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ITALIAN COPS SEIZE $30m FROM VATICAN IN PROBE
vatican bank VATICAN CITY — Italian authorities seized euro23 million ($30.18 million) from a Vatican bank account Tuesday and said they have begun investigating top officials of the Vatican bank in connection with a money laundering probe.

The Vatican said it was "perplexed and surprised" by the investigation. Italian financial police seized the money as a precaution and prosecutors placed the Vatican bank's director general and its chairman under investigation for alleged mistakes linked to violations of Italy's anti-laundering laws, news reports said. The is probe not the first time the bank — formally known as the Institute for Works of Religion — has faced trouble. In the 1980s, it was involved in a major scandal that resulted in a banker, dubbed "God's Banker" because of his close ties to the Vatican, being found hanging from Blackfriars Bridge in London.

The Vatican expressed full trust in the chairman of the bank, Ettore Gotti Tedeschi, and his director-general, and said it had been working for some time to make its finances more transparent to comply with anti-terrorism and anti-money laundering regulations. "The Holy see is perplexed and surprised by the initiatives of the Rome prosecutors, considering the data necessary is already available at the Bank of Italy," it said in a statement. News reports circulated more than a year ago that Italian investigators were scrutinizing millions of euros worth of Vatican bank transactions to see if they violated money laundering regulations.

In Tuesday's case, police seized the money from a Vatican bank account at the Rome branch of Credito Artigiano Spa, according to news agencies ANSA and Apcom. The bulk of the money, euro20 million ($26.2 million), was destined for JP Morgan in Frankfurt, with the remainder going to Banca del Fucino. According to the reports, the Vatican bank had neglected to communicate to financial authorities where the money had come from. The reports stressed that Gotti Tedeschi wasn't being investigated for laundering money himself but for a series of alleged omissions in financial transactions. Prosecutors declined requests seeking confirmation of the reports.

Gotti Tedeschi was named chairman of the bank a year ago after serving as the head of Italian operations for Spain's Banco Santander. A member of the conservative religious movement Opus Dei, Gotti Tedeschi frequently speaks out on the need for more morality in financing and is a very public cheerleader of Pope Benedict XVI's finance-minded encyclical "Charity in Truth." News of the investigation came just after Benedict wrapped up a difficult trip to Britain and as the Vatican still reels from the fallout of the clergy sex abuse scandal. The Vatican bank, located in a tower just inside the gates of Vatican City, isn't a typical bank. Its stated mission is to manage assets placed in its care that are destined for religious works or works of charity. But it also manages ATMs inside Vatican City and the pension system for the Vatican's thousands of employees.

The bank is not open to the public. Depositors are usually limited to Vatican employees, religious orders and people who transfer money for the pope's charities. Its leadership is composed of five cardinals, one of whom is the Vatican's secretary of state. But the day-to-day operations are headed by Gotti Tedeschi and the bank's oversight council. The Vatican bank was famously implicated in a scandal over the collapse of the Banco Ambrosiano in the 1980s in one of Italy's largest fraud cases.

Roberto Calvi, the head of Banco Ambrosiano, was found hanging from Blackfriars Bridge in London in 1982 in circumstances that still remain mysterious. London investigators first ruled that Calvi committed suicide, but his family pressed for further investigation. Eventually murder charges were filed against five defendants, including a major Mafia figure, and they were tried in Rome and acquitted in 2007. Banco Ambrosiano collapsed following the disappearance of $1.3 billion in loans the bank had made to several dummy companies in Latin America. The Vatican had provided letters of credit for the loans.

While denying any wrongdoing, the Vatican bank agreed to pay $250 million to Ambrosiano's creditors. Last year, a U.S. appeals court dismissed a lawsuit against the Vatican bank filed by Holocaust survivors from Croatia, Ukraine and Yugoslavia who alleged it had accepted millions of dollars of their valuables stolen by Nazi sympathizers. The court said the bank was immune from such a lawsuit under the 1976 Foreign Sovereign Immunities Act, which generally protects foreign countries from being sued in U.S. courts.

