Book of the Week: God’s Bankers: A History of Money and Power at the Vatican, by Gerald Posner

While Gerald Posner was researching this fascinating book about the Vatican Bank, an Auschwitz survivor told him: “Profits: They matter as much in the church as they do inside IBM. Don’t forget it.” That anecdote recalls the lesson that Americans learned about political scandals during the Watergate crisis: Follow the money.

Following the profits of the Vatican Bank is a valuable exercise; it reminds us that the Vatican and its leaders are just like IBM or Richard Nixon and should be regulated accordingly. When the church is allowed to go its own way without oversight, bad things happen, as the history of the bank repeatedly demonstrated.

Profits Above All

The Vatican Bank was created during World War II. The Vatican’s unique political/religious status meant that the bank was never held to regular international banking standards. This unregulated status left the bankers free to do business equally with fascist and Nazi governments with one goal in mind—to make money for the Vatican.

At the time, American State and Treasury officials knew that the bank was involved in many dubious practices that international regulations prohibited. Those officials wanted to regulate the church’s bank as they did other nations’ banks—especially after they determined that the most powerful cardinals in the church were either fascist or Nazi.

President Franklin Roosevelt’s administration ignored government officials’ warnings, however, because FDR didn’t want to do anything to forfeit the Catholic vote. Thereafter the Vatican received special religious exemptions that freed it from obeying any securities laws. From the start, therefore, the Vatican was the “only country permitted to operate in both Allied and Axis zones without fear of retribution from either side.”

Historians have long debated why Pope Pius XII did so little during the war to criticize the Holocaust. God’s Bankers provides a chilling explanation: there was more money to be made if Pius stayed silent. Silence left the church free to collect the Kirchensteuer, the war tax that Germany imposed, and to invest in other dubious financial enterprises world-wide. The Vatican received over $100 million in 1943 alone from the Kirchensteuer.

Posner makes a stunning suggestion about the connection between papal silence and the Vatican’s focus on profits:

Files still sealed in the Secret Archives might answer whether Pius XII’s muted response to the Nazi atrocities was in part prompted by the fear that any condemnation might cause Hitler to refuse to collect the tax, or instead to collect it and keep it for the Third Reich. The Vatican’s dependence on this income might also explain its steadfast opposition to Allied and Russian demands later in the war for Germany’s unconditional surrender.

In contrast to Pius XII, according to Posner, Angelo Roncalli, then Papal Nuncio in Budapest and later Pope John XXIII, saved more Jews in several months by issuing them phony baptismal certifications than Pius accomplished during six years of war. Roncalli had other priorities than making a profit for the Vatican.


The drive for profits was at odds with the church’s claim to be a moral agent whose good works should put it outside the laws that governed everyone else. Contrast that long history of Vatican silence about the Holocaust with the Vatican’s willingness to take a public stance on sexuality. Incredibly, the Vatican has condemned contraception and same-sex marriage much more than it ever condemned the Nazis and the Holocaust.

Follow the money on birth control and you will learn an important lesson. Posner discloses that in 1968, Italian reporters found out that the Vatican had invested in Istituto Farmacologico Serono, a pharmaceutical company that made birth control pills, as well as Udine, a military weapons manufacturer. While the pope was teaching that contraceptives are always wrong for women, his church was profiting from them. Thus the drive for profits confirms the hypocrisy of the church’s claim to be a moral exemplar in matters of human sexuality—or anything else.

Secrecy/Lack of Transparency

Vatican bank officials always tried to keep the bank’s activities secret, as well as free from regulation and oversight, on the theory that “bad information could only harm the church if it became public.” Even while other nations finally moved to disclose how they had kept control of illegally received Nazi gold, for example, the Vatican kept its archives and records hidden during post-Holocaust efforts at justice. Moreover, until very recently, the Vatican resisted independent audit requirements that are necessary to any bank in an international banking system.

Posner demonstrates that this independence allowed the bank for years to operate as a money launderer, “the world’s best offshore bank,” for wealthy Italians and Catholics around the world.

Posner pursues the story of American Archbishop Paul Marcinkus, President of the Vatican Bank and participant in numerous bank scandals, in exquisite detail. Marcinkus repeatedly rejected Department of Justice (DOJ) and FBI efforts to identify the scope of fraud in the bank. Posner’s excellent reporting reveals that the first U.S. Ambassador to the Vatican, William Wilson, was so loyal to Marcinkus, Rome and the bank that he intervened with DOJ to stop any probes into the bank’s integrity and protect the American archbishop. In a three-page typewritten letter dated July 15, 1982, Wilson wrote to Reagan’s Attorney General, William French, urging him to block publication of a book critical of Marcinkus and the bank.

A young attorney at DOJ named John Roberts—who is now Chief Justice of the United States—wrote a memo making it “clear that Justice would not entertain any special accommodation for Marcinkus in such a sensitive area.” Three cheers for this minor triumph of the rule of law. Unfortunately, Italian and American prosecutors were stymied in all their attempts to prosecute Marcinkus and figure out what was really going on at the bank.


Posner follows the money to explain why most popes did not reform the bank. Pope John Paul II had no interest in reform because he used the bank’s secrecy to collaborate with the Reagan administration to fund Solidarity in Poland.

Although Pope Benedict started a few reforms, it is Pope Francis, Posner explains, who has made changing the bank a top priority of his papacy. “Pope Francis is different because he knows the damage that has been done to the credibility of the church by this very small bank and its history of scandals.”

It is good news that Pope Francis is changing something in the church. Despite great publicity and acclaim, he has not yet done anything to change the climate of opposition to women’s, workers’ and LGBTQ rights that now pervades the church. To the new pope’s credit, Francis’ bureaucrats have finally helped make the bank part of the world-wide international banking system, subject to the same regulations as everyone else.

There is a lesson from that history. Legal accountability should not be the choice of the popes, differing in scope whether it is Pope Pius XII, John XXIII, John Paul II or Francis who runs the church. The law needs to regulate financial institutions without exception, without depending on the whims of church administrators, simply because all financial institutions must follow the law. The Vatican Bank confirms the danger of special rules for religious institutions.

Don’t believe that argument that the church should be exempt from financial laws because it is a moral and religious actor. This is the church that condemned contraception more than the Holocaust and made profits from contraceptive sales while prohibiting its use by women.


Leslie C. Griffin

Leslie C. Griffin

Dr. Leslie C. Griffin is the William S. Boyd Professor of Law at the University of Nevada, Las Vegas, William S. Boyd School of Law. Professor Griffin, who teaches constitutional law, is known for her interdisciplinary work in law and religion. She holds a Ph.D. in Religious Studies from Yale University and a J.D. from Stanford Law School.