vatican City State Ettore Gotti Tedeschi is on the spot. If, in the past, the former president of the I.O.R. was seen a strong defender of transparency, now Ettore Gotti Tedeschi is projecting his image of a person under attack, in order to get back to the previous image. In fact, his behavior has been censored by many inside the Vatican. The memorandum of the meeting of the board of Superitendance of the I.O.R. that voted the no confidence on Gotti Tedeschi listed nine accusations against the president of the I.O.R. Among these, one was of «erratic »  behavior. And Ettore Gotti Tedeschi seems to keep on his erratic behavior even now that he is out of the Vatican.

Vatican transparency

During his two years and a half as president of the board of Superintendence, Ettore Gotti Tedeschi collected a lot of information, and some of it is being leaked to the press. The media polemicizes the ciphered accounts of the I.O.R. But this should not be shocking:  the I.O.R. is not a bank. It is a “Pontifical body”, whose funds are at the disposal of the Pope. It is something more similar to a Trust than to a bank. I.O.R. accounts have always been given ciphered codes, rather than names, even if the accountes are not secret, and the information on them is complete. The «transparency operation »  began under Angelo Caloia, president of the body of Surveillance of the I.O.R. before Gotti Tedeschi. Since 2002, Caloia adopted the KYC policy, i.e. Know Your Customer. Each customer of the Institute was carefully analyzed. Obviously, since it is not a bank, I.O.R. cannot transfer money by itself. So it opens several bank accounts – especially in Deutsche Bank -  and there the money is transferred, and all the money movements can be traced. Since  the promulgation of the Vatican anti-money laundering law, each transfer must be justified and explained in a very precise manner, and that is why I.O.R. asks its customers to fill an appropriate form that some customers do not like. It is not even newswothy that in the I.O.R. there are the so called « lay » accounts, i.e. accounts that do not belong to cardinals or religious congregations, but to people outside of the Holy See. The opening of this kind of accounts is also covered in the anti-money laundering law. Paolo Cipriani – the I.O.R. general manager – said in an interview published on the Italian newspaper Il Corriere della Sera that there are no numbered accounts at the Vatican bank and the only Italians, apart from priests, monks and nuns, who banked with the IOR were lay employees or pensioners of the Holy See. Cipriani added that Gotti Tedeschi had been invited to inspect lists of accounts, but – Cipriani says – «he didn’t take things in hand. It was as if he were absent, even when he was present».

(false) Information

All of these (false) information is part of a strong press campaign. Gotti Tedeschi could not come to terms with receiving a no confidence vote by the board of I.O.R. and a press release that some observers defined « a declaration of war » . Several Italian media outlets proposed an external commission to evaluate how Ettore Gotti Tedeschi worked in the I.O.R. And his friends in finance and industry defended Ettore Gotti Tedeschi on the prominent Italian newspaper Il Corriere della Sera. After that, they tried to set up a sort of independent commission whose spokesperson would be Vito Gamberale, president of the Fund F2i, among whose members is Gotti Tedeschi.. Then, after the raid that brought to the seizure of his papers, and so also of the I.O.R. document, it seems that Gotti Tedeschi thought that he could trumpet his view through the Italian magistrate – the public prosecutor of Rome denied to have taken “Vatican” dossiers, but maybe the public prosecutor of Naples will do it; finally, it also seems that he may want to write a book, a Vatican best-seller that will forever save him from the accusation of being erratic.

More or less fanciful stories of how things went on come out from the same circles that spread misinformation about Gotti Tedeschi being under attack. And so we could read that Gotti Tedeschi had been fired because everybody in the Vatican opposed his transparency policy. Even that Gotti Tedeschi was victim of the American lobby of the Knights of Columbus.  The drafter of the memorandum of no confidence, Carl A. Anderson, was also among the first to speak up against Gotti Tedeschi in the Vatican.  A letter from Anderson criticizing the former president of the I.O.R. has been leaked to the press.  Anderson is the Supreme Knight of the Knights of Columbus. But fact, the Knights of Columbus are beyond suspicion. Their founder, Michael J. McGivney, is going to be beatified. They cooperate with the Holy See since the Benedict XV pontificate, they do not hesitate to send financial aid when requested, and they help poor. The wealth of the Knights of Columbus comes from a leading insurance society they manage, which has always gained Triple A financial ratings for its reliability.

Was there a war?

That the Knights of Columbus would like to take possession of the Holy See, getting rid of Opus Dei, is unsubstantiated. It was not only Carl A. Anderson statements and opinion that brought about the no confidence vote on Gotti Tedeschi. The four members of the board of Surveillance of the I.O.R., completely agree, and as the letters leaked to the Italian newspaper Il Fatto Quotidiano show.  Both Carl A. Anders and Rolando Schmitz – another member of the board – recommended the no confidence on Gotti Tedeschi. The letters were addressed to Cardinal Bertone, the “president” of the Commission of Cardinals that manages the I.O.R. Rolando Schmitz also wrote to Bertone that he would resign if an eventual no confidence vote of the board would not be confirmed by the commission of cardinals.

A press release

All of these rumors – coming out from circles very close to Gotti Tedeschi, and some say from Gotti Tedeschi himself – damage the reputation of the Holy See. This why the Holy See wanted to do away with the utter chatter with the Friday, 8^th of June press release underlining its « surprise and concern»  for the «recent events »  involvingEttoreGotti Tedeschi. The Holy See also says that it trusts that «the prerogatives acknowledged to the Holy See by the international legal order are being adequately considered and respected »  by the Italian judicial authorities.

The Holy See statement is a message to the Italian magistrates that are canvassing and studying the Gotti Tedeschi memorandum of its days as president of the I.O.R. In fact, the Italian public prosecutor denied to have taken documents about the I.O.R.: those papers had been found, seized and then sealed. But the investigators obviously glanced them. And the Holy See reminds all that those are documents from a sovereign country, seized to an ex president of a « body of State ».

Even if Gotti Tedeschi does not enjoy a “functional” immunity as president of the I.O.R. since the no confidence vote, those papers are from the time when he was in charge, and they are not part of the enquiry on Finmeccanica. The Holy See press release goes beyond, setting the record straight about what has been written during these days. First of all, «the Holy See confirms his full trust in the people whoworkat theInstitute for Religious Works with commitment and professionality»; and it is « examining with the maximum care»  the possible damage infringed upon the rights of the Institute and of its bodies. So, there is the possibility of a legal action. And this possibility upholds the « transparency line »  wanted by Benedict XVI: there is nothing to hide, and so there is nothing to deny. There is simply a desire to do away with any falsity.

What the Holy See is doing

The raid of the house and the office of Ettore Gotti Tedeschi gave rise to the rumors about the motives of the no confidence vote. Even in this case, it was the same I.O.R. to speak in a fair and strong manner – even too candidly for some internal observers. The Holy See confirms once again that the « no confidence vote on Ettore Gotti Tedeschi by the Board of Superintendence was rooted on objective reasons, concerning the governance of the Institute, and not determined by a presumed opposition to transparency, which the Holy See and the I.O.R. itself particularly care for».

