VATICAN CITY -- As the legendary Italian journalist Luigi Barzini often observed, everything in Italy is about making a grand display, and yet nothing is at it seems.
That paradox certainly seemed evident in the Vatican bank affair
that broke this week with titillating news about possible money laundering by Ettore Gotti Tedeschi, head of the Institute for Religious Works, as the Vatican bank is formally known, and his chief lieutenant, Paolo Cipriani.
The story made headlines around the world, and why not? It has all the elements of a Dan Brown thriller:
There is the Vatican and its rumored wealth (not so much, in reality), plus accusations of money laundering that conjure images of sordid crimes. And at the center is a member of the conservative Catholic society Opus Dei -- a squeaky-clean Italian economist who was appointed to the post of "God's Banker" by Pope Benedict XVI less than a year ago to help the Vatican's financial institution become more transparent in its dealings.
The interest was also understandable given the scandalous history of the bank in the 1980s, when it was headed by an influential American churchman, the late Archbishop Paul Marcinkus, whose shady dealings in the fraudulent bankruptcy of Banco Ambrosiano, then Italy's largest private bank, almost ruined the Holy See as well. The Marcinkus affair included a mysterious suicide (or murder, depending on which version you believe) as well as rumors of machinations by a shadowy right-wing group.
The IOR (the acronym of the Vatican bank's name in Italian, Istituto per le Opere Religiose) eventually paid out more than $240 million to creditors, and the Vatican bank has been trying to restore its image ever since. (The IOR manages bank accounts for religious orders and Catholic associations.)
In fact, Gotti Tedeschi was named to head the bank a year ago in part to improve its record of transparency. Gotti Tedeschi had been working closely with international banking authorities to have the IOR included on the so-called White List, the global listing of countries that comply with worldwide anti-money laundering policies. The Vatican bank expected to be approved for the White List by December.
"The Vatican has been disgraced and I have been profoundly humiliated," Gotti Tedeschi said in one of a number of interviews he gave in the wake of the news reports. With a sense of drama and a public profile rarely displayed by Vatican bankers in recent years -- in keeping with the nature of the story -- Gotti Tedeschi said the charges were "truly unjust" and that the whole episode has been so upsetting that he suggested he might resign.
But in the next breath Gotti Tedeschi -- a 65-year-old banking executive and father of five who teaches financial ethics at a Catholic university in Milan -- grows defiant, exasperated as what he sees as an absurd investigation prompted by a "procedural error" that could have been clarified and rectified if Italian authorities had simply "picked up the phone and called me."
In fact, the details of the case that have emerged certainly do not point to the kind of salacious story that many might like, and the Vatican would fear, especially as it is struggling to emerge from the pall of clergy sexual abuse scandals that have been dogging the pope and the church.
According to Italian investigators, and Gotti Tedeschi, the probe was triggered by two recent transfers from the Vatican bank totaling some $30 million, which authorities have seized pending a resolution of the probe. Bank of Italy regulators indicated that the $30 million deposited by the Vatican Bank in another Italian financial institution, Credito Artigiano Spa, were not accompanied by the proper disclosure information, as required by European Union regulations.
The Vatican funds were to be transferred to two other banks, JP Morgan in Frankfurt and the Banca del Fucino, to be invested in the German bond market, Gotti Tedeschi said.
"Since I assumed the presidency of the IOR, I have committed my whole self, according to the indications received by the pope and the secretary of state [the pope's second-in-command at the Vatican, Cardinal Tarcisio Bertone], to make every transaction more transparent and in line with international norms against money laundering," the Vatican banker told the Italian daily Il Giornale. "For this reason, I feel really humiliated."
"God is always present in everything I do," he added.
In fact, not only did the Vatican secretary of state give Gotti Tedeschi a full and public vote of confidence, but the mayor of Rome, Gianni Alemanno, expressed
his "personal solidarity" with Gotti Tedeschi. "I know his seriousness and professional and institutional correctness," Alemanno said.
So what's going on?
Two scenarios seem likely, according to news reports and Vatican officials I spoke with.
The simplest and most plausible explanation is that the probe was triggered by the Vatican bank's failure to follow a relatively minor procedure in a complex international financial system that the IOR is in the process of joining.
It was only in 2003 that Italian courts recognized Italian authority over the financial system of the Holy See -- which is technically an independent nation, albeit of just 108 acres. And it has been just 10 months since the Vatican bank began the vetting process for the anti-money laundering White List. Both sides are on a learning curve about each other, and under those circumstance minor mistakes can snowball into crises.
"These were operations [the money transfers] of ours, direct operations, without the involvement of a third party" as would normally happen in a money-laundering scheme, Gotti Tedeschi noted. That Gotti Tedeschi first heard of the Italian investigation on Tuesday when reporters called him for comment seems to reinforce the notion that the normal lines of communication were not working.
That said, the simplest explanation is rarely the most appealing, or even the most likely, especially when it comes to Italy and the Vatican. The history of both cultures -- that of Italy and the Vatican -- can safely be described as byzantine, with apologies due to Byzantium
"A procedural error is being used as an excuse to attack the Vatican bank, its president, and the Vatican in general," Gotti Tedeschi charged in his interview with Il Giornale
. "It would have been enough to ask us for the information instead of plastering it on the front page."
Vatican officials I spoke with weren't about to touch the topic -- few in the Holy See really understand high finance anyway, and the details of this case are especially arcane. Instead, they shook their heads and muttered something about Italian political agendas.
That suspicion is not surprising. For one thing, the Vatican and the Italian bishops have grown increasingly exasperated with -- and critical of -- the personal and political behavior of Silvio Berlusconi, the Italian leader and the country's leading media mogul. Berlusconi's hardline policies on immigrants, for example, and his increasingly outlandish public behavior with various women (he is married) have apparently overcome the Vatican's onetime support for his conservative policies of moral issues.
Moreover, on Sunday, Italy celebrated the 150th anniversary of the founding of the modern Italian state, an event that was made possible only by stripping the papacy of its temporal holdings across central Italy by force in 1860. That was followed a decade later by the conquest of Rome itself by the Italian army over the small papal forces, leaving a pope a prisoner of the Vatican for much of the next 60 years until a concordat could be negotiated.
The Vatican is still smarting from that humiliation, and Vatican officials know that anti-clericalism can still be as strong among Italians as it was in the 19th Century -- though those same Italians are still of course devoted to the Virgin Mary and the saints, and much of the faith beyond the papacy, and the pope's bank.