God's Bankers: A History of Money and Power at the Vatican

by Gerald Posner

  10 Squires, “Division Among Cardinals Paved Way for Selection of Pope Francis.”

  11 Sharon Churcher and Tom Worden, “Special report: The damning documents that show new Pope DID betray tortured priests to the junta,” The Daily Mail, March 16, 2013; “Pope Francis: What Did He Really Do in Argentina in the 1970s?” The Guardian, March 20, 2013; Jeevan Vasagar, “Pope Francis Pledged to Fight for Priest Kidnapped by Junta, 1976 Letter Reveals,” The Telegraph, March 18, 2013.

  12 Pope Francis: From the End of the Earth to Rome, compiled by reporters from The Wall Street Journal (New York: ePub, 2013), Kindle edition, 406-466 of 1782.

  13 Ibid., 558, 560, and 615 of 1782.

  14 See “Jorge Mario Bergoglio is the new Pope of the Catholic Church: Francis I,” “Vatican Insider,” La Stampa, March 13, 2013.

  15 See Sandro Magister, “The ‘Segretariola’ of Francis, the Pope Who Wants To Do It All Himself,” L’Espresso, August 9, 2013. Benedict, meanwhile, moved into a 600-year-old unused convent in the Vatican. The internet carried the unsourced story that he wanted to retire and end his days in his native Germany but he feared that without the protection of Vatican sovereignty, he could be arrested by the International Criminal Court in the Hague for crimes against humanity for protecting pedophile clerics. In fact, some U.S. sex abuse victims had made such a request in 2011, but the Hague never acted on it. The Vatican dismissed it at the time as a “ludicrous publicity stunt.” Manuel Roig-Franzia, “Despite Investigating Catholic Scandals, Author Jason Berry Keeps the Faith,” The Washington Post, September 20, 2011.

  16 See generally “Cardinal Pell: Pope Francis’s Good Press Won’t Last Forever,” Catholic Herald, August 8, 2013.

  17 Pope Francis quoted in Jon Favreau, “The Social-Minded Pope Francis is a Very Different Kind of Pontiff,” The Daily Beast, January 14, 2014.

  18 Pope Francis quoted in Laurie Goodstein and Elisabetta Povoledo, “Pope Sets Down Goals for an Inclusive Church, Reaching Out ‘on the Streets,’ ” The New York Times, November 26, 2013. In September 2014, Pope Francis witnessed the marriages of twenty Roman couples, some of whom had lived together or had previous annulments. Some press reports cited it as further evidence that Francis was breaking with tradition. But Catholic periodicals pointed out that the Pope had not in fact formally veered from church dogma. See “No Scandal Here: The 20 Couples Married by Pope Francis Were Legit,” National Catholic Register, September 16, 2014.

  19 Pope Francis quoted in Antonio Spadaro, S.J., “A Big Heart Open to God,” America—National Catholic Review, September 19, 2013.

  20 Pope Francis quoted in Laurie Goodstein and Elisabetta Povoledo, “Pope Sets Down Goals for an Inclusive Church, Reaching Out ‘on the Streets;’ ” and Chua-Eoan and Dias, “Pope Francis, the People’s Pope.”

  21 “Pope Francis, The People’s Pope,” TIME, December 11, 2013; “Person of the Year,” The Advocate, December 16, 2013.

  22 Mark Binelli, “Pope Francis: The Times They Are A-Changin’,” Rolling Stone, January 28, 2014.

  23 William Saletan, “Pope Francis Is a Liberal,” Slate, September 19, 2013.

  24 See Marshall Connolly, “The Secret to Pope Francis’ Fame REVEALED,” Catholic Online, December 26, 2013, online at https://www.catholic.org/hf/faith/story.php?id=53689.

  In 2014, Fortune ranked Francis number one on its list of “World’s Greatest Leaders.” And a magazine focused just on Francis was launched. Il Mio Papa promised to run pictures and news weekly to update Pope Francis’s followers and fans. See Elisabetta Povoledo, “A New Magazine for Fans of the Vatican’s Biggest Star,” The New York Times, March 4, 2014; “Fortune Ranks the World’s 50 Greatest Leaders,” Fortune, March 20, 2014.