So much care that it reworked the law n. 127 anti money-laundering not even one year after its promulgation. Holy See is working to fulfill the European request and to adhere to the international standars. For what concern the new law, MONEYVAL advisors focused on the new role of the Authority of Financial Information, that it is still crucial on the anti money-laundering law of the Holy See, but that it is now placed in a larger institutional settings that includes the State Secretariat, the Vatican City State Administration and the Gendarme Corps. The “presence” of the Secretariat of State among the bodies involved in trasparency – it deals with internal and international policy – does not seem to be evaluated negatively by te MONEYVAL advisors.  For what concerns the “controlled” body, the I.O.R. seems to be evaluate for great part adherent to the international standards. This would contrast the accusation of Gotti Tedeschi. Who told that he had been «fired because of his work for transparency». And whose story is taking attention away from the Holy See work.

It is a very clear message. The majority of the leaked documents recently published in the book Sua Santità (His Holiness) by Gianluigi Nuzzi discredit Benedict XVI’s secretary Msgr. Georg Gaenswein and the Secretary of State, Card. Tarcisio Bertone. So, the Pope renews his trust in his closest collaborators, the ones that work in silence. It is a clear signal of change in the Holy See’s communication strategy, reached in a crescendo: first, on Tuesday morning, Federico Lombardi, director of the Holy See Press Office, invited journalists not to be manipulated, since many of the stories published in newspapers fall «outside reality»; on Tuesday afternoon, an interview to Angelo Becciu –substitute (deputy) to the Secretary of State – was published on the Holy See newspaper L’Osservatore Romano. In the interview. Becciu asked journalists to reach «a higher moral standard», and criticized partisan narratives of events; finally, on Wednesday morning, for the first time the Pope talked openly and clearly about the Vatileaks scandal. The Church is not whispering anymore, and there are few things left to interpretation. On the other hand, there are things to take note of.

Paolo Gabriele’s arrest

Paolo Gabriele’s arrest – the Pope’s butler is accused to be in possession and have leaked Papal and Holy See private documents – is just one piece of a puzzle that risks to become hard to manage.  It is not because the Vatican investigators may eventually conclude that there are many people who can be blamed for the situation, perhaps including some cardinals.  The issue lies with a persistent «gang of malcontents» within the Vatican.  It is not a big gang, but it is entrenched in key posts and can count on loyal and silent employees in every corner of the Rome Curia. The close linkages between elements inside and outside the Vatican complicates things even further. Some claim that the masonry had a role in this «scandal», but a masonry working for the good of the Church, in order to save the Church from Card. Bertone.  Yet, attacking Bertone means attacking Benedict XVI and his gentile revolution, which has very much changed the face of the Curial leadership. Attacking Bertone also means attacking the Secretariat of State’s credibility, and this could be dangerous: the Secretariat of State handles relations with foreign countries, and its international image has been damaged. According to Pastor Bonus – the pastoral constitution that outlines the organization of the Roman Curia – the Secretariat of State must also coordinate the Curial offices. However, on the recent past– particularly since the end of the Second Vatican Council – the Secretary of State’s coordination role has lost ground, and his diplomatic profile risen. No surprise that diplomats are unhappy: they suffer from their internal loss of influence, even when they have maintained important relations with elements outside the Church.  If one is to look for a point of contact with the masons or with those hostile to the Church, one should look there.

The inquiry

The inquiry that led to Paolo Gabriele’s arrest started long time ago. The inquiry has been described as an obscurantist Vatican initiative. In fact, the Holy See is acting as every State would, if its head had private papers stolen. The papers are stolen, so the person who stole them needs to be arrested and punished. It is a principle of justice that deals with the right to privacy. It is a crucial matter. Ever since the first leaked documents were published in the Italian newspaper il Fatto Quotidiano and were shown in Gianluigi Nuzzi’s tv program Gli intoccabili (The untouchables), it was evident that most of them were stolen directly from the desk of the Pope. Some did not even had any marking’s from  the Secretariat of State, which means that they came directly from the Pope.

The Vatican Gendarme Corps started its inquiry right after the first publication of the documents. In March, a commission of three cardinals – Herranz, Tomko, and De Giorgi – is appointed by the Pope to investigate the leaks. It was widely known – inside the Vatican – that someone had passed papers out of the Vatican Walls, and that Gianluigi Nuzzi was writing a new book. The strategy is to stay put until the publication of the book. It is a risk. But Vatican enquirers need to be able to charge someone with a crime: as long as the documents were quoted in journals, but not actually reproduced, allegations of wrongdoing could be denied. But, once the documents are published, there is proof of a crime to charge someone with. The possible motives are yet to be determined.

As soon as the book by Gianluigi Nuzzi is published, the Holy See is ready to respond. Informal meetings are called to consider whether or not to take legal action, and a decision to do so is taken. Lombardi states that the publication of the document is «a criminal act» implying that legal action is forthcoming. Everything is now clear, since that kind of document can only come from the Papal apartment.

Who took the documents out? Memores Domini – lay women at the service of the Pope – are excluded; the two secretaries of the Pope, msgrs Georg Gaenswein and Alfred Xuereb, are also excluded; the circle inexorably draws around Paolo Gabriele.

Gabriele – his lawyers maintained and Father Lombardi confirmed– wants to collaborate with the magistrates, and this will broad the scope of the investigation. Paolo Gabriele is not “the” guilty party. He is just part of a sophisticated operation, that involves many among the Curial second lines (i.e. those “grey eminences” that never lose their posts) and among those who once had positions of power but no longer do. The legacy of the 27 years of John Paul II’s Pontificate has been particularly heavy for Benedict XVI. Those who managed power during the last years of John Paul II’s Pontificate, while the Pope was ill, have sought to keep it.

It was – several voices in the Vatican corridors say – the powerful secretary of Karol Wojtya, Stanislao Dziwisz (now cardinal and archbishop of Cracow) who recommended Paolo Gabriele – even if Dziwisz now pointed out that Gabriele did not work for John Paul II. Gabriele began his service in the Papal apartment as second assistant about a decade ago. When Angelo Gugel – the previous butler – retired, Gabriele inherited the position and a house in the Vatican. Dziwisz – who did not want to leave Rome – still kept some influence, in part because he had Wojtyla’s private papers and documents. The late Pope in his will had asked Dziwisz to burn his private papers. But the archbishop of Cracow said that he kept the papers.

Rings of a long chain

We need to look back in time, to Karol Wojtyla’s Pontificate. John Paul II gave great visibility to the Church, and made of it a strong institution in diplomacy. His words, his free style, breaking conventions, tilted the balance of power between states. His first international trip was to Mexico, in 1979. There, the priests could not even wear a habit , and were not allowed to have properties of their own. His second international trip was to Poland, his homeland. There, communism put religion aside and promoted a state atheism that is evident even in public housing construction projects, built by the government, where no provisions are made for places of worship. Things would change in these two countries, and so it will happen in the several countries John Paul II will be visiting during his Pontificate.

It is the Cold War era, and the Church is immersed in intense but behind the scenes diplomatic relations. Notwithstanding John Paul II’s criticism of Western consumerism («We like the singer, not the song», will be the revealing headline of U.S. newspapers during the first John Paul II’s visit to the United States), diplomatic relations deepen and are strengthened with Western countries, in order to counter Communism.

