Vatican moves closer to ending decades of secret banking
James Politi in Rome
The Vatican is in advanced talks with Italian authorities to end decades of secret banking in the city-state, as Pope Francis presses ahead with his efforts to clean up the finances of the Catholic Church.
The move would mark the latest step in the reform of the Vatican Bank — known as the Institute for Religious Works (IOR) — which has been shrouded in controversy since its founding during the second world war.
“The negotiations are at a good point. There are shared objectives: transparency and information exchange. It’s reasonable to think we could close it by the end of the month,” an official from the Italian finance ministry said on Wednesday.
For years, the IOR has been eyed with suspicion by Italian and global authorities who viewed it as a hub for illicit behaviour, from tax evasion to money laundering. But under intense pressure from governments and other financial institutions, Pope Benedict XVI and now Pope Francis have undertaken sweeping changes to the IOR, closing as many as 3,000 accounts and reforming many of its practices.
Details of the agreement in the works with Italy remain under wraps but Father Federico Lombardi, the Vatican spokesman, also said it would involve “greater and more complete transparency and exchange of information for tax purposes”.
Matteo Renzi, Italy’s prime minister, said in a recent interview with L’Espresso magazine that any deal with the Vatican would be modelled around similar ones agreed in recent weeks with Switzerland, Liechtenstein and Monaco — other tax havens close to home.
If the Vatican agrees to sharing information with Italian tax authorities and anti-money laundering investigators, it would mark a further departure from days in which money could be easily hidden within the walls of the Holy See, some analysts said.
“It’s good news that the Vatican is keeping up with developments elsewhere, and [such a deal] is consistent with the reforms that have been going on there,” said Joshua Simmons, policy counsel at Global Financial Integrity, a Washington-based group that seeks to curb illicit financial flows. “Pope Francis has really made this a priority,” Mr Simmons added.
The Vatican Bank has about €6bn in assets, with most of its 17,000-plus clients being religious orders and Catholic charities operating across the world. Between 2013 and 2014 it brought in Promontory, a Washington-based advisory group, to screen each of its clients for dubious activity and it is now regulated by the Financial Information Authority (AIF), the Vatican financial regulator set up in 2010.
Since last year, the IOR has been led by Jean-Baptiste de Franssu, the French former senior executive at Invesco, the fund manager.
“Our ambition is to become something of a model in financial management rather than a cause for occasional scandal,” Cardinal George Pell, head of economic affairs at the Vatican, said at the time of his appointment.
The biggest scandal almost certainly came more than 30 years ago when Roberto Calvi, the chairman of Banco Ambrosiano, in which IOR was a big shareholder, was found hanging from London’s Blackfriars bridge amid suspicions that he — also known as “God’s banker” — was the victim of Mafia hitmen.
France's Front National referred to EU anti-fraud body over staff wages
Far-right group may face investigation into claims its MEPs’ assistants were paid by European parliament while working for party in France
Tuesday 10 March 2015 15.39 GMT Last modified on Wednesday 11 March 2015 01.05 GMT
France’s far-right Front National (FN) has been referred to the EU over allegations that MEPs’ assistants took salaries from the European parliament while working for the party.
The president of the European parliament, Martin Schulz, this week alerted Olaf, the EU’s anti-corruption agency, after reportedly finding that 20 people who were being paid from the EU budget as parliamentary assistants to FN MEPs appeared in documents as officials of the party’s national organisation structure in France.
The anti-fraud body must now decide if it will open an investigation to determine whether FN party workers took staff salaries from the EU while doing separate work for the national party in France.
Rules state that assistants paid by the European parliament must work directly on Strasbourg parliamentary matters. The suspected fraud could total €7.5m (£5.3m).
Le Monde, which was first to report the story, said one of the FN parliamentary assistants was costing the EU €10,535 (£7,490) a month.
The European parliament said in a statement: “Assistants paid by the European parliament must perform work directly linked to the exercise of a member’s parliamentary mandate.”
Schulz also wrote to the French justice minister, Christiane Taubira, in case there were grounds for looking into possible illicit party funding in France.
The FN leader, Marine Le Pen, announced on Twitter that she would file a legal complaint against Schulz over what she termed a slanderous false accusation.
Her anti-EU, anti-immigration party topped the French poll at last year’s European elections and now has 23 MEPs, including Marine Le Pen and the party’s founder, Jean-Marie Le Pen.
News of the referral to the EU fraud squad comes as polls show the FN gaining an unprecedentedly high score in French local elections later this month, overtaking both the Socialists and Nicolas Sarkozy’s rightwing UMP party in the first round.
Manuel Valls, the Socialist prime minister, told French radio at the weekend: “I fear for my country, I fear that it will smash itself to pieces against the Front National.” He warned that the FN could win the next presidential election in 2017 and described their policies as a “disaster” for France.
Asked about possible European parliament fraud, Marion Maréchal-Le Pen, an FN MP in France’s national assembly, told France Info radio that she felt the referral was politically motivated.
She said: “Mr Schulz is a political activist. During the European elections he held a certain number of meetings against the Front National. He has applied to the letter the orders of Manuel Valls who has said elites should mobilise against the Front National.”
Le Pen added that being a European parliamentary assistant and “at the same time an adviser to Marine Le Pen on very technical questions – I absolutely don’t see how that is incompatible”.
Florian Philippot, a FN vice-president and MEP, accused the French prime minister of getting Schulz to concoct a false scandal. Philippot sent an ironic tweet referring to the party’s anti-European stance, which said: “After all, Schulz is right. Our assistants don’t work for the European Union but against it!”
While it is uncertain whether the FN will succeed in getting large numbers of party officials elected to county councils in the second round of local elections this month, a high first-round score would build on its steady rise in French politics against a backdrop of high unemployment and a stagnant economy.
A good showing in the local elections would allow the party to cement a new grassroots base in the runup to presidential elections in 2017.
Several polls have shown that Marine Le Pen could reach a runoff round in 2017, but she would have little chance of defeating a mainstream candidate to win power.
In 2012, two senior members of Ukip, which has railed against the EU “gravy train”, paid back more than £37,000 meant for European office staff after diverting it to party workers based in the UK.