  25 Eric Marrapodi, CNN Belief Blog editor.

  26 Simon Edge, “Top of the Popes: Could Pope Francis Be the Most Popular One Yet?,” Express, January 10, 2014.

  27 Antonio Spadaro, S.J., “A Big Heart Open to God.”

  28 Pope Francis quoted in Francis X. Rocca, “Pope Condemns Abortion as Product of ‘Throwaway Culture,’ ” Catholic News Service, September 20, 2013.

  29 Pope Francis quoted in Steven Ertelt, “Pope Francis: Catholic Church Must Minister More to Women After Abortion,” LifeNews, September 19, 2013, online at http://www.lifenews.com/2013/09/19/pope-francis-catholic-church-must-minister-more-to-women-after-abortion/. See generally Cheryl K. Chumley, “Pope Francis Takes Veiled Swipe at ‘Progressive’ Democrats,” The Washington Times, November 26, 2013.

  30 Pope Francis quoted in Matthew Schmitz, “Pope Francis on How to Talk About Abortion, Gay Marriage, and Contraception,” First Things, online at http://www.firstthings.com/blogs/firstthoughts/2013/09/pope-francis-advice-on-how-to-talk-about-abortion-gay-marriage-and-contraception/.

  31 “UN Panel Confronts Vatican on Child Sex Abuse by Clergy,” BBC News Europe, January 16, 2014.

  32 Kharunya Paramaguru, “Vatican Snubs U.N. Probe on Sex Abuse Cases,” Time, December 4, 2013.

  33 “U.N. Expresses “Deepest Concern” over Widespread Sexual Abuse by Clergy, Finding Vatican Failed to Protect Children,” Center for Constitutional Rights, February 5, 2014; “The Vatican: Criticism From the U.N. Panel, The New York Times, May 24, 2014, A7. To its credit, in September 2014, the church put Archbishop Jozef Wesolowski under house arrest inside the Vatican and announced it would hold its first ever criminal trial of a cleric on charges of sex abuse. The Polish-born Wesolowski had been recalled to Rome in 2012 after numerous allegations of sex with young boys in the Dominican Republic, where he was stationed as Nuncio. Laurie Goodstein, “Former Vatican Ambassador Is Facing Sexual Abuse Trial,” The New York Times, September 23, 2014. In November, Francis excommunicated an Argentine priest who had been criminally convicted in 2011 of molesting four boys. Victims had been outraged that he had been allowed to spend all but 15 days of his sentence in a Buenos Aires monastery.

  34 O’Malley quoted in John L. Allen Jr. and Lisa Wangsness, “Pope Softening Tone, Not Stance, O’Malley Says,” The Boston Globe, February 9, 2014.

  35 Ross Douthat, “The Pope and the Precipice,” The New York Times, October 25, 2014.

  36 Francis echoed many of his predecessors in condemning the greed and excesses of capitalism. But what set him apart was the vigor with which he tried to redirect the church toward serving the poor. When President Barack Obama met with Francis in 2014, they focused on a subject about which both agreed: the need to fight the growing disparity between rich and poor. See “A Pope for the Poor,” TIME, July 29, 2013; “Obama Meets Pope Francis; Stressing Fight Against Inequality,” Boston Globe, March 27, 2014.

  37 “CNN Poll: Pope’s Approval Rating Sky-High,” CNN, December 24, 2013, online at http://religion.blogs.cnn.com/2013/12/24/cnn-poll-popes-approval-rating-sky-high/.

  38 Simon Edge, “Top of the Popes: Could Pope Francis be the most popular one yet?” The Express, January 10, 2014.

  39 “U.S. Catholics Admire the Pope Yet Differ With Many of His Views,” ABC/Washington Post poll: The Pope and the Church,” October 13, 2003, released October 15, 2003.

  40 Kay Campbell, “Rock Star Pope Francis Makes Cover of ‘Rolling Stone’—What’s up with That?,” AL.com, February 12, 2014, online at http://www.al.com/opinion/index.ssf/2014/02/rock_star_pope.html.

