Popes bankers under investigation

(FT.Com): Italy’s finance police have seized €23m held by the Vatican in an Italian bank while the pope’s top two bankers have been placed under investigation for suspected money laundering. Police confirmed reports that they had confiscated the funds held by the Institute for Religious Works (IOR) – the Vatican’s bank – in an account at Credito Artigiano, an Italian bank, following suspicions raised by the Bank of Italy over two attempted transfers. Ettore Gotti Tedeschi, formerly Bank Santander’s head of operations in Italy and a professor of ethical finance, was appointed head of IOR a year ago.

According to sources close to the Vatican, one of his main mandates was to bring the bank in line with international norms and regulations on tax havens and money laundering.

The second official being investigated is Paolo Cipriani, the bank’s director-general. The Vatican expressed its full confidence in Mr Gotti Tedeschi. In a statement it expressed surprise at the investigation and said it remained committed to financial transparency.

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