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The Vatican and Money Laundering

By Dr. Jeff Mirus (bio - articles - email) | Jan 03, 2011

A personal reaction, if I may, to the highly-touted adoption of anti-money laundering laws and procedures by the Vatican (see Pope sets out new rules for Vatican banking transactions):

First, while the Vatican had already been moving step by step to be in compliance with the financial safeguards adopted by the European Union, there is no question that the Church felt a pressing need to accelerate the process in the wake of the investigation of the fiscal sloppiness of the Vatican Bank. Hence the Pope mandated the reforms in a Motu Proprio on December 30th; the Vatican Secretariat of State issued a communiqué on the scope and importance of these new rules; and the Director of the Vatican Press Office called public attention to this newly-acquired Europeanesque financial probity. (All of these statements are linked following the news story referenced above.)

Second, it is interesting to see the principles of “honesty, transparency and responsibility” described as key principles of Catholic social ethics and self-applied to Vatican financial affairs. While I would argue that honesty and responsibility are strong suits among Vatican administrators, I would not dispute that wherever large sums of money are found, temptation and even criminal activity, especially involving mere employees, will not be far behind. But I would also argue that transparency is not a strong suit at the Vatican. Transparency is something that seldom comes naturally; it must be learned as part of particular processes applied to particular situations.

Indeed, transparency runs counter not only to the personalities of those habituated to the labyrinthine character of Vatican politics, but to the general nature of politics, diplomacy and financial wheeling and dealing throughout the world. Legitimate moral purposes often demand considerable discretion, and can sometimes require even that money be moved from source to destination under the radar. Still, banking in itself ought to be financially transparent, and making it so does not mean that the Holy See must conduct complex negotiations in public, nor even that the Vatican Press Office must suddenly start telling the truth about things like a pope’s health.

The Vatican, like all political entities, struggles with reasons of state. In this context and other more important ones, it is necessary to insist that transparency is not a virtue; it is merely, when properly deployed, a safeguard.

Third, you have to wonder who does the English translations for the Vatican Information Service. In Benedict’s motu proprio, a key sentence reads: “Quite rightly, the international community is increasingly equipping itself with juridical principles and instruments that enable it to prevent and contrast the phenomena of money laundering and the financing of terrorism.”

Prevent and contrast? A check of the Italian reveals the verbs “prevenire e contrastare”. As you might suspect, while “contrastare” can mean “contrast”, it can also mean “hinder” or “contest”. In this case, “combat” would have been the appropriate English equivalent.

So why do I trouble to make these somewhat whimsical observations? The point, I think, is that there is a great difference between what is central to the Church’s mission and affairs like this, in which the Church must “do the right thing” both as a good neighbor and to appear more virtuous than Caesar’s wife. Certain hoops must be jumped through, not only to ensure sound financial practices and preserve credibility, but to take the target off one’s back, especially for the Church, which is to many the very definition of a target.

But while procedures can be both good and helpful, they do not ensure virtue. It is a shame that the Pope must be distracted by such things, even if we agree that he must. In the world of sin and salvation, such things must be taken with a grain of salt. They are not, shall we say, the crux of the matter.

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