The Vatican Bank

Vatican Bank

The Pope’s Swiss Guard in front of the Vatican Bank.

St Peter's Basilica

St. Peter’s Basilica.

So starts off an article about the current woes of the Vatican Bank.  The Roman Catholic Church has been known for it’s greed for centuries;  that was one behind several of Martin Luther’s objections in the 1500s that lead directly to the Reformation.

The first known use of plenary indulgences was in 1095 when Pope Urban II remitted all penance of persons who participated in the crusades and who confessed their sins.  Later, the indulgences were also offered to those who couldn’t go on the Crusades but offered cash contributions to the effort instead.  In the early 1200s, the Church began claiming that it had a “treasury” of indulgences (consisting of the merits of Christ and the saints) that it could dispense in ways that promoted the Church and its mission.  In a decretal issued in 1343, Pope Clement VI declared, “The merits of Christ are a treasure of indulgences.”

Pope Pious XII

Pope Pious XII, founder of the Vatican Bank

This ancient history comes more modern:

Peter’s Pence was revived in 1859 and was linked to appeals for military support. These donations had begun in the seventh or eighth century in England and were a type of tribute collected from the laity for the pope as their monarch. The new Peter’s Pence came from “both clergy and laity, the rich and powerful, including the pretender to the French throne, Emperor Maximilian of Mexico, Austrian archdukes, and Roman princes, as well as the poor.”2 In addition, Catholics from all over the world volunteered to fight in the pope’s army.

Being dependent on the generosity of others did not sit well with the popes and their curia (the bureaucracy running the Vatican) during this period. So when Benito Mussolini’s offer of $1 billion (in 2006 dollars 3) and independent sovereignty for the Vatican City State in return for the Church’s support of his dictatorship was made in 1929, the deal was accepted. Besides, since there were no more European monarchies with power, communism was atheistic and the Vatican abhorred democracy as the form of government through which it had lost its land and as a bad influence on a subservient laity, Catholic officials supported fascism anyway, so much so that every European fascist country, save Germany, was Catholic.

The Church and the pro-Catholic press have always insisted that the money provided by the 1929 Lateran Treaty was reparations for the Papal States, but that makes as much sense as the colonies compensating King George III after winning American independence.

Pope Pius XI hired a layman, financial genius Bernardino Nogara, to handle the windfall. Historian, John Pollard quotes 4 author, J. Gollin, stating that Nogara agreed to take the position on two conditions:
1.    That he not be restricted by religious or doctrinal considerations in his investment-making.
2.    That he be free to invest funds anywhere in the world.

“The papacy was now financially secure. It would never be poor again,” is the oft-quoted statement by Pollard.5 “From June 1929 onwards, the investments of the Vatican, following the strategy of Bernardino Nogara, moved into the financial markets of the world.”6 The Vatican was now also allied with the 1%, men with no allegiance to any nation, cause, or group save themselves.

Bernardinonogara.jpg ‎(228 × 294 pixels, file size: 15 KB, MIME type: image/jpeg) Source. Image taken circa 1912.

And the Vatican proceeded to invest these monies in it’s usual way — completely secretly.

Research in old archives, however, reveals more of the truth. Companies House files disclose that British Grolux Investments inherited its entire property portfolio after a reorganisation in 1999 from two predecessor companies called British Grolux Ltd and Cheylesmore Estates. The shares of those firms were in turn held by a company based at the address of the JP Morgan bank in New York. Ultimate control is recorded as being exercised by a Swiss company, Profima SA.

British wartime records from the National Archives in Kew complete the picture. They confirm Profima SA as the Vatican’s own holding company, accused at the time of “engaging in activities contrary to Allied interests”. Files from officials at Britain’s Ministry of Economic Warfare at the end of the war criticised the pope’s financier, Bernardino Nogara, who controlled the investment of more than £50m cash from the Mussolini windfall.

Nogara’s “shady activities” were detailed in intercepted 1945 cable traffic from the Vatican to a contact in Geneva, according to the British, who discussed whether to blacklist Profima as a result. “Nogara, a Roman lawyer, is the Vatican financial agent and Profima SA in Lausanne is the Swiss holding company for certain Vatican interests.” They believed Nogara was trying to transfer shares of two Vatican-owned French property firms to the Swiss company, to prevent the French government blacklisting them as enemy assets.

