European Commission to Take Legal Action against Catholic Church (Vatican) in Holocaust Money Laundering Case

8/3/2019 European Commission to Take Legal Action against Catholic Church (Vatican) in Holocaust Money Laundering Case

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B R I M S T O N E & C O ., "' ,1".i:Xl$*'5il""oo\ fAsHrNGroNDC 2OooG usATEvFax + t -202-314-2406cxluaens@anrusroNEANDcoM PANY.coMNovember 8, 201

' European ommissionDirectorateGeneral or EconomicandFinancialAffairsFinancialStability& MonetaryAffairsFinancialnstitutions FinancialStabiliwHeadof UnitMr. BenjaminAngelB-1049 russelsBelgiumF ax: t32) 2 29 80998Via Fax,EmailandMailIn re: (Vatican)Autoriti di InformazoneFinanziariaAIF) & Eu/VaticarMonnetaryAgreementndEuropean ommissionetterofJanuary , 2011(ref.no 93 9)DearMr. Algel:On January , 201 followinga series f letterswiththeEU Commissionndthe Euopean CentralBank,you refened our allegationsof postWorld WarTwo eramoney aunderingof assetsrom formerYugoslaviaby cunentandpastaccountholdersat theIstitutoper le Operedi Religione(IOR) to theAutoritA di InformazioneFinanziaria AIF) which was ust formedat thebeginningf201lThe AIF has efused o acknowledge r respondo our correspondenceatedI]uly2,2011andSeptember4,2011. We alsoattemptedo fax the AIF onSeptember, 2011.Based nmy priordealings ith Vaticanagencies ndorgans, canonlyconclude his isyetagaindeliberate onfeasancey theAIFto avoid aking urisdiction. I note someAIF officersare forner or culrentofficials ofthe IOR. This behavior s completelynappropriateor aa agencywhosepurports o carry out harmonizationand antimoney aunderingandanti enorismprovisions fEU, COEandEurozoneiscalpolicies'

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Thebehavior fthe AIF howevers 10004onsistent ith the OR's 10yearlegal battle n the United Statesederalcourts n thecase Alperin v. VaticanBank and OFM,lJnited StatesDistrict Courtfor the NorthemDistrict ofCalifomia.D.C.No. CV-99-04941-MMC. axineM. Chesney, istrictJudge,Presiding. TheIOR spared o expense r legal argumentn ultimatelypreventinga federalcourt from exercisingurisdiction over t and tsconfederate,he FranciscaaOrder.This bolstershe argumenthat the IORand AIF shouldbe held accountable nderanti money aundering egimes.The Vatican stateby engagingn intemationalbarking through he IOR,purporting o carry out EU anti money aunderingandanti terrorismdirectives }rough the AIF and as a memberofthe Eurozone,must bynecessityollow the applicable awsand may not hold itself abovehe law.As youmayknow fiom ourpreviouscorrespondenceo the EU Commission,our firm represents ver a thousandndividualsof Serb,Jewish,and Romadescent orldwidewith the majority esidentn Serbia.We representindividuals residentn the EuropeanUnion including Swedenand heUnitedKingdom. We alsorepresent everalorganizationncluding he JasenovacMemorial Society, ndependentCouncilof SerbianRoma,and he RepublikofSrpskaKrajina n Exileall ofBelgrade,Serbia nd heAmerican onprofitcorporation,Jasenovac esearchnstitute. Our clients arewell into theirseconddecade f legalstruggleand manyof the original victims haveunfortunatelypassed n without closure.We appreciatehat the EuropeanCommissionhas ndicatedhat within theframeworkof EU law it doeshaveauthority o initiate legal or otheractionsagainst he Vatican.Thereforewe unequivocallyequest heEuropeanCommissionoinvestigatehe alleged nstitutionalshortcomings fthe AIF in generaland f necessaryold the AIF accountableor its willful failure toaddress ur legitimatemoney aunderingallegationsIn the attached xhibitswe have dentified severalOR accountshat evennow may still hold remnants rprofits derived romthe Ustashareasury.TheIOR and at leastone ofthe accountholders, he FranciscanOrder,havecategorically efusedo cooperate. heAIF refuseso respond.Any furtherattemptsby us to bring this matterbeforeAIF appear o befutile absentacogentexplanation rom AIF about heirhandlingof ourcorrespondence.


