HSBC Whistleblower Says Vatican Blocked Italian Probe Into IOR Bank

The Vatican blocked an Italian probe into its scandal-tainted bank, the Institute for Religious Works (IOR), the former HSBC employee who disclosed information on thousands of Swiss bank account holders said Wednesday.

Franco-Italian computer specialist Herve Falciani gained access to confidential data from 2006-2007 and passed it on to French authorities in the hope of exposing tax cheats hiding behind Swiss banking secrecy laws.

"Italian investigations on the IOR were blocked by the Vatican: Switzerland was ready to cooperate, but the Vatican placed its veto," Falciani said, launching a book in Rome, as quoted by the ANSA news agency.

Over the decades, the IOR has been involved in a long list of financial scandals, allegedly offering a safe haven for the funds of Italian mobsters, politicians and entrepreneurs, going beyond its prime remit of assisting worldwide church operations.

Under Pope Francis and his predecessor Benedict XVI, a clean-up process got underway. Under new management, the IOR has screened its client base and closed thousands of accounts, and is in the process of being downsized significantly.

Falciani - who has fled from Switzerland and has been indicted there for breaking bank secrecy laws, and industrial espionage - said he hoped that his revelations could encourage Francis to continue with the process.

He said he was prepared to return to Switzerland to testify in his trial as long as he would be given assurances that he would not face immediate arrest, "to explain, to show that mistakes were made and to give a contribution."

Vatican foiled over bid to hide Swiss bank data

A top Swiss court on Monday rejected an appeal by the Vatican's bank to keep secret information from one of its Swiss bank accounts suspected of being used for fraud.

Judges at Switzerland's federal criminal court allowed the transfer of most information sought by prosecutors in Italy from the account held by the Vatican bank, officially known as the Institute for Religious Works (IOR), the daily Le Temps reported.

Italian prosecutors suspect the account was used in 2007 and 2008 by third parties to launder as a donation funds from the sale of a company.

The IOR had invoked the Vatican's sovereign immunity, but the judges found that the transactions in question did not relate to functions covered by that immunity.

However, Swiss judges ruled that information not pertinent to the investigation would not be transferred.

Under pressure from its international partners, in particular the United States, Switzerland has been gradually dismantling its decades-old tradition of banking secrecy.

Meanwhile, the IOR has been trying to rid itself of a reputation for shady dealings, following a series of money-laundering scandals in the past.

It was the main shareholder of the Banco Ambrosiano, which collapsed in 1982 amid accusations of ties to the Mafia, while its chairman Roberto Calvi — dubbed "God's Banker" — was found hanging from Blackfriars Bridge in
London in a suspected murder by mobsters.

Pope Francis was elected in 2013 with a mandate to clean up the Vatican and has focused on improving transparency in the centuries-old institution.