All too often, the mere mentioning of Vatican finances immediately prompts the depiction of mysterious scenarios and obscure arrangements. Recently, an article in the English newspaper The Guardian emphasized that it was funds that the Italian dictator Benito Mussolini’s gave the Vatican that allowed it to build a financial empire that now includes luxury shops in the heart of London. In reality, it is not quite so. History can help us to better understand Vatican finances reason for being. Basically, the Vatican’s financial structure was born with the establishment of Vatican City State, «that piece of land that permits us to fulfill our mission», in Pius XI’s words.

Vatican City State was born as the reparation for a wrongdoing. In 1870, the Bersaglieri soldiers of the Italian King Vittorio Emanuele opened a breach in Rome’s city walls, a dozen metres to the west of the Roman gate – known as Porta Pia – and  marched down Via Pia, defeating Pope Pius IX’s troops. The Pope went into exile to Castel Gandolfo, and most of the Holy See’s patrimony was confiscated. It is in that period that Saint Peter’s Pence collection began. It was a spontaneous collection of offers from the faithful, and this allowed the Holy See to cover its bills. The Kingdom of Italy proposal for reparations, the legge delle guarentigie (Law of Guarantees) was a unilateral offer that did not compensate the Holy See for the loss of goods and lands. In addition, many lands belonging to monasteries and parishes were also confiscated, to give the economy of the Kingdom of Italy a respite. Relations between the Holy See and Italy were very tense. With time, this tension subsided. Catholics re-organized, overcame the Papal ban over political participation in the institutions of the Italian Kingdom, and gave birth to a political thought of their own, along the lines of the “new-born” social doctrine, inspired by Pope Leo XIII –who is considered by many one of the greatest philosophers of the last two centuries. Then, the First World War broke out. Pope Benedict XV was committed to peace, and frustrated by how difficult it was for the Holy See to conduct diplomatic relations. At the time, States entertained diplomatic relations with the Holy See through their embassies to Italy. Countries in war with Italy recalled their ambassadors, and so relations between the Holy See and these States in particular became very difficult. Benedict XV was keenly aware of this: a territory and a sovereign State was needed to carry a mission of peace.

When the First World War ended, Giovanni Giolitti was the Italian premier. Benedict XV considered the possibility of a «Conciliation» between the Church and the Italian State. Giolitti was against any such conciliation because he opposed (like some still do today)  recognizing the Holy See’s sovereignty. «If the Vatican – Giolitti said – would ask me to for a fully sovereign territory the size of a postage stamp (and certainly it would ask for something much bigger), I wouldn’t give it to it. » Giolitti’s words are reported in the Conciliation Memoirs of Cardinal Pietro Gasparri, still unpublished, and also mentioned by Benny Lay – the dean of the vaticanologists – in his book Finanze Vaticane (Vatican Finances). Giollitti’s attitude moved the Vatican to turn its attention to Benito Mussolini, who – when he was just a member in the Chamber of Deputies – took the position that fascism should not preach or practice anti-clericalism. It was 1921. The following year, Mussolini rose to power.

Conciliation negotiations were long and difficult. One of the challenges was agreeing on financial compensation. Pius XI worked personally on this issue. The Pope aimed to obtain an indemnity of 2 billion liras –which the Italian State could pay in instalments. For the Pope, this amount corresponded (with the addition of interests) to what the Italian State had unilaterally committed to pay after the occupation of Rome, per the Leggi delle Guarentigie. Pius XI settled, in the end, with 1 billion and 750 million liras, part in cash, part in bearer bonds.

What to do with this money? Two months after signing the Lateran Pacts and almost thirty days before their ratification, the Pope reached out to Bernardino Nogare (born in 1870, deceased in 1958). Pius XI asked Nogara to manage the funds from the Financial Convention of the Lateran Pacts. This is the «Mussolini money» The Guardian wrote about. This money came, in fact, from the Italian State as compensation for the occupation, and helped the Holy See to carry on its mission.

The Guardian, however, maintains that Mussolini was rewarding the Vatican with a huge amount of money in exchange for support and official recognition of the regime. This money would have been invested in prestigious real estate in London. The real estate belonged to Grolux Investments, a society controlled by the Swiss Profima. The latter could be traced back to the Vatican. In fact Bernardino Nogara was a member of Profima’s board.

Why would any of this be considered breaking news? Bernardino Nogara introduced the Vatican to the holding of stocks. Charged with the Special Section of the Administration of the Apostolic See Patrimony (the so-called Speciale), Nogara bought stocks, making conspicuous and smart investments. Through them, Nogara became a member of the boards of administration of several Italian companies, which enhanced his international prestige. During the Great Depression of ’29, Nogara founded Grolux Investments and the Swiss society Profima, to diversify Holy See investments, particularly by investing in gold and real estate.

The story of the establishment of Grolux is in John Pollard’s book Money and the Rise of the Modern Papacy: Financing the Vatican, 1850-1950. In that book, Pollard follows a money trail over three continents. Pollard’s is said to be a book about Popes and their administration of money. But truly, most of the Popes –with Pius XI one of the exceptions– have not paid any attention to administrative matters.  The latter were delegated to a highly select group of ecclesiastics and lay people with financial expertise. They are fascinating protagonists of this story. Just think about Giacomo Antonelli, Cardinal and Pius IX’s Secretary of State, who oversaw the Papal treasury from 1850 to 1876. Antonelli was one of the architects of the first massive reorganization of the budget for the Papal States. The success of his efforts to balance the budget depended on a loan requested and obtained from the Rothschild Banking House. Some could be surprised: did the Church really ask for a loan to a Jewish bank? In fact, this should not come as a surprise, considering that the Church’s relations with the Jewish community are closer than one may think. So close that Federico Cammeo, a Jewish jurist, drafted the Fundamental Law of the new-born Vatican City State after the Conciliation Bernardino Nogara, furthermore, was a top manager of the Banca Commerciale Italiana, managed by the Jewish banker Giuseppe Toepliz (and because of this, for many years the Vatican did not buy stocks in Italian banks other than the Banca Commerciale Italiana).

