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The Vatican and the Gold Standard

The U.S. State Department website states the following in its profile of the Vatican (Holy See): “Industries: Worldwide banking and financial activities; printing; production of coins, medals, postage stamps, a small amount of mosaics, and staff uniforms.”

Opus Dei controls the Church’s “worldwide banking and financial activities” according to author Robert Hutchison (Their Kingdom Come: Inside the Secret World of Opus Dei) and Robert P. George is the leading representative and spokesman for Opus Dei in the US which is why I was alarmed by Frank Cocozzelli’s recent post, “Robert P. George’s Cross of Gold.” Cocozzelli wrote: “Religious Right strategist and well-connected GOP neocon, Robert P. George…., is leading a coalescing alliance of economic and social conservatives that aims to crucify common prosperity, once more, upon a cross of gold” by means of their “economic plan of setting the value of the dollar to the value of the amount of gold the United States holds in reserve.” Cocozzelli continues, “That’s why it is so significant that the gold standard is a featured issue of George’s American Principles Project. The goal of Gold Standard 2012 is ‘….to reach out to lawmakers to advance legislation that will put the U.S. back on the gold standard.”

One way the gold standard “crucifies common prosperity” is by favoring lenders while penalizing borrowers. As Cocozzelli notes, “workers rely more and more on credit instead of their own earnings to obtain property and services. In short, the American economy goes from being one made up of upwardly mobile individuals to larger numbers of debtors in living in one huge company town.” A recent Huffington Post article warned, “Americans accumulated $6.5 billion in credit card debt between July and September, according to the study from CardHub. Between April and September, the study says, consumers increased their debt by 11 percent over the same period last year. Although consumers made significant progress paying down their debt during the first months of 2010, they’re now on track to erase that gain by year’s end.”

Setting the value of the dollar to a finite resource such as gold also has the effect of increasing the value of the gold itself, substantially increasing the wealth of those who own it. And as demonstrated in the last month’s elections, money buys Republican victories.

Like all aspects of Catholic Church finances, the exact quantity of gold held by the Vatican/Opus Dei, is speculative. A suit brought by Holocaust victims and their heirs in U.S. Federal Court (Alperin v. Vatican Bank, Ninth Circuit Court of Appeals, Case No. 09-17761, 08-16060) against the Vatican Bank alleges that gold and other assets stolen from concentration camp victims were deposited in the Vatican after World War II. The case was dismissed in March 2010 on grounds of Vatican sovereign immunity from lawsuit in the United States.

Interestingly, the suit is based on US government records which report the transport to, and deposit of gold in, the Vatican Bank.

The “Ustasha Treasury”refers to a horde of “looted assets” originally plundered from Serbs, Jews, and Gypsies in Croatia, Bosnia-Herzegovina, Dalmatia, portions of Slovenia and Serbia, and from citizens of the former Soviet Union by agents of the [Nazi-allied] Ustasha Regime and revealed as having been concealed since May 1945 by the Eizenstat Report on the Ustasha Treasury released in June 1998 by the US State Department. In the closing months of the Second World War, this plunder was collected from various repositories and banks in Zagreb by the Ustasha Regime dictator Pavelic, who personally supervised its partial evacuation in several tranches from Zagreb to Switzerland. In late 1944 or early 1945, [Fr.] Draganovic transported an unknown quantity of the Ustasha Treasury to Rome and the Vatican at the behest of Pavelic.

Another substantial portion of the Ustasha Treasury accompanied Pavelic into exile in Austria in May 1945 where it was hidden. In late 1945 two boxes containing 45 kilograms of the Austrian gold horde were entrusted to Draganovic who personally delivered it to [Franciscan priest, Fr.] Mandic and the Croatian Confraternity of San Girolamo in Rome to set up operations there….

When it became apparent the Axis powers would fall, Babic and Draganovic were tasked with conceiving plans whereby the Ustasha Treasury could be saved from the advance of the Red Army. Draganovic and Babic devised a plan in which Ustasha assets would ostensibly become assets of the Roman Catholic Church with the active cooperation of OFM [Order of Friar Minors i.e. the Franciscans]. The Ustasha Treasury therefore would not only be saved from the Communists but from seizure by the Allies as Axis loot.

In 1946 Babic carried out the final leg of the plan when he and Ustasha members dressed in British uniforms, accompanied by a few men clad as priests escorted the remainder of the Ustasha Treasury in a 10 truck British flagged convoy through Northern Italy to the San Girolamo Pontifical College in Rome where it was received by Mandic, Draganovic and the Confraternity of San Girolamo on behalf of the OFM and certified as property of a Roman Catholic Church entity and thus eligible for deposit at the Vatican where it would be safe from the Allies. At some point during the convoy’s journey it was joined by Ante Pavelic personally who was present for the convoy’s arrival in Rome.

