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Vatican bank troubles await pope's attention

Francis inherits Benedict's struggle to clean up the secretive institution, which has been plagued by suspicion of money laundering.

March 23, 2013|By Tom Kington, Los Angeles Times

In 2012, the Vatican removed the bishop of Trapani in Sicily during an investigation into possible shifting of funds through an IOR account opened by a local priest after the alleged illegal sale of church properties. Prosecutors suspected Sicilian Mafia involvement.

Benedict's careful plan to shake up the IOR took a hit in May with the sacking of Gotti Tedeschi, a respected Catholic banker and coauthor of an encyclical with Benedict.

Gotti Tedeschi asserted that he had been targeted by the board because he was demanding information on nonreligious accounts.

But Carl Anderson, a member of the lay board and head of a powerful Catholic charity group, the Knights of Columbus, said that Gotti Tedeschi was not up to the job, a position backed up by other Vatican observers.

Either way, the debacle forced the pope to turn to headhunters to bring in an outsider, Ernst von Freyberg, the German chairman of shipbuilder Blohm & Voss, to take over the bank in the waning days of his papacy.

Now it will be left to Francis to stick to the task of cleaning up the bank.

"Benedict figured out the Vatican could no longer say the bank was unique and different," said Vatican watcher Reese, "and now there is no question Francis will continue Benedict's push to get the IOR on the White List."

"As a Jesuit, Francis understands how to manage organizations, and he understands power," said Marco Politi, an Italian Vatican expert. "I would not put it past him to now convert the bank into a regular bank, with all the transparency rules that entails."

Kington is a special correspondent.

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