Vatican Bank

The official name of the Vatican bank is the Istituto per le Opere di Religione (I.O.R.), or the Institute for Religious Works. It has been called one of the most secretive financial institutions in the world. The bank is known to manage contributions such as the annual worldwide Peter's Pence collection, used for religious, humanitarian, and social development work, and to support activities of the Holy See, the central administration governing the Roman Catholic Church. The bank also manages funds entrusted to it by religious orders and individuals associated with the Vatican. The nature and extent of its holdings and specific transactions, however, are not disclosed.

In contrast to this lack of official information, the bank often found itself the subject of unflattering publicity under its former president, Archbishop Paul C. Marcinkus, who headed the bank from 1971 to 1989. A native of Cicero, Illinois, he was one of the highestranking Americans in the Vatican, serving Popes John XXIII, Paul VI, John Paul I, and John Paul II. Initially charged with papal travel arrangements and security, he was appointed to head the Vatican bank despite a lack of financial experience.

In the mid-1970s, an Italian banking scandal linked the bank with Sicilian financier Michele Sindona. Sindona had advised the Holy See and Marcinkus on handling assets and investments. When Sindona's financial empire collapsed, the Vatican experienced losses estimated to be in the tens of millions of dollars. Sindona later died in a Milan prison after his coffee was laced with cyanide.

The next decade brought another scandal, more Vatican losses, and the death of another former financial adviser. Italy's largest investment bank, Banco Ambrosiano, failed in 1982. At the time, the Vatican bank owned a share in the bank and partnered in many deals with its president, Roberto Calvi. The Vatican denied any wrongdoing but agreed to pay $244 million to creditors of Banco Ambrosiano as recognition of moral involvement in the collapse. Archbishop [Page 2178]Marcinkus avoided arrest and standing trial by claiming diplomatic immunity, with which the Italian high court concurred. Calvi was found hanged in London under mysterious circumstances in 1982. At first ruled a suicide, five people went on trial in 2006 charged with his alleged murder.

Marcinkus was also mentioned in a controversy involving the Vatican and millions in Nazi gold purportedly laundered from Germany after World War II. A U.S. State department report implicated the Vatican in the scheme, and investigators tried to question Marcinkus, who again successfully claimed diplomatic immunity. The issue was recently revived in a lawsuit filed against the Vatican bank by Holocaust survivors claiming the bank profited from assets seized by Nazi leaders from prisoners in World War II prison camps. The bank claimed the matter was outside the jurisdiction of federal courts because it involved foreign policy issues. In January 2006, the U.S. Supreme Court allowed the lawsuit to proceed.

Marcinkus served as governor of Vatican City for a year after he left the bank presidency in 1989. He then retired to Arizona, where he died on February 20, 2006. After Marcinkus retired, the Vatican turned over management of the bank to a board of lay financial experts (i.e., not priests or members of a religious order). The finances of both the bank and Vatican City are now overseen by an economic commission of 15 cardinals.

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