The convoy however was not unloaded at San Girolamo but was parked in a safe area off the nearby Via Tomacelli where Pavelic and the British uniformed Ustasha disembarked. Then with care, the convoy’s British indicia were removed and Vatican license plates provided. The convoy was then driven into St. Peter’s Square and into the Vatican where it was received by representatives of the Vatican Bank in their official capacity as depository for Church contributions from around the world. This single transfer contained the greater remaining part of the Ustasha Treasury. It was estimated in 1946 to be worth an estimated 200 million Swiss Francs by US Treasury Agent Emerson Bigelow who contemporaneously reported the incident to the US government. These funds were placed under the control of Mandic who as OFM Treasurer had the knowledge, access, and ability to utilize the Vatican financial system, Vatican extraterritorial rights in Rome, the OFM’s internal resources and various external OFM and Diocesan accounts to convert the treasure into a useful form that could be dispersed worldwide to banks in Spain, Latin America, the United States and elsewhere in evasion of post war Allied currency and monetary controls in place in Italy and to promote the Ustasha agenda

The events described in the preceding two paragraphs were documented by former US Army Counter Intelligence Corps (CIC) Special Agent William Gowen in 1947. Gowen investigated the Ustasha on behalf of the CIC in Rome which was interested in interdicting the ratline and other human smuggling rings. As part of his official duties Gowen interviewed Draganovic and Babic who admitted their roles in the delivery of the Ustasha Treasury to San Girolamo and the Vatican. Three additional named informants of Gowen also verified the events related to Gowen by Babic and Draganovic. These were Ferenc Vajta, the former Hungarian

Consul in Vienna 1944-1945 and who served as an informant for French Intelligence in Innsbruck, Austria in 1946 and was involved in smuggling Hungarian assets to Rome and Austria; Dr.Miha Krek, former Deputy Premier of the wartime Royal Yugoslav government in exile who in 1946 was an officer of the British sponsored Central European Federal Club “Intermarium” in Rome and was sentenced in absentia to 15 years in prison by the post war Communist government of

Yugoslavia, and Monsignor Augustin Juretic who in 1941-1942 had served as a consultant to the Croatian Catholic Episcopal Congress with Draganovic and left Croatia in 1942 for exile in Switzerland and Italy due to political differences with the Ustasha regime and became an Allied informant.

Author John Loftus (Unholy Trinity: How the Vatican’s Nazi Networks Betrayed Western Intelligence to the Soviets) has “theorized that the genocide of World War II directed at Jews, Serbs, Roma, Soviets, and others by the Nazis and their allies generated vast amounts of loot and plunder including gold coins, wedding rings, and dental gold from concentration camps. These genocide-tainted treasures were re-smelted at the Reichsbank and other central collection points and laundered through the Swiss banks, Bank for International Settlements and the Vatican Bank during and after WWII.”

The Alperin v. Vatican Bank suit also produced evidence that the Vatican deposited 637 “United States Assay Office Gold Bars…which it does not wish to sell” in a US Federal Reserve Bank in 1940 and kept gold on deposit with the Federal Reserve until at least 1975  (A letter dated May 23, 1940 by a Federal Reserve official states: “Should the Holy See change its views about the usefulness of Signor Mussolini and Herr Hitler as bulwarks against communism, and, therefore, as protectors of the Church, the only means it has for breaking away from the fetters of the former is by going into exile as it did in the thirteenth century…”)

The State Department also lists “production of coins and medals” as a Vatican “industry.” In modern times, the Vatican has minted coins, including gold, since the 1930s, the vast majority sold as sets to collectors. Ironically, it was a new agreement reached in December 2009 with European Union monetary officials which led to the recent investigations into Vatican banking transactions. In exchange for permission to more than double the value of their coins to 2.3 million euros ($3.3 million) annually the Vatican had to adopt certain EU norms aimed at preventing money laundering, fraud and conterfeiting.

8 Responses

  1. This would make a fantastic screenplay – or Graham Green novel. Chilling to the bone, but horribly fascinating. “The truth will out.” Thanks for this.

    • It WOULD make a fantastic screenplay and then the Vatican can complain some more about anti-Catholic bias. Your welcome. Betty

  2. This certainly explains why the Vatican turned a blind eye to Ustache atrocities, especially those perpetrated by Franciscans.

    I personally believe that the canonization of Pius XII should never happen if only because of his complicity with the Ustache. It’s unfortunate that this particular episode from WWII is so little known, especially given the fact the Bosnian war had some of it’s genesis in retribution for the atrocities committed by the Ustache.

    • The history of the Franciscans in Croatia reaches right through to the “miracle” at Medjugorge and sheds light on the absolute nonsense of the “apparitions.” Someone should write a book on this history.


  3. Excellent post, Betty. Thank you for picking up on the gold issue.

    • And thanks to you, Frank, for writing about Robt. P. George’s promoting a return to the gold standard. These are very dangerous people.


  4. Great summary above, actually the case is not quite dead, we argued the appeal against the Franciscans on February 18, 2011 in the Ninth Circuit and we are pursuing the claims against the Vatican Bank with the new Vatican Financial Authority which was initiated january 2011 on orders of the EU Commission.

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