It can seem self-serving, but the mission of the Church is also to protect her communities, and that is why during those times the struggle against Communism is a priority. So, the Church sent money to Solidarnosc, the Catholic Union that is going to change Poland; the Church established diplomatic ties with Ronald Reagan’s U.S. administration; the Church protected its communities even by establishing a dialogue with dictatorial regimes – in fact, you make an agreement with whom you do not trust. Augusto Pinochet’s case is very telling. Pinochet is the dictator of Chile, and he claims himself to be Catholic. In 1986, when he was the victim of a shooting, Pinochet ascribed to the Virgin Mary his survival, and proof of it – he said – was the profile of the Virgin etched by the bullets on his Mercedes. Chilean bishops did not think it was as Pinochet said. On the contrary, many of them were against him. Fortunately, there is a Papal nuncio to deflect confrontations, and his name is Angelo Sodano. At the same time, the military junta sent the nuncio several complaints about bishops and priests with strong political views.

When – in 1987 – John Paul II goes to visit Chile and leans out from the balcony of the presidential house of La Moneda, a hand ushers Pinochet to the side of the Pope. John Paul II – annoyed at what had happened – adds to his program a meeting with the Chilean opposition. Sodano’s considered the Chilean military junta  «a transitory dictatorship». Even now that everything has passed, Sodano is uncomfortable when reminded about relations with Pinochet. Back in 1993, Sodano – already ascended to the post of Secretary of State – wrote to Pinochet that he held for him the highest consideration. Even this is transitory.

The diplomats

Sodano’s way of thinking and acting comes from the diplomats’ school. It is the education of those formed in the Ecclesiastical Accademy and in the shadow of the Ostpolitik of Cardinal Agostino Casaroli, Secretary of State towards the end of Paul VI’s and the first decade of John Paul II’s pontificates. The Academy taught that diplomacy should be a sort of «martyrdom of patience»: ecclesiastical diplomats should talk with everybody, even putting aside differences, or even if the starting point of the dialogue is far from the religious truth, in order to gain some concession. This gives birth to a Church that is very active diplomatically, and this is why she breeds many «high level» diplomats during those years. A pupil of Card. Sodano is Leonardo Sandri: he will be appointed Papal nuncio to Mexico and then substitute (deputy) to the Secretary of State, at the time when Sodano himself is Secretary. Also Giovan Battista Re is formed in the confines of the Secretariat of State, and later will be created cardinal and appointed prefect of the Congregation of Bishops. So is Achille Silvestrini, prefect of the Congregation for the Oriental Churches in the nineties, an esteemed and controversial figure. And Crescenzio Sepe – now archbishop of Naples, who at first was responsible of the Information Office, and ascended to prefect of the Congregation for the Evangelization of Peoples.

Sodano is appointed Secretary of State in 1990, replacing Casaroli. The world has changed. The Berlin Wall fell, the Cold War ended, there is no longer a need to fight Communism. The world is now different. No one puts religions aside, and the Holy See is invited, repeatedly, to enhance its participation in the United Nations by becoming a member state, and not just a permanent observer. The Holy See declined, in order not to risk its neutrality. John Paul II carries on with his guiding mission, but his voice is increasingly set aside. No one listens to him when he speaks against the NATO intervention in Yugoslavia. And no one will listen to the Church when he condemned the Second Gulf War, after 9/11. John Paul II becomes definitely aware that the world has changed during his last trip to Poland: he sees that the enthusiasm for him and for the Church has diminished. The blocks of the Cold War are gone, and the multilateral world acknowledge religions’ right to exist. But this right is conceived mostly in terms of tolerance: religious freedom is confused with freedom of worship, the freedom to profess a faith is confused with freedom of expression. But, even if the world has changed, the Vatican Ostpolitik – based on a sort of Westphalian epistemology that is outmoded– remains always the same: they hope for concessions from the countries’ administration, and they seek behind the scenes agreements, since that is the diplomacy Vatican diplomats learned.

Two teams contending: diplomats and Cdf

One should maybe look to the diplomats’ environment to identify the members of the “Gang of Malcontents”. What is now evident is that the attack to the Pope comes from inside the Church, and that it takes advantage of forces against the Church that are also willing to stir trouble from the outside. The heart of the matter is the Holy See’s sovereignty, and everybody seems to be aware of it. It is at the heart of the matter when the letters by Msgr. Viganò – former number 2 of the Vatican City State administration – are leaked, since they are presented and discussed by the media as if the Church were a multinational on Italian territory. It is a key point in the discussion about the financial transparency and the anti-money laundering law, and it concerns the reform of the Vatican Law n. 127 – (the “old” law practically does not consider the Holy See a State: there is no hint to official privileges and immunities; the Holy See governmental bodies are not involved in ensuring transparency, there is just an Authority for Financial Information – as if in Italy or other countries there would just be the Financial Intelligence Unit to oversee transparency of the institutes of credit, and there would not be the Guardia di Finanza; there is no mention of the peculiarities of the Holy See/Vatican City State).

These are intersecting issues. They involve people that some would consider above any possible suspicion. There are Vatican rumors about a cupola, a group of people that meets once a month in Cardinal Sodano’s office as dean of the College of Cardinals, the first dean to have an office for that post in the recent history of the Church. Sodano very much wanted this multi-million euro office for himself, after he had been replaced as Secretary of State.

Here it becomes evident that, during this Papacy, the «bite and devour» that the Pope censored in a letter to bishops in 2009 has nevertheless been going on. At the beginning of  2006, Sodano knows that his time as Secretary of State is coming to an end. He wants to place his men in key posts. He was one of the first promoters of an immediate beatification of John Paul II – he wanted it to be by acclamation right after his death, in order to move the historical assessment on the Pontificate at least 50 years forward. He did not succeed: Benedict XVI waives the five year waiting period after the death of a candidate, but requests a traditional canonical process.

Then, Sodano presses for the appointment of a successor to Card. Camillo Ruini, then president of the Italian Bishops’ conference. Vatican chats tells that Sodano asks Msgr. Paolo Romeo – then Papal nuncio to Italy, now cardinal and archbishop of Palermo – to send a letter to all the Italian bishops (except Ruini) to indicate who they would prefer as successor of Ruini. Unsurprisingly, someone informs Ruini. Also to be expected, Ruini refers the issue to the Pope. And, naturally, the Pope confirms Ruini as president of the Italian Bishops Conference donec aliter provideatur. He also calls Paolo Romeo for consultations. Romeo leaves the meeting anguished. But it is Sodano that is left shaking.

The news that Sodano will be replaced takes place in June of 2006. To do away with tensions, the Pope announces the substitution will come into effect in September. The new Secretary of State will be Tarcisio Bertone, archbishop of Genoa. Sodano does not waste time. He sends Msgr. Piero Pioppo, then his personal secretary, to Genoa in order to convince Bertone not to accept the new post. But Bertone stands firm, he is faithful to Benedict XVI. There is a summer of interregnum, and Sodano makes his last appointments: Piero Pioppo is appointed as prelate of the I.O.R., a position that had remained vacant for years and that represents a sort of link between the (lay) board of Superintendence and the college of cardinals of the Institute. Then, in September, when the replacement takes effect, Sodano refuses to vacate his office quarters, waiting for his new office as dean to be restructured. After one year, he moves to his new office. The officers of the Secretary of State are still on his side.

