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European Plutocrats Covered Up Vatican Money Laundering

Holocaust survivors want an accounting of the gold and assets stolen from them, then deposited in and laundered through the Vatican Bank. Their complaint was blocked by the EU Commission. Additionally, the Council of Europe’s MONEYVAL inspectors – “15 years fighting money laundering in Europe” – gave the Vatican their approval while ignoring the recent charges of money laundering brought by the Bank of Italy and the U.S. Treasury Department. Both European agencies are seemingly oblivious to the accusation before the International Criminal Court at The Hague of Vatican “crimes against humanity.” They sustain the pretense of Vatican decency and respectability because they want the Pope’s banking empire to continue servicing their “dark money” – a financial system so effective the Pope was just moved up from 7th to 5th on Forbe’s list of the “Most Powerful People in the World.”

The “other” Holocaust

The history of Holocaust survivors seeking justice from the Vatican Bank, formally known as the IOR or Institute for Religious Works, originates in the nearly forgotten “other” Holocaust.

During World War II, the Nazi puppet government in Croatia, the Ustasha under the leadership of Ante Pavelic, committed genocide against 500,000 Serbs, Jews, and Roma, roughly an eighth of the population.

“Relations with the Vatican were as important as relations with Germany because Vatican recognition was the key to widespread Croat support.”1

Pavelic was received in a private papal audience in May 1941 just after becoming dictator of Croatia. “After receiving the papal blessing, Ante Pavelic and his Ustasha lieutenants unleashed an unspeakable genocide in their new country. But Pius XII refused to cut his ties with Catholic Croatia and in 1943 once again imparted the papal blessing on Pavelic, who by that time was a genocidal killer.”2

Under Pavelic’s policy of “kill a third, deport a third, and convert a third,” the Catholic Ustashas executed, tortured, starved, buried alive and burned to death Orthodox Serbs, Jews, Roma and members of the resistance between 1941 and 1945. “Manual methods, the Ustasha’s favorites, were those which utilized sharp or blunt craftsmen tools: knives, saws, hammers, et cetera. These liquidations took place in various locations.”

Priests and monks, usually Franciscans, took a leading part in the massacres. Nearly half of the 22 concentration camps in Croatia were headed by Roman Catholic clergy. Nine concentration camps were just for children. One camp for children run by Catholic nuns used toxic soda to save bullets.

The worst camp in Croatia – and third largest concentration camp in Europe – was Jasenovic, infamous for its barbarism, where men, women and children were interned, tortured and executed. Run by the Franciscan priest, Fr. Miroslav Filipovic, thousands were victims of “mass shootings, clubbings and decapitation.” “The names of some 20,000 murdered children of all three nationalities collected thus far by historians provides only a hint of the scale of the crimes committed there against children.”

Pope Pius XII could not plead ignorance to these atrocities. A report published by the U.S. State Department in June of 1998 unequivocally states that the Vatican was aware of the situation in Croatia. Avro Manhattan wrote in the preface for his book, “The Vatican’s Holocaust”: “It is an historical fact. Rabid nationalism and religious dogmatism were its two main ingredients.”

Wartime Archives Opened

In 1997, President Bill Clinton issued an executive order directing all branches of the U.S. government to open their wartime records and pressured other countries to follow the U.S. example.

Sixteen countries established their own historical commissions according to a PBS News Hour report. Appearing as a guest on the June 2, 1998, broadcast, Undersecretary of State Stuart Eizenstat, under whose direction a report based on the wartime archives of 11 U.S. agencies was produced, spoke about assets stolen by the Nazis and efforts to recover them. Eizenstat added, “We found some new information out about Croatian gold” and Vatican involvement. “We [the U.S. State Department] asked the Vatican to open their archives.”

The Vatican refused and has still not opened their wartime records to the public.