Nogara could count on the benefits of a renewed diplomatic activity of the Church.  Benedict XV had left the Vatican coffers empty, because the First World War prevented bishops from coming to Rome for ad limina visits and contribute to Peter’s Pence. From 1930 on, Nogara invested in a web of projects extended throughout Europe and financial centres in the United States and South America. He was the first non-roman to be in charge of the Vatican finances. He came from a family so Catholic that it weep because of the breach of Porta Pia. With a degree in industrial and electro-technical engineering from the University of Milan, he left for England as soon as he married and went to work in a mine in Wales. From there he was sent to a mine in Greece. In 1908, he was living in Constantinople and managing mines in Asia Minor. There, he founded the Eastern Commercial Society, a branch of the Banca Commerciale Italiana. Well-versed in the political and economic realities of the Ottoman Empire, he became the Italian government’s trusted advisor for Easter affairs.  In this role, he was involved in the Ouchy Treaty, which ended the war in Libya between Italy and Turkey. In 1914, Nogara was the Italian delegate to the Board of Administration for the Ottoman Public Debt.  At the end of the First World War, he was part of the economic and financial commission of the Conferences created to draft peace treaties with Austria, Hungary, Bulgaria, and Turkey.

Overall, Nogara was comfortable dealing with multiple relations in diverse context – the diplomatic-political context as well as the banking one. He was the right man to manage a estate with such a clear international make-up that Speciale’s staff were required to be fluent in French and English.

In the meantime, the Opere di Religione (Religious Works) administration increased in importance within the Sacred Walls. Italy’s alliance with Hitler’s Germany in the war, in 1940, makes increasing the operational capacity of the Opere di Religione all the more important and urgent. This branch of the Vatican financial system, since the very beginning of the war, was able to exchange Italian liras for hard currencies, which facilitated the Pope’s aid to the victims of the conflict. How to enhance this work? From 1940 on, the administration of Opere di Religione was placed under a Cardinals’ Commission. Through this mechanism, the Pope’s assistance reached occupied Poland, the Balkans, and wherever the Pope and the Secretariat of State needed it to reach.  As the Ossservatore Romano (the Vatican daily newspaper) recently noted in an article heading, «Pius XII fought Nazism even with (money from the Vatican’s) investments.»

Were these operations legal? Carlo Pacelli – Pope Pius XII’s nephew and general advisor of Vatican City State – raised this issue with some Italian jurists, among them Vittorio Emanuele Orlando – a prominent Italian politician, who had been Prime Minister and was also part of the Italian delegation in the negotiations of the Peace Treaty of Versailles, which ended the First World War. The question was: given that the Opere di Religione operated from the Vatican, were its transactions linked to Vatican City State or could they be considered legally independent? The jurists concluded they could be considered independent. And so, on June 27, 1942, Pius XII promulgated the establishment of the Institute for Religious Works (Istituto per le Opere di Religione, I.O.R.), an entity with its own corporate identity. This permitted the Holy See to deliver the Pope’s aid all over the world, even to Hiroshima and Nagasaki – also thanks to Vatican bank accounts opened in the United States, a request made by Vatican official to the U.S. Chargé d’Affaires Harold Tittman and approved by President Roosevelt.

This is how the Holy See’s estate and financial wealth was born and its management evolved. It is a sovereign wealth fund, managed through a sort of Central Bank (APSA; the Administration of the Apostolic See Patrimony) and an entity (the IOR) which assets are at the sovereign’s disposal, while the Prefecture for Economic Affairs oversees over the dicasteries balances and have now power to address Holy See’s financial and economic policy and everything is under the Authority for Financial Information oversight. These financial arrangements have been enhanced and modernized through the years with new agencies and also new ways to report balances. The Holy See is now committed to a qualitative enhancement toward full financial transparency.  Perhaps this development is most worrisome to those who have been reckless in their interactions with Vatican financial institutions, taking advantages of the latter’s peculiarities and of Vatican sovereignty. Ultimately, the Holy See financial scandals were always about Italian bankers (from Michele Sindona, to Roberto Calvi, to Ettore Gotti Tedeschi, the former IOR president who was recently involved in an Italian bank investigation regarding his role as Italian representative of the Spanish bank Grupo Santander), and in fact relations between Italy and the Holy See have been very tense, seemingly proving a certain level of Italian hostility toward the Holy See’s path to financial transparency. The Holy See has overcome this hostility, embarking on an international standards path, which is the only way to go in a globalized world. This path will eventually make Vatican City State a modern State, with multilateral relations and an internationally recognized financial capacity. This is the only path to make the Holy See independent from any external influence. The question is: who is not comfortable with the Holy See sovereignty?

