Unexpected: Vatican replaces financial watchdog head

Amid a brewing financial scandal over the Holy See’s investments in London real estate, Pope Francis, Monday, announced he will replace the Vatican’s top financial watchdog official.

Announcing René Brülhart’s replacement, the Vatican said Pope Francis has chosen a new president but does not name him or her.

The three-sentence announcement said Francis thanked Brülhart for his work as his term ended and would soon name “an individual with a high professional profile and competence at the international level.”

Brülhart said he had decided to resign at the end of his five-year term, which ends on November 19.

However, according to John Allen of Crux, the president of the Financial Information Authority (AIF) has no fixed term of office, “To assert that it’s the end of a non-existent “mandate” is prima facie dubious”, comments Allen.

The main purpose of the financial watchdog is to prevent financial crimes at the Vatican and oversee the cleanup of the Vatican Bank.

Brülhart, a highly respected Vatican figure in the international financial community, is a former director of Liechtenstein’s financial intelligence unit, where he helped end the country’s reputation as a financial pariah.

A former vice-chair of the Egmont group, a global network of financial intelligence units, the Swiss lawyer, dubbed by some as the 007 of anti-money laundering efforts.

Since Brülhart’s involvement at AIF,  the Vatican notched a string of impressive successes, including

  • the Moneyval process,
  • membership of the Egmont group which groups financial information agencies from 130 countries to share information in the global fight against money laundering and terror financing,
  • the MOUs signed with various countries, and, most recently,
  • the Vatican’s entry into the Single Euro Payments Area (SEPA), which allows the Vatican bank to have its own IBAN code to facilitate wire transfers.

Since Brülhart’s resignation, Marc Odendall, a retired Swiss-German banker also tendered his resignation from the AIF.

Odendall said Brülhart’s resignation and the Egmont Group removing the AIF from its communications network made his involvement pointless.

“We cannot access information and we cannot share information.

“There is no point in staying on the board of an empty shell,” Odendall told the Associated Press, Tuesday.

AIF remains an Egmont member but is suspended from the secure communications network.

“Today it’s difficult to resist the sense that Rome is headed back to the future, meaning a situation in which financial management is lodged with a largely Italian nexus of clerics and lay financiers, and where power dynamics have at least as much impact on outcomes as financial norms and best practices.

“Perhaps it’s unreasonable to expect the Vatican’s communications team to put all that in a statement, at least quite so bluntly. Just don’t try to tell us there’s nothing to see here, when the eye test reveals something else indeed,” writes John Allen.

Police raid

In October Vatican police raided the offices of the AIF and Secretariat of State, the Holy See’s executive.

The raid was part of an investigation into a large property investment in London.

The Vatican’s secretariat of state had put 150 million euros into the luxury apartment building in London’s tony Chelsea neighbourhood, only to see tens of millions end up in the pockets of middlemen who were managing the venture.

In 2018 the secretariat of state decided to buy the building outright while working with British authorities to nab the middlemen.

However internally, the Vatican bank and auditor general’s office raised an alarm with Vatican prosecutors that the buyout looked suspicious, sparking the raids on AIF and the secretariat of state.

Since the raid, the AIF’s security chief resigned and the Vatican has suspended five employees, including the AIF’s deputy, Tommaso Di Ruzza.

It is unclear what the suspended employees are suspected of doing.

The saga over the Vatican’s financial control comes as early next year it is expecting a review by the Council of Europe’s Moneyval committee.

Moneyval measures compliance with international standards against money laundering and financing of terrorism.



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