Vatican Banker Running Scared: Gotti Tedeschi Could Turn Whistle-Blower

By Barbie Latza Nadeau

Ettore Gotti Tedeschi feared for his life when he was ousted as head of the Vatican bank after a vote of no confidence May 24. The 67-year-old Italian was brought in by the pope’s secretary of state, Cardinal Tarcisio Bertone, in 2009 with a mandate to turn the troubled bank around and help “facilitate transparency” with an eye toward quashing rumors that the bank was a den of iniquity. The Vatican had hoped that through Gotti Tedeschi’s guidance, the tiny city-state could finally earn a coveted spot on the global Financial Action Task Force “white list” of states whose financial practices can be trusted.

In reality, Gotti Tedeschi says he found the bank’s record much worse than he could have imagined, and that he spent the last two years struggling endlessly against the Vatican’s powerful Vatican forces, whom he says blocked his every attempt at transparency. He stormed out of his final meeting of the board of the Vatican bank, known as the Institute for Religious Works (IOR), even before they cast their no-confidence vote against him. The bank says it dismissed him due to lack of management skills and “progressively erratic personal behavior.” But Gotti Tedeschi says he was ousted because he got too close to the truth about the bank’s alleged shady dealings. He told a Reuters journalist moments after he was sacked, “I have paid the price for transparency.”

A week after his ouster, Gotti Tedeschi was in trouble again. His home in Piacenza and his offices in Milan were searched by Italian police, who say they were combing for evidence that he was an “informed witness” with regard to questionable business dealings of Italy’s state-run defense and aerospace firm Finmeccanica, whose president is his close pal. He has not been arrested, nor is he officially under investigation, and the police say the Finmeccanica inquiry is a separate affair not at all related to his problems with the Vatican bank. But in searching his property, investigators reportedly found a treasure trove that could link the Vatican to all sorts of shady dealings and underworld characters. And the Vatican top brass desperately want to get their hands on it, sternly warning Italian police that because the Vatican is a “sovereign nation” their documents are protected under immunity, even if they are found during a criminal probe outside its borders. “The Holy See is surprised and concerned at the recent events that Professor Gotti Tedeschi is involved with,” said a Vatican statement issued Friday. “We have faith that the prosecutors and Italian judicial system will respect our sovereignty—recognized internationally—with regard to these documents.”

What they are reportedly worried about is a secret dossier that Gotti Tedeschi told friends he compiled “just in case something happens to me.” Local press reports say the dossier includes 47 different binders with emails from the pope, letters from cardinals, and notes and reports from various meetings tied to Vatican bank business. He had reportedly planned to deliver the dossier directly to Pope Benedict XVI, presumably as a counterargument to his May 24 firing. The cache reportedly contains irrefutable evidence that could substantiate claims that the IOR is involved in money laundering and tax-evasive practices. There were documents that allegedly show financial transactions between the Vatican and a number of surprising characters, including politicians and known middlemen for mafia bosses. If true, it would give Italian authorities a rare opening to investigate the Vatican’s banking practices with names, account numbers, and transaction dates of dealings with financial entities outside the Vatican’s historically secretive jurisdiction.

In 2010, Gotti Tedeschi and IOR general manager Paolo Cipriani were placed under criminal investigation by authorities in Rome on suspicion of alleged money laundering for shady transactions between the Vatican’s bank accounts. More than €23 million was frozen and later released after the Vatican allegedly cleansed itself by passing anti-fraud legislation. Gotti Tedeschi’s dossier reportedly also included a list of enemies who might want to harm him, including Cipriani, who is still under criminal investigation in the Italian judicial system from the 2010 affair. The Italian police are taking the banker’s enemy list seriously and are considering providing him with police protection.

There is little doubt that Tedeschi has reason to be worried for his safety. Three decades ago, another of “God’s bankers,” Roberto Calvi, was found hanging from a noose under Blackfriars Bridge in London. His pockets were weighted down with bricks and cash. Calvi was not the head of the IOR like Gotti Tedeschi, but he was closely tied to the Vatican’s secret banking structure as head of Banco Ambrosiano, which went bankrupt at the time amid allegations of money laundering, mafia collusion, and generally questionable banking practices. The Vatican owned a small stake in the bank, but wielded great influence over Calvi, who knew the Vatican’s deepest financial secrets.

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