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 sword of Damocles of the Past

More than an axe, it is a sword of Damocles, made up of a past that hangs above Benedict XVI, but does not refer to Joseph Ratzinger. When he was prefect of the Congregation for the Doctrine of the Faith, Joseph Ratzinger used to work in the same way he worked as a theologian: he did not want to raise up a school, he preferred to build a team; he did not oppose to any one, he preferred harmonically match ideas of different kind; he did not acted a short-sighted protectionism of pre-judicial positions, he preferred looking at innovative foods for thought. This attitude had been the same of his Papacy. With a starting point: the search for truth. Benedict XVI dedicated the first of his Messages for the World Day of Peace to the truth. The theme was: «In truth, Peace». It is important to notice that the Message for the World Day of Peace has a very strong diplomatic impact: it is delivered to the Chancellors of all over the world, and it is the trace on which the Secretariat of State develop the traditional Papal new year speech to the ambassadors accredited to the Holy See.

Yet, only after seven years, this Papacy’s address seems to be in some ways understood. Before, medias provided just a distorted image of Benedict XVI. Then, medias began to put the Pope up everything, as if he was an ascetical, evanescent and out of the current business of the Church leader. But Benedict XVI, little by little, shaped the face of his Curia. His men trained in the Holy Office he leaded, applying the canon law and being kind with people and understanding to ideas. This Curia knows Ratzinger’s modus operandi, that is determined and accommodating at the same time. This Curia now can prepare for the final act of this quiet revolution: the Year of Faith.

«Scoops» against the Pope?

Right when the year of Faith is up to come, informing papers are delivered behind the curtain of the Roman Curia and are leaked to the press. The last «scoop» would be about a plot to kill the Pope. It is a note written in rough German – probably by a non German speaking person – , that Cardinal Darìo Castrillòn Hoyos brought to Vatican Secretariat of State. The note was a summary of a report of non well précised Chinese officials. These latter were reporting what they learned by cardinal Paolo Romeo, archbishop of Palermo that went mysteriously (maybe to encourage Chinese business in Sicily) to China the last November. Romeo would say that the Pope was not supposed to live more than 12 months. The newspapers made headlines news of the plot. «It seems to me something that is so far from reality that I don’t even want to address it», Father Federico Lombardi, s.j. director of the Holy See Press Office said.  Evidently, somebody has all the interest that these news, this «nonsense» were headlines.

Before,  The letters that msgr. Carlo Maria Viganò – former General Secretary of the Governatorate of Vatican City State – addressed to Pope Benedict XVI and to card. Bertone, Vatican secretary of State, to denounce the «corruption » in procurements of Vatican City State administration had been profusely highlighted by the Medias. According to the press, Viganò had been appointed as Papal nuncio to the United State because of this letter.

Then, an internal memo of the Authority of Financial Information – the Vatican body that  controls all Vatican finances – had been leaked to the press. The memo was part of an inside debate if the new Vatican legislation was to be considered a retroactive legislation, and if it was to be applied in the so-called IOR case (that is the seizure – ordered by Italian magistrates – of 23 million euro transferred by the IOR). Can this memo be considered a proof that the Holy See does not want to cooperate with Italian Magistrates? Actually, the reform itself of the Vatican Law n.127 (the anti-money laundering law) shows that Holy See is going to accomplish the international standards, yet not denaturalizing the nature of Vatican finances (in the Vatican there are no market and no banks).

Some days later, Luca Tescaroli – the Rome prosecutor who has pursued a 30-year-old case concerning the worst scandal at the IOR: the death of Roberto Calvi, the Catholic banker who helped managed the Vatican’s investments and was found hanging from London’s Blackfriars Bridge in 1982  – has recently revived judicial requests to the Vatican for information about IOR/Ambrosiano scandal. He complained that no information has been provided by the Holy See. But these international requests never got to the office of the Protocol of the Secretariat of State, nor they had ever passed through the Italian Embassy to the Holy See. His requests did not probably fulfill all the requirements of an international submission by a foreign prosecutor, the same requirements needed for all States.

Is Bertone under attack?

While speaking about these cases, Vatican had been treated by Italian medias as any multinational company whose seat is in Italy, while prelates had been always depicted as sharks money-makers. «We defend the Pope, not Bertone», was the slogan within newspapers offices. Bertone was in fact the executor of Benedict XVI’s will. In a meeting with the heads of Vatican offices, he asked for more cohesion and stigmatized the «small chatters», that weaken the Church.

In a passage of the last document leaked to the press, one can read that the Pope «barely stands Bertone». It is false. Let’s make a step back in the past. In June 2006, the Pope had to announce that -  after his return to Rome from his trip to Bavaria -  his first act of governance will be the change of the secretary of state, with cardinal Tarcisio Bertone replacing cardinal Angelo Sodano.

Benedict XVI’s initial plans did not include making the announcement as early as he did, with an official statement in June 22, 2006. But the resistance he encountered within the curia convinced him to nip the opposition in the bud. Many in the Curia were discontent. Bertone not only was not a career diplomat – as almost all the secretaries of state have been in recent centuries – but he came from the ranks of the Congregation for the Doctrine of the Faith, of which he was the secretary from 1995 to 2003. He was the number two man, with Joseph Ratzinger as prefect, and now he is again becoming the main collaborator of the new Pope. Even after his election as Pope, Ratzinger has kept him as an adviser and a friend: not a week was gone by that they have not spoken together or seen each other.

Bertone’s appointment as Secretary of State signed a sort of “vindication” for the Holy Office. Called by this name until the 1960’s, the Congregation was referred to within the Vatican as «la Suprema». Its highest official was the Pope himself, and the rest of the curia hinged upon it. But then came Paul VI, and the secretariat of state became the central axis of the curia. With John Paul II, who had little interest in Church governance, the power of the secretariat of state in the Church’s internal and external affairs grew even greater. It is no surprise that in the last change of the papacy, the two head honchos of diplomacy and of the curia – cardinals Sodano and Achille Silvestrini – were the ones most staunchly opposed to the election of Ratzinger, just as they later tried to block the appointment of Bertone.