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Therefore, n behalfofourclientswe allegehe ollowing:l. The structure ndpersonnelfthe AIF preventt from unctioning sanindependent uthority;2. TheAIF asapractice oesnot answer orrespondencehe Vaticandeemsobjectionable;3. TheAIF's nonfeasancen ouroarticularmatter s an ndication finstitutionalfailure to comply with applicableEU Directives.We ask hat heEuropean ommissionakeappropriatectionncludingusing tsgoodoffices o resolvehis matter.It is ourposition hat financial nstitutionsmustbehave n anethicaland egalmanner.Whilewe do not disputehe Vatican tate nswers olely o its Godin matters ffaith, in matters f financehe awsof Man apply.Respectfuly submitted,

Attomey andSolicitorPSPlease otewe arealsocopying his o Moneyval t heCouncilofEuropewhich we understands currently evaluatinghe fitnessofthe AIF.Copy o:Direitorate GeneralofHuman Rightsand LegalAffairsDirectorateof MonitoringCouncilof Europe67075SfasbourgCEDEX,FRANCEemail [email protected]


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B R I M S T O N E & C O .JONATHAN LE\ 'Y

ATTORNEY & SOLICI fOFI' 629 K STREET Nl /v SUITE 3OOWASHTNGTON DC 2C)006 USA

TEL/F^x 1 -202-3 | a'24O4

Jtrly ,2011Autoritddi Informazione inanziariaAIF)CardinalAttilio Nicora,PresidentPalazzo anCarloRomeVATICAN CITYUstasha ictimGoldand heEU/VaticanMonetaryAgreementYourEminence:We havepreviously onespondedbout hismattern detailwithdleELrropeanommissionndEuropean enhalBank-We were hen eferredto thi nascent tF by theEuropean ommission irectorate eneralorEconornic ndFinancialAffair onJanuary ,20 | We havewaitedseveralrnonthsor theAIF to becorneully activeandstaffed nderts enablingstatutesefore ontactingouabouta matternvolvitrg efiainaccounts tthe OR(lstitutoper e Opere i Religione)hathavebeen sed o launderand etainWorld WarII eravictim assetsiom formerYugoslavia,hesocalledUstasha reasury. urclientsncludeHolocausturvivorsworldwideandorganizationsn Serbia nd heUnitedStates. estiges fthe assets,includingmoveable nd mmoveableroperty r profits here iom arestillondeposit t he OR.Thisrequestor an nvestigationnd nquirydealswith theunresolvedssueofthe "iJstasha reasury" nd hemissinggoldandothervaluablesiomformerYugoslaviairstdocumentedy the 1998UnitedStates tateDepartmeni izenstat/Slanyeport ntitledConcerns bout heFateoftheWirtimeUstasha reasury hichconcludedhat herewasevidencepointingo Vaticannvolvementn launderingoncentrationampgoldandloot after he SecondWorldWar.


