Pope moves to tighten controls at Vatican Bank

In yet another indication of his desire to clean up the administration of the Holy See, Pope Francis yesterday issued a “motu proprio” strengthening the monitoring of all Vatican entities habitually engaged in financial activities, including the Vatican Bank IOR. A “motu proprio” is basically a papal decree which takes immediate effect and, as such, it provides a clear indication of how the pope views any specific issue.

To some extent, the new decree represents part of the Holy See’s attempts to prevent its bank – or “Financial Institution” as the Vatican terms it – being used for money laundering or the financing of terrorism. In this, the Vatican is trying to comply with the recommendations last year of the European Council’s anti-money laundering “Moneyval” committee.

In a remarkable press conference on the aircraft on the way back to Rome from the World Youth Day celebrations in Brazil last week, Francis had been candid about his concerns for the future of IOR (Institute for Religious Works). He admitted that consideration was being given to either changing its status or even to closing it down altogether.

The alleged mis-management of IOR was one of the most hotly debated items at the cardinals’ meetings which preceded the March conclave at which Francis was elected Pope.

In June, Vatican employee Monsignor Nunzio Scarano was arrested on charges that, along with a former secret services agent and a shady financial dealer, he had attempted to illegally "import" €20 million into Italy, using his IOR accounts. That was just the latest in a line of IOR scandals which go all the way back to IOR's involvement in the infamous Banco Ambrosiano scandal in the early 1980s which ended with the violent death of "God's Banker", Roberto Calvi, found hanging under Blackfriar's Bridge in London in June 1982.

'Prudential supervision'
Explaining the decree yesterday, Vatican spokesman Fr Federico Lombardi said that the main thrust of this decree was to reinforce and extend the powers of AIF, the Vatican's Financial Information Authority, set up in January 2011 by Pope Benedict. In other words, AIF has been called on to exercise ever greater "prudential supervision" over all Vatican entities habitually engaged in financial activities.

Vatican observers report that, in the past, the monitoring role of AIF has prompted bitter disagreement between its head, Cardinal Attilio Nicora, and the current secretary of state, Cardinal Tarcisio Bertone, who wanted to restrict its powers of investigation.