Is it time to assess the financial secrecy of the Vatican?

   0   0 Blog, Corruption, Offshore History
A bastion of opacity; the IOR in Rome

A bastion of opacity; the IOR in Rome – photo: John Christensen

The Vatican-based  Istituto per le Opere di Religione (the Institute for Religious Works or IOR, a.k.a. the Vatican Bank) probably falls into the category of the world’s most controversial bank. Now, according to this long read article in today’s Guardian, the bank’s unaccountable bureaucracy and self-serving networks who have operated with impunity for decades, faces a vigourous shakedown led by Pope Francis himself.

Created in the late 19th century, prior to which the Vatican’s wealth was apparently stored in a coffer under Pope Leo’s bed – the bank has been implicated in numerous scandals, including handling Nazi assets, acting as a conduit for covert funding of Cold War counter-insurgency programmes, plus, of course, the infamous dealings with the Banco Ambrosiano, made famous by the third of the Godfather film trilogy.

With so many of its transactions conducted using cash, and with such a strong veil of secrecy surrounding its activities, the IOR became notorious for money-laundering, with many commentators (including this blogger) arguing that the Vatican was itself a tax haven.  As Paul Vallely argues in the Guardian:

“The Vatican was a natural tax haven. It was an offshore bank in the middle of Rome that Italians could enter merely by waiting for the traffic lights to change from red to green. In line with the Roman Catholic church’s traditional aversion to transparency, the bank authorities adamantly refused to cooperate with the Bank of Italy’s investigation.”

Pope Francis’ mission is to radically break from that past.  He has appointed Australian Cardinal George Pell to lead the transformation of the IOR into a modern, transparent financial management service that elevates the churches’ mission to help the poor to top priority.  According to Vallely:

“Francis told his financier advisers at their first meeting in July 2013 that “sound financial management was a pillar of his greatest mission: aiding the poor and underprivileged”. What that meant, said Cardinal Pell, is that “the Pope wants to maximise the amount of money coming in so that it could be spent on the poor and the works of the church. Because we’re trying to help people is no reason why we should be inefficient, or not transparent, or open to being robbed.”

Bold sentiments, and who would not want Cardinal Pell to succeed with his task?  And one way of checking his progress might be for the Vatican to agree to being assessed under TJN’s Financial Secrecy Index, which cuts through the fine words and perceptions looking instead at legal fact and published international assessments.  If the Vatican can achieve a secrecy score better than forty it will compare favourably with most other countries.  How about it, Cardinal Pell?

Read the full Guardian article here.



Related Posts

The Offshore Wrapper – Friday 18 August

panama_cityThe Offshore Wrapper is our weekly roundup of news from the world of tax justice. If you want to receive the wrapper every week in your inbox, you can subscribe here.


Swiss Politicians seek to block automatic exchange of banking information with developing countries

Photo by Pedro SzekelyCould we be seeing a return to the bad old days of Swiss Banking? A right wing party in Switzerland, the Swiss People’s Party, has launched an assault on the automatic exchange of banking information, according to Swiss Daily Newspaper Tages Anzeiger.


The Offshore Wrapper – Data havens and new crackdowns on tax avoidance

Gorgeous Computer FixingsBelow is the text of the offshore wrapper,  a weekly roundup of news from the world of tax justice sent out to our mailing list. If you haven’t signed up yet and would like to receive the wrapper in your inbox every week – you can do so here.


Open data for tax justice – designing a new CbCR database

OD4TJlogoThis week, TJN participated in a design sprint in London organised by Open Knowledge International. The purpose of the sprint was to bring together coders and tax justice advocates to start work on building a database for the new country by country reporting data that we hope will be released in the future, if public […]


New research on key role major economies play in global tax avoidance

offshore-network_colorcorrectedAn important new study on Offshore Financial Centres (OFCs) from the University of Amsterdam has made some fascinating discoveries, challenging, as the Financial Secrecy Index has, the popular misconception that tax havens are only palm fringed little islands and exposing that in fact major economies play a key role in global tax avoidance. Specifically they’ve […]


About The Author

John Christensen

Trained as a forensic auditor and economist, he has worked in many countries around the world, including a period of working in offshore financial services with Touche Ross & Co. For 11 years he was economic adviser to the government of the British Channel Island of Jersey. In 2003 he became what the Guardian has described as “the unlikely figurehead of a worldwide campaign against tax avoidance.” His research on offshore finance has been widely published in books and academic journals, and John has taken part in many films, television documentaries and radio programmes.
View all posts by

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to Top