This would never have happened without the decision of Benedict XVI in 2010 to make all Vatican financial operations transparent. And if it had been left to those who pull the string at IOR - and who resisted any measures that would allow Moneyval to examine Vatican's financial transactions for purposes of guarding against money laundering through the banks - they would never have interpreted 'financial transparency' to mean letting the world know these basic facts that the faithful have a right to know about the IOR. IOR first opened its doors to 'outsiders' when it invited ambassadors to the Holy See to a briefing on IOR last May 15, two weeks before IOR president Ettore Gotti Tedeschi was dismissed by the IOR administrative council.
See, that wasn't so hard:
IOR opens up to newsmen
by ANDREA TORNIELLI
June 28, 2012
The Vatican financial institution IOR manages approximately 6 billion Euro and has some 33,000 accounts belonging to 25,000 client depositors, but has no secret or anonymous accounts. [For example, a corporate depositor, such as a religious congregation, can have multiple accounts, one for each of its national branches and different institutions.]
It operates strict checks on money transfers, guarantees traceability of payments and is doing everything in its power to bring itself in line with international anti-money laundering regulations.
This was the crux of the message conveyed today by IOR director-general Paolo Cipriani ina briefing for 53 journalists from all around the world. It was the first time ever that IOR has ever opened its doors and given a briefing to journalists.
[Also the first time that anyone finally has an idea of how big - or small - the IOR is as a financial institution. For perspective, consider that the top 50 banks in the world today control assets ranging from 500 billion to 2.7 trillion dollars.]
The open house included a visit to the hall with counters open only to selected clients, preceded by a two-hour presentation on the activities of the institution established by Leo XIII in 1887 and transformed to its present strucgture by Pius XII in 1942.
The director of the Vatican Press Office, Fr. Federico Lombardi, said he was happy with the initiative: “We want to further this line of legality, transparency and correctness; this is why we want to communicate important information to the media.”
During his presentation, Cipriani, accompanied by deputy director Massimo Tulli and four other directors, reiterated on a number of occasions that the Vatican bank wants to “remove the veil of secrecy” concealing its activities and eliminate suspicions about the Vatican bank being used for dirty operations.
Cipriani also stressed that the services offered by the Vatican bank “are conceived according to the Catholic Church’s basic ethical principles.”
He explained that the institute’s primary objective was not to create profit on its balance sheet but to satisfy the client.
[That's a strange statement. Wasn't IOR created so that it could generate legitimate profits through its investments, out of which the Church can finance various 'religious works' around the world? Of course, every bank wants to satisfy its clients, and clients want their money to grow and to remain safe, hopefully in legitimate ways, and their privacy to be respected - those are general intentions, not specific objectives, much less the primary objective for IOR! It is so frustrating when reporters don't challenge statements like that made by Cipriani.
This is why the IOR organizes conferences with the financial authorities of various religious orders, to illustrate market trends to them and rationalize how the bank programs its investments in order to get the best and safest deal for its clients and itself.
Entities who can open an account with IOR include nunciatures, bishops, dioceses, religious congregations, parishes, canonical foundations, seminaries, Catholic educational institutions and embassies to the Holy See.
Cipriani said that 77.% of IOR clients are Europeans, 7.3% Vatican, 6.3% African, 4.1% South American, 2.3% North and Central American, 2.5% Asian and 0.2% from Oceania.
Cipriani retierated IOR's version of the Italian investigation into a 2010 IOR transaction, in which some 23 million euro of IOR funds was sequestered by the Italian government which suspected an irregular money transfer from the IOR account in Italy's Credito Artigianle bank to its own bank account in Frankfurt for the purpose of buying German bonds.
“These funds", he said,"are intended for normal treasury operations by IOR, and not for money transfers".
He also explained how and why JPMorgan closed out its Milan account with IOR recently. The bank had asked for detailed information that was not specified in the collaboration contract: “We wanted to know how the information was going to be used and we expressed our willingness to provide said information if the Italian bank surveillance authority requested it.”
Cipriani also pointed out that “The IT system which has been in place since 1996 makes it impossible for any shady operations to take place; while in the past there may have been irregularities in some accounts, this is no longer possible because every single Euro that comes in and out can be traced.”
Under scrutiny, Vatican opens
IOR doors to newsmen
VATICAN CITY, June 28 (AP) – The
Vatican bank, one of the most secretive institutions in the
secrecy-obsessed Vatican [The Vatican is no more secrecy-obsessed than, say, any sovereign state's defense and intelligence establishments!], opened itself up to a little external scrutiny Thursday in a bid to show it's serious about fighting money-laundering and being more financially transparent.
[AP and other newsmen, including the most veteran Vaticanistas insist on calling IOR the Vatican bank, and it isn't until the 12th paragraph that AP bothers to ackonwledge the difference.]
During a nearly three-hour power-point presentation to a few dozen journalists, the bank's director, Paolo Cipriani, highlighted the peculiar nature of the Institute for Religious Works, the institute's official name, and stressed its internal and external financial controls.
But more importantly, he sought to refute media allegations that the institution has been less than cooperative with requests for financial information from banks such as JPMorgan and Italian authorities.
