The Holy See’s Swiss anti-money laundering advisor, René Brülhart,
is playing an increasingly key role in the Vatican’s finances.
Meanwhile, the Vatican Bank (IOR) still has no president.
“[H]is success, combined with his good looks, led one magazine to dub the 40-year-old Swiss lawyer the James Bond of the financial world.”This is how The Economist described René Brülhart, the director of Liechtenstein’s Financial Intelligence Unit (FIU), in its 20 October issue.
Brülhart is now the Vatican’s new financial advisor, whose job it will be to get the tiny State onto the “white list” of territories deemed to comply with international standards on combating financial crime.
Last September, Fr. Lombardi had announced that Brülhart was being hired to strengthen the Vatican’s armour in the battle against financial crime.
In actual fact, Brülhart had, albeit in an informal and low key way, Brülhart had already started working with the Holy See back in December 2011, when, in a matter of weeks, the Secretariat of State changed its anti-money laundering law, in line with Moneyval’s requirements. Moneyval is the Council of Europe’s anti-money-laundering group.
These changes, which were set in stone by a new law promulgated in January 2012, were at the centre of a heated internal debate, whose protagonists included the President of the FIA (Financial Information Authority), Cardinal Attilio Nicora and the President of the IOR (Institute for Works of Religion, commonly known as the Vatican Bank), Ettore Gotti Tedeschi. Both these figures were concerned about a downsizing of the body in charge of combating anti-money laundering.
In the Moneyval report published last July, Strasbourg experts recognised the progress made by the Vatican and indicated areas where work still needed to be done. The legislative basis for the surveillance of money-laundering practices needed further reinforcement.
Assessors commented the role, responsibilities, authority, powers and independence of the FIA were not clear. The FIA is the financial authority created by the Vatican to intervene in cases where suspicious operations are performed or when transferrals of money of dubious provenance are made.
Furthermore, experts observed, “there has never been a sample testing of the CDD files maintained by the IOR or a supervisory assessment by the FIA including the scrutiny of transactions and the origin of funds in transactions carried out by the IOR.”
Hence “it [was] strongly recommended that IOR is also supervised by a prudential supervisor in the near future as currently there is no adequate, independent supervision of the IOR and that the supervisor should have adequate powers of enforcement and sanction against financial institutions, and their directors or senior management for failure to comply with or properly implement requirements.”
Brülhart has begun to play an increasingly central and important role, significantly lightening the workload of American lawyer Jeffrey Lena who had been part of the Vatican Secretariat of State’s team in charge of changing the anti-money laundering law, right from the start.
According to The Economist, Brülhart has two aims: the first is to “build a financial-intelligence unit that can investigate suspicious money flows properly.” The second is “to create a truly independent supervising authority for the Vatican Bank and the Administration of the Patrimony of the Apostolic See, which manages the Vatican’s property and securities holdings.”
This is given that the FIA “lacks the legal powers and independence necessary to monitor and sanction these financial institutions.”
The Vatican has assured it is not thinking about establishing a new body, although the idea was taken into consideration ten months ago. It is, however, working on responding effectively to Moneyval’s requests.
In recent weeks the Italian judiciary, which is looking into suspect money flows noticed in the Vatican Bank’s accounts, sent some rogatory letters to the Holy See. Despite the introduction of anti-money laundering laws and the assurance given by Vatican Bank heads that it no longer holds any anonymous accounts, investigators found that dirty money can also pass through non anonymous accounts belonging to priests or clerics who are deceived or who are too complaisant. This problem exists in banks in every State but is particularly embarrassing for a “sui generis” State like the Vatican.
The path towards transparency which Benedict XVI is so eager for the Vatican to follow is not simple by any means, despite the impressive efforts of the sturdy young Swiss “Deus ex machina” the Holy See has placed its trust in. This is partly because there are some in the Catholic Church who, following the scandals of recent months, are wondering whether it is really necessary for the Vatican today to keep an institution like the IOR going.
Meanwhile, no progress seems to have been made in the choice of a successor to the Vatican Bank’s former president, Ettore Gotti Tedeschi. He was fired last May in a way that had never been seen before in the history of the Holy See.
”There is no hurry; there is no reason to do things in a hurry,” reliable Vatican sources assure. According to information “filtering through” from the Holy See, the Vatican Banks’ new president will neither be Italian nor American.
Instead, it looks likely that a German (the 74 year old Ronald Hermann Schmitz, the former MD for Deutsche Bank and current vice president of the IOR who is temporarily standing in for Gotti Tedeschi, is a German). A decision is expected before Christmas.
The selection process appears incredibly thorough, which is a sign of the significant interest and attention which Secretariat of State authorities are giving to this issue. The fact a new president has not been chosen, five months after Gotti Tedeschi’s dismissal, shows that the position does not urgently need to be filled and that the bank’s management, which has been entrusted to the IOR and its director general, Paolo Cipriani, is currently deemed satisfactory.