Vatican says "misunderstanding" behind bank probe

Thu Sep 23, 2010 7:39am EDT
 
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By Philip Pullella

VATICAN CITY (Reuters) - A "misunderstanding" between banks was the cause for the Vatican Bank being investigated by Italian authorities on suspicion of money laundering, the Vatican said on Thursday.

The Vatican also said its bank, known as the Institute for Religious Works (IOR), was committed to "complete transparency" and it was working to secure inclusion in the "White List" of states which comply with international standards of banking.

It outlined its defense in a letter sent to the Financial Times and distributed by its press office to journalists in Rome in a defense of the image of the Holy See and that of its bank.

"The current problem was caused by a misunderstanding -- now being examined -- between the IOR and the bank which received the transfer order," spokesman Father Federico Lombardi said in the letter.

On Tuesday, Rome magistrates put the IOR's top two officials, President Ettore Gotti Tedeschi and Director General Paolo Cipriani, under investigation and froze 23 million euros ($30.21 million) of its funds in Italy.

Two recent transfers from an IOR account in an Italian bank were deemed suspicious by financial police and blocked. One was a transfer of 20 million euros to a German branch of a U.S. bank, and the other of 3 million euros to an Italian bank.

Lombardi's letter betrayed the Vatican's deep irritation that magistrates had opened the probe and made it public.

"The nature and aims of the transactions under investigation could have been clarified with great simplicity," he said.   Continued...