In its statement Tuesday, the Vatican also said it was working to join the so-called "white list" of the Organization for Economic Cooperation and Development, which keeps tabs on financial openness on the exchange of tax information. The OECD divides countries into three categories: those who comply with rules on sharing tax information (white list), those who say they will but have not acted yet (gray list), and nations which have not yet agreed to change banking secrecy practices (blacklist) Currently the Vatican bank isn't on any OECD list.

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  • Millions seized from Vatican Bank in money laundering probe
  • PROPOSED WEB VIDEO RESTRICTIONS CAUSE OUTRAGE IN ITALY
    New rules to be introduced by government decree will require people who upload videos onto the Internet to obtain authorization from the Communications Ministry similar to that required by television broadcasters, drastically reducing freedom to communicate over the Web, opposition lawmakers have warned.

    The decree is ostensibly an enactment of a European Union (EU) directive on product placement and is due to go into effect at the end of January after being subjected to a nonbinding appraisal by parliament. On Thursday opposition lawmakers held a press conference in parliament to denounce the new rules -- which require government authorization for the uploading of videos, give individuals who claim to have been defamed a right of reply and prevent the replay of copyright material -- as a threat to freedom of expression. "The decree subjects the transmission of images on the Web to rules typical of television and requires prior ministerial authorization, with an incredible limitation on the way the Internet currently functions," opposition Democratic Party lawmaker Paolo Gentiloni told the press conference.

    Article 4 of the decree specifies that the dissemination over the Internet "of moving pictures, whether or not accompanied by sound," requires ministerial authorization. Critics say it will therefore apply to the Web sites of newspapers, to IPTV and to mobile TV, obliging them to take on the same status as television broadcasters. "Italy joins the club of the censors, together with China, Iran and North Korea," said Gentiloni's party colleague Vincenzo Vita. The decree was also condemned by Articolo 21, an organization dedicated to the defense of freedom of speech as enshrined in article 21 of the Italian constitution. The group said the measures resembled an earlier government attempt to crack down on bloggers by imposing on them the same obligations and responsibilities as newspapers.

    The group launched an appeal Friday entitled "Hands Off the Net," saying the restrictive measures would mark "the end of freedom of expression on the Web." The restrictions would prevent the recounting of the life of the Italians in moving pictures on the Internet, it said. The decree was also criticized by Nicola D'Angelo, a commissioner in the Communications Authority, which would be likely to play a role in policing copyright violations under the new rules. The decree ran contrary to the spirit of the EU directive by extending the rules of television to online video material, D'Angelo said in a radio interview. He also expressed concern at the requirement for government authorization for the uploading of videos to Internet. "Italy will be the only Western country in which it is necessary to have prior government permission to operate this kind of service," he said. "This aspect reveals a democratic risk, regardless of who happens to be in power."

    Other critics described the decree as an expression of the conflict of interests of Silvio Berlusconi, who exercises political control over the state broadcaster RAI in his role as prime minister and is also the owner of Italy's largest private broadcaster, Mediaset. They said the new copyright regulations would prevent Internet users from sharing snippets of popular TV shows or goals from the Italian soccer league, currently viewed online by millions of people. Mediaset has successfully sued YouTube to obtain the removal of its copyright material, in particular video from the reality show "Big Brother," from the online video-sharing platform. A judge in a Rome civil court ordered the removal of the material last month, and the new decree is seen as providing further protection for Mediaset's online commercial interests.

    Alessandro Gilioli, who writes a blog on the Web site of the weekly magazine L'Espresso, said the decree was intended to squelch future competition for Mediaset, which was planning to move into IPTV and therefore had an interest in reducing the number of independent videos circulating on the Web. "It's the Berlusconi method: Kill your potential enemies while they are small. That's why anyone doing Web TV -- even from their attic at home -- must get ministerial approval and fulfill a host of other bureaucratic obligations," Gilioli wrote. He said the government was also keen to restrict the uncontrollable circulation of information over the Internet to preserve its monopoly over television news. Paolo Romani, the deputy minister responsible for drafting the decree, insisted the text simply adopted the recommendations of the EU directive but said the government was prepared to discuss modifications. The decree did not intend to restrict freedom of information "or the possibility of expressing one's ideas and opinions through blogs and social networks," Romani told the ANSA news agency.

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