Jan Lois Condorez reports from the Vatican: The Vatican has hired a new cleaner to sort out its bank. Why? The answer is wrapped in another question: just how dirty is the Vatican Bank?
We’re not talking here grime that you take a scrubbing brush to get rid of. We’re talking about something far more corrosive: corruption and financial dealings that would take a month of confessions to get through and even then the absolution would probably not be guaranteed. Got the picture? You should and the Vatican has. Moreover, it is about to do something about it.
The Vatican has hired one of Europe’s shrewdest financial lawyers to convince the world that the Vatican Bank has cleaned up its act. His name is René Brulhart. Never heard of him? Well, maybe because he’s a Swiss lawyer and likes it that way. So does the Vatican.
Mr Brulhart was until recently the director of the Financial Intelligence Unit (FIU) of Liechtenstein. When he took over eight years ago Liechtenstein’s reputation was scuffing the floorboards. It would not be an exaggeration to say that before Brulhart came to Liechtenstein it was considered to be a dirty money laundry. Most scammers could come out clean – and with most of their funds intact.
Brulhart is an elegant guy with ultra smart dress sense and clean Swiss manners. His job in the exquisitely tiny European principality between Austria and Switzerland was indelicately described – bust financial crime. Clean up the system and clean up Liechtenstein’s rep. Seems he did. So that’s why the Vatican has asked him to tea.
The Vatican Bank, or the Institute for Works of Religion, is not a major player in the banking world with $8 billion assets and between 33,000 and 33,500 accounts carefully numbered. It is also a cash-rich bank that moves notes through different accounts not just within the Vatican but across the world. The secrecy of the account owners makes it harder to smell dirty money, especially freshly laundered.
The Vatican Bank has been an easy target for critics for many years, largely because every so often a new mischief is discovered. For example, in May 2012 the bank’s president Ettore Gotti Tedeschi was ‘let go’. A bad man in charge of a bad bank? Not necessarily. He says he was fired because he was ‘too close to the truth’. The investigation of that ‘truth’ is taking its time. There are many truths in the Vatican Bank. How will Brulhart tell fact from fiction?
His first job will be to repeat what he did in Liechtenstein and put together an FIU. That’s harder than it appears. Firstly, Brulhart has to establish within the Vatican his TORs – his Terms of Reference. He has to be as sure as he ever can be that he has authority and the backing for that authority at the highest Vatican level.
That is not easy because too many people at the highest levels could be charred if the Vatican Bank burns. His people have to go through a long training procedure that allows individual expertise to be brought into a team. Thirdly, he has to gain the confidence of the existing structure of the bank. Anyone familiar with Vatican (never mind Italian) institutions will be chuckling cynically at that thought.
Giving a directive does not mean it will be followed. When the Pope authorised the setting up of the Financial Information Authority two years ago, it found it had few rights of investigation. It was a toothless organisation. So what chance of success?
The Vatican secretary of state, Cardinal Tarcisio Bertone, is a powerful man in the Vatican. Maybe he is the most powerful. It was he who pulled in Brulhart. That should go some way to oil the investigation. How far is uncertain.
There is a glitch in the system that will not help Brulhart: the Vatican Bank doesn’t operate like a commonly funded and used bank. It is a ‘holy’ bank supposedly there to fund good (not bad) works. So the procedures and subtleties that made Brulhart successful during the past eight years may not be applied, never mind work, in the Vatican.
His main task is to get the bank to a point where the rest of the global financial institutions agree that it’s now clean. There is, however, a bigger and unspoken task: it is to convince the Roman Catholic Church’s faithful that at least one apparently corrupt institution has been corrected.
At the end of the process, world bankers may say everything is now Okay, but then the faithful and most others will never believe world bankers of all people. A hard task is ahead for the quiet man from Switzerland.