  Chapter 43: “Back from the Dead”

  1 Carol Glatz, “Vatican says number of Catholics, priests, bishops worldwide increased,” Catholic News Service, March 12, 2012; Nuzzi, Ratzinger Was Afraid, 81.

  2 Sanderson, “The Scandal at the Vatican Bank.”

  3 Phillip Pullella, “Insight: Pope to Review Vatican Bureaucracy, Scandal-Ridden Bank,” Reuters, Vatican City, April 2, 2013.

  4 For a full online copy of the 64-page AIF annual report for 2012, see http://goo.gl/715NOC. Andrea Tornielli, “Vatican Insider First Report by Vatican Financial Watchdog Reveals Suspicious Transactions,” La Stampa, May 22, 2013.

  5 Vatican Radio interview with IOR President Ernst von
Freyberg, May 31, 2013.

  6 Freyberg interviewed in ibid.

  7 Cipriani quoted in Andrea Tornielli, “The Vatican Bank’s Media ‘War,’ ” “Vatican Insider,” La Stampa, June 14, 2013.

  8 The members were Cardinal Raffaele Farina, president; Cardinal Jean-Louis Tauran; Bishop Juan Ignacio Arrieta Ochoa de Chinchetru; Monsignor Peter Bryan Wells, secretary; and Dr. Mary Ann Glendon, a Harvard law professor and former U.S. ambassador to the Holy See. Letter of the Holy Father Francis for the Establishment of a Representative School Papal Commission for the Works of Religion, Vatican.va, June 26, 2013.

  9 Rachel Donadio, “Pope Fills Key Job at Troubled Vatican Bank,” The New York Times, June 16, 2013, 11.

  10 Sandro Magister, “The Prelate of the Gay Lobby,” L’Espresso, July 18, 2013.

  11 Michael Day, “Pope’s Bank Clean-Up Man Found Stuck in Elevator with Rent Boy,” Belfast Telegraph, July 20, 2013; see also “Catholic Bishop in Charge of Cleaning Up Vatican Finances Got Stuck in a Lift with a Rent Boy and Lived with his Gay Lover in Uruguay,” Daily Mail Online, July 20, 2013.

  12 John Hooper, “Francis in Brazil: Vatican Politics: Sex Claims Raise Questions Over Key Papal Decision,” The Guardian, July 22, 2013; see Barbie Latza Nedeau, “A Reformer in Rome: Pope Francis Appears Serious About Changing the Vatican, but a Scandal Looms,” Newsweek, July 24, 2013.

  13 “New Vatican Bank Official Reportedly Part of ‘Gay Lobby,’ ” Catholic News Agency, July 18, 2013; John L. Allen, Jr., “Vatican Denies Scandal Report on Vatican Prelate,” National Catholic Reporter, July 19, 2013.

  14 The six were Jochen Messemer, a director of the German insurer, ERGO; Jean-Baptiste de Franssu, ex-chief of Invesco Europe’s asset-management; George Yeo, Singapore’s ex-Foreign Minister; Joseph Zahra, the former chairman of Malta’s largest bank; Professor Enrique Llano, an economist from the University of Madrid; and Jean Videlain-Sevestre, a former senior executive at Citroën. Tully, “This Pope Means Business,” Fortune.

  15 Pope Francis quoted in Tully, “This Pope Means Business,” Fortune.

  16 The six laymen—together with a PR specialist, Francesca Immacolata Chaouqui, and a Spanish Bishop, Lucio Angel Vallejo Balda—became directors of the Pontifical Commission for Reference on the Organization of the Economic-Administrative Structure of the Holy See (COSEA). See “Chirograph of the Holy Father Francis for the Institution of a Pontifical Commission for Reference on the Organization of the Economic-Administrative Structure of the Holy See,” Communique from the Secretary of State, July 18, 2013; Anita Bourdin, “Le pape veut simplifier et rationaliser les organismes du Vatican,” Zenit, July 19, 2013.

