BUSINESS
02/11/2013 01:07 pm ET

Pope Benedict XVI's Legacy Haunted By Vatican Financial Scandal

The race is on to determine the legacy of Pope Benedict XVI, the 85-year-old who surprised the world by announcing his resignation Monday. But there's one chapter of his reign that the Vatican surely hopes will disappear from memory sooner rather than later.

In May 2012, the Pope's butler was arrested for leaking documents that included allegations of financial corruption and claims of infighting over complying with international money-laundering rules, according to NPR.

News of the scandal came as the Pope was trying to better the Vatican's decades-long reputation for financial corruption, yet his efforts weren't enough. In 2010, Italian prosecutors took custody of 23 million Euros belonging to the Vatican after they became suspicious of potential money-laundering, according to Bloomberg.

In the same year, the Vatican also drafted a law to ensure that the the church was meeting international standards when it came to money-laundering and terrorism financing, according to CNN. But by 2012, the Vatican still fell short in 7 of 16 key requirements, according to a Moneyval report.

Though the report found the threat of financial crime at the Vatican to be low, Moneyval still said it could be a prime target for money launderers, according to CNN. The Bank of Italy shut down credit and debit card payments at Vatican shops and attractions last year, citing the report as one of the reasons.

And it’s not just the Bank of Italy that’s worried. The U.S. State Department added the Vatican to the list of countries that are possible targets for money-laundering last year, according to the Financial Times.

In response to all of the money-laundering allegations, the Vatican ousted its bank chief, Ettore Gotti Tedeschi, in May. Shortly after Tedeschi’s ouster, a humiliating document detailing his mental health was leaked, which at the time the Vatican said it “truly regrets.”

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