Former 'God’s Banker' could blitz Vatican with cache of secret documents

The former head of the Vatican Bank has become the Papacy’s Enemy Number One, after police discovered a trove of documents exposing financial misdeeds in the Holy See. The banker now reportedly fears for his life.

­Earlier this week police conducted a dawn raid on the house and office of Ettore Gotti Tedeschi. Investigators say they were looking for evidence in a graft case against defense and aerospace firm Finmeccanica, which was formerly run by a close friend of Gotti Tedeschi.

Instead, as it turns out, police stumbled upon an entirely different find.

They discovered 47 binders containing private communication exposing the opaque inner workings of the secretive Holy See.  They included financial documents, details of money transfers and confidential internal reports – all prepared by Gotti Tedeschi to build a convincing expose of corruption in the Vatican.

A renowned economics professor and head of the Italian branch of the giant Bank of Santander Gotti Tedeschi took what turned out to be a poisoned chalice of a job in 2009, when he became the President of the Institute for Works of Religion, the formal name for the Bank of Vatican. His brief was formidable – to introduce transparency to a lucrative enterprise that had become a byword for money-laundering and corruption.

After a tumultuous three years marked by in-fighting and public scandals, Gotti Tedeschi was unanimously dismissed from his post by a board of Vatican officials in May.

“I have paid for my transparency” the indignant banker said to the media, as he stormed off even before his dismissal hearing was over.

The confidential minutes of the stormy meeting obtained by Reuters showed the banker accused of "progressively erratic personal behavior" and "exhibiting lack of prudence and accuracy in comments regarding the Institute".

But there may have been other reasons.

Aware that his crusade against corruption was failing, Gotti Tedeschi probably began to leak important documents to the media.

The drip-drip of damaging revelations (alongside more personal ones presumably passed onto the media by the Pope’s own butler) has been dubbed 'Vatileaks', and has captivated Italy in recent months.

At the hearing, the board that dismissed the banker also indirectly accused Gotti Tedeschi of being behind some of the leaks, pointing to his "Failure to provide any formal explanation for the dissemination of documents last known to be in the president's possession."

While the leaks were a weapon with which to attack his enemies, Gotti Tedeschi was also preparing a last resort option if the battle was lost – a ‘suicide belt’ that would blow the lid off Vatican.

Several months ago, he reportedly told his friends that he began collecting an exhaustive dossier “in case something happened to him.”

It is this dossier that the police have now apparently discovered.

The Vatican is barely concealing its panic – and wants the folders handed back unopened.

“We have faith that the prosecutors and Italian judicial system will respect our sovereignty—recognized internationally—with regard to these documents,” said an official statement.

But there is little chance the Papacy will get its way this time.

Italian prosecutors have frequently been at loggerheads with the Vatican and have accused it of using its sovereignty as a shield against proper regulation.

If the documents do spark a legal firestorm, Ettore Gotti Tedeschi is sure to be a key witness in any trial. A former employee against his employers, and a conservative Catholic pitched against the Vatican itself.

Allegedly, Gotti Tedeschi keeps a list of personal enemies in the Vatican – people who he had felt would stop at nothing to prevent him from reforming the Institute for Works of Religion. His friends have told the media he is shaken and scared.

Police are now considering putting the whistle-blowing banker under armed protection.

Source: RT

Europe Brings Out The "Capital Controls" Bazooka

Here we go:

• EU SOURCES HAVE DISCUSSED IMPOSING CAPITAL CONTROLS AS WORST CASE SCENARIO IF GREECE LEAVES EUROZONE - RTRS
• IMPOSING BORDER CHECKS, LIMITING ATM WITHDRAWALS ALSO PART OF WORST-CASE SCENARIO PLANNING - EU SOURCES - RTRS
• SUSPENSION OF SCHENGEN ALSO DISCUSSED

In other words, that money you thought you had... You don't really have it. We can only hope this message was not meant to restore confidence and prevent future bank runs. Because if Europe wanted a continental bank run, it may have just gotten one.

This is getting scary very fast.

Full piece from Reuters:

European finance officials have discussed as a worst-case scenario limiting the size of withdrawals from ATM machines, imposing border checks and introducing capital controls in at least Greece should Athens decide to leave the euro.

EU officials have told Reuters the ideas are part of a range of contingency plans. They emphasised that the discussions were merely about being prepared for any eventuality rather than planning for something they expect to happen - no one Reuters has spoken to expects Greece to leave the single currency area.

Belgium's finance minister, Steve Vanackere, said at the end of May that it was a basic function of each euro zone member state to be prepared for problems. These discussions appear to be in that vein.

But with increased political uncertainty in Greece following the inconclusive election on May 6 and ahead of a second election on June 17, there is now an increased need to have contingencies in place, the EU sources said.

The discussions have taken place in conference calls over the past six weeks, as concerns have grown that a radical-left coalition, SYRIZA, may win the second election, increasing the risk that Greece could renege on its EU/IMF bailout and therefore move closer to abandoning the currency.

No decisions have been taken on the calls, but members of the Eurogroup Working Group, which consists of euro zone deputy finance ministers and heads of treasury departments, have discussed the options in some detail, the sources said.

As well as limiting cash withdrawals and imposing capital controls, they have discussed the possibility of suspending the Schengen agreement, which allows for visa-free travel among 26 countries, including most of the European Union.

"Contingency planning is underway for a scenario under which Greece leaves," one of the sources, who has been involved in the conference calls, said. "Limited cash withdrawals from ATMs and limited movement of capital have been considered and analysed."

Another source confirmed the discussions, including that the suspension of Schengen was among the options raised.