The Pope’s Regensburg speech takes place during the 2006 trip to Germany, and it is a diplomatic earthquake. It is the «swansong» of Sodano’s era. Benedict XVI had already began to change the art of diplomacy. The all-is-good Casaroli’s Ostpolitik does not work anymore: the Berlin Wall fell, and with it the traditional enemies of the Church have left the scene. There are no more Communists, and if there are, they struggle among themselves. On the other hand, the Western world is thriving, and Vatican diplomats feel they are among friends. In the name of the struggle against Communism, many relationships had been established. There is, among the Vatican top officials, a mistaken sense of victory. Centesimus Annus, one of the social encyclicals by John Paul II, is a result of an internal debate: how much does the Social Doctrine of the Church apply to the modern world? A «middle way» prevails: it is not overtly critical of the Western World and liberalism, but at the same time it reaffirms the positions of the Social Doctrine of the Church.

In the mean time, the diplomats’ careers are advancing, they are a closely knitted group – even if a book, Via col Vento in Vaticano, published at the end of the nineties, insinuates a subtle war between two factions. They have strengthened their ties in a thousand battles, when they needed to save a community, a diplomatic relation, and this had to be done without taking into consideration more deeply rooted truths. During the war, the Church must promote peace. And truth is maybe a goal too big to achieve.

But there is another team being trained, and it is the team of the Congregation for the Doctrine of the Faith. The leader of the Cdf team is Joseph Ratzinger, since 1983. Step by step, the Cdf assumed the «Ratzinger’s method». It suffices to read his biography to understand that Ratzinger loves to harmonize positions, not to impose his own point of view. And this is why the decisions of the Congregation for the Doctrine of the Faith do not just censure a position, but go on to note those aspects of a criticized book, theology or ideas which are good. Few may remember, but there are two Cdf statements on the Theology of Liberation,  the first one pars destruens and the second one pars construens of a dialectic process. Nothing is demonized completely.

When prefect of the Cdf, and even earlier, as archbishop of Munich and as a theologian, Joseph Ratzinger warned that pragmatism and ideological struggles had taken the place of faith in Jesus. It is Joseph Ratzinger’s constant worry. In his theological works, he always shed the light on the «Jesus issue». For years, he thinks about a historical  biography of Jesus based on the Gospel, which he will publish after his election as Pope. He is also always worried and aware of the need to harmonize different positions, a concern that he takes from the theology of history of Saint Bonaventure –the topic of his postdoctoral dissertation.

Ratzinger’s team

There is more. Benedict XVI makes of the struggle against the old guard of the Church a sort of moral battle. One of the very first decisions he makes as a Pope is on access to seminaries: the instruction – issued by the Congregation for the Doctrine of the Faith – is criticized, since it denies access to seminaries to anyone who has in any way, even superficially, supported a «gay culture» or a gender culture. Benedict XVI, wants to form true and well-rounded priests, and he also maybe wants to avoid even the opportunity of a gay lobby, believed to be an old undercurrent in some Church circles.  Several times he censured and condemned priestly careerism. One of his strongest denunciations is in 2009, as he celebrates a mass to ordain five bishops.  Among them are Pietro Parolin and Gabriele Caccia, numbers 3 and 4 of the Secretariat of State, faithful to Angelo Sodano, who are appointed bishops and respectively sent as Papal nuncios to Venezuela and Lebanon. It is Benedict XVI’s quiet revolution: the Pope waits for members of the old guard to end their terms in office, and then he replaces them with people he trusts.

In addition to Bertone, the team of Benedict XVI slowly, but inexorably, takes hold of the Curia: William Levada replaces Ratzinger as prefect of the Congregation for the Doctrine of the Faith; Ivan Dìas is appointed prefect of the Congregation for the Evangelization of Peoples; Malcolm Ranjuth – now archbishop of Colombo -  is appointed secretary of the Congregation for Divine Worship. With Bertone, Dias, and the new foreign minister Giovanni Lajolo (who afterwards was appointed as number one of the Vatican City State administration, and has since retired), the Church’s international politics will be less passive and more interventionist, less «realist» and more «Wilsonian»,  along the great ideological battle lines that influence laws, customs, and coexistence among peoples. In Italy, in Spain, and in the West, the principles that Benedict XVI defines as «non-negotiable» are life, the family, and education. In the Islamic countries, the key issue is religious liberty. The same goes for China. There the new course of Vatican geopolitics was reinforced by the naming as cardinal – a firm decision taken by Benedict XVI against the judgment of Sodano and his followers – of the combative bishop of Hong Kong, Joseph Zen Ze-kiun.

This Papal line – that dates back to the very beginning of the Pontificate – is confirmed by the last consistory and even by the most recent choices of Benedict XVI. Diplomacy must be rooted in law, and law in truth. Since his first message for the World Day of Peace (In truth, peace) to the appointment as Papal nuncio to Ireland of Charles J. Brown, a non diplomat that previously served in the Congregation for the Doctrine of the Faith, Benedict has changed the face of the Church and of its diplomacy, making them more concrete and Jesus-oriented.

Diplomats are marginalized, and unhappy. In the mean time, new Benedict XVI’s men take important posts in the Roman Curia: in 2010, Marc Ouellet is appointed prefect of the Congregation of Bishops. He was one the Canadian editors of the Communio magazine, of which Ratzinger is one of the founders, and in Canada he faces the so-called revolution tranquille, the progressive Canadian secularization. Now he seems to be one of the candidates to be the new prefect of the Congregation for the Doctrine of the Faith. Joao Braz de Aviz is appointed as Prefect of the Congregation for Religious orders, replacing Franc Rodé – who, as Sodano, was considered one of the protectors of the Legionaries of Christ, the Congregation that Benedict XVI wants cleaned up and reformed after the scandals involving its founder Marcial Maciel.  A Curia and a College of Cardinals enriched with able jurists, confirming a «more law, less diplomacy» approach. In fact, Benedict XVI clearly affirmed in the letter to the Catholics of Ireland in 2010 that underappreciating canon law is one of the reasons why the Church is rotten.

Within the Curia, a guerrilla warfare is being waged.

Old stories, new problems

This guerrilla is also fed from some «missteps». Leonardo Sandri is moved from his post as substitute at the Secretariat of State and replaced with Msgr. Filoni. Filoni – who had previously served as Papal nuncio to the Philippines and in Iraq – is a pupil of Cardinal Bertone, and seemed to be the right man at the right place. If Sandri was the focus of too much gossiping and was too close to the old establishment to be a trusted man, Filoni seems to be the opposite.

But the relationships between Filoni and his old master Bertone worsens. There are rumors – no one would confirm them – that maintain that Filoni wanted to send money to a mission he was very close to, in Taipei, Republic of China (Taiwan). Both Bertone and the Pope asked him not to send this money: if the substitute of the Secretary of State sends money to the Republic of China, this may be considered by the government of the People’s Republic of China an undue intromission, thus complicating the already complex links between Holy See and Beijing. But Filoni sends the money anyway, and the Secretary of State gets a formal diplomatic protest from the People’s Republic of China. The relationship between Bertone and Filoni – is said – deteriorates from there on.

