Monday, June 04, 2012

Ratzinger wants German as head of Vatican bank

The dismissal of Ettore Gotti Tedeschi from the Vatican bank (IOR) is not official yet, but in the Vatican the race for his job has already begun. 

Despite his age (81), Hans Tietmeyer, former leader of Bundesbank and current member of the Pontifical Academy of Social Sciences is one step ahead of all the other possible candidates. He is the only one Benedict XVI really likes and would have a ‘soothing’ effect on the power-struggle raging inside the Vatican financial world. 

The other potentials capitulated one after the other (Cesare Geronzi, Antonio Fazio, Giovanni Bazoli), no one is considered more suitable than Tietmeyer to manage the ‘Pope’s strongbox’ now that Berlin rules Europe’s finances and the Holy See is trying to get itself onto the OCSE’s “white list”.

Moreover, after the American group JP Morgan broke off all ties with the Vatican bank following the inquiry by the Public Prosecutor’s Office in Rome for breaking anti-money laundering laws, the IOR’s main partner is Deutsche Bank, which is where the current provisional President Ronaldo Hermann Schmitz comes from. In the last few days an operation has begun to ’clean up’ the Vatican bank’s image.

Two groups of ambassadors accredited by the Holy See have just visited the Institute. This is an unprecedented move that was decided to improve transparency within the Vatican financial institutions and especially to publicly show the IOR’s compliance with the international regulations against money laundering. In transactions the IOR often operates as a trust company rather than a bank, hiding the identity of the real owners of the funds by using its current accounts. 

Therefore the Bank of Italy has demanded that all Italian institutes ask the IOR the name of the real account holder when operating transactions. “So they invited us to visit, to hear what they had to say, to see a presentation of what they really are up to now” explained the British Ambassador accredited to the Holy See, Nigel BakerI do not think the process will be smooth because there will be certain areas in which the IOR will not be able to say: we’ve reached full international compliance, yet."
 
The Vatican has worked hard for months. The Secretariat of State in particular and the Governorate were very busy drafting a new version of the basic law against money laundering, Law 127, issued on 25 January 2012 by the head of the Governorate, Cardinal Giuseppe Bertello. The new law shows that in a Sovereign state like the Vatican, decisions even the ones concerning the economy must come from the governing bodies, therefore from the Secretariat of State, which basically acts as a political shield. 

This specification caused some internal turbulence, which is at the root of the power struggle between the Secretary of State Tarcisio Bertone and the head of the Financial Information Authority (AIF) Attilio Nicora. The IOR has worked for a long time in the full knowledge of being part of a sovereign state with a unique set up and the problem of being judged from the outside was not heavily felt. 

Now it has become paramount to evaluate whether the Holy See can legitimately join the  list of virtuous countries, that  have the greatest transparency and monitoring standards. Hans Tietmeyer seems to have the best profile to accomplish this task. The Curia said that: “The Pope wants a well managed IOR, far away from all scandals.”