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Thisgoldbullion,silver,andothervaluablesrevictimpropertyooted romSerbs,Roma, ndJewsby the unrecognizedroatianUstashaegimewhichhasnever beenaccountedor by theVaticandespitenumerous emandsincluding urown awsuitn the UnitedStates gainstheVaticanBank(hrstituteor ReligiousWorks).Thevictimswe representufferedosses ffamilypropertyo the Ustashancludinggold,silver,banknotesnd ewelrywhichwas ootedby theUstashandeventually epositedt theHoly See'sVaticanBank n 1944-1946ndhavebeenunaccountedor sinceForexample:Nadezda ateswasbom n Bihac,Bosnia,KingdomofYugoslavian 1923.Plaintiffs father, ankoBates,wasawealthySerbbusinessmann BihacandownedanestablishmentamedKafanaBeograd TheBatesamilyownednumeroustherpropertieshrough ut the egionandhadaccumulatedgreatdealof wealth ncluding n opulentlyurnished omeandjewelryrncluding nedozenhandmadebraceletsf l8 caralgoldwith sapphiresnddiamonds nd hreenecklaces aden the sarneashionwith darksapphires,twenty ings nade f l8 caratgold,hundredsf golddrtcats' ndmany temsoflesser alue.Theyalsopossessedquantity fcashanda largestockoffoodanddrinkusedn their rade.On June23, l94l agents fthe UstashaRegime nterednto Bihacandarrestedhe SerbandJewishnhabitantsPlaintiffwitnessedhewell organized illagingandplundering f theBatesfarnilyproperty ndJewish ropertiesn theneighborhoody theUstashaRegime's gents.Teams fspecialsoldierswith tnrcksconductedhelootingoperationn a thoroughmanner.The Ustashaoldiers erdedheSerbs ndJewsnto hechangingoomsat theBihacsports rounds, heretheywere horoughly earchedelieved f anyconcealedaluables.Plaintiffandher amily was ansportedo l(mjeusaby theUstasha lrereher atherandbrotherweremurderedy Ustasharmedorcesunderhecommand ftheUstasha ovemor f Bihac,LjubomirKvatemik.Dr. Milan Batess a resident fthe UnitedKingdomand s legalrepresentativeo these laimson belralfoftheBatesamilyanddemandsnaccounting ftheir shareof gold in theUstashaTreasuryestimatedo wortlr40 ounces nd he amily ewelryworth n excess f$100,000MilevaReljanovicVujcic)wasborn n 1930 n Vojskova,Bosni4KingdomofYugoslavia ndcurrentlyesidesn Sweden.n 1942heUstashaRegime'sagentsorcibly removedall Serbsrom Vojskova n order o


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"colonize"he egion.Thevillagestoreand ts contents wnedby plaintifPsfamilywasseized nd he Serb esidentsf the own errorized yrampaging stasha rmedorceswho killedand aped ndiscriminatelyamonghe Serbs.Thestoreand ts contentstereconvertedo cashby theUstasha egime'sMinistryofColonization nd heproceeds ddedo theUstasha reasury.Plaintiffandher amilymembers eresento Jasenovacconcentrationampwhereher atherandsomeofher siblingsdied. Uponentering asenovac,heUstasha egime gents onfiscatedhe ewelry hefarnilyhadconcealedn theirpersons. s.Reljanovic, Swedish itizenalso equest anaccountlng.Tlreorganizations,he ndependentorrncil fSerbianRoma,RepublikSrpska rajina n Exile,TheJasenovac emorialCenter ndJasenovacResearchnstitute lso eq[estan accountingn behalfoftlreirmemberssorne fwhowere ictims r egal eirs fvictims ftheUstasha.Thisgoldandothervaluables re n VaticanBankcustody ndwere ootedby he ndependenttate fCroatia etween94l -1945 spartoftheUstashaenocidalampaign gainst erbs,ews, ndRornan whichanestimated00,000 ocalledundesirables,ainlySerbs ndRoma,wereliquidated.fhegoldand ootedassets asdepositedttheVaticanBank n1946accordingo contemporaneousocumentsuthored y Alliedinvestigatorsndbutlressedy thesworn estimony f formerUS SpecialAgentWilliam Gowenwho while slationedn Rome nvestigatedndinierviewedheUstashanvolved n thehansfer f lot to theVaticann 1946and 1947.I mustalsoadd he osses four Romaclientsareextremely elldocumentedlrroughheeffortsofthe Independentouncilof SerbianRoma.Romaassets ereoften n goldandsilvercoin andwereconfiscatedby theUstasha ndbecame artofthe Ustasha reasury.Thisvictimgoldhasbeen hesubject fa decadeong awsuitn theUnitedStates 999 o 2010againsthe VaticanBank hrstituteor ReligiousWorks)andwhich s stillpending s o TheFranciscan rder.' The awsuithoweverwasdismissed ithoutprejudicen regardso the OR andOFM, t was' Alperin . ValicanRankatd Ot&4,UnitedStates istrictCourt or theNorthemDistrictoftalifornia. D.C.No. Cv-99-04941-MMC. axineM Chesney, istrictJudge,Presidine.


