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Vatican admits infighting in financial watchdog agency between Italian board, Swiss director

VATICAN CITY - The Vatican on Tuesday acknowledged recent infighting inside its financial watchdog agency which preceded the resignation of its president, a new development as Pope Francis works to reform the Holy See's finances in meetings this week.

The board of the Financial Information Authority complained in a letter to the Vatican secretary of state that it was being kept in the dark about agency activities since the arrival of Swiss anti-money-laundering expert Rene Bruelhart as director, Rome daily Il Messaggero reported Tuesday.

Two weeks after that Jan. 16-dated letter, Pope Francis accepted the resignation of the agency president, Cardinal Attilio Nicora, who had clashed with Bruelhart.

The Vatican created the agency in 2010 as part of its first major push to comply with international anti-money-laundering standards. Its mission was to supervise, regulate and investigate the Holy See's financial activities to ensure they complied with international norms, and to share financial information with other countries in the fight against money laundering and financing of terrorism.

Bruelhart, who previously headed Liechtenstein's financial intelligence unit, joined the Vatican regulator in 2012. He since has been credited with delivering progress in the Vatican's compliance with international financial norms and scoring membership in the coveted Egmont group of financial watchdog agencies.

He inherited a board dominated by Italians with close ties to Italy's financial institutions, which have long clashed with the Vatican. The founding statute of the agency specifies that the board and president have strategic oversight authority, while operational matters lie with the director.

In its letter, the board nevertheless complained it was unable "to do its job because it was kept in the dark about nearly all the activities" of the agency's investigations into suspicious transactions.

Asked Tuesday about the letter, Vatican spokesman the Rev. Federico Lombardi acknowledged that there had been differences of opinion within the agency as it evolved from when it was conceived over the course of new changes in personnel, leadership and internal structure.

"I'd be surprised if there weren't discussions or differences of visions or interpretations," he said.

Revelations of infighting came as Francis and his Group of Eight cardinal advisers heard recommendations Tuesday from a commission of inquiry on reforming the Vatican bank. The bank has long been wracked by scandal, most recently after a Vatican accountant was arrested on suspicion he used his Vatican bank account to launder money.

Some cardinals have called for the bank's closure, but Lombardi said the commission stressed the bank's "mission of service" to the church.

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Follow Nicole Winfield at www.twitter.com/nwinfield

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