The principal document State Department historians found which linked the Vatican to looted gold from the Ustasha victims was the Bigelow dispatch. On October 16, 1946, Emerson Bigelow, a U.S. Treasury agent located in Rome, wrote the following report to Harold Glasser, director of monetary research at the U.S. Treasury Department:

The Ustascha [sic] organization (a Croatian fascist organization, headed by Ante Pavelic) removed funds from Jugoslavia estimated to total 350 million Swiss francs. The funds were largely in the form of gold coins.
Of the funds brought from the former Independent Croat State where Jews and Serbs were plundered to support the Ustascha [sic] organization in exile, an estimated 150 million Swiss francs were impounded by British authorities at the Austro-Swiss frontier; the balance of approximately 200 million Swiss francs was originally held in the Vatican for safe-keeping. According to rumor a considerable portion of this latter amount has been sent to Spain and Argentina through the Vatican’s “pipeline” [ratline], but it is quite possible this is merely a smokescreen to cover the fact that the treasure remains in its original repository.

Alperin vs. Vatican Bank

In 1997,

The three most prestigious Swiss banks agreed to set up a restitution fund in the U.S. to repay Holocaust victims for economic losses facilitated by the Swiss. The banks ultimately agreed to pay $1.25 billion into the fund to be distributed as financial aid….
By February 1999, the German government…announced plans to pay reparations to victims of Nazi atrocities from funds provided by some of the country’s largest companies….The German fund is expected to amount to $1.7 billion, with a dozen major German businesses – including Deutsche Bank, Daimler-Benz, Volkswagen, and Siemens – participating.

In November 1999, Croatian Jews, Serbs and Roma survivors and their relatives as well as organizations representing over 300,000 Holocaust victims and their heirs filed a suit seeking “an accounting and recovery of the Ustasha Treasury that according to the U.S. State Department was illicitly transferred to the Vatican.” Furthermore, they alleged that the Vatican had concealed and laundered those looted assets. The plaintiffs sought not only disclosure but also restitution and damages.

The testimony of former U.S. intelligence agent, William Gowen, aided the lawsuit. Gowen stated that his investigation in 1947 led him to believe that the Ustasha Treasury had been concealed at the Vatican Bank and that the Vatican was implicated at the highest level.

While the plaintiffs, many in their 80s and 90s, “dwindle to a handful,” Vatican lawyers defended against the lawsuit on technical grounds while never contesting the facts of the case.

On December 28, 2009, the 9th Circuit Court of Appeals in San Francisco upheld a lower court ruling that the Vatican Bank was immune from lawsuits such as Alperin v. Vatican Bank under the 1976 Foreign Sovereign Immunities Act which protects foreign countries from being sued in U.S. courts and that therefore U.S. courts had no jurisdiction.

The same defense has successfully defeated three clerical sex abuse cases and a RICO suit filed by five state insurance commissioners against the Holy See for laundering money stolen by Martin Frankel from insurance companies. Testimony 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 or his agents – were willing to launder a convicted swindler’s money without hesitation or moral reservation.


“If a state is perceived to be at risk for money laundering, its financial institutions – in this case, the Vatican Bank in particular – usually pay a price. Depositors may take their business elsewhere, worried about possible seizures of assets, while banks in other countries may impose higher transaction costs to cover more aggressive ‘due diligence’ measures. In general, a state’s ability to play the global financial game is impeded.”

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.

“The IOR absolutely needs that inclusion [in international standards] to conduct its financial transactions.”

The Holocaust survivors, represented by Dr. Jonathan Levy, submitted a request to the European Commission for an “investigation and inquiry” dealing with the unresolved issues of the “Ustasha Treasury and the missing gold and other valuables from the former Yugoslavia” and “Vatican involvement in laundering concentration camp gold and loot after the Second World War.”

We also note that the Vatican Bank (Institute for Religious Works) is currently under investigation and subject to a freezing order by Italian authorities for money laundering activity lending credulity to our allegations that Vatican City State financial practices do not meet their obligations to the EU under applicable treaties nor comply with FATF [Financial Action Task Force, an intergovernmental group] anti-money-laundering standards….

The European Commission responded that the Vatican was in the process of implementing the EU legislation including creating a Financial Authority and that the EC was “carefully monitoring this process.” Then the EC referred the survivors to the Vatican Financial Authority due to be operable January 1, 2011, adding that the EC “may take legal action if the Vatican Authority did not comply with the Monetary Agreement between the European Union and The Vatican City State.”

