The Institute was involved in a major political and financial scandal in the 1980s, concerning the 1982 $3.5 billion collapse of Banco Ambrosiano, of which it was a major share-holder. The head of the Vatican Bank from 1971 to 1989, Paul Marcinkus, was under consideration for indictment in 1982 in Italy as an accessory of the bankruptcy.
The Bank Identifier Code of the Vatican Bank is IOPRVAVX.
The purpose of the Istituto per le Opere di Religione is "to provide for the safekeeping and administration of movable and immovable property transferred to entrusted to it by physical or juridical persons and intended for works of religion or charity".
It is thus not a department of the Roman Curia, and is therefore not among the departments of this central administrative structure of the Roman Catholic Church listed in that section of the Holy See Web site.
Nor is it a central bank responsible for a country's monetary policy and for maintaining the stability of a currency and money supply.
It is unlike a normal bank also in that any profit it makes does not go to shareholders, which in this case do not exist, but is used instead for religious and charitable purposes.
The Cardinal Commission for the Supervision of the Institute for Works of Religion is composed of:
The supervisory council is composed of:
The oversight commission is composed of five cardinals headed by Cardinal Secretary of State Tarcisio Bertone. Since February 2008, the other cardinals are Attilio Nicora, President of the Administration of the Patrimony of the Apostolic See; Jean-Louis Tauran, President of the Pontifical Council for Interreligious Dialogue; Telesphore Placidus Toppo, Archbishop of Ranchi; Odilo Pedro Scherer, Archbishop of São Paulo.
When Pope John Paul I became Pope in 1978 he was informed about the allegations of wrongdoing at the Vatican Bank, and instructed Jean-Marie Villot, Cardinal Secretary of State and head of the papal Curia, to investigate the matter thoroughly. Pope John Paul I died after only 33 days in office, leading to claims that he had been murdered as a result of discovering a scandal. Pope John Paul I is generally accepted to have died from natural causes, although some medical experts believe that he may have died from a pulmonary embolism or an adverse reaction to the medication that he was taking rather than from a heart attack as was stated in original press reports of his death.
The Vatican Bank was Banco Ambrosiano's main share-holder. Father Paul Marcinkus, head of the Institute for Religious Works from 1971 to 1989, was indicted in Italy in 1982 as an accessory in the $3.5 billion collapse of Banco Ambrosiano, one of the major post-war financial scandals. Banco Ambrosiano was accused of laundering drug money for the Sicilian Mafia, which used Propaganda Due (aka "P2"), a mobbed up Masonic lodge, as an intermediary. P2 and its Worshipful Master, Licio Gelli, were also involved in financing right wing terror groups during the 1970s. As for Fr. Marcinkus, he would never come to trial in Italy, where courts ruled that he possessed diplomatic immunity. He lived in retirement in Sun City, Arizona (US) until his death on February 21 2006.
The Vatican Bank has denied having legal responsibility for the Ambrosiano's downfall but did acknowledge "moral involvement", and paid $241m (£169m) to creditors. As of 2006, investigations are continuing concerning the murder of Ambrosiano's chairman, Roberto Calvi, which, according to Ernest Backes, former #3 of Clearstream, may have been linked to the death of Gérard Soisson, who used to work for Clearstream, a "bank of banks" which practices financial clearing. According to recent wiretap information, however, Calvi's death was almost certainly decreed by the Cupola, the ruling council of the Sicilian Mafia, which had come to view Calvi as a liability since the bank's collapse.
According to a 1998 report issued by the US State Department, the Nazi Croatian treasury was illicitly transferred to the Vatican Bank and other banks after the end of World War II. For its part, the Vatican has repeatedly denied any Franciscan participation in Ustashi crimes or the disappearance of the Croatian Treasury, yet has refused to open its wartime records to substantiate its denial.
A 1946 memo from US Treasury agent Emerson Bigelow, declassified in 1997, quoted a "reliable source in Italy", who alerted his superior that Croatian officials had sent 350 million confiscated Swiss francs (CHF) to the Vatican Bank "for safekeeping". On the way some CHF150 million were allegedly seized by British authorities at the border between Austria and Switzerland, which brought the secret transfer into the open. "There is no basis in reality to the report", said Vatican spokesman Joaquin Navarro-Valls, as reported in Time magazine
Vatican Bank and Franciscan Order were accused of financing the ratlines and ODESSA and laundering concentration camp loot. A class action suit, Emil Alperin et al. v. Vatican Bank et al., was filed in the United States district court in San Francisco on November 15 1999. The plaintiffs are concentration camp survivors of Serb, Jewish, and Ukrainian background and their relatives as well as organizations representing over 300,000 Holocaust victims. John Loftus, co-author of Unholy Trinity, serves as an expert witness in this case.
Another suit, Levy v. CIA, filed under the US Freedom of Information Act seeking release of US intelligence agency files regarding the alleged Vatican spymaster, Fr. Krunoslav Draganovic. New records on Draganovic were released as a result of that lawsuit in 2001.
The lawsuit was still pending in a United States Federal Court as of August 2008.