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Vatican wants clean-up amid corruption probe: experts

June 23, 2010

VATICAN CITY-- Shaken to its core by revelations of pedophile abuse in the Church, the Vatican is moving to publicly clean up its finances as a top cardinal is caught up in a corruption probe, experts say.

Prosecutors are investigating Cardinal Crescenzio Sepe over allegations he took kickbacks as head of Propaganda Fide, the body that handles the Vatican's vast real estate holdings and financing much of the Church's missionary work.

The Vatican has defended Sepe's "intense and generous" work, and the cardinal insist he was acting at the time with the full support of the Roman Catholic Church.

But Vatican expert Sandro Magister says Pope Benedict XVI has acted cool towards Sepe, who left Propaganda Fide four years ago to become Archbishop of Naples.

He sees this as a sign that the pope "clearly wants to clean up" the Vatican's earthly business.

"It was Benedict XVI who moved Sepe away from Rome" in 2006, replacing him with Ivan Diaz, an Indian cardinal considered "light years away from any kind of wheeling and dealing," Magister told AFP.

On Monday, the Vatican set up a link from its website to the historical archive of Propaganda Fide in a bid to promote better transparency.

And in September last year, Benedict overhauled the Vatican Bank, the epicentre of previous financial scandals, placing at its head respected banker and transparency advocate Ettore Gotti Tedeschi, Magister added.

The moves on financial openness come after months of pressure for the Vatican to crack down on child sexual abuse in its ranks, after a string of revelations concerning pedophile priests in Europe and North America.

In recent months Benedict has accepted the resignations of bishops implicated in abuse cases in Belgium and Ireland, and has published anti-pedophilia guidelines on the Vatican's website.

"The pedophilia scandal has left a mark, and there is is a will on the pope's behalf to be done with hypocrisy and to have a clearer, cleaner position in all areas," Vatican expert Bruno Bartoloni said.

The Vatican could take a tougher stance on transparency by accepting a rogatory, or request for judicial assistance, which Italian prosecutors are reportedly preparing to obtain more documents on Propaganda Fide.

But the Holy See has rarely responded to Italy's requests for legal cooperation, notes Bartoloni, who also believes the pope is likely to face strong resistance in his transparency efforts.

"Popes come and go, but bureaucracies remain," he said.

Propaganda Fide's real estate holdings are estimated at around 9 billion euros (11 billion dollars).

Sepe, who headed the body from 2001 to 2006, allegedly sold a building at a quarter of its market value to Italy's then infrastructure minister, Pietro Lunardi.

Italian media have reported that in exchange for the favorable sale price Propaganda Fide obtained public subsidies worth 2.5 million euros for public works that were never completed.

The probe is part of a broad corruption inquiry that has touched figures close to Prime Minister Silvio Berlusconi, forcing one of his ministers to resign in May and causing public embarrassment for one of his right-hand men.

Sepe, a media-savvy prelate with a large following in Naples, has issued his own defence, saying all the balance sheets involved had been vetted and approved by the Vatican and that he is the victim of a smear campaign.

The Vatican "expressed appreciation and esteem for my management," Sepe told a press conference Monday.

"I forgive, from the bottom of my heart, those that -- in and outside the Church -- wanted to hit me," he said.

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