On the day before the deadline for implementing Directive 2005/60/EC, Pope Benedict XVI announced via a moto propio (decree), the establishment of law no. 127 “concerning the prevention and countering of the laundering of proceeds from criminal activities.” He created the Autorità di Informazione Finanziaria (AIF) to oversee Vatican compliance with the new law.

The moto propio began:

The Apostolic See [i.e. the Vatican] 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….

Vatican press official, Fr. Federico Lombardi, issued a statement the same day, part of which reads: “The Pope has signed a document…of great courage and of great moral and spiritual significance.” The new law responds “to the moral requirement of ‘transparency, honesty and responsibility’, which must always be observed in the social and economic field.” (emphasis mine) Lombardi neglected to mention the Monetary Agreement.

The AIF is an “independent” watchdog guarding against corruption and money laundering according to the Vatican and its supporters although its president, director and four board members, like every Vatican official, are appointed by the Pope or by someone appointed by the Pope. As one Italian journalist noted: “All members of the Authority are, in fact, ‘internal.’”

At the time Benedict named him as president of the AIF, Cardinal Attilio Nicora remained in his post as president of the Administration of the Patrimony of the Apostolic See which administers the Vatican’s immense property holdings, rental income, and global investment portfolio. Nicora also remained on the Supervisory Council of Cardinals over the IOR, as a member of the Pontifical Commission of Vatican City State and member of the so-called Council of 15, the assembly of 15 cardinals that periodically meet to take stock of the Vatican financial situation. Since the AIF is charged with monitoring the monetary and commercial activities of every Vatican agency and department, Nicora has the enviable position of supervising his own performance.

According to Nicora, the text of law no. 127 “had been agreed with the European Commission” and “was the subject of positive verification by the Joint Committee EU-State of Vatican City who provided the Monetary Agreement of 17 December 2009.”

On January 5, 2011, the EC wrote the survivors that the matter should now be referred to the Vatican’s AIF. Levy waited several months for the AIF to become operational and then sent two requests to the Vatican for information regarding IOR accounts used to retain and launder the Ustasha gold.

Levy informed the EC in November 2011 that the Vatican had ignored the survivors’ letters and requested that the Commission “use its good offices and take appropriate action under the Monetary Agreement between the European Union and the Vatican City State.” The Commission responded in December that it was not obligated to do anything because Levy was not a “’person’ described under Directive 2005156/EC.”

Levy wrote in February 2012 that the Commission had erred and that the solicitor-complainant was a person described under Article 2(1)(3)(b) of the Directive “which specifies that independent legal professionals in the exercise of their activities that are acting on behalf of and for their client in any financial transaction are obliged to report money laundering to the member state’s FIU [Financial Intelligence Unit, the title of the anti-money-laundering watchdog group of most FATF countries], which in this case was the Vatican’s AIF.”


Ongoing money laundering has been considered before in the case of the Swiss National Bank. The SNB’s deliberate retention of looted assets was correctly described as money laundering…. The IOR matter is no less serious….

The EC wrote back in March 2012 that it would not take action because the IOR “belonged to the Holy See” and not the Vatican City State, the entity to which the Directive applied. (The Holy See is the legal and diplomatic name of the Vatican. Vatican City State refers to the land located inside Rome.) Levy sent documentation that the IOR was created under the laws of the Vatican City State and was a Vatican City State entity. Levy also submitted evidence to the EC including sworn statements by a Vatican attorney made during the Alperin v. Holy See lawsuit about the connection of the Holy See and Vatican City State.

Finally, Levy lodged a complaint with the European Ombudsman on October 22, 2012, alleging maladministration by the EC based on the Commission’s refusal to enforce the anti-money-laundering provisions of the Monetary Agreement between the European Union and the Vatican. The Office of the European Ombudsman acknowledged receipt of the letter but reminded Levy that there is no time requirement for a response.

“According to Dr. Levy, the Vatican and European Commission cannot continue to ignore post war money laundering allegations of gold looted from former Yugoslavia: ‘The Monetary Agreement between the European Union and Vatican City State is quite explicit, allegations of money laundering must be investigated.’”

