In 1929, Italy's fascist dictator Benito Mussolini gave the Vatican a big chunk of cash in exchange for its recognition of his government. What happened to the money? Well, the Vatican has kept that a secret, but research is revealing that it's been used to develop a massive property empire in Britain worth at least £500m.
In 1929 Italy wasn't at war with the rest of the world and fascism wasn't as discredited as it is now, so there probably isn't a lot of room for criticism of the original exchange. It's certainly understandable, though, that the Vatican wouldn't want to draw attention to their fascist-funded cash reserves once World War II started.
What about afterwards, though? It might not look great that the Vatican achieved financial stability through the support of a fascist dictatorship, but it wouldn't have required a great deal of work to point to the original context to deflect most of the criticism.
The Mussolini money was dramatically important to the Vatican's finances. John Pollard, a Cambridge historian, says in Money and the Rise of the Modern Papacy: "The papacy was now financially secure. It would never be poor again." ...
The Mussolini investments in Britain are currently controlled, along with its other European holdings and a currency trading arm, by a papal official in Rome, Paolo Mennini, who is in effect the pope's merchant banker. Mennini heads a special unit inside the Vatican called the extraordinary division of APSA - Amministrazione del Patrimonio della Sede Apostolica - which handles the so-called "patrimony of the Holy See".
According to a report last year from the Council of Europe, which surveyed the Vatican's financial controls, the assets of Mennini's special unit now exceed €680m (£570m).
While secrecy about the Fascist origins of the papacy's wealth might have been understandable in wartime, what is less clear is why the Vatican subsequently continued to maintain secrecy about its holdings in Britain, even after its financial structure was reorganised in 1999.
Source: The Guardian
It's entirely possible that the secrecy has less to do with the fascist source of the funds and more to do with the desire to conceal the extent to which the Vatican is invested in worldly activities and thus able to exercise worldly, secular control over other people's lives. This is especially true in Britain where there is a centuries-old animus towards and suspicion of the power of the Catholic Church.