President of Vatican bank named in investigation

View from St Peter's - pic ICN

The president of the Vatican bank, Ettore Gotti Tedeschi, has been named in an investigation by Italian magistrates into money-laundering, Italian state television RAI reported today.

Yesterday, Italian treasury police seized 23 million euros, deposited in a Rome bank account by the Vatican bank, the station said.

A statement issued by the Vatican Secretariat of State today said it was bewildered and amazed at the legal action, saying its operations are legitimate and documented. It said the Vatican bank was committed to "full transparency" in its operations and had been actively working for some time with Italian and international authorities to comply with procedures that ensure funds are not used for terrorism or money-laundering.

It said the necessary information on the particular banking operations being probed were readily available to investigators.

"The Holy See therefore wants to express the maximum trust in the president and director general of the IOR," the statement said.

According to RAI, no proof of money-laundering has yet emerged in the probe, but investigators said the Vatican bank had failed to disclose information about banking operations as mandated by Italy's 2007 law against money-laundering. It said a second unnamed official of the bank was also under investigation.

Ettori Gotti Tedeschi, an Italian banker and professor of financial ethics at the Catholic University of the Sacred Heart in Milan, was appointed by Pope Benedict as president of the Vatican bank, known formally as the Institute for the Works of Religion last autumn. The appointment was seen at the time as a move toward greater transparency in the bank's operations.

In the 1980s, fraud allegedly lined to the Vatican bank led to the collapse of Italy's Banco Ambrosiano.