The last year Ettore Bernabei – one of the major exponents of the world in State bodies, since he has been president of the Rai (the Italian national television) – interpreted the pedophilia scandal as the last attack moved from masonry to Catholicism in Italy. Catholics, he explained, were heading Italy’s economic boom during the Sixties. Catholic ideas were the “engine” of this economic boom. Bernabei – by explaining to «pour Cognac down to children» – outlined a sort of war scenario between Masonry and Catholicism, between lay and Catholic finance (but some call it «Finanza Bianca», white finance). The winner of this war seemed to be the exponents of lay finance. Ettore Gotti Tedeschi – a banker who proclaims himself as a true Catholic and at the same time is a follower of laissez-faire theories – is now the president of the I.O.R., even if one could notice that recently Benedict XVI instituted the Authority for Financial Information to control several Vatican and Holy See bodies, included the I.O.R.; Giulio Tremonti is the Italian Minister of Economy: he was one of the engineers of Otto per mille and he devotes himself to appear faithful of the Church. In the past, he theorized the need of a tax cut, then he wrote a book (La paura e la speranza) to underline – on the contrary – that the person comes before the numbers. Among the great bankers, the last exponent left of the so-called “Finanza Bianca” is Giovanni Bazoli, president of Intesa San Paolo and friend of Romano Prodi, former Italian Prime Minister: Prodi brought Italy into “euro area” and then criticized Fazio for doubting the economic keeping of Italy. While Cesare Geronzi – who had been for years at the top of Bank of Rome and of the Unicredit Bank, with good Vatican relationships reinforced even by sponsoring the World Youth Day in Cologne in 2005 – is now out of the games. Geronzi was one of the first to abandon Antonio Fazio when the former governor was put under investigation. Today, Fazio’s thesis about preservation of the Italian bank system are shared by the people who succeeded him. It is too late.

The reinforcement of Italian banking system was one of the key points of the Fazio’s economic job. He felt the risk that the possible indiscriminate takeover of Italian banks by big international banks would eventually let fall the “architecture” of Italian economy, made up by the little credit institution promoted by don Luigi Sturzo. The system gave birth to several credit institutions: Banche Popolari (Popular banks), Casse di risparmio (mutual savings banks) and Casse Rurali. All of these institutions were attentive to the small companies and anchored to the real economy.

Let’s make some step behind, and see what the financial scenario was before the Fazio’s case. During the spring of 1999, two Public Exchange Offers are launched: the first one is launched by Unicredit Bank to Banca Commerciale Italiana, the second one is launched by San Paolo Imi toward the Bank of Rome. The Bank of Italy do not reject the offers. But nor Unicredit, nor Intesa San Paolo preventively informed Bank of Italy of the offer. According to the regulations – estabilished by the then governor Antonio Fazio together with the Cicr (the government interministerial committee for credit and savings) and become part of the regulations – if one want to control the majority stake of one bank has to inform bank of Italy at least seven days before the board of administration of the bank would eventually meet and launch the offer. Since none of the two banks has followed this rule, the Public Exchange Offers failed. «Fazio uses the supervision as an instrument of power», critics complain.

Then, the Cirio and Parmalat cases are brought to light. Since the manager involved in the cracks are Catholics, a scenario of “Catholic managers” helped and sustained by “Catholic bankers” is easily outlined. Even bank of Italy has to weather the storm, since it is accused that its vigilance failed. The trials will eventually absolve all the banks involved, proving that Bank of Italy correctly carried out its job. But, in the midst of the trials, many newspapers trace back the network of friendships of Calisto Tanzi, the head of Parmalat, and underline that he is very close to Opus Dei and to the circles of Finanza Bianca. Yet, just a few remember that Ettore Gotti Tedeschi was briefly part of the Parmalat Trial: he was who that enlisted Parmalat in the stock exchange, and he seated in the Parmalat board for about one year.