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dismissedot onthemerits,but ongrounds flack of subjectmatterjurisdictiondue o Vatican overeignrganmmunity iom legalprocessnthe UnitedStates.hatudgmentwasappealednd s now final by orderoftlreUnitedStates inthCircuitCourtof Appeals sof March201 . We arenow fiee to bring hismatterdirectly o theVatican shasben uggestedrepeatedlyn thepastby the IOR's attorney,Mr. Lena.Wehavenot donesopreviously ecauseheAIF wasnotyet in existencendnoappropriateauthority xisted ver he OR or its account olders. s dreappeals nowterminated, ebring hismatter oyou n a timely ashion.In sum,we are equestinghe Commissionpenan nquiryandaccountinginto thesewell founded llegationsf moneyaunderingnd etention fHolocaust ictim assets yfinancial rgans ssociatedith or whichareagenciesftheVatican ity Stat.We standeady o submitelectronicallyr by posta large olumeofinfonnationncluding estimony nddocumentationo sttpportheseallegationsnd o cooperatentirely.The egal epresentativesfthe OFMand OR arealso n possessionf volumes f legaldocumentsiom the tJSCourts nd lreirown ntemalnvestigationshichhavenot been eleasedDespite eingprovided rnple pportunity nd orum, heOFM and OR hasrepeatedlyefusedo answerhis allegation y Holocaustictimsby citingsovereignnd urisdictionalmmunity tom inquiry nstead. owever,weasserthroughhe VaticanMonetaryAgrsement ith theEU, he imehasfinally arrived br closuren this ongunresolved atter f Holocaustssetlaundering y theValicanunderheauspicesfthe European ommtsstonandEuropean entralBank.IOR accountsnd/or heirsuccessorccountshatareor wereassociatedwith these ames re dentified sbeingunder uspicion fretainingHolocaust ssets:AnteBonifacicOrderof FriarsMinorCroatian lmanacCroatianCatholicMessenger ewspaperCroatianCustody fthe Holy FamilyofChicagoCroatianHistoricalSocietyCroatian iberationMovement


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Croatian ublishing ouseCroatiaDanicaNewspaperof Chicago)Fr. KrunoslavDraganovicFr. DominikMandic,OFMFranciscanrintery of Chicago)SreckoPsenicnikTheCroatianConffaternity f SanGirolamoTlreRomanCatholicDiocese f ZagrebThankyou or yourcooperationn this endeavorndwithall due espect erequesthatmembers fthe FIA whoareassociatedith IORor OFMrecusehemselveslom tlrismatterowing o theappearancefa conflictofinterest iven heprotracteditigation hatprecededhis equest.Finalfy,we wiff request n acknowledgementy fax+l-202'318-2406 remail:[email protected] ourreceipt fthis letter.Sincerely,


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B R I M E T O N E & C O .JONATHAN LEVY

ATAORNEY & SOLICITORI629 K STREET N\/v SUITE 3OOWA5HINGTON DC 20006 USA

TEL/F^X | -202'3 | A'2406

September4,201IAutoritddi lnformzzione inanziariaAlF)CardinalAttilio Nicora,PresidentPalazzo anCarloRomeVATICAN CITYUstasha ictimGoldand heEU/VaticanMonetaryAgreementYourEminence:As attomeyor survivors fthe Ustashaenociden formerYugoslavia'haveanunshakeableelief hat usticewill bedone'We beganhiseffortforan accountingfthe Ustasha reasuryn 1999 rom heVaticanBankandFranciscan ider.Thereforet waswith somehope,wegreetedheformation fthe Autoriti di InformazioneinanziariaAIF) andourrefenalto it by theEuropean ommission, irectorate eneralor Economic ndFinancial ffairs,Financialnstitutions nit.Againwewaited atiently ntilJuly2,20ll for heAutorile i. .-.Iriformazioneinanziariao becomeully staffed nd unctional'Wetenderedurcommunication.eeAttachmentndCertificate f mailing'OnSeptember, 201 we attemptedo ffi your officeareminder utwe havereceived oresponse.Thematterofthe Ustasha reasurys not a solelyhistorical laim;we areconvincedhatevidencer even emnants fthese undsstill existatinstitutions nderheAIF's supervision.orexample,n thepast ewyears'significant ccusationsnvolving ooteddiamondsormerly n thecustody fthi Diocese fZagrebhaveappeared,he socalled Zagorac ffair'"


