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Vatican financial watchdog denies wrongdoing after raids, defends suspended director

The Holy See’s anti-money laundering watchdog has strongly denied allegations of wrongdoing levelled by Vatican prosecutors over a real estate investment in London.

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The Vatican Financial Information Authority (AIF) issued a statement Wednesday insisting that its activities have been entirely above board.

The AIF is responsible for monitoring Vatican economic transactions for signs of money-laundering and other financial crimes.

The Authority has been in the spotlight since Vatican gendarmes raided offices at the AIF and the Secretariat of State October 1 over “serious indications of embezzlement, fraud, abuse of office and money laundering”, in the words of Vatican prosecutors.

AIF director Tommaso Di Ruzza was suspended in connection with the raids.

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Go deeper

In its statement Wednesday, the AIF board confirmed that the raids were “in connection with an ongoing institutional activity carried out by AIF based on a Suspicious Activity Report involving several foreign jurisdictions”.

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But the AIF added that since the sweep it has carried out an “internal investigation to gain a thorough understanding of the relevant operational activity” of the Authority.

That investigation, the board continued, confirmed that the Authority’s activity “was properly institutional in nature and conducted in conformity with the AIF’s governing Statute”.

The board furthermore affirmed that neither director Di Ruzza “nor any other employee of AIF improperly exercised his authority or engaged in any other wrongdoing”.

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Why it matters

According to search warrants leaked to the press, Vatican prosecutors have doubts about the “unclear role” played by the AIF in the investment by the Secretariat of State of 150 million euros in ‘Peter’s Pence’ donations in a luxury apartment building in London’s Chelsea neighbourhood.

Di Ruzza is believed to have obtained the legal advice that greenlighted the investment, although the AP reported that the AIF director was actually working with Britain’s financial intelligence authority to try to catch the middlemen who ended up profiting from the Chelsea investment.

At any rate, in its statement the AIF board reaffirmed “its full faith and trust in the professional competence and honorability of its Director”.

The board moreover commended Di Ruzza “for the institutional work carried out in the handling of this particular case”.

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The AIF said it would continue to be “fully cooperative with competent authorities” as it carries out its domestic and international activities.

The Authority also declared it hoped “potential misapprehensions” around the raids and ongoing investigation “will be clarified soon”.

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What’s next

The investigation over the Chelsea investment has come at a sensitive time for the Vatican.

Not only has it drawn attention away from the ongoing Amazon Synod, and claimed the scalp of former Vatican police chief Domenico Giani, but it also comes just as Italian journalist Gianluigi Nuzzi has published a book claiming that the Vatican is very close to defaulting on its debts.

The Vatican probe also comes just months before the Holy See faces a visit from the Council of Europe’s Moneyval committee, which evaluates compliance with international standards against money laundering and terrorist financing.

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