At one point, Cipriani displayed a letter from Italy's financial police thanking him for his "timely and exhaustive response" in signaling a suspect transaction to them even before the Vatican's new anti-money laundering law went into effect last year. And he described in detail the exhaustive checks carried out by the institute to ensure that the money that comes into and out of its accounts is clean.
The institute, known by its Italian acronym IOR, has long been the subject of rumor and scandal — earned in part because of its role two decades ago in one of the most spectacular banking collapses in Italy, and ongoing suspicions by Italian investigators that it hasn't abided by anti-money laundering norms.
Cipriani, in fact, remains under investigation by Rome prosecutors for a 2010 suspect transaction. He hasn't been charged and said the transaction merely involved moving money from one IOR treasury account to another — not a client transfer which requires more information be provided.
In his first ever news conference, Cipriani said that his aim in coming before reporters was to "remove the veil and shadow of the past and do the utmost to respect the needs of the Holy See."
However, TV cameras and recording devices were barred, and Cipriani didn't take spontaneous questions from reporters. Instead the Vatican spokesman selected some that had been previously submitted and posed them to Cipriani, an affable, fast-talking Italian who nevertheless seemed a bit overwhelmed by the whole encounter.
The visit comes on the eve of a crucial decision by a Council of Europe committee on whether the Vatican has complied with a host of anti-money laundering and anti-terrorist financing norms.
A good compliance grade will enhance the Vatican's chances of eventually getting on the so-called "white list" of countries that share financial information — a keen aim of both the Pope and Cipriani, since the bank has to deal with financial institutions that insist that its books are clean.
The Institute was founded in 1942 by Pope Pius XII to manage assets destined for religious or charitable works. Located in a squat stone tower just inside the Vatican City gates, it is not open to the public and
isn't even a bank per se but rather an institution that provides financial services, such as bank transfers and financial advice, for church entities in 150 countries.
It has about 35,000 accounts belonging to religious congregations, dioceses, Holy See offices, diplomats and Vatican officials. Cipriani said it has about €6 billion ($7.5 billion) in assets and makes conservative, ethically-minded investments, about five percent of which are in the stock market and the bulk in bonds.
It doesn't do any business with offshore banks, applies regular customer due diligence and internationally-approved bank transfer measures and has a fully functioning anti-money laundering system of checks, he said.
The IOR has been in the news lately because of the unprecedented ouster of its president, Ettore Gotti Tedeschi, who was brought in specifically to help usher in a new era of transparency. The IOR's lay board of financiers removed Gotti Tedeschi last month, saying he was actually becoming an obstacle to transparency.
[They have never explained how - considering that he managed the drafting of the first financial transparency law signed by Benedict XVI in December 31, 2010, which was subsequently amended to give three other Vatican offices (the Secretariat of State, the Vatican Governatorate and the Vatican Gendarmerie) financial oversight powers alongside the Financial Information Authority created by the 2010 law - amendments made over the objections of Gotti Tedeschi and the Pope's personal pick for the Vatican's financial supervisory czar, Cardinal Nicora.]
On Wednesday, the board met for the first time since the ouster and began deliberations on the selection of a new president.
Cipriani didn't mention Gotti Tedeschi's name or refer to the ouster. He did, however, respond to some other issues that have arisen in recent months, including the abrupt decision by JPMorgan to close its IOR account earlier this year.
Because the IOR isn't a traditional bank per se, it relies on commercial banks in Italy and elsewhere to carry out its transactions. Its 35-year relationship with JPMorgan came to an end when the U.S. bank asked for information about transactions beyond the scope of what the IOR was contractually required to provide.
Cipriani said the type of information JPMorgan was seeking involved "types of questions made by vigilance authorities" — a reference to the Vatican's belief that Italian banking regulators were forcing JPMorgan to seek such information, even though it went beyond what is required.
The questions didn't concern an individual suspect transaction, but rather general questions about the IOR's policies about joint accounts, accounts with delegates and other matters, Cipriani said.
Cipriani displayed a letter in which he told JP Morgan to go through the Vatican's financial intelligence unit to get the information it wanted. Instead, JP Morgan "unilaterally" closed the account, he added.
JP Morgan has said it cannot comment. The Bank of Italy has refused repeated requests for comment about its decision to designate the IOR an offshore entity, a move that required banks in Italy to apply more scrupulous controls over their IOR transactions.
The IOR was implicated in a scandal over the collapse of the Banco Ambrosiano in the 1980s in one of Italy's largest fraud cases. Roberto Calvi, the head of Banco Ambrosiano, was found hanging from Blackfriars Bridge in London in 1982 in circumstances that remain mysterious.
Banco Ambrosiano collapsed following the disappearance of $1.3 billion in loans the bank had made to several dummy companies in Latin America. The Vatican had provided letters of credit for the loans.
[It certainly is pertinent to mention here that the IOR was the majority stockholder in Banco Ambrosiano]
While denying any wrongdoing, the Vatican bank agreed to pay $250 million to Ambrosiano's creditors.
[Modificato da TERESA BENEDETTA 28/06/2012 21:38]