In the 1970s and 1980s, there were some bad investments made with Mafia funds:

The IOR or Institute for Religious Works (snickering is allowed) commonly referred to as the Vatican Bank, was reorganized into its current form by Pope Pius XII in 1942. Since almost every mainstream media report about the IOR refers to the Banco Ambrosiano scandal, most are already aware that in the late 1970s and early 80s the IOR had a criminal partnership with the Ambrosiano and that its president, Roberto Calvi, was hanged from Blackfriar’s Bridge in London. Although no one was ever convicted, the Italian government tried several members of the Mafia for Calvi’s murder so the motive is generally understood that out of the 1.3 billion investor dollars which were lost, a lot of that was mob money.

Innocent people also were murdered:
Jan. 29, 1979 – Judge Emilio Alessandrini, Milanese magistrate investigating the Ambrosiano.
Mar. 20, 1979 – Mino Picorelli, journalist who had named Vatican officials involved.
July 1979 – Milanese lawyer Giorgio Ambrosoli investigating Michele Sindona.
Oct 1979 – Rome investigating security agent Lt. Col. Antonio Varisco and his driver.
Apr. 27, 1982 – Roberto Rosone, manager of Banco Ambrosiano, survived being gunned down.
Jun 16, 1982 – Calvi’s secretary, Graziella Corrocher, “suicided” from a 4th floor window.
Oct. 2, 1982 – Giuseppe Dellachia, Ambrosiano bank executive also “suicided” from upper story window.

This same article continues:

In the 2002 RICO suit filed by five state insurance commissioners against the Holy See for money laundering,   statements showed two lawyers, three priests, two monsignors, one bishop, one archbishop and four cardinals – in fact every single Vatican employee or person with close ties to the Vatican approached by Frankel [Martin Frankel wanted to launder money he had defrauded from American insurance companies through the IOR]or his agents – were willing to launder a convicted swindler’s money without hesitation or moral reservation.


Ettore Gotti Tedeschi, an Italian economist, banker and member of Opus Dei, was appointed in April 2009 as president of the IOR “with a mandate to turn the troubled bank around and help ‘facilitate transparency‘ with an eye toward quashing rumors that the bank was a den of iniquity. The Vatican hoped that through Gotti Tedeschi’s guidance, the tiny city-state could finally earn a coveted spot on the global Financial Action Task Force ‘white list’ of states whose financial practices can be trusted.”

Pope Benedict XVI signed a Monetary Agreement with the European Union dated December 17, 2009. Under its provisions, the Vatican is required to implement EU “legal acts and rules” as regards “prevention of money laundering, prevention of fraud and counterfeiting of cash and non-cash means of payment, medals and tokens and statistical reporting requirements” as covered by Directive 2005/60/EC of the European Parliament. The deadline for implementation was December 31, 2010.

Then last year, in May 2012, a book came out that exposed the ongoing fraud, money laundering: “His Holiness” by by Italian journalist Gianluigi Nuzzi.  He used the information from Vatileaks along with information gleaned from other sources to expose the whole hot mess to the world.  Of course, the Vatican denounced it as criminal privacy invasion.

Pope Benedict XVI has already appointed a commission of cardinals to investigate the “Vatileaks” scandal, which erupted earlier this year with the publication of leaked memos alleging corruption and mismanagement in Holy See affairs and internal squabbles over its efforts to comply with international anti-money laundering norms.

I write this in March, 2013, and the Vatican Bank is in serious trouble.  And has been for at least a year.

Cardinal Tarcisio Bertone

The pope’s bankers faced another bitter setback early this year when JPMorgen closed the IOR’s transfer account in Milan. In explaining its decision, the American bank wrote to Rome in mid-February that strict anti-money-laundering regulations no longer permit “additional deposits or withdrawals via account No. 1365.”

Meanwhile, the situation back at IOR headquarters was becoming increasingly unchristian. While Gotti Tedeschi lost support from above, Cardinal Secretary of State Bertone took care to see that Benedict’s decree was watered down. In the new version, it says that monitoring of the Vatican bank is only permissible with the consent of Bertone himself. Cardinal Nicora, the man originally assigned to become the Vatican’s new financial watchdog, was not pleased. In a letter to Bertone written soon after the change, Nicora complained that, with it, “we are taking a step back and remaining a tax haven.”

Pope Benedykt XVI (2010-10-17) born Joseph Aloisius Ratzinger on 16 April 1927

Is this what brought Benedict to resign?  It might have been enough on it’s own.  But there are other issues that he failed to deal with as well.  But they will be another blog entry.


3 thoughts on “The Vatican Bank

    • I’m currently going through and updating. In 4 to 7 years times, some things have more information available, while links to others fail. But sure if you want to share. Just understand I’m a human and I’m not perfect.

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