Vatican City State Law no. 127 goes into effect April 1, 2011. As announced by Pope Benedict XVI last December, a newly formed Financial Information Authority has “full powers of supervision over all the institutes and offices of the Holy See, the Roman curia, and Vatican City, including the IOR (Istituto per le Opere di Religione better known as the Vatican Bank).” Law no. 27 also provides for penalties, even prison, for malefactors. According to the Vatican and its supporters, the Autorità di Informazione Finanziaria (AIF) will be an “independent” watchdog guarding against corruption and money laundering.
Happy April Fools’ Day. Since the people in charge are appointed by the pope, it’s just some more of the Vatican policing itself and we know how that has worked for hundreds of thousands of children who have been raped and sodomized.
In the past, no one at the Vatican had to pretend their financial transactions were legal, much less ethical or moral, since the IOR’s reputation for secrecy and scandal could only attract additional depositors. The Vatican Bank, being located in an independent nation, is beyond the reach of any law enforcement agency. (The corruption that we know about is the result of transactions occurring outside of the Vatican which led to investigations. More on that later.)
When the Vatican wanted to mint its own euro coins, however, the Holy See was required to enter a Monetary Agreement with the EU in December 2009. Under its provisions,
the Vatican City State shall undertakes to adopt all appropriate measures, through direct transpositions and possibly equivalent actions, with a view to implementing the EU legal acts and rules listed in the Annex to the Agreement in the field of: (a) euro banknotes and coins; and (b) prevention of money laundering, prevention of fraud and counterfeiting of cash and non-cash means of payment, medals and tokens and statistical reporting requirements….
The Court of Justice of the European Union should be the judicial body in charge of settling disputes which may arise from the application of the Agreement….
Legal Provisions to be Implemented: Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing, OJ L 309, 25.11.2005, p. 15–36 Deadline for implementing: 31.12.2010
Vatican financial corruption again made headlines this past September when $31 million held in accounts outside the IOR in Italian banks were seized under suspicion of money laundering. Opus Dei member Ettore Gotti Tedschi, head of the IOR, was also put under investigation. Meanwhile, the Vatican has given the press assurances that it was all a “misunderstanding,” yet Italian financial regulators have still not released the funds.
On December 30, 2010, one day before the deadline for implementing Directive 2005/60/EC, the pope announced via a moto propio (decree) establishment of the AIF and the “exercise of a penal institution.” Under the theory that if you repeat something often enough it becomes the “truth.” Benedict begins with quoting his own falsehood:
The Apostolic See has always raised its voice to urge all people of good will, and especially the leaders of nations, to commit themselves through a just and lasting peace in every part of the world to the building of the universal city of God which is the goal of the history of the community of peoples and of nations [Benedict XVI, Encyclical Letter Caritas in Veritate, (29 June 2009), n. 7].
It’s not until the fifth paragraph that he mentions “implementation of the Monetary Convention between Vatican City State and the European Union of 17 December 2009.”
The Vatican press official, Fr. Federico Lombardi issued a statement the same day, part of which reads:
Speaking plainly, the Pope affirms that the “Holy See approves such a commitment [of guaranteeing just and honest coexistence in an increasingly globalized world] on the part of the international community, “and intends to adopt the rules” the community uses “to prevent and combat” these terrible phenomena….
Thus the new norms respond both to the need to conserve the effectiveness of the organizations that work in the economic and financial sector at the service of the Catholic Church in the world and, – more importantly – to the moral requirement of “transparency, honesty and responsibility”, which must always be observed in the social and economic field (Caritas in Veritate, 36)….
“The Pope has signed a document of a type a little unusual for him, but one of great courage and of great moral and spiritual significance.”
Lombardi neglected to mention the Monetary Agreement entirely.
According to a letter * written by Mr. Benjamin Angel of the European Commission, Office of the Directorate General for Economic and Financial Affairs to Washington attorney, Dr. Jonathan Levy, Esq., the Vatican regulations will be in compliance with EU Directive 2005/60/EC but here’s the kicker. The European Commission, as executive body of the European Union, is “responsible for proposing legislation, implementing decisions, upholding the Union’s treaties and the general day-to-day running of the Union….In particular the Commission has a duty to ensure the treaties and laws are upheld, potentially by taking member states or other institutions to the Court of Justice in a dispute.”
And the Monetary Agreement similarly states: “The Court of Justice of the European Union should be the judicial body in charge of settling disputes which may arise from the application of the Agreement….”
In other words, while the Directive 2005/60/EC and the Monetary Agreement provide for oversight that the Holy See establishes a financial regulatory system with adequate laws against money laundering and the financing of terrorism and that any disputes among the signatories to both can “potentially” be settled by the Court of Justice, neither creates international oversight of the Vatican Bank or criminal activity within the Vatican City State.
As Mr. Angel wrote, “If the Vatican City State fails to properly transpose the directive or it does not adequately comply with the requirements of the directive, the European Commission may initiate legal action against the Vatican City State.” “May” means the EC is not required to even investigate, enforce or prosecute for non-compliance of Directive 2005/60/EC.
Remember that the case in September involved IOR accounts in Italian banks. Convicted criminal Martin Frankel was discovered using the IOR to launder his stolen cash by the State of Mississippi insurance commissioner investigating Frankel’s theft of insurance company reserves. The Calvi/Marcinkus fraud collapsed like a house of cards when the Banco Ambrosiano went belly up. The FBI and New York City District Attorney’s office were investigating the Mafia when they stumbled onto the plan to pass counterfeit securities through the IOR.
All of these illustrate that the investigations began in other countries, not the Vatican City State. The last three also proved there were no internal Vatican concerns about the illegal source of deposits.
While the Vatican (“people who control illegal activities seek to exploit certain weak spots [i.e. IOR]”) and its supporters (“This absence of external supervision enjoyed by the IOR was, however, also very attractive to less virtuous subjects, tempted to use the Vatican bank for illicit operations, using religion as a cover, disguising themselves as benefactors or exploiting the naivety of depositors.”) try to pretend that the churchmen involved in these scandals were at best “naïve,” the facts are that in the last three examples, the crooks were directed by Church officials on how to use the Vatican Bank for illegal purposes.
Nothing in the new regulations will suddenly make honest men out of Catholic prelates.
- *No internet link available as Dr. Levy emailed me a copy of the letter.
Filed under: Uncategorized |