The EC had written in 2010 that they “may take legal action if the Vatican Authority did not comply with the Monetary Agreement between the European Union and The Vatican City State,” and then a year later put forth bogus excuses like Levy not being a “person” under the agreement or that the IOR belongs to the Holy See.


Looking for further approbation of its appearance of financial regulation, in February 2011 the Holy See requested to become subject to the Council of Europe MONEYVAL (the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism) evaluation and follow up procedures. MONEYVAL did an on-site inspection in November 2011. In addition, MONEYVAL stated it would continue to monitor the Vatican’s conformance to FATF standards. “The aim of MONEYVAL is to ensure that its member states have in place effective systems to counter money laundering and terrorist financing and comply with the relevant international standards in these fields.” (emphasis mine)

You can judge whether the Council of Europe’s eventual approval and profession of confidence in the ability of the Pope and his men to police themselves and adhere to international standards of honesty and transparency is deserved. For the sake of brevity, we’ll skip past Pius XII and John Paul II’s support of rightwing atrocities in the name of “anti-communism” (both men being pushed towards sainthood by Pope Benedict), the murders of Italians innocently caught in the web of Vatican corruption and look at just the last few years.

Vatican “Rap Sheet”

Vaticano S.p.A. by Gianluigi Nuzzi was published January 1, 2009. Documents obtained by a Vatican employee who didn’t want them published until after his death show the IOR to be “a unique ‘off shore’ corridor for politicians around the world who want to keep their money away from legal controls….The IOR is like a credit card that ensures privileges to be granted in exchange for political backing, legal provisions and business support.”

Case of the Pope: Vatican Accountability for Human Rights Abuse, is a book released in September 2010. Its author, Geoffrey Robertson, QC, a veteran human rights lawyer and United Nations judge, argued that the Vatican should be treated as a “rogue state.” Robertson called on the rest of world to protest the pope’s immunity for civil and criminal actions.

On September 21, 2010, the Bank of Italy’s Financial Intelligence Unit informed the IOR that it was under investigation for possible money laundering and issued notices against Ettore Gotti Tedeschi and Roberto Cipriani, president and director general respectively of the IOR, for omission of procedures against money laundering. Prosecutor Nello Rossi said €23 million (about $31 million) in IOR transactions were seized from Credito Artigiano accounts. According to court documents, prosecutors stated the IOR deliberately flouted anti-money-laundering laws “with the aim of hiding the ownership, destination and origin of the capital.” Court documents also revealed suspicions that transactions totaling €900,000 involved clergy acting as fronts for corrupt businessmen and the Mafia.

Since that money was being transferred to a Vatican account with JP Morgan Chase in Frankfurt, a Roman prosecutor asked the Hessian Attorney General District Court to help in their investigation. The request was rejected.

The Vatican gave the press assurances that it was all a “misunderstanding” and denied any wrongdoing. The €23 million was eventually released in June 2011 because the presence of the Vatican AIF “reassured Italian prosecutors,” but Judge Maria Teresa Covatta was quoted as saying the intended beneficiaries of the transactions were still unclear.

In September 2011, a support group for survivors of sex abuse by religious personnel together with a human rights organization filed a complaint with the International Criminal Court at The Hague. It contained over 22,000 pages of documents from 65 countries around the world about the sexual abuse of children by Catholic priests, brothers and nuns and the Church’s cover-up. The complaint urged the prosecutor to investigate high-level Vatican officials for crimes against humanity. An addendum included the publication of an Amnesty International Report calling Catholic child sex abuse in Ireland torture and additional evidence showing how the Pope played a larger role in protecting the notorious Mexican priest, Fr. Marcial Maciel Degollado, than was previously known.

More documentation will be forthcoming from a Melbourne researcher, advocate and lawyer, Judy Courtin, who is preparing a report about the Church’s sexual abuse of children in Australia, especially on the suicides.

After the MONEYVAL inspection in November 2011 and in response to its recommendations for a more convincing demonstration of “accountability and independence,” the Pope issued emergency decree no. 159 to amend law no. 127 on January 25, 2012. All Holy See entities would now be responsible for anti-money-laundering practices and their monitoring and supervision by the Financial Information Authority (AIF) was to be “compulsory.” Other oversight responsibilities were also delegated to the Secretariat of State, the Governatorate of the Vatican City State, and the Prefecture for the Economic Affairs of the Holy See which is supposed to coordinate all the financial activities.

