VATICAN CITY — The president of the Vatican bank was effectively ousted Thursday after receiving a unanimous vote of no-confidence from bank overseers for having leaked documents and failed to do his job at a critical time in the Holy See’s efforts to show financial transparency, the Vatican and officials said.
Ettore Gotti Tedeschi has been a polarizing figure ever since he was named president of the bank, known as the Institute for Religious Works, or IOR, in 2009. He is being investigated on suspicion of money laundering by Italian magistrates, but the investigation isn’t believed to have factored into the decision since the Vatican considers the probe to be motivated by outside political interests.
In a statement Thursday, the Holy See said the vote was taken because of Gotti Tedeschi’s failure to fulfill the “primary functions of his office.” He himself has told prosecutors that he barely paid attention to the bank’s works, showing up only two days a week while tending to his primary position as head of Spain’s Banco Santander’s Italian unit in Milan.
In addition, Gotti Tedeschi was found to have leaked confidential documents to serve his personal and political interests, according to a source in the Vatican secretariat of state. The source requested anonymity because he was not authorized to discuss internal Vatican investigations. The Vatican is in the midst of a scandal over leaked documents and has begun a criminal investigation into the source of the leaks, as well as appointed a commission of cardinals to get to the bottom of it.
In a statement, the Vatican said the board had grown increasingly concerned about the governance of the bank and that the situation had deteriorated recently.
During a regularly scheduled board meeting Thursday, the five superintendents, who include the former No. 2 at Deutsche Bank, Ronaldo Hermann Schmitz, and Carl Anderson, head of the Knights of Columbus, a major U.S. Catholic fundraising unit, unanimously adopted a no-confidence motion and recommended that Gotti Tedeschi’s mandate be terminated.
His fate isn’t final. On Friday the cardinals who sit on the IOR’s governing council are to meet to consider the board’s decision. While it wasn’t clear if they could ignore the no-confidence vote, already the Vatican made clear the search was on for a new president.
The IOR said: “The council is now looking forward to search for a new and excellent president who will help the institute rebuild relationships between the institute and the financial community based on mutual respect based on internationally accepted banking standards.”
The no-confidence vote comes at a critical time for the Holy See in its efforts to shed the IOR’s image as a secretive tax haven battered by years of scandal.
The Holy See is heading into a July meeting of Moneyval, a Council of Europe committee that will determine whether it has complied with international norms to fight money laundering and terror financing. Transparency of the IOR’s finances has been one of several criteria that the Moneyval evaluators have investigated. It wasn’t clear if the timing of Gotti Tedeschi’s ouster was aimed at sending a message to the Moneyval investigators, but just last week the Holy See met with them to discuss the preliminary findings of their report.
Gotti Tedeschi has long painted himself as the symbol of Vatican financial transparency, but the vote Thursday indicated that his primary collaborators on the board had found him to be anything but. He was faulted for not keeping the board of superintendents apprised of the work of the bank, among other failings.
Recently, he raised eyebrows when he made a joke about Hitler, war and economics.
Gotti Tedeschi was a frequent contributor to the Vatican newspaper and went on a very public speaking tour extolling the benefits of a morality-based financial system and citing frequently from the pope’s encyclical on the subject, “Charity in Truth.”
The Vatican bank was founded in 1942 by Pope Pius XII to manage assets destined for religious or charitable works.
The Vatican bank’s finances have long been shrouded in secrecy. Most famously, it was implicated in a scandal over the collapse of the Banco Ambrosiano in the 1980s in one of Italy’s largest fraud cases. Roberto Calvi, the head of Banco Ambrosiano, was found hanging from Blackfriars Bridge in London in 1982 in circumstances that remain mysterious.
Banco Ambrosiano collapsed following the disappearance of $1.3 billion in loans the bank had made to several dummy companies in Latin America. The Vatican had provided letters of credit for the loans.
While denying any wrongdoing, the Vatican bank agreed to pay $250 million to Ambrosiano’s creditors.
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