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By Nicole Winfield (Associated Press) | Updated July 2, 2013 - 6:31am





Monsignor Nunzio Scarano, a recently suspended accountant in one of the Vatican's main financial departments, is accused of fraud, corruption and slander stemming from the plot, which never got off the ground, attorney Silverio Sica told The Associated Press. He said Scarano was a middleman in the operation: Friends had asked him to intervene with a broker, Giovanni Carenzio, to return 20 million euros they had given him to invest. Sica said Scarano persuaded Carenzio to return the money, and an Italian secret service agent, Giovanni Maria Zito, went to Switzerland to bring the cash back aboard an Italian government aircraft. Such a move would presumably prevent any reporting of the money coming into Italy. The operation failed because Carenzio reneged on the deal, Sica said. (AP Photo/Francesco Pecoraro)

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But the bank, known as the Institute for Religious Works, or IOR, has remained under the glare of prosecutors and now Francis amid fresh concerns it has been used as an offshore tax haven.

Last week, a Vatican accountant was arrested as part of Rome prosecutors' broadening investigation into the IOR. Monsignor Nunzio Scarano is accused of corruption and slander in connection with a plot to smuggle 20 million euro ($26 million) into Italy from Switzerland without reporting it to customs officials.

Scarano, dubbed "Don 500" by the Italian media because of his purported favorite euro banknote, acknowledged under questioning yesterday that his behavior was wrong but that he was only trying to help out friends, attorney Silverio Sica told The Associated Press.

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Von Freyberg, who was named IOR president in February following the clamorous ouster last year of Italian banker Ettore Gotti Tedeschi for incompetence, thanked Cipriani and Tulli for their years of work and said much progress has been made in recent years to bring greater transparency to the Vatican's finances.

"While we are grateful for what has been achieved, it is clear today that we need new leadership to increase the pace of this transformation process," von Freyberg said in a statement.

Italian banker Rolando Marranci was named as acting deputy and another banking expert, Antonio Montaresi, has been brought into a new position as chief risk officer to help ensure the IOR complies with anti-money laundering and anti-terrorism norms. Both belong to the Promontory Group, an expert in the field of anti-money laundering which has been retained by the IOR to help it comply with international norms.

The IOR's board has begun the process of finding a permanent director and deputy director, the statement said.

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DIRECTOR AND DEPUTY DIRECTOR OF THE IOR RESIGN

Vatican City, 2 July 2013 (VIS) – A communique was issued in English by the Holy See Press Office late yesterday afternoon, the full text of which is given below:

“IOR-Director Comm. Paolo Cipriani and Deputy Director Dott. Massimo Tulli have offered their resignations from their current positions. After many years of service both have decided that this decision would be in the best interest of the Institute and the Holy See. The Oversight Council and the Commission of Cardinals have accepted their resignations and asked President Ernst von Freyberg to assume the functions of the General Director ad interim with immediate effect. The Vatican regulator AIF has been informed accordingly. The Special Commission appointed on June 26 2013 has acknowledged the decision.

“Ernst von Freyberg will be supported by Rolando Marranci as acting Deputy Director and Antonio Montaresi in the newly created position as acting Chief Risk Officer with the remit of overseeing compliance and special projects. Previously Rolando Marranci served as Chief Operating Officer at a leading Italian bank in London. Antonio Montaresi has served as Chief Risk and Chief Compliance Officer with various banks in the US.

“'In the name of the Oversight Council I thank Mr. Cipriani and Mr. Tulli for their personal dedication over the past years,' said President Ernst von Freyberg. 'I welcome Rolando Marranci and Antonio Montaresi as outstanding professionals,' he said. 'Since 2010 the IOR and its management have been working hard to bring structures and processes in line with international standards for anti-money laundering. While we are grateful for what has been achieved, it is clear today that we need new leadership to increase the pace of this transformation process. Our progress is in no small measure due to the continued support from the governing bodies of the Institute and its personnel.'

“The Oversight Council has also initiated a selection process with the aim of appointing a new General Director and Deputy Director in the near future.

“Elizabeth McCaul, Partner-in-charge of the New York Office and Chief Executive Officer of Promontory Europe and Raffaele Cosimo, Chief Operating Officer of Promontory Europe were mandated this past May by the President of the Oversight Council to strengthen the Institute’s anti-money laundering program in seven work streams including conducting a forensic review and screening its client relationships. Mr von Freyberg has also asked Elizabeth McCaul and Raffaele Cosimo to serve as Senior Advisors to support the management. Previously, Ms. McCaul served as New York Superintendent of Banks and is considered a leader in regulatory circles. Mr. Cosimo is an expert in bank governance and operations.”

About the IOR

“The 'Istituto per le Opere di Religione' (IOR) is an institute founded in 1942 by Papal Decree. The IOR’s purpose is to serve the Holy See and in the Catholic Church throughout the world, as set out in its Statutes. The IOR safeguards the assets of a clearly defined group of legal and natural persons that have an affiliation to the Catholic Church defined by Canonical or Vatican Law. A Cardinals’ Commission, a Prelate, an Oversight Council and a Directorate constitute the IOR’s corporate governance structure. The IOR, which has 114 employees, is exclusively situated on the sovereign territory of the Vatican City State.”


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