Filoni is nowadays a cardinal and the Prefect of the Congregation for the Evangelization of Peoples, and the Secretariat of State substitute is now Angelo Becciu. Even though he studied at the old diplomatic school, Becciu has a completely different profile. His career makeover came about in Cuba, where – as Papal nuncio – he managed to smoothly navigate the transition of power from Fidel to Raul Castro.

The Secretariat of State has been regenerated, and so the guerrilla has aimed at other targets. The first leak of Vatican documents – a delicate surgical operation – originally takes place with the publication of another book by Gianluigi Nuzzi, Vaticano S.p.A.. Then, in 2010, the scandal of pedophilia breaks out in the headlines of newspapers, and it is also fed from some internal leaks. These are all circumscribed situations, as were the leaks of the first months of 2012. Up until Sua Santità (His Holiness) is finally published. The book – evidently written in a hurry, since it is full of mistakes – is the signal that maybe something got too far out of the program of measured leaks.

Everybody tries to take advantage from this warfare: every single issue – even if does not have anything to do with it – is described as one of the reasons behind this situation. Even the no-confidence vote on the president of I.O.R. Ettore Gotti Tedeschi by its board of Superintendence is linked to Vatileaks. It is not. Many try to explain the no-confidence motion by linking it to the internal debate about the new Vatican anti money laundering law that both Gotti Tedeschi and Card. Nicora defined «a step behind» in the path to transparency.  Nicora is president of the Authority for Financial Information, Aif, and also a member of the Commission of Cardinals in the I.O.R. and of the Pontifical Commission of Vatican City State – these last two also under the Aif.

Cardinal Attilio Nicora seems to be a key person in the passage from the whispering Church to the Church that speak out loud. He – during the first months of 2005, when John Paul II was about to pass away – was asked to outlined a reform of Pastor Bonus, favored by Angelo Sodano himself. The project remained just a draft. Some sources, who wish to remain anonymous, say that the project’s goal was to have a less bureaucratic Curia: the Pontifical Councils would be embodied in the Congregations, and the prefects of the Congregations, together with other trusted cardinals, would be part of a sort of committee for the management of the Church that would take the duties of the first section of the Secretariat of State of His Holiness. So, His Holiness secretariat would disappear as it exists today, and would keep just the diplomatic section. Part of the reform would address Pontifical Universities, which would fall under the umbrella of a single Roman university, and would each take different specializations.

Some observers considered this reform overwhelming. Yet, the reform would have let Angelo Sodano maintain in effect his leadership. Not as Secretary of State, but exercising his weight and his influence as a member of the «management committee» and trying – as Dean of the College of Cardinals – to guide the works of the next Conclave.

None of these scenarios can be officially confirmed: they are based on hearsays gathered from the Vatican corridors. But these stories point to a more complex and diverse scenario than just a struggle between old and new, good and evil, sketched out by the media. Bertone is depicted as the absolute evil. He surely suffers from some oversights and unfortunate choices. He is accused of an overtly personalistic management of the Church. On the other hand, who wouldn’t appoint trusted associates to key positions? And it is Benedict XVI who trusts Bertone. So much that the Pope – several times, and publicly – has renewed his confidence on him.

His reform is something more similar to Gregory VII. That of Gregorian reform is an heroic enterprise, brought on by a few man that works to re-moralized their society and so purify the Church. People gathered around Ildebrando of Soana begins a movement whose effect were so vast that a whole world change. Will this happen with the Benedict XVI’s Papacy?

Elected Pope with the name of Gregory VII, Ildebrando do not only care about the purification and moralization of the Church. He also collect the ancient sources, so creating a corpus of papers that will be the first global law of the world, the Canon Law. More, he defends the autonomy of the Church. In Dictatus Papae, Gregory VII affirms the supremacy of the Pope on any other power, the imperial one included. Then, he organizes the Pontifical Legates network. He establishes two kind of Pontifical Legates: the one in loco, charged by the Pope to look after the application of Gregorian reform on a territory; and the one sent by  Rome to accomplish mission in a foreign countries. The defense of the autonomy and sovereignty of the Church is also brought on, during the Gregorian Age, by creating new canonic collection. Gregory VII auspicates the research of the sources of the law, and so many researchers look for documents that affirms that the Papal authority is the source of the law. This research will bring to light the writings of Attone, Anselm from Lucca, Deusdedit.

It is the work Benedict XVI is doing as well. Joseph Ratzinger began his theological research with his Doctoral thesis on the «People of God and House of God in Saint Augustine’s Doctrine of the Church» – defended in 1951 -, and he has always been aware that he needed to look back to the Church, and then he understood that the Church needed to be less worldy, and that being less wordly means to change and unify. Finally, the Canon Law is the tool that the Church has to do it.

Benedict XVI wants to focus on Canon Law, and this is one of the reasons why the Secretary of State is a Canonist and the last Papal nuncios appointed is Charles J. Brown, a non diplomat that served for years in the Congregation for the Doctrine of the Faith. This comeback of the Canon Law is driving the Benedict XVI’s choice for what concern international relations, and even for what concern its commitment for financial transparency. This led to a renewed Vatican anti-money laundering law. Not everybody had been happy about it, inside and outside the Vatican Walls. Why?

The new text of anti-money laundering Vatican Law come into effect

There had been no modification to the Decree n. 159 issued by the Pontifical Commission for Vatican City State. The last 25th of January, Holy See issued the decree n. 159 to amend the Vatican City State Law n. 127 concerning the countering of money laundering and financing of terrorism. As the art. 7 of the Fundamental Law of Vatican City State, the President of the Pontifical Commission for Vatican City State  «in cases of urgent necessity, he can issue dispositions having the force of law, which  however lose their force if they are not confirmed by the Commission within ninety days». The Commission confirmed the decree and – beyond whatever it has been written and told during these last three months – there were no doubts about it.

Anti money-laundering Vatican law: a never ending debate

Ever since the Law n. 127 had been issued, the Governatorate knew that this law had been written in a hurry, under the pressure of the investigation of the Public Prosecutor of Rome on two money transfer ordered by the I.O.R. (the Institute for Religious Works), and with the necessity to fully comply to the norms required by the European Union in the Monetary Convention signed by the Holy See in 2009. Yet while Holy See and European Union were discussing the terms of the Monetary Convention, the then number two of Vatican City State Carlo Maria Viganò showed himself doubtful about what the on-going discussion was going to ask to the Holy See, and proposed to unhook the Holy See by Euro area, in order to preserve its sovereignty.

The law n. 127 reassured Italian prosecutors, but on the other hand it did not completely fit to the international standards. The decree was an improvement of the law promoted by the Vatican City State administration in order to fit to international standards and at the same time to let them adhere to a peculiar State that is Vatican City State, while preserving the Holy See sovereignty.

An Italian problem?

Yet, during these last three months, Italian medias highlighted several rumors coming from «inside the Vatican» against the improvement of the law 127. Il Fatto Quotidiano – one of the most prominent and aggressive Italian newspaper – published a series of leaks of reserved documents. Among these documents, there was also an e-mail sent by the Director of the Authority for Financial Information Francesco De Pasquale (the controller) to the president of the Council of Superintendency of the I.O.R. (the controlled). This documents proved a questionable relationship between two parts of the mechanism of control of the Holy See, and at the same time proved that an animated debate took place within the Sacred Walls about the improvement of the Vatican Law n. 127.

