The head of the Vatican Bank, Ettore Gotti Tedeschi, is under investigation as part of a money-laundering inquiry, police sources say. Prosecutors also seized 23m euros from the bank's accounts with another smaller institution [jesus, no wonder Gorgeous George is always smiling - Ed]. The inquiry was launched after two suspicious transactions were reported to tax police in Rome. The Vatican said it was "perplexed and astonished" [I'm sure], and expressed full confidence in Mr Tedeschi.
The Vatican Bank, known officially as the Institute for Religious Works [hahahaha!], was created during World War II to administer accounts held by religious orders, cardinals, bishops and [Nazis] priests. In a statement, the Vatican said it had been working for some time to make its own finances more transparent to comply with anti-terrorism and anti-money laundering regulations.
Investigators are looking into claims that Mr Gotti Tedeschi and another senior official violated laws that require banks to disclose information on financial operations. The BBC's David Willey in Rome says the Bank of Italy's financial intelligence unit tipped off Italy's tax police last week, after two suspicious transactions were reported between the Vatican Bank and two different Italian banks. The tax police seized one deposit of 23m euros that the Vatican Bank had deposited with a small Italian bank called Credito Artigianato, Willey says.
The Vatican Bank was last mired in scandal in 1982 when its governor Archbishop Paul Marcinkus was indicted over his involvement with the collapse of what was then Italy's largest private bank, Banco Ambrosiano. Although he was never arrested, the fallout from that scandal took a darker turn when two of its top executives, one of them its chairman, Roberto Calvi, were murdered. Calvi, known as God's Banker because of his close ties to the Vatican, was found hanged under Blackfriars Bridge in London.