Vatican aims to keep charities, donations clean with new law
VATICAN CITY (AP) — The Vatican’s financial watchdog has taken on responsibility for evaluating suspicious donations to Vatican-based charities and foundations, an assignment that marks a new phase of Pope Francis’ financial reforms.
An annual report released by the Financial Information Authority on Friday showed a progressive consolidation of efforts to bring the Vatican into compliance with international norms for fighting money laundering and terrorist financing.
For its dual job of supervising the Vatican bank and serving as the Holy See’s financial intelligence unit, the AIF, as the agency is known, collects and evaluates reports of suspicious transactions. In recent years, the bulk of those reports have come from the bank, the Institute for Religious Works, but also other Holy See offices.
In its annual report, the agency noted a law that took effect in November requiring all Vatican-registered charities and foundations to report suspicious transactions to AIF or face sanctions of up to 20,000 euros. That law was a response to a recommendation from the Council of Europe’s Moneyval process, which the Vatican joined in a bid to shed its image as a loosely regulated offshore tax haven.
There are only a few dozen such foundations, but the Vatican’s tribunal recently scored its first financial crime-related conviction stemming from a suspicious transaction by a Vatican-registered non-profit: the fundraising foundation of the Vatican’s Bambino Gesu Pediatric Hospital. The former hospital president was convicted of abuse of office last year for diverting nearly a half-million euros in foundation donations to renovate the penthouse apartment of a top Vatican cardinal.
Over the years, the Vatican has worked to clean up its financial house, particularly at the bank, which has long been mired in scandal. In February, two former bank heads were found liable by the Vatican’s civil tribunal for mismanagement for bad investments and ordered them to repay the institution.
And on May 9, another former bank president, Angelo Caloia, and his lawyer are due to go on trial on criminal embezzlement charges related to losses of more than 50 million euros ($62 million) from Vatican real estate sales.
Going forward, the current leadership has proposed changes that would eliminate a three-person board of auditors. AIF director Tommaso di Ruzza said the board was foreseen in 1990, before other controls were instituted, and may no longer be necessary.
Some observers have also expressed concern about the future of the IOR itself, given its limited services as a bank — no ATMs outside the Vatican, no online banking options, no loans and limited investment options — has resulted in clients taking their business and money elsewhere.