At the Vatican bank – money, mystery and monsignors

June 12, 2012

(President of the Vatican bank IOR Ettore Gotti Tedeschi speaks during the presentation of his new book "The Economic Reasons" in downtown Rome February 22, 2012. REUTERS/Alessandro Bianchi )

For a financial institution whose ATMs offer Latin as a language option, whose offices are below the pope’s windows and where tellers work under the gaze of crucifixes, one might assume the Vatican bank would have a dispensation from earthly travails.

But new judicial woes and internal upheavals at the bank, officially known as the Institute for Works of Religion (IOR), have raised new hurdles for the Vatican, just as it entered the final stretch of years of efforts to join the international club of financial righteousness.

On May 24, in the type of corporate drama rarely seen in the Vatican, Ettore Gotti Tedeschi, 67, the Italian president of the IOR, stormed out of the bank’s executive offices.

He had spoken for 70 minutes non-stop in the boardroom to defend his management but left in a huff when it became clear that the other four board members were intent on approving a no-confidence motion against him.

Gotti Tedeschi, a conservative Catholic who heads the Italian retail unit of Spain’s Banco Santander, went to his car in the Sixtus V Courtyard and left the Vatican via the nearby Saint Ann’s Gate, receiving a customary crisp salute by a Swiss Guard oblivious to the drama that had just unfolded.

“During the deliberations, at 4:00 p.m., you abandoned the premises of the Institute without notice and without waiting to receive notice as to the results of the no-confidence vote,” says a memorandum of the meeting seen by Reuters.

A day after the astonishing arrest of the pope’s butler in an affair of purloined documents, and 30 years after a Vatican-linked financier known as “God’s Banker” was found hanged from a bridge in London, the last thing the Holy See needed was more headlines about its bank, housed in the 15th-century Tower of Nicholas V, which Pope Benedict can see from his bedroom window.

For the past two years the Vatican, a 108-acre sovereign city-state surrounded by Rome, has been pulling out all the stops to make the “white list” of states that comply with international standards against tax fraud and money laundering.

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