The Vatican has 13 dicasteries (departments) or “congregations”, 3 tribunals, 13 councils and 3 “offices”. In addition, there are 47 foundations. The head of each one previously had financial autonomy and the idea of anyone else looking over his shoulder created a firestorm of bickering, back biting and mostly fear. “And so began the ‘Vatileaks’ scandal as Italian newspapers published leaked internal letters showing conflicts among top Vatican officials over who had authority over whom and how transparent should the IOR and other Vatican financial agencies become.”

Some showed the IOR is still “a rogue ‘offshore bank,’ including purportedly ‘encrypted’ and ‘secret’ accounts” and “raised questions about the Vatican’s willingness to cooperate with international regulators trying to track suspect transactions.”

Those in the know “believe that the real core of the [Vatileaks] scandal is a power struggle over control of the Vatican’s finances.”

“With the large volumes of international currency that goes through the Holy See, it is a system that makes it vulnerable as a potential money-laundering center,” Susan Pittman of the U.S. State Department’s Bureau of International Narcotics and Law Enforcement, told Reuters. On March 7, 2012, the U.S. State Department for the first time named the Vatican as one of 67 nations “of concern” on its list of money-laundering centers. (There are three categories, “of primary concern,” “of concern,” and “monitored.”) “Officials said the Vatican is on the list because it isn’t clear whether a year-old anti-money laundering regime is effective.”

Under pressure from the U.S. Treasury Department, JP Morgan Chase notified the Vatican on March 16, 2012, that it closed the IOR account in its Milan branch because the IOR was “unable to respond” to information about the provenance of the deposits. JP Morgan had been requesting the information since 2010.

JP Morgan reported €1.8 billion ($2,200,000,000) had been deposited in the last 18 months in the account. (And this is one account out of how many throughout the world?) At the end of each day, the balance was reduced to zero and the contents moved to an IOR account in Frankfurt. According to Spiegel, investigators suspected the account was used to launder funds from “dubious sources.”

His Holiness: The Secret Papers of Pope Benedict XVI by Gianluigi Nuzzi was published in early May. Nuzzi was given over four thousand Vatican documents by a “deepthroat” who admired his previous book, Vaticano S.p.A. He said his source “was not an isolated whistle-blower, but a conduit for a larger faction in the Vatican….In terms of motive, Nuzzi describes this group as composed of reformers fed up with ‘crooks and power games.’”

The “array of details about smear campaigns, corruption, intrigue, ungodly ambition, ties with the underworld, and sexual scandal” among its hierarchs sent shockwaves through the Vatican.

Also in His Holiness: “The problem of child molestation in America is described in the documents as a simple financial issue: all the money is paid to the accusers to avert humiliating public trials.”

According to Nuzzi his informant told him, “The truth emerging in the newspapers and the official discourse within the Holy See was so different, the hypocrisy reigned supreme, and the scandals were multiplying. I’m not talking only about the pedophilia and murder cases like the killing of the Swiss Guard and the disappearance of Emanuela Orlandi, but about money laundering, corruption, and threats.”

On May 24, Ettore Gotti Tedeschi, president of the IOR Supervisory Council of laymen, was fired via a blistering statement to the press written by IOR Council member Carl Anderson, Supreme Knight of the Knights of Columbus, a former member of the Reagan administration and representing the American plutocracy at the Vatican Bank.

Gotti Tedeschi’s home and office were raided June 5. “Investigators were focusing on accounts at the Vatican Bank held by ‘politicians, shady intermediaries, contractors and senior (Italian) officials’ as well as ‘people believed to be fronts for mafia bosses.’ Investigators reportedly found ‘property investments and Church property sales that could disguise money transfers to fronts….’”

Gotti Tedeschi told the press he was in fear of his life.

