Vatican Case Raises Questions on Whether Papal Butler Did It

Photographer: Alessandra Benedetti/Corbis

Paolo Gabriele, lower left, the pope's butler, in this file photo. Close

Paolo Gabriele, lower left, the pope's butler, in this file photo.

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Photographer: Alessandra Benedetti/Corbis

Paolo Gabriele, lower left, the pope's butler, in this file photo.

The Vatican is conducting a widening probe into leaked documents that prompted the arrest of Pope Benedict XVI’s butler last week in a case local media have compared to an Agatha Christie novel.

The Vatican yesterday ruled out any involvement in the investigation of a cardinal or a woman, after newspapers Corriere della Sera and La Stampa reported that the butler hadn’t acted alone and that a cardinal, the Roman Catholic Church’s highest rank after the pope, was also among the suspects.

The pope is “aware of the delicate situation going on inside the Curia,” or the Holy See’s government, spokesman Federico Lombardi told reporters at the Vatican yesterday. “No cardinal or woman is under investigation.”

Italian media have offered contradictory versions of the events behind the May 25 arrest of Paolo Gabriele, the butler found in possession of classified documents. The case has often been portrayed as part of a palace intrigue pitting loyalists of an increasingly isolated Benedict, 85, against Cardinal Tarcisio Bertone, the Vatican’s de facto prime minister.

“It’s right out of an Agatha Christie novel,” Rome daily Il Foglio said.

Vatican Bank

The story began last week when Ettore Gotti Tedeschi was ousted as head of the Vatican bank, formally known as the Institute for Works of Religion, or IOR. Gotti Tedeschi, who had been trying to bring the bank into line with global-transparency standards, was removed in a no-confidence vote by the IOR board for having failed “to carry out various duties of primary importance,” Lombardi said in a statement on May 24.

The next day, Gabriele was arrested in a case Lombardi said had nothing to do with Gotti Tedeschi, a former executive with Banco Santander SA (SAN) who also teaches financial ethics at Milan’s Catholic University.

Gabriele has so far been charged with “aggravated theft,” Lombardi said yesterday. Many classified Vatican documents came to light this month with the publication in Italy of “The Secret Papers of Benedict XVI” by Gianluigi Nuzzi, a book that aimed to expose Bertone’s growing influence.

Not Alone

The butler wasn’t acting alone and high-ranking clerics were also involved in the leaking operation as part of an attempt to protect the pope from Bertone’s machinations, daily Repubblica reported yesterday, citing an unidentified person involved in the effort. Gotti Tedeschi’s removal was also orchestrated by Bertone, the person was cited as saying.

The group began to act after Archbishop Carlo Maria Vigano, then-secretary general of Vatican City, was made papal envoy to Washington last year, the person told Repubblica. In his book, Nuzzi published a letter in which Vigano tells the pope that his transfer would undermine his efforts to root out corruption inside the Vatican.

“What to say?” Lombardi said with a chuckle when asked by reporters at a briefing today whether the leak case stemmed from Vatican intrigue. “I don’t have a global vision of the situation,” he said, adding that he couldn’t give a “credible” answer to the question.

Hanged in London

Under Gotti Tedeschi, the Holy See sought to improve the IOR’s image after scandals that included the $1.3 billion collapse of partly Vatican-owned Banco Ambrosiano, once Italy’s largest private bank. Its former chairman, Roberto Calvi, dubbed “God’s banker,” was found hanged under London’s Blackfriars Bridge in June 1982.

After the IOR came under investigation for allegedly flouting Italy’s money-laundering laws in September 2010, Gotti Tedeschi helped lead a Vatican effort to bring the bank into line with the European Union’s financial-transparency rules. New Holy See legislation binding the Vatican to EU norms went into effect last year.

Vatican officials have been divided over how to interpret the new regulations, according to Holy See documents published in February on the website of Il Fatto Quotidiano newspaper. One group including Bertone argued the rules weren’t retroactive, while Gotti Tedeschi and others believed the Vatican must turn over all relevant information to the Vatican’s new financial authority and Italian prosecutors, the newspaper reported.

Closed Account

In March, Il Sole 24 Ore, Italy’s main financial daily, reported that JPMorgan Chase & Co. (JPM) was closing an account held by the IOR to comply with Italy’s anti-money-laundering rules. The biggest U.S. bank, in a Feb. 15 letter to the IOR, cited a lack of transparency on payments through the IOR’s account in Milan, the newspaper said.

A Bank of Italy inspection last year resulted in a request for information on money transfers at the Vatican bank’s account at JPMorgan’s Italian unit, Il Sole reported. The U.S. State Department on March 7 added the Holy See for the first time to its watch list of nations at risk for money laundering.

Nuzzi, the author, said Gotti Tedeschi had introduced a system of checks on clerical bank accounts that was “unheard of” in the Vatican, with alarms going off on accounts with any movements that exceeded the norm.

“When you try to transform an offshore bank into a more normal bank, naturally you’ll run into resistance,” Nuzzi said by phone yesterday. “Gotti Tedeschi was a victim of his efforts to implement anti-money-laundering norms.”

Shortcomings

According to the IOR’s Supervisory Board, Gotti Tedeschi exhibited shortcomings including not attending board meetings and poor communication with its members, lack of prudence in comments about the bank, failure to explain the “dissemination” of documents in his possession and “progressively erratic behavior.” The board made public its criticism in a nine-point statement on May 24.

Carl Anderson, who’s secretary of the board, has denied that Gotti Tedeschi’s dismissal had anything to do with the bank’s transparency efforts. “We confirm our decisive commitment to transparency, which isn’t under discussion,” he told La Stampa in an interview on May 26.

Moneyval, a Council of Europe committee that evaluates anti-money-laundering measures, is due to meet with Vatican officials in July to determine whether the city-state should be put on the EU’s financial-transparency “white list.”

The pope has so far not directly commented on the events of the last week. Buffeted by other crises including a global priestly pedophilia scandal, the pope told faithful in St. Peter’s Square on May 26 that “a wind is shaking the House of God” even as it’s “built on a rock.”

The investigation of the butler and the leaked papers is being overseen by a panel of cardinals “who are continuing their work, carrying out talks within the time required by the investigation,” Lombardi said yesterday. “They won’t let themselves be pressured by the media.”

To contact the reporter on this story: Jeffrey Donovan in Rome at jdonovan26@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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