In the Vatican City, financial investigators believe that a critical department that is responsible for observing real estate and investments was previously used for money laundering, insider trading and market manipulation.
According to a senior Vatican source, a confidential document covering the time period from 2000 to 2011 has been handed over to Italian and Swiss investigators because some activity took place in these two countries as well.
However, most of the focus in the case revolves around the suspicious financial practices of the Vatican. The financial sector of Vatican City has long centered on its official bank, which is called the Institute for Works of Religion (IOR). One department of the IOR in particular, known as the Administration of the Patrimony of the Holy See (APSA), has acted as its own financial institution.
The APSA is sort of a general accounting office. It manages the Vatican’s real estate holdings in various parts of Italy, most notably in Rome. The administration also pays the salaries of Vatican employees, and it also acts as a purchasing office and a department of human resources.
One division of the APSA also manages the finances and stock portfolio of the Vatican. This division is under suspicion for being used by an outsider for business that was not related to the Vatican. Additionally, the division is suspected of having corrupt staff members who violated the regulations of the APSA.
The investigation focused on the chairman of an Italian bank called the Banca Finnat Euramerica S.p.A. The bank’s chairman Giampietro Nattino was also the owner of APSA “Portfolio 339”, which contained four separate accounts.
According to reports, Nattino is suspected of using APSA accounts to make personal trades on the Italian stock market. He also relocated the account’s balance to another account in Switzerland immediately before the Vatican enacted stricter laws against money laundering.
Many officials have questioned the unusual origin of these accounts and the questionable relocations of funds as the portfolio was closed. Most believe that this was a major violation of department regulations. The department is usually not allowed to conduct financial transactions for external parties.
Nattino responded by saying that he is innocent and that he believes that matter can be cleared up in the near future. Still, there is much to examine in regards to the situation, as Nattino might have been responsible for widespread money laundering, insider trading and market manipulation.
The recent investigation comes as part of an effort by Pope Francis to give financial authorities in Vatican City more oversight over the Vatican’s finances. The Vatican has recently enacted significant reforms and put more controls into place to discourage unusual financial practices.
Pope Francis has revamped the Vatican’s bank, which was once widely known for being scandalous and highly corrupt. The Pope has offered more power the Financial Intelligence Authority, and has appointed the Vatican’s first auditor-general.
He has also established a new ministry that is responsible for all economic activities of the Vatican. Previously, various departments of Vatican City were allowed to operate with little or no control over their budgets.
However, it is unknown if these efforts will be able to bring total financial transparency to the Vatican, which has historically been very secretive in this regard.