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Weareawarelat since uly heAIF andVaticanBank IOR) mayhaveseveredheir overlappingstaffing' This was one of our requests inceourcommunication eals n partwith the IOR. Howeverwe do not understandwhy wehave eceived o resPonse.Ourwitnessesre n their 80'sand90's.We have ecentlyocated directwitnesso money aundering fthe Ustasha reasury y individualsaffiliatedwith the OR andOFM in postSecondWorldWar Italy.He s inhis 90'sand esidesn Canada.I am sure he ackofresponse y theAIF is an oversight. oweverf wehavenot heard nythingwithin 30daysofreceiptofthis communication,ewill not standdly by whileout witnessesndsurvivors ass n.Finally,we still request nacknowledgementy fax+l -202-318-2406remail:[email protected] ourreceipt ftbis letter'Sincerely,

. JonathanLevy,PhDSolicitor


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EUROPEANOMMISSIONDIREC'TORATEENERALECONOMICNDFIMNCIALAFFAIRSFinandal tablllty ndmonetaryflai|sFhanclal nstltutlom nd flnanclal tlbllltyDGECFIN09 11 ntn**,1gQ5L1q

Brussels,ECFIN/E3IBA2010)

SgUijg!: Holocaust ictimGoldand hEu/VaticarMotrotrryAgreement

DearMr. Levy,

Followingyour etterof October 0, 2010 andyourrequestor the Commissiono openan inquiryagainsthe VaticanCity State onceminghe money aundering f Holocaust ictim assets nd hepossible seoftheir gold n themintingofeurocoins, heCommissionxaminedarefully ourclaim.The MonetaryAgrcementbetweenhe EuropeanUnion (EU) and he Vatican City State,asyourightlyhavenoticed n your etter,obliges he VaticanCity State o implement setof EU legislation nprevention f money aundering y the end of 2010.The Vaticanauthorities re curently in theprocess f tansposing his relevant egislationnto its legalorder,and I canassueyou that theCommissionn itscapacity arefullymonitorshisplocess.Accordingto the draft law received tom the Vatican autho ties, we can nform you that in line withthe EU lawsrequiremntshis draft foresees n establishment f a specialautholity, operationalasofJanuary , 2011 or implementingheanti-moneyaunderi[gmeasues, ndwith the right to conveyapprop atecontrols fthe relevantnstitutions fboth n theVatican nd heHoly See.Thisauthoritywill cooperatewith the EU and with the relevantntemationalbodiesactive n the fight againstmoneylaundering.As regards, our pointson the coin issuance the Cornmission ervices ontactedhe Vaticanauthorities hichensured s hat:

BRIMSTONE& CO.Aftorneys SOLICITORS1629K StreetNW Suite300Washington C 20006USAT EL/FAX 1 202-318-2406Commissionurcpesnn,-1049 luxellesEuropese ommissie,-1049 russet- etgium.et6phon6i32-2) 991111.Ofiice: U-10/034Tere hone:irecl ine 322 29697E5.


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(i) The silver eurocollector oinsaremiutsdby an extemal ontactor thc IDsitututio oligrafiaoGZeccadello Statoofthe ftalianRepublic, nd he atterpurchasestself hesilver neededor mintingof slivercollector oirs,(ii) Thegoldcollector oinsarealsomiuldby the ositututioPoligrafico Zeccadello Statoof thItalian Repubtic. he raw matrial eededor minting t is purchasedach ine by the VaticanCityStatetomsDcaialisedwisswhole-sellincnstitutions...