The Pope’s valet, Paolo Gabriele, was arrested on May 26 and charged as the sole person responsible for leaking documents to Nuzzi. He was put in solitary confinement, a four-by-four meter cell. He was forbidden all means of communication except with Vatican officials and his immediate family. Gabriele said he passed internal documents to Nuzzi due to his belief that “a shock, perhaps through the media” would “bring the Church back on the right track” because he saw “evil and corruption everywhere in the Church.”

Nuzzi reaffirmed that the documents came from “20 disgruntled Vatican staffers,” but only two laymen (the other an IT specialist) have been punished. Even after Gabriele’s arrest, the leaks continued.

The investigation into the alleged abuse experienced by the Gabriele during his confinement in a Vatican prison cell remains open.

On May 29, Vatican spokesman, Fr. Federico Lombardi, urged journalists “not to allow themselves to be manipulated” by the insider accounts regarding Gabriele’s arrest and Gotti-Tedeschi’s dismissal. The same day, the deputy Secretary of State, Cardinal Angelo Becciu, gave an interview asking journalists to reach “a higher moral standard.” Secretary of State, Tarcisio Bertone, accused journalists of imitating the fictional The Da Vinci Code in their reporting. Becciu called the theft of documents “an immoral act of unprecedented gravity.”

Outrage against the Catholic Church’s global and systemic torture of children had peaked in 2010. There were reports that Pope Benedict XVI failed to act against pedophiles while he was archbishop of Munich and Freising and as head of the Congregation for the Doctrine of the Faith. Fr. Raniero Cantalamessa gave a Good Friday sermon with the pope in attendance equating the reporting of clerical crimes to persecution of the Jews. On Easter Sunday, Cardinal Angelo Sodano derided the news reports as “petty gossip.” World opinion of the Catholic Church plummeted even further when damning government reports were issued by a Philadelphia grand jury report and in Ireland.

The Pope stated in May 2011 he was taking action. A letter was written to bishops around the world “to prepare policies and guidelines for dealing with cases of clerical sexual abuse of children” and to have them drafted by May 2012. In November 2011, the Vatican issued the guidelines bishops were to follow for the “effective, quick, articulated, complete and decisive plans for the protection of children, bringing perpetrators to justice and assisting victims.” The Vatican claimed the guidelines represented a “very important new step” towards regaining “full credibility.”

Yet on July 11, 2012, Msgr. Charles Scicluna, the Vatican’s top investigator of clerical sex abuse, said “most of the bishops’ conferences around the world have missed a Vatican deadlineon drawing up anti-abuse guidelines,” “that all those who did not send in their proposed guidelines would be getting ‘a letter of reminder,’” and that “evaluating each country’s proposed policies and guidelines for dealing with cases of clerical sexual abuse of minors will take ‘at least a year,’ and that process would not begin until after the summer.”

A former U.S. Treasury Department official and a Senior Fellow for Counterterrorism at the American Foreign Policy Council in Washington, DC., Avi Jorish, wrote on June 27, 2012:

….After a number of very embarrassing episodes in recent years, the Pope pledged to comply with international standards on illicit finance and clean up the bank’s image…often called “the most secret bank in the world.”
….The bank’s president, Ettore Gotti Tedeschi, is a well-known and well-regarded figure throughout European banking and social circles.
….[T]he Vatican Bank has recently been investigated on two separate occasions for money laundering….
….A book published by Italian journalist Gianluigi Nuzzi details…a lack of desire to follow the dictates of the FATF – and its European sister organization, MONEYVAL – to fight illicit finance. The “Vatileaks” scandal…has cast a cloud over [the Vatican’s] effort to demonstrate financial transparency and shed its reputation as a tax haven….As the international community reviews its options vis-à-vis the Vatican, both the FATF and the MONEYVAL are uniquely placed to pressure the IOR to reform. Both organizations have scores of trained staff members who can assist the Vatican to implement a robust anti-money-laundering regime that would satisfy both the EU and the international community

In today’s interconnected financial world, instituting measures to mitigate abuse of the international financial sector is part of the cost of doing business. Unquestionably, one of the most serious public policy challenges the international community will face in the foreseeable future is how to use every tool in its arsenal to make progress against those who exploit tainted money. While the Vatican answers to a higher calling, the EU, FATF and MONEYVAL should insist that its earthly responsibilities are equally important.

