God’s Bankers: A History of Money and Power at the Vatican is an astounding and compelling book. After penning the definitive analyses of the Kennedy and King assassinations (Case Closed and Killing the Dream), author Gerald Posner has turned his sights on the Vatican Bank (Istituto per le Opere di Religioni, or IOR). What he discovers is an “offshore bank in the heart of Rome,” serving as a money laundering instrument of nearly unlimited scope. If not itself a criminal enterprise—and Posner provides plenty of evidence to support the charge that it was just that—the Vatican Bank was run for decades as, at the very least, a willing accomplice to criminal schemes and financial flim-flam operations whose variety and complexity make the head spin.
Parcels of cash were carried into Vatican City so money could be laundered at the IOR and then transferred to a variety of destinations. Beneficiaries were a mixed bag, such as fascists hiding in South America, phantom off-shore holding companies in the Caribbean and Solidarity activists challenging the Communist regime in Poland. Slush funds were run out of the IOR—including money traceable to the CIA—in support of Italy’s Christian Democratic Party in its political battles. Counterfeit stock certificates were housed at the IOR and then knowingly used by Vatican officials as fraudulent collateral to secure nearly $1 billion in loans that were then secretly passed on to the bank’s many business associates. Top IOR officials, like president Archbishop Paul Marcinkus, got neck deep in financial interactions and commercial partnerships with some of the most operatically corrupt European financiers of the 20th century.
One key to the whole sordid tale becomes clear as one reads, checks the footnotes and tries to keep up with the purposefully complex financial transactions. The Vatican Bank operated in total secrecy, entirely unaccountable to any governmental body or regulator outside the Holy See itself. The sovereignty afforded the Holy See under international law allowed the IOR to hide money and launder it without anyone outside of the top leadership of the church being able to track the transactions or even to know who was involved. To say that this unique legal status rendered the IOR an attractive partner to all varieties of knaves and speculators is an understatement.
The other key factor in allowing this dynamic to fester for so long, however, was that officials at the IOR enjoyed the complete confidence and complicity of the only powers that really mattered—the many popes who came and went while “God’s bankers” sought to diversify portfolios and maximize returns in order to keep the whole teetering edifice of the Vatican City State financially viable and institutionally secure.
Any book that approaches an institution as complex as the Catholic church from a single perspective runs the risk of distortion, and that danger is certainly on display in God’s Bankers. To be completely fair to the church, one would have to point out that while the bankers that Posner focuses on were scheming endlessly and deviously skirting every financial standard one can think of, the Catholic church and the popes who led it were also denouncing the arms race and calling for the redefinition of international development. They were spearheading, albeit sometimes through secret slush funds, the liberation of East and Central Europe from Soviet rule.
In short, God’s Bankers does not tell anything like the whole story of the role of the Catholic church over the last century. But Posner explicitly denies that he is trying to do so. He readily grants the complexity of the church and its various roles in the world and in the lives of its adherents. And then he embarks on 500 pages of meticulously documented exposition of one role that the leadership of the church played with particular verve and shocking hypocrisy.
God’s Bankers ends on the cautiously hopeful note of the elevation of Pope Francis to the papacy. Posner suggests that this might be the pope to finally rein in the IOR and reform the church’s financial activities once and for all. The author stops a bit short of offering detailed advice to the new pope, but I think the best approach at this point would be to ask two pointed questions. First, why should the Vatican have its own bank in the first place? The common justification is that the IOR allows dioceses, orders and other arms of the church to place their money beyond the prying eyes of secular powers and regulators. But that so-called advantage is actually a crippling shortcoming. There are many reputable banks in Italy and elsewhere that could responsibly house the church’s money without presenting the temptations—the near occasion of sin?—that total autonomy and secrecy have so clearly brought to the steps of the Vatican Bank.
Second, if the IOR is to be retained, then who should legitimately oversee it? As in so many contexts, it is worth keeping in mind here that the Second Vatican Council defined the church as “the people of God.” The church’s money held in the IOR, therefore, actually belongs in a profound sense to that people, and some way must be devised to at long last render the stewards of this money accountable to its rightful owners. The most fundamental problem uncovered by God’s Bankers, in other words, might not be that this pope or that pope could not muster the energy or will to oversee the IOR effectively. The most fundamental problem might be that a mystical body of one billion souls is still governed by an all-male clerical caste locked up in a hothouse of secrecy and intrigue behind the sovereign walls of the world’s smallest independent country. How much of that is likely to change under Pope Francis?