More than diplomacy, it is important to Benedict XVI that his secretary of state be highly skilled «in pastoral practice and doctrinal understanding». And Bertone, in the Pope’s view, had both of these prerequisites. Ratzinger discovered him in 1988, and since then he has had him work on the most intricate and controversial issues: the schism of the ultra-traditionalist archbishop Marcel Lefebvre, liberation theology, the married men with children who were ordained as priests in communist Czechoslovakia, the third secret of Fatima, the apparitions of Medjugorje, the scandal of pedophile priests in the United States, the marriage of archbishop Emmanuel Milingo to one of the members of the sect of Sun Myung Moon.

One can understand many of Benedict XVI’s choice in Bertone’s appointment. Last but not least, the appointment of Charles J. Brown – a non-diplomat that served in the Congregation for the Doctrine of the Faith – as Papal nuncio in Ireland. The next consistory, in fact – so marked with well-formed experts in Canon Law, as Antonio Maria Vegliò and Francesco Coccopalmerio – is the signal that Benedict XVI want to get back to the solidity of Law, more than entrust on the liquidity of diplomacy. More firmness in Faith, acknolewdge of law and catechism and pastoral care, less diplomacy: these seem to be Benedict XVI’s word orders.

And behind the curtain is…

After Bertone’s appointment, Sodano refused to leave his office as Secretary of State, waiting for the works in his new office to be ended, and so Bertone had to work for about a year in a little office. Sodano is still secretary of State when the Pope goes to Bavaria, in September 2006. There, the Regensburg case on the lecture of the Pope bursted. It seems a Benedict XVI’s owngoal, it is instead the opening of unprecedented path of dialogue with Islam.

There was something else that made Sodano’s remaining in office questionable: his maneuver  to put out of commission the then Pope’s vicar and president of the Italian bishops’ conference, CEI, Camillo Ruini, when this latter turned  75 years old and handed over to the pope the letter of resignation that every bishop is required to write when he turns 75.

In 1991, 1996, and 2001, John Paul II, each time before he made Ruini head of the CEI, asked for the advice of the presidents of the sixteen regions into which the Italian episcopacy is subdivided. But that time – and this was at the end of January 2006 – rather than the pope, the secretariat of state extended the consultation to all of the 226 bishops in office. To each one, the then nuncio in Italy Paolo Romeo sent a letter under the seal of Pontifical Secrecy, asking the recipient to «indicate ‘coram Domino’ and with gracious solicitude the prelate that you would like to suggest».

The letter began by stating that «next March 6 the mandate of the Most Eminent Cardinal Camillo Ruini as president of the CEI will come to a conclusion». And it continued by asserting that «the Holy Father thinks that a change in the office of the presidency is in order».

The letter bore the date of January 26, 2006, and the only one to whom it was not sent was Ruini. But he was immediately made aware of it, and Benedict XVI – who intended to keep Ruini at his post – was also informed. On February 6, 2006 the nuncio who signed the letter, Romeo, was called by Benedict XVI for an audience. The Pope asked him how and why this initiative came about. Romeo left the audience in shambles, but Sodano was the one who was really trembling. On February 9, 2006  Benedict XVI received Ruini together with his then right hand man, the secretary general of the CEI, bishop Giuseppe Betori. They both received the Pope’s reassurances. News of the letter had not yet leaked to the outside.

But a few days later, the news agencies and newspapers were writing about it, attributing the idea for the letter to the pope and to his desire to decide «more collegially» on a replacement for Ruini. And in fact, on the morning of February 14, 2006,  as soon as he saw the complete text of the letter published in two newspapers, Benedict XVI picked up the telephone and ordered that his confirmation of Ruini as president of the CEI be made public immediately.

New stories, old people

Paolo Romeo is also one of the characters of the mordkomplott against the Pope. Behind him, there is still the same cardinal Sodano, that wanted to show his solidarity to the Pope before of the Easter Mass in 2010 – in the spite of clergy abuse storm – attacking the revelations on sex abuses as «petty gossip», and «the chatter of the moment». Yet, it was the same Sodano that for years debarred to make investigations on Marcial Maciel, the founder of Legionaries of Christ, who was found to live a double life, with illegitimate sons and a past of abuses on his seminarists.

A quiet revolution

In the meantime, Benedict XVI went on with his governing project, bringing on his quiet revolution. With time, he changed men in the key posts. It is not sufficient. The strikes does not come from the upper levels, but from the lower ones, clerks within the Secretariat of State that have nothing to lose if they leak some document, and that are still linked to the previous administration. It is a problem that deals with the quality of men. After the fall of the Wall of Berlin, within the Catholic Church, there had been the persuasion that the choice of clerks and official could be made with some more superficiality. Was not the War against the Communism over? An ex clerk of the Secretary of State – who served at the end of card. Agostino Casaroli administration and at the beginning of card. Sodano administration – tells that «suddenly, hiring conditions changed. I had been attentively analyzed, for our psychological quality and our intellectual attitudes. The new clerks hired in Secretariat of State did not seem to have any of these requisites, but a certain good will».

A weakened Curia

Step by step, the machine of the Curia is weakened from the inside. The new pieces of this machine are fascinated by privileges and at the same time they are unconscious of prestige and importance of their role. It is a machine with defective pieces, where an attack against the universal Church and its sovereignty can be easy stroke.

