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Why Vatican cash machines stopped working

13 December 2013

iStock

GOD be praised! The news came in as I settled to write this column: another Ruth Gledhill article has been saved for the nation. The appointment of Peter Hancock to be Bishop of Bath & Wells means that Ruth can carry on into next year publishing the news that Jeffrey John may become the first (openly) gay (and civilly partnered) bishop in England. (The bits in brackets are thought to be too complicated for the simple readers of The Times.)

The most recent version appeared on Mon­day, the day before today's announcement. "The Church of England is on the brink of appointing its first gay bishop.

"The Dean of St Albans, Dr Jeffrey John, came within one vote of being recommended as the new Bishop of Exeter,The Timeshas learnt. The successful candidate to succeed the Right Rev Michael Langrish is to be an­­nounced soon."

Until now, I had thought that there was only one possible reason not to make John a bishop: that he can give the impression that he can't think of any good reason at all why he should not be one. But now I begin to hope that he will be blackballed in perpetuity, so we can have the pleasure of reading this article over and over, whenever the Crown Nom­inations Commission meets.

Though, to be fair, if her story is true, we have learned that the Commission is leaking like a ruptured water balloon.

THE GUARDIAN picked up a very fine story about US religion: in 2009, a conservative Evan­­­­gelical group put up a monument de­­picting the Ten Commandments outside the statehouse in Oklahoma City. The ACLU is suing to have it removed, as a breach of the boundary between Church and State. I think myself that the idea of a wall between the state and the sacred is absurd, and all that these lawsuits really prove is that the US sacralises its own constitution rather than the Bible, or any particular form of Christianity.

But I have to applaud the imagination of a group of Satanists in New York, who have now petitioned to have their own monument put up next to the Ten Commandments.

"Lucien Greaves, a spokesman for the [Satanic] temple . . . said one potential design involves a pentagram, a satanic symbol, while another is meant to be an interactive display for children." This is what's known on the internet as "trolling". You don't often see it done so well in real life.

THE serious journalism this week was once again in the Financial Times: a huge investiga­tion into the Vatican Bank. This contained one of the most perfectly po-faced sentences I have ever read: "Suspicions remain that the bank may have been a refuge for tax cheats from Italy, which European officials admit has a problem with tax evasion."

But the main line of the story was fascinating, and new to me, at any rate. This was the way in which the bank had been brought under control by international regulators who, although they had no purchase within the Vatican, had leverage over the "correspondent banks" - the normally regulated ones that the Vatican Bank was trading with.

"Senior executives from some cor­respondent banks . . . who spoke to the FT reinforced what later emerged from reports by European officials on the bank's workings. There were surprisingly few checks and balances on cash flow - and far less documentation than expected. . . As much as 25 per cent of the bank's business is done in cash - a feature that regulators said raised red flags for money laundering."

"We would say, 'We need to answer the regulator on this matter.' They would say, 'We answer to God,' says another manager at a large European bank."

Some of this informality was deliberate: the article makes clear that the Bank was used by Pope John Paul II to fund Solidarity and related organisations in Poland, and now to help Christian groups in Cuba and Egypt. But once the loose and opaque set-up needed for this was in place, the criminals moved in.

The Bank of Italy struck back. It pressured Deutsche Bank, whose Italian subsidiary ran the cash machines in Vatican City, to close them down, since it would be illegal to assist in the Vatican's breaches of international banking rules. "Deutsche did what regulators had hoped it would. On January 1 2013, a peak holi­day time, there were no ATMs functioning anywhere inside Vatican City. Lines of visitors to the Sistine Chapel were unable to enter unless they paid in cash."

The Vatican got round this by engaging a Swiss firm to run the cash machines, but by the end of the story we learn that 25 per cent of the present staff of the Vatican Bank are consultants from "a global risk-control group", brought in to clean up the enterprise.

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