It had been also leaked to Il Fatto Quotidiano a notation by cardinal Attilio Nicora, president of the Authority for Financial Information (but also member of the Council of Superintendecy of the I.O.R., member of the Commission for the Governatorate of Vatican City State and member of the so-called Council of 15, the assembly of 15 cardinals that periodically meet to take stock of the Vatican financial situation). In this notation, Nicora described the amendments to the Law n. 127 as “step behind” confronting with the previous text, which he blessed and promoted. More. The last March, the 19th, an article published on Il Corriere della Sera, the most spread Italian newspaper, let understand that Nicora himself was working to rewrite the text of the decree n.159, in order to bring the law back to the “old” law n. 127. The article proved that – inside the Vatican – the debate never ended.

Why the anti-money laundering law changed

The amendments to the Law n.127 had been requested by the advisors of MONEYVAL, the body of the Council of Europe that analyze and judge the adherence of the States to the 40+9 GAFI recommendations for contrasting money laundering and financing of terrorism. Marcello Condemi, a member of the Vatican Authority for Financial Information and draftsman of the first sketch of the old law n. 127, worked on a second sketch of the law right after the first on site visit of the MONEYVAL advisors in Vatican, that took place in November 2011. Several debates within the Sacred Walls followed. Finally, with the decree n. 159, the law n. 127 had been essentially modified. The “new” law n. 127 is now more adherent to international standard. It strengthens the power of controlling of the Authority for Financial Information, but at the same time distributed the controlling powers on several bodies of the Holy See, according to the principle of the separation of powers (even the Gendarm Corps is now encouraged to strengthen its intelligence in order to take part to the countering of money laundering with proper tools of investigation).  It gave to the Vatican Secreteriat of State the complete management of the relationships between States – «The Secretariat of State – it is written in the decree n. 159, art. 2 quinquies – foster the adhesion of the Holy See to treaties and international agreements, as well as the relations and the participation of the Holy See to institution and international organization qualified to define norms and good practices for what concerns the prevention and countering of money laundering and financing of terrorism».

That the effort of the Holy See had been to adhere to international standards for what concerns the countering of money laundering without denaturalize its own institution is evident when – in the decree n. 159 – the procedures to take into consideration the list of terror organizations issued by the Security Council of United Nations. According to the law n. 127, Holy See does not mechanically transpose the United Nations Lists. This choice is aimed to preserve the Holy See and Vatican neutrality. In fact, lists are written under the «Chapter 7» of Charter of the United Nations, and that Chapter is applied in war time. Holy See could be embarrassed by a mechanical transposition of the lists, since it could be in contradiction with the Holy See orientation –  Holy See is traditionally neutral and in favor of peace. Since Holy See is a Permanent Observer to the Assembly of United Nations, and not a Full Member, a settlement has been made to the autonomy of the Holy See: the Vatican Secretariat of State – according to the new article 24 of the law n. 127– will draw up its own list of terror organizations that will be based on the one issued by the United Nations, so keeping its autonomy, and at the same time showing to be sensitive to the international security goals. Holy See so maintain its autonomy, but at the same time proves sensibility to the international security goal .

Is there a biggest target?

Maybe there is a biggest target on the basis of the polemics that followed the one the another from the moment in which the Holy See began the process enrolled in the «White List», the list of states most active in preventing and fighting the financial crimes.. The critics to the lack of transparency of Vatican finance would hide a sort of attack to the sovereignty of the Holy See itself. Documents leaked by the press – the so-called Vatileaks, that are now under the investigation of a commission made up of the cardinals Herranz, De Giorgi and Tomko – prove that the «sovereignty issue» has never been taken into consideration by the «step behind» theorists. The leaks are about the retroactivity of the «new» law n. 127; about the will to cooperate with Italian investigators; about a diligence toward Italian authorities that led Ettore Gotti Tedeschi to be voluntarily questioned by the Italian magistrates without these latter submitted the request internationally.

Yet, Paolo Cipriani, General Director of the Institute for Religious Works, explained – during one of the seminars periodically held by the I.O:R. to train the administrators of the Congregation with deposits in the «Vatican bank» – that the Institute has always responded to any request submitted by Prosecutors or Central Banks. The responses by the Holy See, Cipriani explained, had come formally – there had been during the last ten years 20 requests submitted internationally to the Holy See (it is a global data, it does not concerns the only I.O.R.): 19 had been fulfilled by the Vatican City State, the last one has been judged by a Vatican Court – and not formally, for a sort of «good neighborhood relationships» with the other financial institutes. Holy See – Cipriani also underlined – did not answer in the only case the request would be considered a vulnus to its sovereignty.

A wider – international – perspective

It is now time to see things from a wider perspective. The announcement of the improvement of the law n. 127 has been launch in the Osservatore Romano, the newspaper of the Holy See, in an article by msgr. Dominique Mamberti, the «foreign minister» of the Holy See. Mamberti linked the news of the improvement of the law n. 127 to the ratification by the Holy See of three international threaties – the news about the ratification had been given the 25th of January as well. Holy See adhered to and ratified the International Convention for the Suppression of the financing of terrorism(Onu, New York, 1999) and the United Nations Conventions against the transnational organized crime (Palermo, 2000). Holy See also announced the ratification of the United Nations Convention against illicit traffic in narcotics drugs and psychotropic substances (Wien, 1998): this latter Convention had been already signed by the Holy See when it had been adopted by United Nations.

It’s a long time that the campaigns to expell Holy See by the concert of Nations – as the See Change campaign – broke down in the public opinion. In 2007, The Economist – one of the most authoritative magazines in the world – published an article headlined “God’s ambassadors” about the Vatican diplomacy. The article ended with this advice for the Holy See: «It could renounce its special diplomatic status and call itself what it is – the biggest non-governmental organization in the world».

Within the bureaus of the United Nations and of the other major international organization in which the Holy See seats as an observer, the idea to expel Holy See from the concert of nations is widely spreads. Even if this idea did not succed, and – on the other hand – on July 2004 the General Assembly of United Nations approved a resolution that not only confirm, but even enhanced the presence of the Holy See within the United Nations.

So, a more subtle strategy began. This strategy – brought on in international environments – aims to undermine the moral power of the Catholic Church and of religions in general. It consists in remarking that religious freedom is something like the freedom of expression, or in confusing the religious freedom with the freedom of worship. Vatican diplomacy is undermined, too. If Italian Prime Minister Mario Monti caused an «earthquake» at the Italian Ministry for Foreign Affair by showing his intention to appoint ambassadors not raised up with a diplomatic career, Vatican insiders refer about the intention to appoint lay people as diplomatic representative of the Holy See. Pontifical Legates must be bishops, since they represent the Pope. This rule is valid and effective only for Papal nuncios: they work as Papal ambassadors, they keep relationships with the governments, and at the same time they work as bishops, speaking to the Episcopal Conferences of the countries they are appointed at, give their opinion about the to-be-appointed bishops.

