* Former bank head ousted amid money laundering
* New chief approved by Pope Benedict as he nears retirement
* Links to warship company under scrutiny
By Robin Pomeroy
VATICAN CITY, Feb 15 The Vatican appointed a
German lawyer to head its bank on Friday, but the bid to turn
the fortunes of the scandal-hit institution was clouded by his
business links to a military shipbuilder.
The appointment, made by a commission of cardinals, was
approved by Pope Benedict and is likely one of his last major
decisions before he resigns at the end of the month, a move he
announced on Monday, stunning Catholics around the world.
As chairman of the Institute for Works of Religion (IOR),
Ernst von Freyberg will head efforts to improve the image of the
Vatican's bank which is under investigation for money laundering
and has been without a head for nine months.
But within minutes of announcing his appointment, the
Vatican faced a new public relations challenge when asked to
explain Freyberg's chairmanship of Blohm + Voss, a Hamburg-based
shipbuilder in which he is a minority shareholder.
Reporters asked Vatican spokesman Father Federico Lombardi
how the Church could justify hiring someone who worked for a
company with a long history of making warships, including for
After initially announcing that the company was no longer
involved in that business, the Vatican later issued a statement
saying that, while Blohm + Voss's main activity was ship repair
and luxury yacht making, it was also "part of a consortium that
is building four frigates for the German navy".
British buyout firm STAR Capital which bought Blohm + Voss
in 2011 from ThyssenKrupp said at the time it was
acquiring the non-military parts of the industrial
conglomerate's ship business.
Lombardi said the fact that Freyberg organised pilgrimages
to the shrine at Lourdes and was a Knight of Malta - an elite
member of a charitable organisation with roots in the Crusades -
was proof he had the "considerable human and Christian
sensibility" needed for his new role.
In a further clarification, the Vatican said that when Blohm
+ Voss's work on the four warships is complete, the company
"will be 100 percent non-military".
Freyberg takes a position that has been vacant since May
when the bank's board ousted the then head Ettore Gotti
Tedeschi, accusing the Italian of neglecting his basic
Gotti Tedeschi's unusually abrupt dismissal, along with the
arrest of the pope's butler for stealing confidential papal
documents, was the culmination of a leaks scandal that shook the
Vatican and weighed on Benedict's papacy.
The Vatican has been trying to shed its image as a suspect
financial centre since 1982, when Roberto Calvi, an Italian
known as "God's Banker" because of his links to the Vatican, was
found hanging from London's Blackfriars Bridge.
In July, a European anti-money laundering committee said the
Vatican bank failed to meet all its standards on fighting money
laundering, tax evasion and other financial crimes.
The report by Moneyval, a monitoring committee of the
47-nation Council of Europe, found the Vatican passed nine of 16
"key and core" aspects of its financial dealings.
The report said IOR was making changes to meet the other
requirements but found major failings in the running of the
In 2010, Rome magistrates froze 23 million euros ($33
million) that IOR held in an Italian bank. The Vatican said at
the time that its bank was merely transferring its own funds
between its own accounts in Italy and Germany. The money was
released in June 2011 but the investigation is continuing.
"There is a desire to fight all the way against all aspects
of illegality and criminality that have insinuated themselves
into the world of the economy," Lombardi said of the
Freyberg, born in 1958, will relinquish other roles,
including on the board of temporary employment agency Manpower
GmbH, to work five days a week for IOR, the Vatican
said. Lombardi had previously said he would work only three days
a week at IOR.
Carl Anderson, American head of the worldwide Knights of
Columbus charity group and board member of the IOR said Freyberg
would "contribute significantly to the IOR's ongoing work of
modernisation and transparency".