Right after the fall of the Wall of Berlin, the medias spoke only positively about John Paul II. On the other hand, they depict the Curia as rotten, as something that needs to be changed. So rotten that it would be better the Pope to pray, and for the Church not to involve too much in the current affairs of the world. Is it part of the strategy to undermine Holy See diplomacy? Pressures are made against the moral authority of prelates, and at the same time lay government confer upon Churchmen and Churh communities some financial privilege – e.g. tax cuts or financial aids. These tax cuts and financial aids are sometimes legitimated by the law (they are the same acknowledged to other companies and associations), but they are conferred with such a dim procedure that it is easy to create a misgiving climate. The “hottest” case are set aside, in order to use them at the most proper moment.

Market rules

In the mean time, European Union is formed, and market is always more allowed to dominate policy. At the beginning, Vatican machine is not even aware of the new challenge: it is still appeased on precedent positions.  Casaroli’s ostpolitik is considered good in every contingency, from the dialogue with Islam to Chinese situation. The Church is diplomatically weakened – even if still able to fight good fights, e.g. in U.N. Conferences in Beijing and Cairo. Benedict XVI took over this weakened Church. He wants – he has – to repair. He begins changing some piece of the machine. Giovanni Lajolo is appointed as Vatican foreign minister, and his growing agreement with the vision of Benedict XVI was made evident by the sequence of his actions and addresses as the Holy See’s foreign minister, which display a progressive distancing from the «realist» politics treasured by secretary of state Angelo Sodano. Benedict XVI wait the right time. In 2009, msgr. Gabriele Caccia and msgr. Pietro Parolin, number 3 and 4 of Vatican Secretary of State under Sodano’s administration and the under Bertone’s one, are promoted as Papal nuncios. For the first time, the “upper level” of the Secretariat of State has been appointed under Bertone’s administration. The Papal homily at the episcopal ordination of Parolin, Caccia and three other bishops is meaningful. The Pope said: «We do not bind people to us; we do not seek power, prestige or esteem for ourselves. We lead men and women toward Jesus Christ, hence toward the living God. In so doing, we introduce them into truth and into freedom, which derives from truth. Fidelity is altruism and, in this very way, liberating for the minister himself and for all who are entrusted to him. We know how in civil society and often also in the Church things suffer because many people on whom responsibility has been conferred work for themselves rather than for the community, for the common good».

These are the first signals of the fact that the Church changed its attitude, and gets back – modernly – to the origins. The world map goes on changing. States hand over sovereignty to markets, and there is an economic crisis in 2008. In 2009, European Union communicates that the Monetary Agreements with the Vatican is to be reviewed, if Vatican wants to remain hooked to the European Monetary. But Eu commissioners show their hostility, and the Convention will be signed by the European Commissioner Joaquin Almunia and by the Papal Nuncio to the European Union André Dupuy in separate rooms. To face the global crisis, Benedict XVI delivers a social encyclical, the Caritas in Veritate: handed by several people – many do not even agree with the Church -, the encyclical keeps its prophetical message. This prophecy is rooted in the request for more democracy and for an authority with universal competences, whose members are chosen democratically and whose goals is the common good, by regulating the market (thus facing the new Leviathan: international finance) and letting the State develop in a just way. The encyclical is destructured, not understood, un-focused. It is 2009.

The annus horribilis

In the mean time, international scenario changes again. A new global crisis is up to come, and men of Trilateral Commission works for having less democracy – as a paper by Zbigniew Brzezinsky, former U.S. National Security Advisor, states. Holy See has a different idea: at the international tables, Holy See asks more multilateralism, and – on economical scenario – it auspicates a new Bretton Woods, whose winner would be this time John Maynard Keynes ideas.

And here comes the 2010, the annus horribilis. Pedophilia scandals swept all the world, clergy abuse are brought into life, while they had always been hidden. Things are slightly different, and medias do not speak unambiguously, aiming to attack the Pope. It is the same strategy experimented by Adolf Hitler. Together with moral attacks, Hitler obliged the faithful of each religion to pay Kirchensteuer, a tax on religion. It is the reason why religions in German countries became rich and powerful, even if overlooking its focus, as Benedict XVI underlined during his last trip in Germany.

While the Year of Faith is being prepared, bankers took over in Europe. Italian Prime Minister is Mario Monti, Greek Prime Minister is Nicolas Papademos. They both come from Goldman Sachs and Trilateral commission; they both have been appointed, not elected. They must guide Europe to be always more market-oriented. Mario Monti – who claims himself Catholic – give a signal when he went to visit the Pope: one of the Italian Prime Minister’s presents was a book – Il governo dell’Economia e della Moneta – that he wrote in 1992, and this book was one of the pillars of the Maastricht treaty.

Jesus is the key

Attacks to the Church come from the outside, and they are favorite from the inside by incapable officials. Now, these attacks are going to strike the Pope. The tailor-made suite for the Pope is similar to the one tailored on John Paul I: a poor man alone, closed in an ivory tower, taking care of paintings in his apartments and of his clothes – both liturgical and non liturgical. He would make a revolution, but he cannot. Facts says that revolution has come. It was a revolution of faith and thought. A revolution whose symbol is Jesus of Nazaret, to whom Benedict XVI – not casually – already dedicated two books.

There was not just law “n. 127 question”. In the last meeting with heads of Vatican departments (Prefectures and Pontifical Councils), Bertone asked more coordination among the several branches of the Vatican curia. He 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 Pope presided the meeting, and he agreed with each word of his Secretary of State. In 2009 – in his letter to the bishops of Catholic Church concerning the remission of the excommunication of the four bishops consecrated by Archbishop Lefevbre – the Pope quoted this paragraph from Galatians 5:13-15: «Do not use your freedom as an opportunity for the flesh, but through love be servants of one another. For the whole law is fulfilled in one word: ‘You shall love your neighbour as yourself’. But if you bite and devour one another, take heed that you are not consumed by one another».

