Vatican Bank Being Sued

It seems like the Vatican Bank is in a bit of trouble. Mississippi Insurance Commissioner George Dale has filed a lawsuit charging officials at the Vatican Bank with violating the Racketeer Influenced and Corrupt Organizations (RICO) Act. If he wins, damages could exceed USD $600 million.

  Newsday reports:

A Vatican spokesman denies the Roman Catholic church profited from business dealings with Frankel or accepted funds he stole. The church has filed a motion to dismiss the suit for lack of jurisdiction, and a ruling is expected this summer. Dale remains determined to pursue his suit against "The Holy See aka Vatican City State" and others. "The evidence of wrongdoing my investigators accumulated was so clear," he says. "State officials are always slammed as paper pushers. But two federal agencies fumbled the ball with Frankel. The Internal Revenue Service approved Frankel's taxes. The FBI had suspicions but made no moves. In the end, insurance commissioners brought this guy down."

"Dale traces knowledge of a criminal scene almost to the pope by showing the third highest ranking Vatican official, Salerno, approved a very suspect business deal with Frankel, said attorney Jonathan Levy, who represents concentration camp survivors claiming the Vatican laundered money that the Nazis stole from them. Though the church insists it did not profit from St. Francis, that may be beside the point. "We are not claiming that the Vatican profited," said attorney Charles Copeland, local counsel for the Mississippi Insurance Commission. "If a party should have reasonably been aware that those involved in a conspiracy were committing illegal acts in the party's name, that party can be held responsible for the amount stolen," he explained.

Historically, the Vatican has fought U.S. lawsuits by claiming sovereign immunity, the legal concept that courts in this country lack jurisdiction over foreign countries. But the Mississippi lawsuit "very shrewdly focuses on the Vatican Bank's involvement," said Pepperdine University law professor Lee Boyd. "As a commercial entity, the Vatican Bank can be sued by Americans in U.S. courts." "I cannot recall a single legal case where the Vatican Bank gave any records to an American plaintiff during the discovery period," Boyd said. "The Vatican normally settles to avoid the discovery."

For years there have been stories of criminal activity by the Vatican Bank — shady dealings in which people have used the power, prestige, and resources of the Holy See to launder money or worse. Now there is a lawsuit which might actually result in the bank’s financial books being opened up to independent scrutiny. Vatican officials have long denied any wrongdoing where the bank is concerned, but now we may end with proof to the contrary.

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