Pope Resigns: Did a Money Laundering Scheme Force Benedict XVI to Step Down?
Benedict the XVI is officially no longer pope. While he cited poor health and a demanding schedule as the main reason, this hasn't stopped competing explanations from entering the fray. While allegations that the pope was involved in some sort of gay cover-up, or is even gay himself, many are overlooking a little-remembered incident that occurred last March, when suspicious financial activity surrounding the Vatican’s account No. 1365, opened in 2009 with JPMorgan Chase, caused the global bank’s branch in Milan to shut it down.
The account was operating as a sweep account, which facilitates an automatic flow of money at the end of each business day from cash accounts to investment accounts, where the money accrues higher interest. The account was primarily being swept to Vatican accounts in Germany. However, an estimated $1.5 billion had been processed in the short amount of time that the account had been opened, according to Italy’s leading financial newspaper II Sole 24 Ore.
Speculation over money-laundering led JPMorgan Chase to question bankers at the Vatican who ultimately failed to provide an explanation. The Vatican has been under scrutiny for its lack of financial transparency since JPMorgan Chase’s decision to close the account, but no further comment has been made by either party.
A year earlier, the Vatican's bank, formally known as the Institute for Works of Religion (IOR), had employed the help of the Financial Action Task Force (FATF) to mitigate risk of impending malpractice, and the pope pledged to comply with international rules on illicit financial activity to clean up the bank’s image.
But the Vatican was again embroiled in another series of scandal when letters were leaked, suggesting further allegations of corruption and infighting within the Holy See. The scandal was dubbed “Vatileaks” — a spin on the leading international agitator dedicated to exposing secret information.
The embarrassing letters, which featured outright talk of wrongdoing, crucially hindered the Vatican’s effort to redeem itself and demonstrate proper financial conduct. But they’ve also sparked debate over the possibility that the leak was led from the inside, as either a way of influencing who will succeed the pope, or as a marketing ploy to prequel the pope’s resignation and allow the Vatican time to polish it’s reputation.
This isn’t the first time the Holy See has faced allegations of wrongdoing, but never before has it lost its leader in the midst of one. A rampant series of seemingly self-aware sinister activity on the Church’s behalf has aligned quite nicely with the pope’s decision to resign, effective February 28.
Now, the Vatican has until June to merit inclusion on the “white list” by the European Commission. That list features countries that have taken the necessary steps to fight corruption, tax fraud, and money laundering, which perhaps means that the Vatican should meet the international standards of transparency to ensure compliance in this world before they can again begin speaking of bliss in the next.