There has been some «bite and devour» against Bertone, too. Since he has been appointed as Secretary of State, the attacks against him had been continuous. Before Bertone turned 75, several influential cardinals had asked Pope Benedict to make a change in Secretariat of State, because of problems with curial government and the lack of coordination that had taken place. Now that he turned 77, many observers spread the voice that there should be a change of leadership in the control room of the Roman Curia.

Benedict XVI and Bertone are following the same footsteps. Step by step, they are changing the Vatican approach. Not casually, Benedict XVI wanted an expert of Canon Law as Secretary of State, and not a diplomat. This choice was not well taken by diplomats and his protégés, that increased their influence under the former Secretary of State, cardinal Angelo Sodano. But it is part of a long-sighted project of Benedict XVI. The Secretary of State must not necessarily come from the diplomatic service. His function is to «provide close assistance to the Supreme Pontiff in the exercise of his supreme office», and  this close assistance does not deal just with diplomatic relationships. For example – according to Pastor Bonus pastoral constitution – the Secretariat of State must «draw up and dispatch apostolic constitutions, decretal letters, apostolic letters, epistles, and other documents entrusted to it by the Supreme Pontiff».

An expert of Canon law –  and Bertone is – could better coordinate the drawing of documents. The Pope himself – in the 2010 letter to the Catholics of Ireland – wrote that  «the program of renewal proposed by the Second Vatican Council was sometimes misinterpreted and indeed, in the light of the profound social changes that were taking place, it was far from easy to know how best to implement it. In particular, there was a well-intentioned but misguided tendency to avoid penal approaches to canonically irregular situations». Turning back to the solidity of law, to remember Christian roots and to turn back to God. This seems to be the Benedict XVI’s plan for the universal Church, as the next Consistory would show.

So, attacking Bertone means attacking Benedict XVI. Was that a case, some insider questions, that the strongest attacks against Bertone leadership – the Viganò’s scandal and the consistory itself – came right when the Holy See was strengthening is international impact?  Who wants to undermine Holy See international impact? In fact, in those days Holy See rewrote its 2010 anti-money laundering law, the Vatican law n. 127. It is important to see what the new law really is about, going beyond the possible «bite and devour strategy». It was maybe to prevent that strategy that Holy See made no major announcement of the revision, while the Vatican’s foreign minister, Archbishop Dominique Mamberti, referred obliquely to it in an article Friday in the Vatican newspaper L’Osservatore Romano. This is probably also the reason why the law come into effect with an urgent decree, to be ratified by the Pontifical Commission of Vatican City State within 90 days.

The first point of the new Vatican law n. 127 is about financial transparency; the law acknowledges the right to privacy, and at the same time shed the obscurantist myth of Vatican secrecy. In fact, the Vatican law n. 127 aims to protect the right to privacy acknowledged in all the civil countries – the right to privacy is even mentioned in Gaudium et Spes, one of the Constitutions of the Second Vatican Council  – and at the same time it aims to favor the international exchange of financial information.

Why did the Vatican modify the law just one year after its introduction? In fact, the law n. 127 had been written in haste because of several reasons. One of this reasons was the need to solve the «IOR case», that is the seizure – ordered by Italian magistrates – of 23 million euro transferred by the IOR from an account it owned to the Credito Artigiano toward Jp Morgan (20 million) and Banca del Fucino (3 million). Another reason was the need to bring into effect the Monetary Convention with European Union signed in 2009.

It was not downhill to the Monetary Convention. Since February 2009, Vatican and European Commission advisors (Italy was part of the table as observer) start up the job to define the new monetary agreement. European Union conditions immediately seemed too restrictive. The relationship between Holy See and European Union were fraught. Vatican had the will to keep its autonomy, and Mons. Carlo Maria Viganò, then secretary of the Governatory of the State of Vatican City, even proposed to unhook Holy See from the Euro area, in order to let the Holy See avoid to be subjected to too restrictive conditions. Someone also proposed not to close the agreement within the year 2009, and to postpone the closure of the agreement to 2010. But time is short, and hierarchies of the Holy See did not take in consideration both of the hypothesis. The monetary agreement was finally signed on December, 17th 2009. Joaquin Almunia, Europen commissioner for Economical and Monetary Affairs, and mons. André Dupuy, Apostolic Nuncio to the European Union should sign together. But Almunia refuses to sign the agreement in the same room with the pontifical representant, and so Dupuy and Almunia sign the agreement each one in their own office.

Even inside the Vatican, things went on quickly. The Vatican Law n. 127 is adopted and it is decided to extend the effects of the new regulations to the Holy See via a motu proprio by Benedict XVI. The Motu Proprio is released the 30th of December 2010, right in time not to let the agreement lapse. According to some Vatican insiders, the institution of the Authority for Financial Information would mean that the same Ettore Gotti Tedeschi, president of the Commission of Vigilance of the I.O.R., is not given a blank cheque by the Pope, since the I.O.R. itself is subjected to monitoring. This is even truer for what concerns the new law: Jeffrey Lena, the Vatican’s U.S. attorney, noted for example that the new law allows for the IOR itself to be sanctioned up to €2 million if it violates the law — and it also allows for the IOR to have recourse to the Vatican’s court system to appeal.

