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VATICAN CITY (ChurchMilitant.com) - A leading international financial watchdog has suspended collaboration with the Vatican, dealing the Holy See's financial credibility a critical blow.
On Tuesday, The Wall Street Journal revealed that the Egmont Group, an elite global collective of more than 160 financial intelligence agencies, has severed the Vatican's access to its web system, which members use to target money laundering, terrorism financing and tax fraud.
The Vatican's own watchdog group, the Financial Information Authority (AIF), remains a member of the Egmont Group, but it is blocked from Egmont's information-sharing network until it can prove that it will not share criminal investigation data gleaned from other financial intelligence units without their permission.
Egmont members are required to exchange data in ways that "ensure levels of security, reliability and effectiveness at least equivalent to those of the Egmont Secure Web."
The cutoff is another sign of continuing fallout over an Oct. 1 Vatican police raid on the offices of AIF and the Secretariat of State — ostensibly part of an investigation by the Promoter of Justice (Vatican prosecutor) into "serious indications of embezzlement, fraud, abuse of office, money laundering and self-laundering" involving curial officials.
Many observers view the investigation as an attempt to weaken AIF — a salvo in a turf war pitting the regulator and the Secretariat of State against the scandal-plagued Vatican Bank. They note that the raid occurred amid an AIF review of the bank, and followed AIF criticism of the Promoter of Justice for laxity in prosecuting money-laundering cases.
The Oct. 1 raid damaged the Holy See's financial reputation, with some officials warning that moving forward, countries may be unwilling to collaborate with AIF, as information shared with the group could be seized by Vatican law enforcement.
With AIF's access suspended, those predictions have come to pass.
News of the suspension broke one day after word came that the president of AIF is stepping down.
On Monday, the Holy See unexpectedly announced the resignation of René Brülhart; according to the statement, his as-yet unnamed replacement will take office on Pope Francis' return from Asia next week.
Brülhart has been with the Vatican since 2012, working to purge the Holy See of its reputation as a hotbed of financial corruption.
A renowned anti-money laundering specialist, he racked up a series of successes in his seven years with AIF — including securing the Vatican's entry into the Egmont Group. Analysts are suggesting that his resignation will perpetuate the Vatican's reputation for corruption, warning that it signals that Pope Francis' pledges of financial reform are dead in the water.
Brülhart's departure has already prompted a member of AIF's board to resign in protest: On Monday, banker Marc Odendall gave notice that he will no longer serve the Vatican regulator.
Odendall slammed the past weeks' events, saying the Oct. 1 raid that triggered the turmoil could not have happened without Francis' personal consent.
"This has been completely managed by the Holy Father from A to Z," he observed.