In 2005, Consob – the authority that controls Italian stock exchanges – denounces a hidden pact between the Italian raider of Banca Antonveneta. Both Banca Popolare di Lodi (Bpl) and the Dutch Bank Abn Amro are trying to take the Italian Bank over. Officially, Bpl owns the 30 per cent of the sharings of Banca Antonveneta, but – thanks to hidden friends who bought shares on behalf of Bpl – the bank is effectively controlling the 40 per cent of the sharings. Consob suspects that Fiorani eluded the law on the Public Purchase Offer. According to this law, one who gets to control more than 30 per cent of the sharing of a bank must launch a Public Purchase Offer. Bank of Italy inspectors make an investigation on Banca Popolare di Lodi and their report is extremely negative. They send the report to Claudio Clemente, head of the Oversight Services on Credit Institutions of Bank of Italy, and to Giovanni Castaldi. Clemente and Castaldi give a negative opinion on Banca Popolare di Lodi capability to launch a Public Purchase Offer on Antonveneta. Fazio nominates three expert coming from outside Bank of Italy, and they instead give a positive opinion.

The Public Purchase Offer can now be launched. The authorization to the Ppo is not signed by Francesco Frasca, head of Bank of Italy’s Vigiliance – substituted in the mean time as by internal regulations of Bank of Italy – but by Angelo De Mattia. Recently, De Mattia is again on the spot. He is considered by many a man of Geronzi, but he has been for years Fazio’s spokesman in Bank of Italy. Today, De Mattia is now a prominent commentator of economy. While Giulio Tremonti was preparing to hold his speech to the World Day of Savings by giving ethic lessons to I.O.R. account holders in the Vatican, De Mattia animated a debate on the future of the Foundations of Bank Origin. According to Amato-Carli law, the Foundations of bank origin are public holdings, able to manage the majority stake of a bank, but unable to make any banking activity. It is a subtle border. In 2001, Tremonti moved a sort of war to bank foundations, to bring them under a direct public control, in order to nominate the top of the boards and to manage the patrimony of the banks. Tremonti failed, but he did not fully lose the war. He just turned to less laissez-faire oriented position, in opposition to Antonio Fazio. And that’s ironic, since Fazio had always been cautious about free market and its consequences.

From those consequences, Fazio tried to defend the Italian bank system. It is true, he authorizes  to the Public Purchase offer launch by Giampiero Fiorani, head of Bpl. But he authorizes even the Ppos launched by Abn Amro toward Antonveneta and Bilbao Vizcaya toward Banca Nazionale del Lavoro (later, Bnp Paribas will take over to Vizcaya), even if these latter are considered hostile. He does not back Fiorani’s offer for personal interest. Fiorani, on the other hand, keeps Fazio unaware of the illicit part of his manoeuvrings. Fazio explains it when he is called to testify to the trial. On the other hand, Fiorani testifies that Fazio was aware of everything. This discrepancy of testifies would have brought to the Fazio’s condemnation.

Fazio is compelled to resign, and Abn Amro gets from Milan Public Prosecutor the shares of Bpl. But Abn Amro itself is then raided by other international banks and then dismembered. There is more: the Royal Bank of Scotland, a big international bank involved in the dismembering of Abn Amro, fails because of the toxic credits inherited from Abn Amro. The Dutch Bank is then acquired by Grupo Santander, whose board of Italy has among his members Ettore Gotti Tedeschi. In the end, Banca Antonveneta is purchased by Monte dei Paschi di Siena. The “white” (i.e. Christian oriented) fortress of Padua is at the end in the hands of a “red” (i.e. Commonist oriented) fortress. Is it a cross exchange between Masonic lobbies, from the Dutch Abn Amro to the Italian Monte de Paschi? It is even this. But it is just a superficial explanation of this operation. In a few weeks, Grupo Santander gained from Antonveneta 2.5 billion euro.

Antonveneta finally got back to Italy, while everybody now support the need of having Italian bank and institutions to preserve the banking system of Italy. In the midst of an unprecendeted economic crisis, given from an international financial turbulence, the Italian banking system kept his stability thanks to the action of Bank of Italy ruled by Antonio Fazio, and has not the need of Statal interventions (alike Greece). Paradoxically, Fazio was the only one to pay with an exemplar condemnation. Just notice that Francesco Frasca – former head of Bank of Italy oversight, who worked under Fazio’s guidelines – was fully absolved by the trial in Milan, while Fazio was sentenced to 4 year’ imprisonment. This virdict – just a first appearance one – is food for thoughts. Was just Fazio under attack, or was the vision of a catholic-oriented finance under attack?

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.