Modifications of the law – promoted by the Vatican Secretariat of State and the Pontifical Commission of Vatican City State – seem to mean that the new law is not merely «a slap on the face» for some contingent problem. Holy See is going to meet the international standards, and it does not seem to be an occasional concurrency that the same day the implementation of law n. 127 came into effect with an urgent regulations, Holy See announced the ratification of three international agreements. 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 was January, 25th. During those days, medias highlighted Vigano’s scandal, depicting it in the terms that Vatican could be considered a multinational company whose seat is in Italy. Some days later, a confidential memo on IOR-Aif (Authority for Financial Information) relationships had been leaked to the press. This memo was equivocally a blight on the Vatican transparency toward Italian authorities.

Anyway, the IOR case emphasized almost an excess of diligence by Ettore Gotti Tedeschi, president of the Supervisory Commission of the IOR. Gotti Tedeschi agreed to be questioned by the Italian magistrates, even if these latters did not submit the request internationally. Many Vatican insiders considered the Gotti Tedeschi’s one a «questionable decision». It is because this decision seems to be a renounce to the immunity by Gotti Tedeschi, and this renounce to immunity could be eventually extended to the body of State he presides.

It is important to say that it is not only an Italian-Vatican matter. The improval of the Vatican law n. 127 bodes to a long-sighted choice. In fact, Jeffrey Owens, head of tax issues at the Organization for Economic Cooperation and Development which maintains the «white list» of the virtuous State in countering money laundering, said to Associated Press that the Vatican is heading in the right direction with the revised norms. «What I see in these developments – Owens said – is that the Vatican has recognized that in today’s financial environment there is a premium on transparency and that to achieve this, this must conform to the highest international standards, whether in the area of money laundering, tax evasion or bribery».

If the «old» law n. 127 had been written in haste, the «new» law shows that Holy See means business on contrasting money laundering. After just one year, Holy See changes his law as requested by  MONEYVAL Adivsors, come for an on-site visit in the Vatican the last November. The advisors noted inadequacies in the Vatican legislation. According to MONEYVAL official communiqué,  «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». Of these inadequacies, the Holy See was aware. The common references are the 40+9 GAFI recommendations – references that every country should follow.

There are substantial news. For example, the “old” law n. 127 gave the power to supervise and contrast the  money laundering to one only authority, the Authority for Financial Information – established via Motu Proprio by Benedict XVI in 2010. The “new” law fairly share the power among other authorities, that are the Vatican Secretariat of State, the Pontifical Commission of the Governatorate of Vatican City State, the Authority for Financial Information, and also the Vatican Gendarme Corps. This technicality confirms the long-sighted Vatican policy. Jurisdictions are called – coherently to the principle of rule of law – to involve all their institutions, thus competent authorities must follow the same rigour and transparency policy in order to prevent and countering money laundering and financing terrorism.

It is interesting to see that Holy See met the challenge to adequate to International standards without denaturalizing their institutions. In Vatican City State, in fact, there is no market and there are no banks. According to the Italian Supreme Court, IOR is «a central body of the Church», that is a governmental body that does not aim to distribute assets.

One example of the effort of the Holy See is 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 neutral and in favor of peace. Since Holy See is 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 create its own list of terror organizations 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.

Some superficial observer would think that Holy See is not working seriously. It is not true. Holy See is working seriously, and not to respond to internal problems, or to answer to European or Italian claims. More probably, Holy See wants to give its contribution to achieve strategic goals as the countering to money laundering and to international terrorism financing.

On September 6, the I.O.R. ordered Credito Artigiano to make two money transfers from an account of the I.O.R. deposited with the Italian bank: one of 3 million to an account at Banca del Fucino in Rome, and another of 20 million to a JP Morgan account in Frankfurt. Both of the recipients were identified only by their IBAN codes. On September 15, the office of financial information at Bankitalia notified Roman authorities about a possible violation by the IOR of the norms against money laundering. On September 20, the court of Rome ordered the preventive seizure of the entire sum deposited in the account of the IOR, and issued two notices of investigation of the president and director general of the Vatican bank, for omission of procedures against money laundering. The money are frozen, the I.O.R. is in the storm.

One year before, in September 2009, Rome Public Prosecutor investigated on money transfer o fan I.O.R. account deposited with a branch of Unicredit Bank based in via della Conciliazione, close to Saint Peter Church. The investigation led nowhere, but it was a signal that the “bank of the Vatican”, had more difficulties than in the past to make money transfers.

In fact, the I.O.R. is not a “true” bank, and it deposits accounts with branches of several banks all over the world to make money transfers. There are some privileged relationships, e.g. the ones with the Jp Morgan Bank and Unicredit. Since the last investigation, Unicredit strengthen the regulation, and asked to specify in a fairer way from who and why the money are deposited or moved in the account and to clarify even the bank check movements. Is the proverbial Vatican bank privateness going to collapse?

Many worried about the possible collapse of the Vatican privateness when  Ettore Gotti Tedeschi, president of the I.O.R., together with Roberto Cipriani, general director of the bank, agreed to be questioned by the magistrates of Rome. Their deposition filled 91 pages of transcripts, portions of which were leaked to the press.

It was a level of cooperation unprecedented in the history of the Vatican bank. In 1993, when he was called for questioning by the magistrature of Milan, Angelo Caloia, at the time  president of the I.O.R. , got the magistrates to submit a request internationally, with the request forwarded through diplomatic channels to the Holy See as a foreign state.  At that point, the I.O.R, responded with a written deposition, also forwarded through diplomatic channels. It delivered the proof of malfeasance – concerning Enimont “payoffs” of about 45 million euros – and received general approval in the press for having cooperated with the legal system. But his spontaneous deposition, Gotti Tedeschi did not succeed his goal, since the magistrates did not deem satisfactory the clarifications given, and responded “no” to the request to release the confiscated 23 million euros.

