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Cleric and 2 Others Arrested in Vatican Bank Investigation

June 28, 2013 by Leave a Comment

Those arrested were charged with fraud, corruption and slander as part of a broad investigation tied to the famously secretive Vatican Bank.

Prosecutors say that the broker and the Secret Service agent had been plotting to help the priest bring 20 million euros, or $26 million, into Italy from Switzerland in a private jet, the ANSA news agency reported. It said that the 20 million euros belonged to “some friends of the monsignor.” The plot never went through.

In a statement, the Vatican spokesman, the Rev. Federico Lombardi, said that the priest, Msgr. Nunzio Scarano, had been suspended from his position at one of the Vatican’s main financial departments “more than a month ago, ever since his superiors were informed that he was under investigation.”

The Vatican spokesman said that the Holy See had not received any requests from the Italian authorities, but confirmed its “willingness for full collaboration,” and that the Vatican’s internal financial watchdog was following the matter and would take appropriate measures “if necessary.” Those would include requesting that the Vatican’s internal prosecutor open an internal investigation into the monsignor.

A Vatican official said Monsignor Scarano had been suspended from his position as an accountant at APSA, a department that oversees the Vatican’s real estate holdings, after prosecutors in Salerno opened a separate investigation into money laundering. The official indicated that the suspension was a sign that the Vatican was stepping up its internal vigilance.

Only priests, religious, Catholic institutions, employees of Vatican City State and diplomats accredited to the Holy See are allowed to have accounts at the Vatican Bank, known as the Institute for Works of Religion, but rumors have long swirled about whether accounts were used as fronts for other interests, including organized crime and Italian politicians.

In the past, the Italian prelates who controlled the Vatican Bank tended to see any inquires into possible malfeasance as an attack on its sovereignty. Pope Francis and his predecessor, Benedict XVI, have tried to make the Vatican Bank more transparent.

It was not immediately clear whether the Vatican was cooperating with Italian authorities or whether the arrests stemmed from several suspicious transactions — six in 2012 and seven in the first half of 2013 — that Vatican officials said they had flagged and brought to the attention of the Vatican’s own internal prosecutors.

The arrests Friday were the most dramatic events to emerge from the Rome prosecutors’ investigation into the Vatican Bank since 2010, when prosecutors seized 23 million euros from two external accounts used by the Vatican Bank and placed its then-president and director general under investigation.

It had been acting on a warning from the Bank of Italy urging Italian banks to be more vigilant in their dealings with the Vatican, which has not come into full compliance with European banking norms, making it costly and problematic for other banks to do business with it.

In recent years, the Vatican has been under pressure to meet European norms as a condition for using the euro. In 2010, it created an internal financial watchdog and last year appointed as its director a Swiss lawyer who had helped Liechtenstein clean up its murky banking system.

This month, Pope Francis appointed a trusted prelate to a top post at the bank and on Wednesday, the pope took a further step and created a committee of prelates and a Harvard Law School professor to report directly to him on the bank’s progress.

In an interview last month, the new president of the Vatican Bank, Ernst von Freyberg, who was appointed in February by Benedict in one of his last acts as pope, said that he was committed to making the bank more transparent and compliant.

Last year, a report by Moneyval, a monitoring agency under the Council of Europe, said that the Vatican had made progress but still needed to improve in terms of compliance and customer due diligence. The Vatican must submit a new progress report to Moneyval this fall.

Vatican officials have said that the Vatican needs a bank to help Catholic institutions operate around the world, including in politically sensitive areas. The bank had total assets of 7.1 billion euros under management in 2012, most of it invested in government bonds, and turned a net profit of 86.6 million euros.

Article source: http://www.nytimes.com/2013/06/29/world/europe/cleric-and-2-others-arrested-in-vatican-bank-investigation.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Bucks Blog: How Lenders Make Money (and Create It Too)

October 5, 2012 by Leave a Comment

In this excerpt from his new book, “Man vs. Markets,” Paddy Hirsch, senior producer for personal finance at American Public Media’s business radio program production house, Marketplace, explains the basics of lending from the bank’s side of things.

Mr. Hirsch, perhaps best known for his series of whiteboard drawings and videos, leads the Marketplace team that produces two special newspaper sections and two hourlong radio shows each year in partnership with The New York Times.

Today most banks work this way: borrowing money from depositors at one rate of interest, and lending the money out again at another, higher rate of interest. And pocketing the difference.

You might think that makes bankers pretty selfish. They pay measly rates of interest to their depositors and charge higher rates to people who want to borrow from them. In the end they’re firmly focused on making a profit for themselves and their shareholders. The loans they make are a way to make that money.

Fortunately, the banks’ lust for profits works to everyone’s advantage.

The loans the banks make to companies and people usually do a great deal of good. The money helps us to buy everything from groceries to cars and houses, and it helps companies expand and hire. If people are able to borrow (and don’t overstretch), the money they borrow can help grow businesses and create jobs, and that’s good for everyone.

There’s another benefit to banks’ desire to lend money out in order to make profits: Lending creates money. Out of thin air!

This is how the magic works. One day, Mr. Smith comes to his bank and deposits $1 million. The bank keeps 10 percent, or $100,000, in reserve, in case Mr. Smith wants some of his money quickly.

The next day, Mrs. Jones comes to the same bank and asks for a $900,000 loan, to buy a private jet. The bank lends her the money. Suddenly the amount of money in the system has almost doubled. There’s the million dollars that Mr. Smith has in his bank account. And there’s the $900,000 loan the bank made to Mrs. Jones. Both are assets — Mr. Smith can point to his million-dollar balance on his statement, and Mrs. Jones has a briefcase full of cash — so both are real. The bank has turned a million dollars into $1.9 million, just like that.

