tdf | Pope Benedict’s resignation shocked the Catholic Church and left the
Vatican in disarray. His successor will face many challenges, from recurrent sexual scandals to concerns about financial impropriety at the Vatican’s own bank, the IOR or Institute of Religious Works.
In
2011, Al Jazeera investigated allegations that the IOR had been
involved in money laundering and examined Pope Benedict’s plans for
cleaning up the secretive system. With many of those reforms having
fallen short and the Vatican’s finances still under a cloud, the next Pope might benefit from watching this report once again.
Every
Sunday worshipers crowd the Saint Peter’s colonnades in square and from
its balcony the Pope imparts a sacrament and the latest behavioral
guidelines. Over one billion Catholics look to the pontiff for guidance
and donate their money to the Catholic Church. A large portion of this
money makes its way to the Vatican and into the vaults of the IOR, the
Institute for Religious Works, the Vatican’s Bank.
The IOR is the
vehicle through which thousands of charitable and religious initiatives
around the globe are financed. In the recent past, Italian state
prosecutors placed the bank under investigation for suspected money
laundering. Twenty three million Euros in Vatican funds were seized
representing only a fraction of suspect transactions now being
scrutinized. IOR president, Ettore Gotti Tedeschi, was also placed under
investigation and a huge financial scandal now threatens to envelop the
church. For many Catholics, it has the disturbing echoes of another
scandal of 30 years ago, the infamous “Banco Ambrosiano affair” and some
now fear that history may be repeating itself.
President Ettore Gotti Tedeschi was questioned
in order to clarify the situation, but after the questioning the
prosecution thought that they had not received satisfactory answers. It
is surprising that even the president of the IOR could not find a way to
clarify the circumstances.
The Institute for Religious Works is
located behind the walls of the Vatican City state and inside the
massive tower build by Niccolo V. The bank was founded in 1942 by Pope
Pius XII with the purpose of safe keeping the Vatican’s vast assets in
capital and real estate. The IOR doesn’t allow everyone to open
accounts. There are specific regulations allowing only religious
organizations or members of clergy to do so.
The IOR is
administered by industry professionals under the supervision of the
Council of Cardinals, but because the IOR has only one central branch
inside the Vatican, it has to use other banks outside the city state to
move its funds around. However, the names of its accounts holders are
kept secret and transactions bare no other identification than that of
the IOR. This means the origins of any deposit coming into an IOR
account are wiped from the record before the funds are moved out to the
international banking system and that, say critics, makes money
laundering all too easy.
Generally, the profits that the IOR makes
during a year’s worth of financial operations and from the deposits
made, are given to the Pope for charitable works that are carried out
worldwide. The amount corresponds roughly to 70 or 80 million Euros
every year.
Inevitably, this huge flow of cash, much of it
untraceable, has attracted the attention of investigators. The latest
probe began in the hills around Rome in late 2008 when Father Evaldo
Biasini, treasurer of the Congregation of the Missionaries of the
precious blood, answered his mobile phone.