It is a credit to past and present officials of the U.S. government – and an important insight as to one of the many reasons why the Pope wants to elect Republicans – that it is has not been a party to the whitewashing.

MONEYVAL released their evaluation of the “Holy See/Vatican City State” (referred to throughout the report as a single entity) on July 18, 2012, based upon “compliance with the Financial Action Task Force and Directive 2005/60/EC (the 3rd EU Directive).”

The Committee gave the “HS/VCS” a passing grade even though nothing had actually been done to uncover or stop money laundering, the real identity of IOR account holders had yet to be discovered, and there is “a lack of clarity about the role, responsibility, authority, powers and independence of the Financial Intelligence Authority (AIF).”

Their press release noted: “The MONEYVAL report is neither an investigation into past or present allegations of money laundering and terrorist financing, nor is it an audit of a particular financial institution.” But if the purpose of the FATF and MONEYVAL is to stop money laundering, should the committee not have required that the sources and beneficiaries of the €23 million seized from the Credito Artigiano accounts and the €1.8 billion passed through the Milan branch of JPMorgan be identified? Or that those responsible for the money laundering exposed in the “Vatileaks” and Nuzzi’s book be identified and held accountable and that actions be taken to prevent further occurrences?

Giving the Vatican a “passing grade” based solely on good intentions as written in a law that at some future date might be implemented and enforced by the Pope or his handpicked associates raised not a word of protest in the press that I could find.

The Vatican’s only response so far to the MONEYVAL’s 23 “recommendations” where the “HS/VCS” was non-compliant or only partially compliant with FATF standards was to move the layman “insider” Franceso De Pasquale from Director of the AIF to a member of the AIF Board of Directors so that he could be replaced as Director with “outsider” René Bruelhart who had been working with the Vatican since December 2011. Bruelhart is the former director of the Financial Intelligence Unit (FIU) of Liechtenstein and Vice-President of the Egmont Group, the international network of FIUs. Dubbed the “James Bond of the financial world,” the ruggedly handsome Bruelhart now joins the Pope’s personal secretary, “the Black Forest Adonis” Archbishop Georg Gaenswein, as Curial eye-candy.

Meanwhile, in mid-October, “the Italian judiciary, which is looking into suspect money flows noticed in the Vatican Bank’s accounts, sent some rogatory letters to the Holy See. Despite the introduction of anti-money laundering laws and the assurance given by Vatican Bank heads that it no longer holds any anonymous accounts, investigators found that dirty money can also pass through non anonymous accounts belonging to priests or clerics….”


Of course, European plutocrats expect something in return for protecting the Vatican’s horrific World War II secrets and certifying as trustworthy unrepentant money launderers and torturers of children. Last month the European Parliament even elected an orthodox Catholic as EU Commissioner of Health and Consumer Protection. Tonio Borg holds positions opposite to those of most Europeans on divorce, abortion, gay rights and stem cell research. Compare Borg’s election to 2004 when the Italian politician Rocco Buttiglione, a friend of Pope John Paul II, was rejected for the same position on the basis of his opposition to abortion and gay rights.

It can legitimately be argued that the Catholic Church is losing its ability to influence politics. The debacle of the George W. Bush presidency, produced to a large degree by support of the Catholic-directed Religious Right, caused many voters to rethink their blind obedience to their well-compensated pastors and bishops. The Pope lost not only the 2012 U.S. presidential election but also the French election to Francois Hollande. Many “Catholic” countries are liberalizing, or have already done so, their abortion and same-sex marriage laws.

That said, we know the U.S. episcopate is still able to inflict great harm by impeding justice for victims of sex abuse, obstructing women’s health care and denying gay civil rights. Post-election, the bishops have been tasked with wooing Catholics back to the GOP, especially Latinos, with lip service about helping the poor and positioning themselves as the most ardent supporters of immigration reform.

Nevertheless, the Pope was still named the fifth Most Powerful Person in the World by Forbes (behind Obama, Merkel, Putin and Gates).