  17 Nick Schifrin, “Vatican Accountant Accused of Smuggling $26 Million in Private Jet with Ex-Italian Spy,” ABC News, June 28, 2013.

  18 Brülhart told the author that it was an STR—a suspicious transaction report—generated by the IOR that tripped up Scarano. It was a system about which he took great pride since he had introduced it after he became AIF’s director. See also Michael Day, “The Bank of Keeping Mum or Being Dead: The Financial Scandals Just Keep Piling Up for the Vatican’s Money-Men,” The Independent, July 14, 2013, citing a report by Italian magistrates concluding a thirty month investigation into the Vatican Bank.

  19 Philip Pullella, “A Look at the Arrested Vatican Monsignor’s Lush Life, “ABS.CBN News, July 5, 2013.

  20 Nick Squires, “Spy, Monsignor and Banker Arrested in Vatican Bank Fraud ‘Plot,’ ” The Telegraph, June 28, 2013, 1. The tales about Scarano have grown more outlandish since his arrest. One acquaintance has told police he spotted the wayward monsignor in front of St. Peter’s Square loading two suitcases of gold bullion into a van. But, as with many other stories that are often recounted in press reports or on the internet as if a proven fact, it is impossible to determine whether or not it is true.

  21 Alessandro Speciale, “Pope Francis Cleans House at the Vatican Bank,” Religion News Service, July 1, 2013.

  22 Barbie Latza Nadeau, “Heads Roll at Vatican Bank,” The Daily Beast, July 2, 2013.

  23 Rolando Marranci, the ex-CFO of BNP Paribas’s Italian subsidiary, became the deputy director and Antonio Montaresi, chief risk and regulatory officer for the New York branches of Italy’s Banca Nazionale del Lavoro and Banca di Roma, was selected as the chief risk officer. Speciale, “Pope Francis Cleans House at the Vatican Bank.”

  24 Nicole Winfield, “Vatican Bank Director, Deputy Resign Amid Scandal,” Associated Press, Business News, July 1, 2013. One of the Vatican names that kept coming up with Scarano was Paolo Mennini, APSA’s Director General. He also happened to be one of the sons of Luigi Mennini, Marcinkus’s former right-hand man at the Vatican Bank. Mennini, however, has never been charged with any wrongdoing. See Day, “The Bank of Keeping Mum or Being Dead: The Financial Scandals Just Keep Piling Up for the Vatican’s Money-Men.”

  25 Author interview, IOR official, Rome, September 2013.

  26 Carlo Bonini, “The Sins of the Bank of God: Money Laundering Prevention Circumvented for Years,” La Repubblica, July 6, 2013.

  27 “Ex-Vatican Bank Officials Broke Anti-Money Laundering Laws, Prosecutors Say,” Reuters, July 15, 2013.

  28 Gotti Tedeschi quoted in Philip Pullella, “Former Vatican Bank Head’s Lawyers Threaten to Sue to Clear Name,” Reuters, March 28, 2014.

  29 Rachel Sanderson, “The Scandal at the Vatican Bank,” The Financial Times Magazine, December 6, 2013.

  30 John L. Allen Jr. “For Once, an Exposé That Helps the Vatican Bank,” National Catholic Reporter, September 28, 2013. See also Speciale, “Pope Francis Cleans House at the Vatican Bank”; and Sanderson, “The Scandal at the Vatican Bank.”

  31 See for example “Secretive Vatican Bank Takes Step to Transparency,” The New Zealand Herald, October 1, 2013.

  32 Andrea Tornielli, “Exit Bertone, Enter Parolin,” “Vatican Insider,”, La Stampa, August 31, 2013.

  33 Sutherland quoted in Sanderson, “The Scandal at the Vatican Bank”; “Vatican Spurns UN Child Law Committee’s Call for Changes to Canon Law,” Catholic News Agency, September 30, 2014.

  34 Pope Francis quoted in Laurie Goodstein, “Pope Assails Bureaucracy of Church as Insular,” The New York Times, October 2, 2013, A6; “Pope Francis Sets Up a Group of Eight Cardinals to Advise Him,” “Vatican Insider,” La Stampa, April 13, 2013; “Secrets of the Vatican,” Frontline, PBS, February 2014.

