The Vatican Bank is well along the path to transparency, says René Brülhart. His opinion matters because he’s president of the Vatican Financial Information Authority (AIF), which oversees the bank’s progress towards international standards.
Brülhart has been called “the James Bond of international finance”, not only because of his swarthy good looks and elegance but also because of his role in locating the assets that Saddam Hussein had squirreled away in Europe.
He was born in the German-speaking Swiss city of Fribourg in 1972. After postgraduate law studies in the Netherlands, he directed the financial intelligence unit of Liechtenstein, a mini-state previously notorious for money laundering. Brülhart improved the principality’s reputation, raising it to the first ranks of financial transparency, according to the European ratings agency Moneyval. He became vice-president of the Egmont Group of international financial intelligence units.
In 2012 he was appointed head of the AIF, shortly after Benedict XVI ended the Vatican’s financial exceptionalism by agreeing to conform to Council of Europe transparency standards. Pope Francis reinforced the powers of the AIF, whose office is in the San Carlo building close to the Santa Marta hostel where the Pope lives. Unlike some past Vatican finance figures, Brülhart is not linked to groups like Opus Dei or the Knights of Malta.
Pope Francis considered closing the Vatican Bank, formally known as the Institute for Religious Works (IOR), but decided it was needed, provided it was reformed. The AIF is responsible for reshaping the IOR, which Brülhart describes as “a financial system sui generis”.
How has he gone about his task? “Step by step,” he says in his soft, fluent, slightly accented English when I meet him in Rome. “It has been a matter of understanding how the Vatican functions, how its financial institutions have developed and then building a tailor-made system which respects the Vatican outlook and traditions but also international standards.
“We have to work with facts, not emotions. We’ve had to establish the right legal framework and regulations, then implement them.”
There was a crisis shortly after Brülhart’s arrival. At the peak of the tourist season, the Italian central bank blocked the Vatican’s credit card machines, run by Deutsche Bank, because the Italian authorities suspected financial irregularities. It was inconvenient for Vatican residents and tourists but also damaging for the city-state’s reputation. The blockage was expected to last a day but went on for six weeks.
Brülhart helped to find a solution by replacing Deutsche Bank with a Swiss institution which fell under an equivalent system to European Union regulations.
This won him many friends in the Vatican and he has gained more by keeping a low profile, not criticising others, being clear about his goals and why they are necessary, and explaining what will happen if they are not adopted. When he does speak out publicly it is because he believes the Vatican has a responsibility to Catholics worldwide to say what it is doing with money partly supplied by them.
If the AIF suspects that a Vatican operation is connected to financial crimes, it forwards the details to the Vatican Promoter of Justice, who decides if there should be a trial. In 2011 and 2012, seven cases were spotted, whereas from 2013 until today there have been more than a thousand. More than 5,000 of the approximately 30,000 IOR accounts have now been closed.
I mention rumours that some accounts were linked to the Mafia or Freemasons. “Maybe you have more information about such things than me,” replies Brülhart, who has a humorous vein. “With the introduction of the new legal framework to fight financial crimes, the IOR is a tighter operation now and it has returned to its original aim of serving the Church globally.”
In the past five years, the AIF has forwarded 56 reports to the Promoter of Justice. But so far the Vatican has handed out few punishments. “Several prosecutions have been initiated in the last few years,” he says, “the most recent of them just a few days ago. However, you have to keep in mind that it is a new system and it needs time.”
There has been a long series of scandals, dismissals and resignations in the Vatican financial world – evidence that some are resisting reform. But Brülhart insists there is “strong support” for his work. “Changes inspire fear of losing what one already has and you have to go about them with respect for the persons and institutions concerned. But when you do that, even those initially diffident can be persuaded.”
So will there be no more Vatican financial scandals? “I hope not,” he reflects, “but one can never be sure. What I do know is that regulations and instruments to prevent them are now in place and being applied, making identification of potential vulnerabilities easier. Implementing a sustainable system is a process, but we are fully committed to it.”
Desmond O’Grady is a journalist, author and playwright living in Rome