Vatican bank chief's priority:
Clean up IOR'S 'reputation'
not any actual financial mess
VATICAN CITY, May 31 The new head of the Vatican bank says his top priority is to clean up the bank's reputation, saying the institution hasn't served the Pope well
[because of the 'bad' reputation - mostly undeserved!] but provides valuable financial services to the Holy See and its clients that should continue.
Ernst von Freyberg was named president of the Institute for Religious Works (IOR) in February, replacing Ettore Gotti Tedeschi, an Italian banker ousted by the bank's board last May for incompetence and other failings.
Von Freyberg's appointment was part of the Vatican's efforts to shed the bank's image as a secretive tax haven and improve its reputation in global financial circles following
a series of scandals, including a money-laundering investigation launched by Rome prosecutors in 2010.
[Apart frem the unceremonious dismissal of Gotti Tedeschi, which has nothing to do with any questionable dealings, the only 'scandal' that has happened at IOR in the eight years of Benedict XVi's Pontificate is the 2010 investigation mentioned - what this article does not mention is that the Italian prosecutors eventually released some $24 million euros they had frozen for a few months over this alleged questionable transaction, in which they insisted that an IOR fund transfer to a German bank to pay for bonds bought by the IOR was actrully done in behalf of some unnamed client or clients.]
In interviews published Friday, Von Freyberg said he had hired a leading firm, Promontory Financial Group, and the U.S.-based law firm Cleary Gottlieb Steen & Hamilton to ensure that the bank complies with anti-money laundering and anti-terror financing standards. He also hired an outside public relations expert, saying
a big part of the bank's problem was its failure to communicate.
"When I came here, I thought I would need to focus on what is normally described as cleaning out and dealing with improper deposits,'' he told Vatican Radio. "There is -- until now -- nothing I can detect. That doesn't mean that there isn't anything, but it means that it is not our biggest issue. Our biggest issue is our reputation,'' he said.
Some of the sharpest calls for reform of the Vatican bureaucracy that accompanied the March election of Pope Francis focused on the bank and came from cardinals who suggested it needn't exist at all, given its shady reputation. [A reputation that has carried over from the catastrophic Banco Ambrosiano crash in 1982 that cost IOR some $250-million to restitute bank depositors, since IOR was the majority stockholder. A reputation the IOR never appeared to outlive. And the 'stupid' cardinals - pardon the language - were simply gung-ho to pile on any bad thing they could on Benedict XVI's Pontificate, as if they themselves have been running their dioceses faultlessly!]
Von Freyberg, a 54-year-old German industrialist and aristocrat, said the bank's 18,900 customers choose to stay with the IOR because it provides "very, very safe'' investment returns and other services such as asset management and wire transfers.
"They want us to be there,'' he said of the customers. But he acknowledged: "We haven't rendered a good service to the Holy Father with the reputation we have, and this reputation obscures the message. And that I consider my first and most important task to address.''
Earlier this month, Von Freyberg announced the bank would publish its annual report online for the first time on Oct. 1.
In a parallel bid to show greater transparency, the Vatican's new financial watchdog agency published its own annual report last week, revealing that six suspect transactions had been reported in 2012, two of which were forwarded onto Vatican prosecutors for further investigation.
Von Freyburg said, so far, another seven suspicious transactions have been reported by the bank in 2013.
The IOR was founded in 1942 by Pope Pius XII to manage assets destined for religious or charitable works. Located in a tower just inside the gates of Vatican City, it also manages the pension system for the Vatican's thousands of employees.
The IOR on Friday provided preliminary figures for 2012, saying its net profit was 86.6 million euros ($112.6 million), with total assets under management of 7.1 billion euros ($9.23 billion).
It didn't provide figures for 2011, saying only its average net profit from 2009-2012 was 69 million euros ($89.7 million). The bump was due in large part to the performance of Italian government bonds last year.
The bank is not open to the public. Depositors are usually limited to Vatican employees, religious orders and diplomats accredited by the Holy See, though its customer base has long been the subject of speculation that Italians were hiding money there to avoid paying taxes. Currently, each account is being checked to ensure the owner belongs there.
As part of its transparency bid, the Vatican agreed to an independent evaluation process to ensure it was complying with international anti-money laundering and anti-terrorist financing norms. It passed the first evaluation of the Council of Europe's Moneyval process last summer.
Von Freyberg has set a July 31 deadline to come up with norms for customer checks, after the bank missed its December deadline.
"We are late, and I will do my utmost to catch up,'' he said in an e-mail via his Munich-based spokesman, Max Hohenberg of CNC Communications.
Von Freyberg, a member of the Roman Catholic charitable group Knights of Malta, was named IOR president after a months-long search by a headhunting firm, a novelty for the Vatican where backroom deals, nepotism and patronage appointments are common.
His appointment initially raised eyebrows, since he is also chairman of German shipbuilder Blohm + Voss. Von Freyberg chairs the company's civilian branch, but that unit is part of a consortium building four frigates for the German navy.
The Vatican and its bank have traditionally steered clear of investments in companies that manufacture weapons or contraceptives.
[Frigates are ships, not 'weapons', even if they are for the German navy!]
Von Freyberg lives at Casa Santa Marta
attends some of the Pope's Masses -
and they have spoken casually
but never about IOR
VATICAN CITY, May 31 (Translated from AGI) - Named president of IOR last February 15 by Benedict XVI, Ernst von Freyberg told Radio Vatican in an interview that he took office midway through someone else's term and that therefore his term ends in 2015.
He said he had the 'privilege' of living in Casa Sabta Narta and therefore, "sometimes I take part in the Mass celebrated by the Pope"
[Apparently he was not there the day Pope Francis made a remark about IOR during his homily! Or was he?]
However, in his interview with
Corriere della Sera, ge said he had not spoken with the Pope about the problems of IOR.
[It obviously is not that much of a problem then, any more than the Curia, as everyone and his grandmother were decrying loudly before the Conclave!]
"I have met the Pope, when I take part in the Mass at Santa Marta, but I have never spoken to him about the future of IOR. I have only heard his homilies".
Since after the Holy Week, Pope Francis has been meeting each of the heads of Vatican offices one by one, going by the daily list of audiences, but he has not gotten around to the IOR yet.
Just as a news curiosity, here is the AP item from two years ago, to the day, about the release of the sequestered IOR funds:
Prosecutors release sequestered
$33 million to the Vatican bank
VATICAN CITY, June 1, 2011 (AP) -- Prosecutors have released euro23 million ($33 million) seized from a Vatican Bank account last year in a money-laundering probe.
The Vatican newspaper L'Osservatore Romano said prosecutors released the funds after the Holy See passed new anti-money laundering and anti-terror financing laws to conform with EU and international norms.
Italian financial police seized the money in September 2010 as a precaution and placed the bank's top two officials under investigation, alleging the bank broke the law by trying to transfer money without identifying the sender or recipient. [The Vatican clearly said at the time that the money was from the IOR's own account that was being paid to a German bank to pay for some bond purchases.]
The Vatican denied wrongdoing and said the investigation of the bank, known as the Institute for Religious Works or IOR, resulted from a misunderstanding. The officials haven't been charged. [Probably because they committed no violations! The whole sequestration maneuver now seems to be like a monumental publicity ploy to put the Vatican in the crosshairs on a flimsy pretext over an issue that it was already acting upon.]
[Modificato da TERESA BENEDETTA 01/06/2013 14:46]