The Vatican's troubled and
sometimes scandal-hit bank. the Institute for Religious Works
(IOR), saw its profits fall in 2013.
The accounts were unveiled just as the bank completed phase
one of its clean-up, closing some 3,300 possibly or probably
dodgy accounts.
On Wednesday the Vatican will roll out phase two which will
aim to definitively get the controversial bank on the
international white list of top anti-money laundering states.
IOR on Tuesday posted net profits of 2.9 million euros in
2013, down from 86.6 million euros the previous fiscal year.
In a statement, IOR said the 83.7-million-euro drop was due
to "extraordinary expenses, adjustments to the value of
investment funds managed by third parties, and a drop in the
price of gold".
However those losses were made up by the first semester
this year: results based on preliminary data showed net profits
of 57.4 million euros (against 2.9 million euros in 2013).
Also in 2013, IOR contributed 54 million euros to the
budget of the Holy See, down from 54.7 million in 2012.
The money goes to charity and to the pope's "evangelical
activities", the bank said.
Meanwhile, The Holy See posted its umpteenth deficit
Tuesday while the Vatican Governorate was in surplus again.
The Holy See's deficit for 2013 deficit was 24.4 million
euros while the Governorate, which runs the city state, had a
surplus of 33 milion euros, 10 million more than 2012.
In related and slightly controversial news, IOR lost over
15 million euros last year in a TV operation that gained
headlines for the wrong reasons.
Former Vatican secretary of state Cardinal Tarcisio Bertone
in 2012 arranged for IOR to extend a loan to Italian TV
production company Lux Vide, owned by his long-time friend and
former head of RAI State TV, Ettore Bernabei.
The loan shows up in the IOR's books as a "free transfer of
shares equal to 15.1 million euros to a Holy See foundation".
The operation fell under the lens of Rome prosecutors and
Italian finance police in May, after the Holy See denied a
news report that Bertone was under investigation by Vatican
prosecutors for alleged embezzlement.
German magazine Bild, citing "unofficial" Holy See sources,
said the once-powerful official embezzled 15 million euros from
Vatican coffers at the end of 2012.
Those controls fell under a larger probe into the Vatican
bank regarding suspected violations of anti-money laundering
norms.
Pope Francis has created a commission to oversee the
troubled financial institution in an effort to make it more
ethical and transparent.
IOR has had a chequered history.
In the most recent blow to its standing, in March Rome
prosecutors requested that its former general manager of the
Vatican Bank, Paolo Cipriani, be sent to trial for allegedly
breaking Italy's laws against money laundering.
They also requested Cipriani's former deputy, Massimo
Tulli, be indicted.
The case is related to a probe that in 2010 led to the
freezing of 23 million euros over two cash transfers involving
the bank that were deemed suspicious.
Earlier in March a Rome judge upheld a request from
prosecutors for a probe into the former head of the Vatican
Bank, Ettore Gotti Tedeschi, over the same case to be shelved.
Gotti Tedeschi resigned from the bank in May 2012
following a no-confidence vote by the supervisory board, amid
reported disagreements on efforts to get the Vatican on the
white list of financially transparent countries.
Italian banks effectively stopped dealing with the IOR in
2010 after the Bank of Italy ordered them to enforce strict
anti-money-laundering criteria to continue working with it.
From January 1 to February 12 last year the Bank of Italy
froze all credit-card and ATM transactions inside the Vatican
City over its failure to fully implement international
anti-money-laundering standards.
The Vatican has made several reforms to introduce greater
financial transparency and fight money laundering since Pope
Francis was elected to the helm of the Catholic Church last
year.
In June Francis nominated a pontifical commission to make
proposals on the future of the bank and he has even openly
expressed the possibility of abolishing it.
In December the Council of Europe's Moneyval agency, a
monitoring group of financial experts, praised the Vatican's
progress, as it seeks to get on the list of countries with
strong credentials on combatting financial crime.
But it also stressed that more work needed to be done.
In January the Vatican Bank said it was ready to resume
normal relations with Italy after making progress in measures to
prevent money laundering and other financial crimes.
There have been many allegations that the IOR was used to
launder money, most notably by 'God's Banker' Roberto Calvi, the
former head of Italy's biggest private bank, whose body was
found hanging under Blackfriar's Bridge in London in 1982, a
suspected victim of the Sicilian mafia.
The IOR was also named in kickbacks probes stemming from
the 1990 collapse of public-private chemicals colossus Enimont,
part of the Clean Hands investigations that swept away Italy's
old political establishment.
In recent years there have been a series of Italian TV
reports and a best-selling book claiming to show how individuals
used the IOR to squirrel away money, dodging Italian
regulations.
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