Dan Archer

Mrs. Jones drives out of the airport and gives the briefcase full of cash to Mr. Sharif, of Sharif Aviation. Mr. Sharif gives Mrs. Jones the keys to a gently used Bell 407 helicopter and puts the cash in his bank. The bank puts 10 percent ($90,000) aside as a reserve and lends $810,000 to a clothing manufacturer who needs to buy some new equipment. The clothing maker gives the equipment salesman the $810,000. He takes it to his bank, which holds 10 percent in reserve, and . . .

You get the picture. That $1 million has now more than tripled, in terms of its purchasing power. And yet there’s no new money in the system — it’s still just a million dollars. It’s the banks’ ability to lend that money out, over and over, that creates a ripple effect through the economy and improves everyone’s ability to spend and to grow. Lending and borrowing can be a good thing, in other words. So long as you don’t overdo it.

Which means that banks aren’t all bad. Yes, some banks — or the bankers who run them — do make mistakes. Some bankers cheat, some bankers lie, and some bankers take foolish risks that threaten the entire global economy. But most banks and bankers work to our mutual benefit, and the network of the country’s banks has become an essential part of our economy, driving money through the system like a heart pumping blood around the body.

Excerpted from “Man vs. Markets: Economics Explained (Plain and Simple),” published by Harper Business. Copyright © Paddy Hirsch, 2012. Reprinted with permission.

Article source: http://bucks.blogs.nytimes.com/2012/10/04/how-lenders-make-money-and-create-it-too/?partner=rss&emc=rss

Filed Under: Your Money Tagged With: , ,

Bucks Blog: Monday Reading: Try a Private Jet at Public Prices

September 27, 2011 by Leave a Comment

September 26

Monday Reading: Try a Private Jet at Public Prices

Trying private jets at public prices, a look at whether junk food is really cheaper, a Web service offers to automate your life and other consumer-focused news from The New York Times.

Article source: http://feeds.nytimes.com/click.phdo?i=d8fe3d7660ce99cf751bdbd5003bfee1

Filed Under: Your Money Tagged With: , ,

For Instant Ratings, Interviews With a Checkbook

June 13, 2011 by Leave a Comment

ABC and NBC, embroiled in a fight for viewers in the mornings, are increasingly in the news for their willingness to pay thousands of dollars to gain exclusive access to news subjects.

The practice was especially visible last week when ABC News ran an exclusive interview with Meagan Broussard, one of the women who was sent lewd photos by Anthony Weiner, after the network paid her about $15,000 for photos. ABC said its extensive reporting, including the interview, led to Mr. Weiner’s admissions about his online behavior.

Also last week, ABC announced that Diane Sawyer had secured the first-ever interview with Jaycee Lee Dugard, the young woman held captive for 18 years in California. ABC declared that it had not paid any fee for the interview, but last year, according to a longtime ABC News executive aware of the deal, the network paid a six-figure sum for rights to home movies of Ms. Dugard.

The networks provide perks besides paychecks, too: When David Goldman, a subject in a custody battle over his son, brought his son back to the United States from Brazil last year, he was provided both a ride on a private jet by NBC and accommodations at Universal Studios, an amusement park partly owned by NBC’s parent company. Mr. Goldman’s network of choice for interviews was NBC, and he mentioned being “grateful” for their support.

More recently, a high school student in Washington State who faked a pregnancy was persuaded to appear on NBC in May in part because the network placed money in a trust fund for her future education.

Network representatives say their only payments are licensing fees for photographs and videos, not for interviews. In the case of the high school student, NBC said, “the video of the moment when she revealed to her class that she was faking was essential to her story,” the “Today” show executive producer Jim Bell said, adding, “The amount was reasonable.”

Similarly, James Goldston, the executive producer of ABC’s morning show, “Good Morning America,” said the fees paid were relatively small and called the licensing “a very small part of the work that we do.”

In other interviews last week, the licensing distinction was glossed over — and even laughed at — by current and former network employees and executives, some of whom said the practice was at best a questionable breach of ethics.

“The real issue is: by paying for interviews, are you changing the news?” said David Westin, who was the president of ABC News until last winter, when many licensing deals were done. The economic tradeoff rarely makes sense, Mr. Westin said, in a time of budget and staff cuts at network news divisions.

“If you could prove that by spending $20,000 you would make $70,000, O.K., I can justify that,” Mr. Westin said. “But I’ll be doggone if you could go through any of those payments, trace them through and see if it made any sense.”

The Poynter Institute, the journalism ethics group, said last week that the payments corrupted journalism. The group suggested that the trend could be reversed if networks would agree to pay license fees only to people not involved in the story, like eyewitnesses who happen to record a news event.

The practice of paying for interviews is common in Britain. In the United States, magazines like Us Weekly pay for wedding and baby photographs of celebrities and are often granted interviews at the same time, and tabloid shows like “TMZ” and “The Insider” pay for stories and interviews. But they are generally not held to the same standards as the network news divisions, all of which have ethics policies against paying for interviews.

So the networks pay for photos, videos, hotel rooms — even special events, as NBC did in 2007, when its entertainment division paid an estimated $2.5 million for the rights to the “Concert for Diana,” putting its news division in line for exclusive interviews with Prince William and Prince Harry.

Some news executives said that the subjects of interviews were learning how much their stories were worth. “Money is being asked for more and more of the time,” said Jeff Fager, the president of CBS News, who denounced the practice. “If you’re in the business of having to pay people to get a story, it can’t be worth it,” he said.

Article source: http://feeds.nytimes.com/click.phdo?i=ca642c09135fe2d47bd596c5affd7940

Filed Under: Business News Tagged With: , ,