The Vatican Bank – A Cause for Concern

The papacy of the Jesuit Jorge Bergoglio may be off to an auspicious start as far as his personal stamp on the role is concerned. The reception he has received has been extraordinary, due no doubt in part to the perceived austerity of his predecessor, the ailing Joseph Ratzinger.

Whether things will be as positive inside the Vatican walls is another thing.

Pope Francis has dared to go into two areas that have meant trouble for earlier Popes. He has created a Commission of eight cardinals to examine the operations of the Roman Curia – the government of the Church – and advise him on reform. There are in excess of 40 congregations, commissions and councils making up the Curia. They deal with everything from dogma to the observatory.

The Curia seems to be a collection of powerful fiefdoms run by untouchable cardinal warlords. They are virtually unknown to the world but their influence over the Church is immeasurable. Efforts to challenge and reform these power centres has proved difficult, if not impossible. Previous popes have settled into a pattern of living with them rather than taking them on.

St Peter's Square, Vatican City

St Peter’s Square, Vatican City


Then there is the Institute for the Works of Religion – commonly known as the Vatican Bank. It was established in 1942 by Pius XII to administer funds used for religious purposes. It stands separate from the Curia structure, administering in excess of $US10 billion. It holds accounts for dioceses, religious and charitable organisations, priests and Vatican employees. It is not a bank in the sense that it does not make loans.

The Bank has been a running sore within the structure of the Church for decades but more so since 1982 when, under the management of the notorious Archbishop Marcincus, it became the largest shareholder in Milan’s Banco Ambrosiano. The $US4.7 billion Ambrosiano collapse was followed by the hanging of the bank’s boss, Roberto Calvi, under a bridge in London and continuing allegations of impropriety and mafia involvement. Despite much investigative activity no one has ever been charged.

In recent times concerns have centred on the involvement of the Bank in money laundering and in the possible financing of terrorists. Europe has been trying to bring the Vatican Bank under its Moneyval transparency rules but, despite assurances of co-operation, the results have yet to be seen. Accounts are not published although it is said this will happen.

Recent Suspect Transactions

Matters came to a recent head in 2010 when European authorities seized a suspect €23m being transferred to an undisclosed recipient in Germany. This was followed by the sacking of the head of the Bank, Ettore Tedeschi. Ratzinger then created the Financial Information Authority to supervise Vatican financial transactions, promote transparency and oversee anti money laundering.

Soon after his appointment, Bergoglio seemed intent on getting to the bottom of the operations of the Vatican Bank and last week appointed a Commission of five, including a Harvard law professor, to report on its activities.

Arrested Bishop

Hardly was the ink dry on the new Commissions charter than the crisis deepened. Monsignor Scarano – a Vatican accounting chief – was arrested for allegedly smuggling millions from Switzerland to Naples by private jet. Nothing could have been designed to embarrass the Pope more.

Days later, just when things could not have got any worse, the head of the Vatican Bank, Paolo Cipriani and his deputy, Massimo Tulli, resigned claiming length of service and the best interests of the Vatican as reasons.

There is obviously a lot to emerge from the Torre San Niccolo, the office of the Vatican Bank, inside the walls of the papal city. Perhaps Jorge Bergoglio is being reminded of his predecessor John Paul I, whose pontificate lasted all of 33 days. His death is shrouded in mystery but it seems clear he was a pope with a reform agenda. Sadly, John Paul II decided to shelve his initiatives.

By Ex-Australian Politician Stephen Lusher

Stephen Lusher

Stephen Lusher

Stephen Lusher served five terms in the Australian Federal Parliament. He worked around the fringes of politics before setting up Lush on Bondi, a trendy bar on Sydney’s Bondi Beach.

Frequent trips to Italy led to an inevitable love affair with Tuscany. He and his wife Cathy sold up in Sydney and purchased Il Mulinaccio in 2008.

Within two months of moving to the Chianti Hills he was diagnosed with throat cancer. The experience led to him re-focusing his life and priorities. After a few uncomfortable years he thinks he has it beaten.

Stephen’s interests include wine, food, history, culture and travel.

He struggles with the Italian language and indulges himself in some occasional writing.

Photo by DAVID ILIFF. License: CC-BY-SA 3.0

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