Nuncios that are appointed as permanent observer within the International organizations (United Nations, U.N.E.S.C.O., F.A.O., European Parliament) must only care the relationships between the Holy See and the governments. This would open to the appointment of lay people as permanent observers of the Holy See.

Could this be the beginning of a weakening of the Vatican diplomacy? In the book C’era una volta un Vaticano (Once upon a time a Vatican), Massimo Franco, underlines this lack of international appeal of the Holy See. Too appeased on Italy and on its relations with Italy – Massimo Franco writes .- the Holy See lost sight of its wide global horizon that made of it the most long-lived and solid institution in the world. Canon right is the first really global and globalized law of the history, and it still consists in a solidity that no friendly diplomatic relations would touch.

This same problem spoiled the path to the Vatican financial transparency. Holy See borders are not anymore with Italy, but with the whole Europe. Yet, the members of the Authority for Financial Information are all Italian, coming from the Bank of Italy milieau – even if the Bank of Italy proved a certain hostility toward the Holy See (the investigation of the Roman prosecutors undermined the Holy See sovereignty, since prosecutors asked for information to the Financial Intelligence Unit of the Bank of Italy – which should be independent – instead of investigating with the Guardia di Finanza).

The “old” law n. 127 would have probably solved the “judicial” problems with Italy, but certainly it would also set back – if not avoided – the Holy See path to the white list. The Plenary Assembly of MONEYVAL will meet the next July, and on that occasion the report about Holy See will be issued. It will not be at that moment that the Council of Europe will decide about the enlistment – or the not enlistment – of the Holy See among the virtuous States. But probably, the possibility to be part of the white list would have been more difficult without the improvement of the law n. 127, that the MONEYVAL advisors auspicated.

The two news are not directly linked, but they are both meaningful. And they show what is the direction the Holy See is heading to, thanks to the Benedict XVI’s «quiet revolution». And card. Bertone, Secretary of State, albeit in the midst of the storm, is bringing on Benedict XVI’s wills. Now it is the time for a more in depth analysis of the two «Vatican financial» news of the week.

The new regulation of the Prefecture for Economic Affairs

On March, the 9^th had come into effect the new regulation of the Prefecture for the Economic Affairs of the Holy See. The regulation had been published on February, the 22^nd and has been signed by the cardinal Tarcisio Bertone, Vatican Secretary of State. The regulation is – more than a little revolution – a way to keep pace with times and with the responsabilities of the Roman Curia, that is – it is written in the letter of presentation fo the new regulation by the prefect Giuseppe Versaldi – «one of the main instruments that the Holy Father has at his disposal» to act as a Pope.

Established by Paul VI in the 1967, the Prefecture for the Economic Affairs is entrusted with overseeing all the offices of the Holy See that manage finances, regardless of their degree of autonomy. It does not manage finances itself, but instead audits the balance sheets and budgets of the offices that do. It then prepares and publishes annually a general financial report. It must be consulted on all projects of major importance undertaken by the offices in question

It means that the Prefecture oversees all the dicasteries of the Roman Curia and of all the consolidate administrations, and the Vatican Radio, the Vatican Typography-L’Osservatore Romano publishing house, the Vatican Publishing House and the Vatican Tv Center. The Prefecture also oversees the balance sheets of Vatican City State.

In 34 articles, the text outlines the amplification of the competences of the Prefecture, that is the body «responsible for the economic address and program, as well as it is responsible to the vigilance and the control of the administrations of the Holy See». The change is considerable. Just take a look to the previous regulation – delivered November, 20^th 1999, where only «surveillance and control» were mentioned. So, the Prefecture can be now roughly compared to a Ministry of the Economy. The Prefecture – art. 2 of the new regulation – «prepares the document of economic planning in which are outlined all targets» that the administrations of the Holy See must jointly achieve. More: the document «periodically proposes the main macro-economical parameters» the administrations should refer to for their financial forecasting.

Which are the functions of the Prefecture for Economical Affairs? It prepares the annual reports, it carries out extraordinary administration acts and obviously it controls the annual statements. In the article 5 of the new regulation it is also mentioned the promotion of the «cooperation among the dicasteries, even through meetings, to jointly study, examine and evaluate relevant facts of administrative and financial management». This article of the new regulation recall, in some ways, what card. Bertone, Vatican secretary of State, underlined during the last meeting with heads of Vatican departments (Prefectures and Pontifical Councils). Bertone asked more coordination among the several branches of the Vatican curia, and also pointed at the encroach of the «passion for the little news of ecclesiastical gossip, that undermine the Holy See prestige and sometimes crab the climate of confidence and trust among the Holy See’s bodies».

The commitment to surveillance also includes the «analysis, in order to assure a precise and critical acquisition and preservation of the document with juridical relevance referred to any board». During the Papal Vacant See, the Prefecture is kept to give the final balanced and consolidated of the current year to the Cardinal Chamberlain.

One more step toward financial transparency

«Within the framework of the active co-operation between the Holy See and MONEYVAL (the Department of the Council of Europe which deals with the evaluation of systems adopted by member States to counter money-laundering), meetings of a technical nature were held in the Vatican between 14 and 16 March 2012». This is the beginning of the official press communiqué delivered at the end of the second on-site visits to the Holy See of the advisors of the Council of Europe. These visits are not inspections.

MONEYVAL advisors got back to the Vatican after their visit of the last 21-26 November. After their first visit, the Vatican law against money laundering – i.e. the Vatican law n. 127 of 2010 – has been improved and essentially re-written. The new text of the law has been promulgated by the President of the Governatorate of the Vatican City State with a Decree on January, the 25^th. The most important news is that the Holy See, by conforming its anti money laundering law to the international standards – «The Vatican is heading in the right direction with the revised norms», Jeffrey Owens,  head of tax issues at the Organization for Economic Cooperation and Development, said – seems to show to strongly tread the path to be enlisted in the group of the «virtuous» countries for what concerns the prevention and countering of money laundering and financing of terrorism.

This path is followed step by step by MONEYVAL advisors. At the end of the first on site visit, they explained in an official communiqué delivered on the web site of the European Body that «at the conclusion of its mission, the MONEYVAL team  shared and discussed its initial findings with representatives of the Holy See, after which initial views were exchanged». These impressions also dealt with the old text of the law n. 127: MONEYVAL advisors had not such positive impressions of the law, since it seemed to concentrate the warranty of the integrity of «Vatican finance » to the only Authority for Financial Information, without showing the will to truly involve all the Authorities concerned. Perhaps it is not a case that one of the main innovations of the new text of the law n. 127 is about the Authorities involved in the struggle against the money laundering and the financing of terrorism –  beyond the Authority for Financial Information, now the text also mentions the Secretary of State, the Pontifical Commission for the Vatican City State, the Vatican Gendarmes Corps.

