Untraceable cash transfers and a culture of secrecy made the Vatican bank one of the world’s most notorious financial institutions. But Pope Francis’s attempts at reform are meeting ferocious resistance.
At 6.30 on the morning of 28 June 2013 – just three months into the reign of Pope Francis – officials of the Guardia di Finanza the Italian law enforcement agency for financial crime pulled up in front of a rectory in Palidoro a quiet seaside town west of Rome. When they rang the bell the cleric who came sleepily to the door was informed that he was under arrest. A few hours later wearing a well-cut grey suit Monsignor Nunzio Scarano was shown into a cell in the Regina Coeli Rome’s most overcrowded prison.
Scarano – a suave handsome priest known for his extravagant lifestyle (his nickname among other priests was Monsignor Cinquecento, My Lord Five Hundred because of his habit of carrying only €500 banknotes) was head of accounting at the Amministrazione del Patrimonio della Sede Apostolica (APSA) – the body that then managed the Vatican’s property holdings and controlled its purchasing and personnel departments.
His arrest made front-page news. He was accused of trying to smuggle €20m on a private plane across the border from Switzerland in a money-laundering conspiracy involving the Vatican bank – an agent of Italy’s secret services and an Italian broker under suspicion for running a Ponzi scheme.
Doubts about Scarano had first been aroused six months earlier when he had reported a burglary at his apartment in the city of Salerno south of Naples. Paintings from his art collection had been stolen he claimed. When the police arrived at the 17-room apartment on Via Romualdo Guarna in one of the city’s wealthiest neighbourhoods they were startled by its opulence.
It was furnished with valuable antiques and a spectacular display of art lined the walls in hallways divided by Romanesque columns. Scarano’s collection included a painting attributed to Chagall. Police reports estimated the missing artworks were worth €6m.
How could a bureaucrat priest on a stipend of €36,000 a year afford such luxuries? They were all ‘donations’ Scarano told the police. Investigators were convinced they were gifts – along with perks including trips cruises and reportedly massages – from banks soliciting Vatican business.
Scarano had €2.3m in his various personal accounts.