  35 Motu Proprio for the prevention and countering of money laundering, the financing of terrorism and the proliferation of weapons of mass destruction, October 8, 2013.

  36 Statuto Dell’autorità Di Informazione Finanziaria, Vatican News.va, November 18, 2013.

  37 “Pope Names Private Secretary to Supervise Vatican Bank,” Reuters, Rome, November 28, 2013.

  38 Cheryl K. Chumley, “Pope Francis Sends Right-Hand Man to Oversee Vatican Inquiry,” The Washington Times, November 28, 2013.

  39 Freyberg had been under pressure to fill the post left empty since Cipriani’s resignation in the spring, especially since it was only days before Moneyval was due back at the Vatican for yet another on-site evaluation. Kevin McCoy, “Rolando Marranci Named Vatican Bank General Director,” USA Today, November 30, 2013.

  40 “Vatican Finance Group Signs Agreement with German Counterpart,” Patheos, December 4, 2013.

  41 Author interview with René Brülhart, Rome, September 23, 2013; see also Sanderson, “The Scandal at the Vatican Bank.”

  42 Nigel Baker interviewed in Laura Powell, “Inside the World’s Most Secretive Bank,” Economia, December 12, 2013.

  43 They were Vienna’s Christoph von Schönborn, Toronto’s Thomas Christopher Collins, and Cardinal Santos Abril y Castelló, archpriest of the Papal Basilica of St. Mary Major. Arjun Kharpal, “Pope Sacks 4 Cardinals in Vatican Bank in Cleanup,” CNBC, January 16, 2014.

  44 Di Taranto quoted in Arjun Kharpal, “Pope Sacks 4 Cardinals in Vatican Bank in Cleanup.”

  45 John L. Allen Jr., “
Francis Taps Reformer for Financial Cleanup,” National Catholic Reporter, January 30, 2014. When Moneyval made its first on-site evaluation in November 2001, Corbellini was undersecretary of the Vatican City administration, and in that role dealt with the European inspectors.

  46 Andrea Gagliarducci, “Vatican’s Financial Intelligence Authority Receives new President,” Catholic News Agency, January 31, 2014.

  47 Kharpal, “Pope Sacks 4 Cardinals in Vatican Bank in Cleanup.”

  48 Guy Dinmore, “Pope Decrees Sweeping Overhaul of Vatican’s Financial System,” Financial Times, February 24, 2014; see also Andrea Gagliarducci, “Pope Francis Shapes Vatican Finances Under Advice from His Cardinals,” Catholic News Agency, April 1, 2013.

  49 “Australian Cardinal to Head New Vatican Secretariat for Economy,” News.Va (The Official Vatican Network), February 24, 2014. British Monsignor Brian Ferme, the ex-dean of the Faculty of Canon Law at Washington’s Catholic University, was appointed as Pell’s deputy. At the same time, Francis formed the Council for the Economy—with eight clerics and seven lay experts—which was tasked with setting broad economic polices that the new Secretariat would then implement. Guy Dinmore, “Pope Decrees Sweeping Overhaul of Vatican’s Financial System,” Financial Times, February 24, 2014. The Pope also promised to name an auditor-general, who the Vatican said “will be empowered to conduct audits of any agency of the Holy See and Vatican city-state at any time.”

  50 Tom Kington, “Pope Francis Opts to Keep Scandal-Plagued Vatican Bank Alive,” Los Angeles Times, April 7, 2014.

  51 Barbie Latza Nadeau, “The Vatican Bank Is Back from the Dead,” The Daily Beast, April 9, 2014.

  52 Josephine McKenna, “Vatican’s Financial Watchdog Reports ‘Notable’ Spike in Shady Transactions,” Religion News Service, May 19, 2014.

  53 Massimo Faggioli quoted in Sanderson, “The Scandal at the Vatican Bank.”

  54 Rachel Sanderson and Giulia Segreti, “Pope Cuts Scandal-Prone Vatican Bank Down to Size,” Financial Times, July 7, 2014.