As Jorish noted: “Unquestionably, one of the most serious public policy challenges the international community will face in the foreseeable future is how to use every tool in its arsenal to make progress against those who exploit tainted money.” In view of the pressure on international financiers for banking transparency, how will plutocrats be able to continue to hide their “tainted money”?

The real value of the Catholic Church is its secret worldwide monetary network headquartered in a sovereign state and a financial division in the Cayman Islands with no accountability or fear of criminal prosecution.

The Church has roughly 5,000 prelates around the world, each one appointed by the Pope based on the man’s demonstrated loyalty to the Church above all else, as heads of dioceses. Each one has the capacity for hidden bank accounts, investments, slush funds named for some phony charity or foundation. Under the guise of “freedom of religion,” most can operate with little or no governmental oversight. Since money launderers usually get a 5-10% cut, the continued wealth of the Vatican is assured.

Not only will those who need to hide their money benefit. The plutocracy will never cease using every means possible to rule the world.

In the U.S., there are 195 dioceses and the national headquarters of both the bishops and their “charities.” The bishops control 40,000 organizations, agencies and foundations each with a 501(c)(3) tax code. They pay no taxes, provide a tax deduction to their donors, and are under no obligation to produce financial statements which show where their money comes from or where it goes.

While Americans fret over the Koch brothers (no. 41 on Forbe’s list), Citizens United and “dark money” SuperPACs, the Catholic Church can move unlimited funds – foreign and domestic – to think-tanks, media, voter suppression efforts, every means the plutocracy has found to subvert our democracy.

(Clermont is author of The Neo-Catholics: Implementing Christian Nationalism in America (Clarity Press, 2009))

1. Michael Phayer The Catholic Church and the Holocaust, 1930–1965 (Indianapolis: Indiana University Press, 2000) p. 32
2. Michael Phayer Pius XII, The Holocaust, and the Cold War (Indianapolis: Indiana University Press, 2008) p. 219

9 Responses

  1. It is precisely because the Vatican Bank operates as it does and is perceived to be so useful by so many persons and organizations for it’s ability to ‘lose’ track of money that we will not see any reform in the Church. We will so no structural reform and no reform of the celibate male priesthood. The clerical system is too necessary for producing those 5000 obedient and fear based branch managers we call bishops. The Unholy See is a cancer in the global body. Unfortunately it’s a very useful malignancy.

    • Thanks, Colleen. I always value your opinions. You’re one of the few people who “get it” when it comes to $$$ and the Church. Betty

  2. Betty, your work is SO important, because you follow threads that, to my knowledge, no one else is following. And you do so with great care for accuracy and documentation, so that anything you post about these topics is researched to a T. These stories are just stomach-churning to read, at the same time, due to the deep, deep corruption in the heart of the church, and the burden of tremendous guilt on our shoulders due to our complicity in horrendous, unthinkable crimes. Please keep on keeping us well-informed. You have the makings of yet another important book here.

    • Untill we accept our own brokeness we will never hear or experience the Good News of Jesus- the Christ..Untill that occurs the Roman Curia is just another power hungry corporation, that is not transperent or life giving.. We the people of God continue to wait during this Advent time for the CORPORATE Church to get back to the ideals of its founder.
      In Prayerful solidarity

    • Thanks very much for your kind words, Bill, and for all your work exposing “the deep corruption in the heart of the church.” As Guidos’ signed off, we are all “In prayerful solidarity.”

  3. Betty, excellent article. As the financial finagling continues, Robert Mickens gave a great talk at the City Club in Cleveland November 16, 2012, in which he outlined how the Vatican structure is imploding and why. He mentions finances as one reason.

    • The Mickens talk is available on YouTube, which is where I viewed it.

    • Thanks, Karen. I saw Mickens video. He is the 3rd or 4th person I know of who has used the word “implode” to describe the current situation in the Vatican. There is sooooooo much wealth that there is bound to be more “Vatileaks” infighting over who gets control.

      On Mon, Dec 10, 2012 at 12:53 PM, The Open Tabernacle: Here Comes Everybody

  4. […] S. My apologies to anyone who also read my earlier diary “European Plutocrats Covered Up Vatican Money Laundering.” I had read about the ties between Goldman Sachs and the Vatican while researching the […]

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