The goal had been reached with the the law no. 127 of the Vatican State, that adopts four new laws in implementation of the monetary convention – among the ones the Law concerning the prevention and countering of money laundering and of the financing of terrorism – and that regulates the competences of the Authority for Financial Information.

The president of the Authority for Financial information is the Cardinal Attilio Nicora, who also remains president of the Administration of the Patrimony of the Apostolic See. Among the members of the board, there are Marcello Condemi and Giuseppe Dalla Torre. Condemi was the deus ex machina of the new Vatican legislation against money laundering, while Dalla Torre represents the “Vatican” branch inside the Authority, since he is also president of the Court of the Vatican State. The members of the board have the job to give an international warranty to the transparency of the Ior operation, by storing all the money transfer of the I.O.R. in an archive, in order to be able to control each money transfer operation in the bank. Right after the 23 million euro had been confiscated, the I.O.R. – whose accounts are attributed by codes, and not by names – asked his current account holder to fill a detailed schedule to bank more than 10,000 euros. This request has been formalized by the law no. 127. There are problems to apply this law, indeed. If a I.O.R. account holder  directs with an overnight bag to the Torrione Niccolò V – where the bank is based – the Vatican guards would eventually ask him if there is something to declare. But if this account holder declares that he is waited from a cardinal, and that he is bringing to him that overnight bag, no one would stop him at the customs house. Who can be sure that the cardinal who received the overnight bag goes afterward to the I.O.R. to bank the money?

These kind of problems has still not been solved. But the only presence of the law satisfied Italian magistrates, who revoked the seize of 23 million euros. The Holy See made an official statement, underlining its satisfaction, but Ettori Gotti Tedeschi did not. In fact, the new law his not part of the job of his administration, but it is a step a in process toward the I.O.R. transparency whose origins dates before Ettori Gotti Tedeschi presidency, and drove by the A.P.S.A.

Yet, in the past months, trying to un-seize the 23 million, Gotti Tedeschi spoke several times about the “23 million issue”, claiming that the Vatican bank glasnost began under his administration. And a “deep throat” told to Corriere della Sera, the main Italian news daily, that «in ten months, more has been done than in twenty years, there are decades of habits to be changed»: this statement has given flesh and bones to the black legend according to which the legal troubles of the current president of the IOR, Gotti Tedeschi, in office since September 23, 2009, can be attributed to the mismanagement of his predecessor Angelo Caloia, in office during the previous twenty years. Gotti Tedeschi insists that he never said or thought this, while Caloia has demanded that the Vatican secretariat of state make public reparation for the affront, or – at least – to have the opportunity to write an article for the Osservatore Romano.

On march, 12, 2011, Caloia would eventually ended the fouth five year-term as president of the Bank of the Vatican. It was replaced by Ettore Gotti Tedeschi in 2009, but he had already been victim of manoeuvres to be sostituted. In 1999, Hans Tietmeyer, former president of Deutsche Bank, was backed as new president of the I.O.R. from the “old guard” of Vatican Curia. At a conference given by Tietmeyer at the Pontifical Academy of Sciences, Caloia stood up to criticize his ultraliberal theses. The Holy See did agree with Angelo Caloia.

And Holy See still agrees, if one reads the Benedict XVI’s encyclical Caritas in Veritate. But, on the other hand, the new president of the I.O.R. is a staunch proponent of a capitalism inspired by Christianity. Gotti Tedeschi is so ultraliberal to have signed, in 2007, a manifesto in 13 points, spearheaded by the former secretary of the highly secularist radical party, Daniele Capezzone. The manifesto proposed a single 20 percent “flat tax,” presidential government according to the American or French model, tax credits for health care and education, the requirement that the public administrator pay for all damages incurred, the changing of the retirement age to 65, tax exemption for overtime work, the abolition of professional associations and of the legal status of study certificates. When the Caritas in Veritate sketches were ready, Gotti Tedeschi – who was still not president of the I.O.R. – were writing articles on the Osservatore Romano about the creation of “a new economic bubble” to save the economy, and about the need to found a good bank to finance the developing countries – this latter proposal backed from the then British Prime Minister Gordon Brown. Then, Gotti Tedeschi gave his contribution in writing Caritas in Veritate, and now he brings out in several conferences the parts of the encyclical he agrees with, which are the parts considered more in continuity with the John Paul II encyclical Centesimus Annus. Centesimus Annus has never been seriously accepted by the hierarchy or by Catholics as a whole. It has been judged as too friendly toward the capitalist system.  Gotti Tedeschi, on the other hand, considers Centesimus Annus so important to launch the proposal to candidate John Paul II to the Nobel Prize for Economy.

What is the position of the Church? It is sufficient reading a Joseph Ratzinger conference of 1985, when he wrote that «the well-known remark made by Theodore Roosevelt in 1912: “I believe that the assimilation of the Latin-American countries to the United States will be long and difficult as long as these countries remain Catholic.” Along the same lines, in a lecture in Rome in 1969, Rockefeller recommended replacing the Catholics there with other Christians  — an undertaking which, as is well known, is in full swing. In both these remarks, religion — here a Christian denomination — is presupposed as a socio-political, and hence as an economic-political factor, which is fundamental for the development of political structures and economic possibilities».

Ratzinger quoted these theories to criticize them, and this is still is position. Religion is part of integral human development, that  passes through economy, but – firstly – from the human integrity. A “good bank” would not be sufficient. And the I.O.R. does not become a good bank filled with ethics just by changing the legislation. I.O.R. is going to became a “true” international bank. But its privateness criteria will eventually be similar to the Switzerland ones.