Saturday, June 16, 2012

Pope’s ex-banker ‘fears for his life’

Three weeks after he was dismissed as president of the Vatican bank and with a secret dossier he wrote now in the hands of Italian investigators, Ettore Gotti Tedeschi is said to be afraid for his life.
Depending on who you believe, Mr Gotti Tedeschi, 67, is either an “erratic” manager who neglected his duties, or pathologically disturbed, or the victim of an internal power struggle as the Vatican’s bank labours under a culture of secrecy.

In an apparent attempt to discredit him, a letter from a psychotherapist detailing the banker’s mental health was leaked to an Italian newspaper on Saturday. The Vatican expressed regret for the leak.

Last week, prosecutors from Naples and Rome questioned Mr Gotti Tedeschi after police searched his home in Piacenza and office in Milan and seized copious documents and a personal dossier.

According to reports, the latter was to be passed to three trusted figures, including Pope Benedict’s personal secretary, “in the event that something happens to me”.

Already shaken by the leak of confidential documents that led to the arrest of Pope Benedict’s butler as a suspected mole last month, the Vatican has reacted with alarm. It issued a statement expressing its concern about events surrounding Mr Gotti Tedeschi and reminded Italian prosecutors to respect the Vatican’s sovereign immunity.

The Vatican also emphasised that Mr Gotti Tedeschi’s dismissal on May 24 from the Institute of Public Works (IOR), as the bank is formally known, was because of his lack of competence and not – as claimed by the ex-banker – because of opposition he encountered in trying to implement transparency reforms.

Mr Gotti Tedeschi – a conservative Catholic, veteran banker and lecturer in ethics in finance – was brought into the IOR in 2009 as the bank sought to put its affairs in order after its entanglement in various scandals in the 1980s and 90s.

A veteran observer and friend of Mr Gotti Tedeschi confirmed reports that he feared for his life – not unjustly, the source said, given the bank’s murky history and mysterious death 30 years ago of Roberto Calvi, former chairman of Banco Ambrosiano, a bank partly owned by IOR that collapsed as a result of fraudulent bankruptcy.

Mr Calvi – the so-called “God’s banker” – was found hanging from Blackfriars Bridge in London, a presumed victim of the Mafia.

The friend, who asked not to be named, described Mr Gotti Tedeschi as a “candid” and respected figure who became caught up in events beyond his control.

A similar analysis was given by a source in the Italian judiciary, who also asked not to be named. He said Mr Gotti Tedeschi appeared to be “very worried” during questioning last week, although he did not request official protection.

According to media reports, among the seized papers are documents by Mr Gotti Tedeschi relating how he ran into trouble with internal “enemies” when he requested information on IOR accounts linked to Italian politicians, businessmen, state officials and fronts for mafia bosses.

Paolo Cipriani, IOR director-general and reportedly one of the alleged “enemies”, denied the existence of such accounts in an interview with Corriere della Sera, Italy’s leading daily. Mr Cipriani said that when he presented the lists of IOR account holders to demonstrate this, Mr Gotti Tedeschi replied: “I don’t want to know. It is better not to know.”

Both Mr Gotti Tedeschi and Mr Cipriani were put under formal investigation by Rome prosecutors in 2010 in connection with the bank’s suspected breach of Italian anti-money laundering norms.

Funds totalling €23m from two suspicious transactions were frozen but later released. The investigation continues. The two men, who both deny the accusations, have not been charged.

The Naples prosecutors who ordered the search of the ex-banker’s premises last week justified their actions as being part of a separate investigation of suspected bribery involving Finmeccanica, the state-controlled defence group.

They said they were looking for documents that Mr Gotti Tedeschi might have received from his close friend, Giuseppe Orsi, the group’s chief executive. Mr Orsi, who denies the bribery allegations – involving sales of helicopters to India – said the claim was “absurd”.

However, Vatican observers suspect the Naples investigators were more interested in the activities of the IOR and had been frustrated by the apparent lack of progress or will demonstrated by their Roman colleagues to pursue the money laundering probe.

A Italian government official, who asked not to be named, described the IOR as a “bank under siege” – both from the Italian judiciary but also from the Bank of Italy as it cracks down on money laundering by means of banks, including those used as intermediaries.

JPMorgan this year closed an IOR account in Milan used for transfers, reportedly under pressure from Italy’s central bank.

It remains to be seen how recent events will affect the Vatican’s efforts – in response to international pressure – to be accepted into the “white list” of the Paris-based Financial Action Task Force, which lists states according to their compliance with standards on money laundering and terrorism financing. That was supposed to be Mr Gotti Tedeschi’s ultimate goal as IOR president.

Carl Anderson, secretary of IOR’s lay supervisory board, which recommended Mr Gotti Tedeschi’s dismissal last month, was quoted by Reuters as saying the bank would continue to do everything necessary to reach the “white list” standard.

The board’s nine-point memo elaborating on Mr Gotti Tedeschi’s alleged managerial incompetence makes no reference to the transparency issue.

However, it notes his “failure to provide explanation for the dissemination of documents last known to be in the president’s possession” – a statement that has fed speculation that the Vatican feared embarrassing disclosures.

The memo, which was made public by the Knights of Columbus, the influential US Catholic fundraising organisation headed by Mr Anderson, ends by noting Mr Gotti Tedeschi’s “progressively erratic personal behaviour”.

This was followed by a report in Italy’s daily Il Fatto quoting a letter from a psychotherapist and stress expert employed by the IOR, who suggested Mr Gotti Tedeschi had demonstrated a behavioural disorder while being observed at the bank’s Christmas party.

Mr Gotti Tedeschi, who was quoted as saying after his dismissal that he was remaining silent out of respect for Pope Benedict, has declined to comment since.