Pope Francis has announced he will intensify his fight against corruption at the Vatican by strengthening supervision of the Vatican Bank through a special commission of inquiry to investigate and oversee the Institute for the Works of Religion, or IOR, the formal name of the Vatican Bank.

Using a “Motu Proprio,” a decree issued at his own initiative, Francis announced Aug. 8 he was authorizing the Vatican’s Financial Information Authority to have increased supervisory powers over the Vatican Bank and other Vatican departments involved in financial activities.

The move followed a decision announced Aug. 2 by HSBC bank in London to close the Vatican Bank’s account along with the accounts of dozens of diplomatic accounts.

International media speculated HSBC was reluctant to handle the large volume of cash frequently transacted in diplomatic accounts in the wake of paying with a record fine of $1.9 billion last year to U.S. government authorities. HSBC made the deal to avoid prosecution for having engaging in massive money laundering to facilitate transactions by terrorists and drug cartels.

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WND, in a series of exposé articles beginning in February 2012, was the first to report on billions of dollars in money laundering activities being run through HSBC bank. The fraud was documented by more than 1,000 pages of HSBC bank records turned over to WND by whistleblower John Cruz, a former HSBC vice president and relationship manager for HSBC’s southern New York region.

Still, the question remained: Why would HSBC close the Vatican Bank’s account unless the Hong Kong-headquartered bank had reason to suspect the Vatican was engaged in money-laundering activities?

Vatican money-laundering scandals continue

On June 26, the pope set up a special five-member panel that includes four prelates and a female law professor to investigate the Vatican Bank, bypassing the Vatican bureaucracy.

Reuters reported the new commission would have full powers to obtain all documentation and data necessary to their investigation and would be able to bypass usual rules that oblige officials to respect the secrecy of the office. Reuters further reported the pope’s decree establishing the new commission ordered the commission to give its conclusions and findings directly to him.

The back story explaining why Francis set up the special commission of inquiry involves the arrest of a Vatican prelate accused of international money laundering.

In June, just before the new commission of inquiry was constituted, Italian police arrested Monsignor Nunzio Scarano, an accountant in a Vatican department known as APSA, the Administration of the Patrimony of the Apostolic See, a top Vatican financial office that overseas Catholic Church real estate holdings.

Scarano, along with Giovani Carenzio, a financial broker, and Giovanni Maria Zito, described as a military police agent deployed to the Italian Secret Service, were implicated in a scheme to sneak the equivalent of about $26 million in cash into Italy, evading international financial controls by hiring a private plane to bring the cash into Italy from Locarno, Switzerland.

The New York Times reported that prior to his arrest in June, Scarano was under investigation for illegally moving approximately $730,000 in cash from his account in the Vatican Bank to Italian banks.

According to a BBC report in June, Scarano, a priest from Salerno in southern Italy who has served a long-time tenure at the Vatican, has also been under investigation by Italian police for a series of suspicious transactions involving the recycling through the Vatican Bank of a series of checks described as church donations.

Francis determined to clean up Vatican Bank

The Christian Science Monitor reported last week the decision by Pope Francis to clean up the Vatican’s financial affairs is one of his central goals since his election in March.

Vatican observers note an official decision to investigate money-laundering activities at the Vatican Bank can be a risky enterprise.

Pope John Paul I, who died in his sleep Sept. 28, 1978, only 33 days into his papacy, was believed at the time of his death to be getting ready to launch a major investigation into Vatican Bank corruption.

The Institute for the Works of Religion was a major shareholder in Banco Ambrosiano, a major Italian bank that collapsed in 1982 with losses of more than $3 billion.

On June 18, 1982, the chairman of Banco Ambrosiano, Roberto Calvi, a banker with close ties to the Vatican Bank, was found hanging from the Blackfriars Bridge in London in what was widely suspected as a murder disguised as a suicide.

At time of Calvi’s death, the Mafia was believed to have been using Banco Ambrosiano for money laundering purposes.

Calvi was known as “God’s Banker” because of his close ties to the Vatican.

Founded in 1942 as the Institute for the Works of Religion, the Vatican Bank is one of the most secretive banks in the world, operating with 114 employees and over $7 billion in assets.

Traditionally, the Vatican Bank has refused to cooperate with Italian banking authorities and international monetary authorities on the basis that the Vatican is a sovereign state that is not subject to the control of foreign governmental authorities.

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