Yourssincerely,/l r-,l -"".f;**ro


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DG Fl ' " . ' '5 01 rut l

ares 53 13EUROPEANOMMISSIONDIRECTORATEENEFiAIECONOMICNDFINANCIALFFAIRSFinancialtab iryandmonetgryalhilsFlnanclalmrltutlon3end lnanclal iabllltyBrussels,ECFIN/E3IEK/LB2010)

Subiect: Youi letterofNovember17,2010, egardingheEu/VaticanMonetaryAgreement

DearMr. Levy,I thank you for your letter, whereyou ask for clarificationsabout the specialauthority which theVatican s settingup in order to implementanti-moneyaunderingmeasures the 'Auto td dieInformazione inanziaria' AIF). It shouldbe noted that the Vatican aw hansposingDirective2005/60/ECn theprevention f the useofthe financial ystemor thepurpose fmoney aunderingand teno st financing s still at a &aft stage.According o information iom the Vatican, t isexpectedo enter nto forceasofJanuary ,2011.Pleaseind belowmy answerso yourspecific uestions.1) The Directive2005/60lEC f the EuopeanParliamentndof the Councilof 26 October 005ontheprevention f the useof the financial ystemor thepurpose f money aundering nd eroristfinancingaims o preventhe useof the financialsystem or thepurpose f moDey aundering ndtenorist financing. This Directive requiresMember States o prohibit money aunderingand enoristfinancing ald to set up a preventivesystemobliging the financial sector and a wide range of otherpgrsonsndentitieso undenake ertainmeasures:hesenciude nleralia dentiiyihg heircustomerskeeping appropriate ecords,establishing ntemal procedureso train staff andguardagainstmoneylaundering nd reportingsuspicion f money aundering nd eno st financing o the competentnationalauthorities. s an EU Directive,Directive2005/60/ECs not directlyapplicable nd EUMemberStates ave o tanspose ts requirementsnto their nationalegislationArticle 288 of theTreaty on the Functionilg of the EuropeanUnion), which all EU Member Stateshave done.As Imentioned n my reply to your previous letter, the Monetary Agreementbetween he EU and theVatican City Stateobliges he atter to implement he Directive n its legal order.However, he entitiessubject o anti-moneyaundering combatinghe financingof tenorismobligations re limited to natual and legalpersons;hus, states s such arenot coveredby theBRIMSTONE CO,Attomeys SOLICITORS1629 Street w Suite 00WashingtonC20006 SATEUFAX 1-202-3t8-2406Commissionurcpeenn,-1049 ruxeliesEurcpese ommissie,-1049 russel,Beisium. elephon:32-2) 9911 l.OfficeBUI 0/034. ele lhoner irectine 32-212967 E5


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Directive.Moreover,he directive 005/60,8C oes ot cover he compensationfpe$ons who havebeen the victims of money launderingoffences or predicateoffence to money larmdering.It isfurthermore o be noted, that the Directive provides or minimum harmonisationwhich means hatMemberStatesmay adopt or retain n forcestricterprovisions n this fild than hose aid down in theDirective n older to preventmoney aunderingand enorist financing.The ole ofthe European ommissionn thiscontexts as ollowsr f a MemberState ails o passherequirednational egislation, r if the national egislation oesnot adequately omply with therequirements fthe Directive, he EuropeanComrnissionmay nitiate egal action against he MemberState.However,under he Treatyon EuopeanUnion and the Treaty on the Functioning f theEuopeanUnion, heEuropean ommissionasno general owerso interyenen padicular ases sdescribedn your etter.With regardo the explanationsrovided bove, ou shouldseek edress tnationalevel l|Ioueh hecomDetentutho ties.2) According o the draft Vatican aw tansposing he Directive,The 'Autoritddie lnformazionefinanziaria'AIF) will be composed f a chief executive flicer and his/herstaff will be appointedftom among ersonsfadequate ndproven ompetencendprofessionalism.3) TheAuthority's ulingsarewithin he iamework fEU law but theyareonly ndirectly ubjectojudicial review. t meanshat f the VaticanCity State ails o properly anspose he Directiveof itdoesnot adequatelyomplywith the requirementsf the Directive, he European ommissiolmayinitiate egalactionagainsthe VaticanCity State.However, smentioned nder he reply o question1) above, he EuropeanCommission as no generalpowers o intervenen particularcasesasdescribedn your etter.

Yourssincerely,

Benjamin ngel

European Commission to Take Legal Action against Catholic Church (Vatican) in Holocaust Money Laundering Case

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