Vatican bank probe revives Catholic Church's past financial scandals
Italian authorities are looking into allegations of money laundering in the Vatican's bank, adding to the Roman Catholic Church's recent woes over sex-abuse scandals.
The head of the Vatican’s bank said he had been “humiliated” by the announcement of an investigation into alleged money laundering as the Roman Catholic Church received another blow to its battered reputation.Skip to next paragraph
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The investigation demonstrates a more muscular attitude toward the Vatican's finances on the part of the Bank of Italy, which has instituted new regulations on banking transparency, experts say.
Italian authorities froze 23 million euros ($30 million) belonging to the bank, officially known as the Institute for Religious Works, and placed its president, Ettore Gotti Tedeschi, and chief executive, Paolo Cipriani, under investigation for alleged breaches of money laundering laws.
The unprecedented move could hardly come at a worse time for the Vatican. For months, it has been the target of scathing criticism for failing to deal with clerical sex abuse cases around the world.
Pope Benedict XVI’s historic four-day trip to England and Scotland last week, which drew large crowds and was widely regarded as an unexpected triumph, had begun to repair some of the damage. But within a day of his return to Rome, Italian authorities announced the probe into suspicious transactions at the Vatican bank.
It has never been established whether he was killed or committed suicide, although there have been suspicions that he may have been murdered by the Mafia after losing large amounts of mob money.
An American archbishop, Paul Marcinkus, who headed the Vatican bank at the time, was charged as an accessory to fraudulent bankruptcy following the disappearance of $1.3 billion in loans to institutions in South America.
As a Vatican employee, he claimed immunity from prosecution by Italian authorities. A warrant for his arrest was eventually canceled, and he protested his innocence until he died four years ago in Arizona.