The Vatican says the bank's former president, Angelo Caloia, is the highest-ranking Holy See financial official to be indicted on such charges.

Seventy-eight year-old Coloia, along with his lawyer, 94 year-old Gabriele Liuzzo, denied any wrongdoing.

A third person who was under investigation, former director general Lelio Scaletti, died several years ago.

The bank (officially known as the Institute for Works of Religion) alleges "unlawful conduct" by the three occurred from 2001 to 2008. This period involved "the disposal of a considerable part of the institute's real estate assets."

In December 2014, Reuters reported the Vatican's top prosecutor, Gian Piero Milano, had frozen millions of dollars in accounts held by the three men.

Milano says the men regularly under-represented the proceeds from real estate sales in the Vatican bank's official books.

They allegedly received the difference between the real sale prices and the amount officially recorded separately.

Milano's order which froze the assets says the trio often received the money from the real estate sales in cash.

He claims some of the proceeds were deposited in a Rome bank account that was not registered on the IOR's balance sheet.

The bank's internal investigation into the alleged scam begun in 2013 by then-president Ernst von Freyberg, a German businessman.

Freyberg, who was president until 2014, commissioned an independent audit of the sale of properties formerly owned by the bank.

His misgivings were aroused after noting suspicious accounting procedures under the Coloia and Scaletti administrations.

Freyberg then began an overhaul of the bank, which had been implicated in numerous financial scandals.

Thousands of accounts were closed.

Last year Italy put the Vatican on its"white list" of states with cooperative financial institutions.

This ended years of mistrust, providing an endorsement of Pope Francis's efforts to clean up finances.

Moneyval, the Council of Europe's monitoring body, has said in several evaluations the Vatican has made great strides in cleaning up the IOR and other financial departments.

At the same time, Moneyval says the Vatican still needs to be more aggressive in bringing cases to trial.

Source

• Reuters
• CruxNow
• New York Times
• Image: Speigel Online

And the strongest notes in this hymn of praise come from the basso profondo of the Australian cardinal himself.

The 73-year-old Pell, who is officially the prefect of the Vatican's recently created Secretariat for the Economy, gave a glowing progress report of his financial reform efforts in an 1,800-word article published last week in Britain's Catholic Herald.

Modern and transparent with checks and balances

He made it clear that Pope Francis was mandated by "an almost unanimous consensus among the cardinals" to carry out financial reform.

He said they were "well under way and already past the point where it would be possible to return to the 'bad old days,' " even though much remained to be done.

He added that the basic program for reform was drawn up by an "international body of lay experts" that the pope appointed and was based on the following three principles: first, the adoption of "contemporary international financial standards" and "accounting procedures"; second, transparency in producing annual financial balance sheets; and third, "something akin to a separation of powers" with "multiple sources of authority."

Yet Pell made it clear that his secretariat, above all others, possessed "authority over all economic and administrative activities" in the Vatican, even though its policies would be "determined by the Council for the Economy."

That body is headed by Cardinal Reinhard Marx of Munich and includes eight other cardinals and seven laymen. "Having decision-making lay members at this level is an innovation in the Vatican," Pell wrote.

His article highlighted several other positive developments in the way the Vatican will manage its financial resources in the future.

Indeed, there is much to be praised.

But the article has also set off alarm bells and raised concerns over a reform that is deeply unpopular among Vatican employees fearful of ending up on the wrong end of the stick.

It also never mentioned why the Congregation for the Evangelization of Peoples (Propaganda Fide), a virtual empire that has a vast patrimony of investments and prime properties in central Rome and elsewhere, is apparently not subject to the reforms. Continue reading

• Robert Mickens in National Catholic Reporter

Robert Mickens is editor-in-chief of Global Pulse.

Vatican Radio quoted bank president Ernst von Freyberg that the site will provide information "on our reforms and the things we do in the world and how we support the Church and its mission and charitable works."

The bank, which is officially known as the Institute for Works of Religion, has been the target of investigations by Italian authorities.

Freyberg said he plans to run the bank in line with international norms. "Our task is to run [the bank] in a way that it can respond to international norms, that it is a clean institute and one of service," von Freyberg was quoted as saying.

He said the new measures are aimed at giving Pope Francis the ability to decide the right formula for the bank.

Pope Francis last week said the bank must become "honest and transparent."

The pope made his comments at the end of his first international trip to Brazil for the World Youth Day celebrations.

"I don't know what will become of the bank. Some say it is better that is a bank, others that it should be a charitable fund and others say close it," he said.

"We have to find the solution," Francis said. "But whatever the solution, it must have transparency and honesty. That's the way it must be," he said.

The Vatican earlier confirmed its Financial Information Authority had signed a memorandum of understanding with Italian authorities over the exchange of financial information to combat money laundering in line with international standards.

The Vatican has already signed similar agreements with other countries, including the United States.

Visitors to the Vatican Bank website can read about the bank's 71-year history, how many customers it has (18,900, as of last year), its employees (114), and its net profit for 2012, listed as €86.6m (£75.6m).

Sources

UPI

Chicago Tribune

euronews

The Guardian

Image: AFP/Getty Images/NYT