The trend seems to be in favor of an involvement of the whole Vatican institutional framework, and at the same time in favor of more attention paid to the peculiarities of the Holy See and of the Vatican City State, as MONEYVAL advisors suggested. This effort also merited the appreciation of MONEYVAL advisors. «The meetings – it is written in the press communiqué – had been planned earlier, taking into account both the specific nature of the Holy See and of Vatican City State and the fact that this was the first evaluation of their respective legal systems. The meetings made it possible to continue gathering information on the steps taken thus far in the process of complying with international standards in the area of preventing and countering money-laundering and the financing of terrorism, such as the adoption of the Decree No. CLIX of 25 January 2012, replacing Law No. CXXVII of 30 December 2010, as well as the ratification of and adhesion to certain international Conventions pertinent to the question».

The conventions which the communiqué refers to are the  adhesion and ratification to the International Convention for the Suppression of the financing of terrorism (Onu, New York, 1999) and the United Nations Conventions against the transnational organized crime (Palermo, 2000), and the ratification of the United Nations Convention against illicit traffic in narcotics drugs and psychotropic substances (Wien, 1998) –  this latter Convention already signed by the Holy See when it had been adopted by United Nations. It is highly meaningful that the adhesion and ratification to these Conventions had become official on January, the 25^th, the same day when the Decree of the President of Vatican Governatorate had been promulgated.

The path to the new law

In actuality, Vatican officials were already working to an improvement of the law n. 127, in full knowledge of the fact that the law had been written in hurry and under several pressures (among these pressures, two investigations promoted by the Rome Public Prosecutor: one about a money transfer from a IOR account deposited with a branch of UNICREDIT Bank in via della Conciliazione in Rome in 2009; and the seizure of 23 million euro transferred by the IOR from two accounts it had in Banca del Fucino and Credito Artigiano to another IOR account to a JpMorgan Bank branch in Frankfurt).  The same law n. 127 had to accomplish to the need to put into effect the Monetary Agreement between the Holy See and the European Union, signed in 2009.

It easy so easy to understand why the law n. 127 is important – even if some observers underlined that the law was particularly severe (especially for what concerned the introduction in the Vatican legislation of the auto-money laundering crime, while several legislation – Italian one included – does not contemplate this kind of crime). But there was also the need of a more in-depth reflection to accomplish the Vatican City State peculiarities, since in the Vatican there are no banks and no financial market.

Almost before the MONEYVAL advisors went to the Vatican for the first on site visits, the tops of the Holy See were thinking about how the Vatican could better adhere to the international standards. It was not only a technical problem, it was a problem to let the international standards in a peculiar reality as the Vatican is. This reflection brought to the improvement of the text of the law n. 127.

Who is against financial transparency?

Obviously, this brought to a lively debate within the Holy See officials. As the medias covered, among the opponents to the improvement of the law was the cardinal Nicora, president of the Authority for Financial Information. Nicora – as revealed by the Italian newspaper Il Fatto Quotidiano, that published a note written by card. Nicora – defined the new text of the law . 127 «a step behind» (this sentence had been highlighted several times in the commentaries about the so-called «Vatican finance»). In order to avoid a conflict of interests with the presidency of the Authority for Financial Information, Nicora resigned by the presidency of the APSA – the Administration for the Patrimony of the Apostolic See, a sort of «Central Bank» of the Holy See – but still holds his post within the Vigilance Commission of the Institute for Religious Works (which is under the surveillance of the Authority for Financial Information), within the Council of the Fifteen – a sort of “Little Parliament” made up by 15 cardinals that meet periodically to verify the correctness of “Vatican finance” – and also within the Pontifical Commission for the Vatican City State, that, according to the new text of the law n. 127, will be one of the actors that regulate the Authority for Financial Information.

According to the vaticanista Sandro Magister, even Ettore Gotti Tedeschi, president of the Council of Superintendency of the IOR, was against any intervention on the law n. 127. Gotti Tedeschi even feared the risk of an exam failure of the new text by MONEYVAL. Probably, Gotti Tedeschi – who still seats in the board of the Administration of the Cassa Depositi e prestiti – Loan & Deposit Saving, a public body controlled (with the 70 per cent of stocks) by the Italian Ministery of Economy, and this charge would in theory not tally with his Vatican charge as representative of a body of State – fears that his «image» of solver of the age-old Vatican financial obscurity could be delegitimized.  And this image is so important for him that – with an excess of diligence – he agreed to be questioned by the Italian magistrates, even if these latters did not submit the request internationally. Many commentators considered the Gotti Tedeschi’s one a «questionable decision», if not even damaging for the Holy see’s interests, since it could be read as a renounce to the immunity for the Central bodies of the Holy See.

Among the followers of the «step behind» -doctrine there was also the direction of the Authority of Financial Information. An e-mail of the director Francesco De Pasquale to Ettore Gotti Tedeschi had been leaked to the Italian newspaper Il Fatto Quotidiano. In the e-mail, De Pasquale unveil his adversity to the re-writing of the law n. 127. This e-mail also unveil an almost questionable relationship between the controller (De Pasquale) and the controlled (Gotti Tedeschi), also considering that the warranty of the integrity of «Vatican finance» had been depicted to reside in the Authority for Financial Information.

Waiting for July

MONEYVAL conclusions on the Holy See and  Vatican City State financial reliability will be delivered the next July at the plenary assembly of the body. This agenda has been agreed long time ago, and it never changed, as the official communiqué well let understand (one can there read that the meetings had been «planned earlier» and that the report «as scheduled» will be examined by the Plenary Assembly of MONEYVAL next July). There will be no eventual change of schedule for the drafting of the final report. One should not even be surprised by the comeback of the MONEYVAL advisors: all the European Countries had at least two, and sometimes even three rounds of evaluation, and this evaluations are about a long-time commitment of adherence to the international standards, and are not an exam about the financial transparency/not transparency to bring into an end within a few months.

Italian vision vs. European (and international) vision

The day after the MONEYVAL on site visit to the Vatican, the Italian newspaper Il Sole 24 Ore spread the news that a IOR account deposited with a branch of JpMorgan Bank in Milan had been closed because the IOR could not satisfy the requests of transparency. The article – very detailed, indeed – can be seen as a counterattack of the followers of the «Italian party». While the Holy See worked in order to accomplish the international standards of transparency, the propaganda on «Vatican obscure finance» rose up especially thanks to the investigations promoted by the Public Prosecutor of Rome and requested by the Unit for Financianl Information of the Bank of Italy. Is Italian State working to consider the Vatican something less than an enclave in the Italian territory? And did this interest toward the Vatican finance rise especially in Italy? And is the Authority for Financial Information itself a player that is playing is game in the field of Italy, and not in the field of the Holy See, that is working to strengthen its international appreciation and acknowledge?

Just take a look to the board of the Authority for Financial Service. Excepted Nicora, Dalla Torre and an internationalist jurist come from other charges within the Holy See, many members of the Authority for Financial Information – e.g. Francesco De Pasquale, Marcello Condemi – come from Italian banks and from the Bank of Italy, where they were not appointed in important charges. The composition of the board is not seen – by some insiders – coherent with the universality of the Holy See (whose employees are traditionally chose internationally) since the imbalance to Italy is considered a sign of weakness and source of risks, more than of opportunity, since the troubles of the Holy See came from a request of the Bank of Italy then headed by Mario Draghi (now president of the European Central Bank).

So, while Europe shows appreciation for the steps forward of the Holy See, on the Italian side the war of the «financial» leaks just began. The news of the closing of a IOR account is probably just a first signal.