Vatican appoints new chief for scandal-dogged bank

Vatican appoints new chief for scandal-dogged bank

Wednesday, July 9, 2014 2:00 pm


VATICAN CITY – The Vatican on Wednesday named a French businessman to head up its scandal-plagued bank as part of a radical overhaul ordered by Pope Francis after a year-long inquiry.Vatican_Jean-Baptiste-de-Franssu

Jean-Baptiste de Franssu, former chief executive of Investco Europe, will lead a newly streamlined bank following internal investigations into thousands of suspicious, ineligible or inactive accounts.

“Our ambition is to become something of a model for financial management rather than cause for occasional scandal,” Vatican finance minister Cardinal George Pell, who was himself named earlier this year, told journalists.

Franssu said he would “continue the efforts of transparency”, adding: “I see this role as a mission”.

“Catholic ethical investments will drive how we will manage assets,” he said.

The appointment comes a day after the bank said profits had been all but wiped out in cleaning up its accounts.

A team of experts have been preparing the ground for the overhaul since last summer, when the pope vowed to make Vatican finances transparent following decades of scandal.

The Vatican also announced a new committee to modernise and cut costs in its media activities to be led by British politician and chancellor of Oxford University Chris Patten, prioritising Twitter and digital channels.

– ‘Silence and secrecy’ –

“We are working so that international financial standards will be followed in all the dicasteries (departments) and sections of the Holy See,” Pell said, though he admitted that “at the moment we are not quite at that stage”.

Vatican spokesman Federico Lombardi praised the outgoing bank management saying: “It was not easy to change from a style of silence and secrecy to one of transparency. And I think for the most part you have succeeded.”

Changes at the Institute for Religious Works (IOR) — as the bank is known — will include shifting assets to a new central Vatican Asset Management (VAM), while an existing property agency will be absorbed into the finance ministry.

The VAM, to be set up within two years, is planned to operate independently from IOR.

Outgoing bank head Ernst von Freyberg had spoken on Tuesday of the “painful but very necessary process” of cleaning up the IOR but on Wednesday he said he was pleasantly surprised there was less murkiness than he had expected.

“The good surprise is that once you’ve checked everything at IOR, many things are not true.”

There were “no enormous amounts held by Italian families, politicians or bad organisations,” he said in a reference to allegations of accounts being used by the mafia to launder money.

Franssu, 51, is a board member of Carmignac Gestion asset management and the founder and chairman of mergers and acquisitions firm Incipit.

The father of four is also an independent board member of various charities in the United States and Europe including the World Youth Alliance.

– Troubled history –

The IOR has a reputation for secrecy and intrigue and a history of troubled relationships between management and the Vatican’s top clerics.

In 2012, its then head Ettore Gotti Tedeschi was sacked after a major falling out with Vatican Secretary of State Tarcisio Bertone — the pope’s number two.

The IOR said it had paid a price for tidying up its accounts, with last year’s profit plunging to 2.9 million euros ($3.9 million) from 86.6 million euros in 2012.

Scandal has continued to plague the institution, with the Vatican admitting earlier this year that it was investigating Italian media reports accusing Bertone over a suspicious 15-million-euro deal involving the bank.

The IOR’s 2013 financial statement listed an unspecified loss of 15.1 million euros, though it was not clear whether this was a reference to the Bertone affair.

Allegations of money laundering have dogged the bank for decades. It was the main shareholder of the Banco Ambrosiano, which collapsed in 1982 amid accusations of laundering money for the Sicilian Mafia.

The chairman of Banco Ambrosiano, Roberto Calvi — dubbed “God’s Banker” — was found hanging from Blackfriars Bridge in London that year in a suspected murder by mobsters.

More recently the bank has been investigated for money laundering by Italian authorities, with its former director general and his deputy now facing trial.

A former top Vatican accountant, Monsignor Nunzio Scarano, is currently on trial for laundering fake donations from offshore accounts through the IOR.

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