"These are not political discussions, these are discussions among finance experts who need to be prepared for any eventuality," the second source said. "It is sensible planning, that is all, planning for the worst-case scenario."

The first official said it was still being examined whether there was a legal basis for such extreme measures.

"The Bank of Greece is not aware of any such plans," a central bank spokesman in Athens told Reuters when asked about the sources' comments.

The vast majority of Greeks - some surveys have indicated 75 to 80 percent - like the euro and want to retain the currency, something Greek politicians are aware of and which may dissuade them from pushing the country too close to the brink.

However, SYRIZA is expected to win or come a strong second on June 17. Alexis Tsipras, the party's 37-year-old leader, has said he plans to tear up or heavily renegotiate the 130-billion-euro bailout agreed with the EU and IMF. The EU and IMF have said they are not prepared to renegotiate.

If those differences cannot be resolved, the threat of the country leaving or being forced out of the euro will remain, and hence the need for contingencies to be in place.

Switzerland said last month it was considering introducing capital controls if the euro falls apart.

In a conference call on May 21, the Eurogroup Working Group told euro zone member states that they should each have a plan in place if Greece were to leave the currency.

Belgium's Vanackere said two days after that call that it was a basic function of each euro zone member state to be prepared for any eventuality.

"All the contingency plans (for Greece) come back to the same thing: to be responsible as a government is to foresee even what you hope to avoid," he told reporters.

"We must insist on efforts to avoid an exit scenario but that doesn't mean we are not preparing for eventualities.

Source: Zerohedge

World's Largest Organization for Computer Professionals Comes Out Against CISPA

The US Public Policy Council of the Association of Computing Machinery (ACM), representing ACM, came out against CISPA, the cybersecurity legislation recently passed by the US House. ACM is the world's largest organization for computer professionals. They are joining a diverse group of individuals and organizations opposing this bill, including a wide array of digital civil liberties organizations like EFF, computer scientists like Bruce Schneier and Tim Berners-Lee, and companies like the Mozilla Foundation.

CISPA is intended to protect America against cyberthreats, but destroys core privacy protections by providing vague definitions and unfettered access to personal communications by companies and government agencies. In one such example, ACM criticized the expansive definition for "cyberthreat information," which could "encompass everything from port scans to destruction of entire networks." We agree, and voiced identical concerns when CISPA was first released.

Vague definitions are accompanied by a vague standard for companies to make "reasonable efforts to limit the impact on privacy." Though the standard is well intended, ACM correctly identifies that the vague standard "fails to invoke any framework, standards, oversight, or controls to be used" for personal information. They also conclude that the bill creates "no meaningful support for collection minimization" and shares information that "could have nothing to do with cybersecurity"—problems that we have consistently highlighted in our commentary on CISPA. These large gaps in privacy protections highlight some of the core shortfalls we have voiced about CISPA.

Digital civil liberties groups, companies, and computer researchers are glad ACM joined the opposition to CISPA. The upcoming bills in the Senate share many similarities to CISPA and must be stopped. This is the reason why we vow to take the fight to the Senate, ask you to sign our petition against the Cyberspying Bills, and tweet your Congressmen.

Source: EFF Electronic Frontier Foundation

Fukushima Radiation Cleanup Flawed – ‘Just A Show’

Euro fears boost virtual currency Bitcoin

The bad news out of Europe is benefitting safe haven countries, pushing down borrowing costs for a whole swath of governments. On May 30 the yield on the benchmark 10-year U.S. Treasury slipped to 1.6%, the lowest since the Second World War.

Fearful of the future, Europeans are moving their money out of their banks and dumping it into safe havens such as U.S. Treasuries, Government of Canada bonds — and apparently the virtual currency Bitcoin. ‘We’re getting requests from people saying, can we mail you euros? We can’t do that legally, but they keep asking’

“European volume has been skyrocketing,” said Charlie Shrem, chief executive of BitInstant LLC, a company in New York that enables clients to transfer funds between Bitcoin and U.S. and Canadian dollars, British pounds, euros and other major currencies.

According to Mr. Shrem, the sudden rise has been driven by people in countries like Greece, Italy, Spain — and even the Netherlands — anxious to protect their savings.

“We’re getting requests from people literally saying, can we mail you euros? We can’t do that legally, but they keep asking.”

The bad news out of Europe is benefitting safe haven countries, pushing down borrowing costs for a whole swath of governments. On May 30 the yield on the benchmark 10-year U.S. Treasury slipped to 1.6%, the lowest since the Second World War. Ten-year bond yields in Germany, France and Canada have all hit record lows in recent weeks. Even the U.K. is getting a lift.

But why is Bitcoin caught up in the frenzy?

The darling of techies, hipsters and, increasingly, currency traders, it was created back in 2009 as an Internet-only currency regulated by a network algorithm. Traditional currencies, the thinking went, are cumbersome and expensive to use in online transactions. Every time a purchase is made, fees must be paid to a bank or credit card company. Costs are even more onerous when one currency is converted to another.

Bitcoin solved these problems and others as well, since it operates outside the payment systems operated by the banks. More importantly, it’s not under the control of any central bank or government. In fact, the supply of Bitcoins is controlled by an algorithm.

Proponents argue that makes it safer than traditional fiat currencies and essentially immune to the political pressures.

Indeed, at a time when governments around the world are pumping massive amounts of so-called fiscal stimulus into the economy, potentially setting the stage for untold inflation down the road, it’s not surprising that Bitcoin is suddenly attracting a lot of attention, as are other digital currencies.

For fans of the currency, it’s hard to imagine a better way to shelter your savings from the ravages of the gales that are blowing through global financial markets.

But it’s not the only alternative currency that’s garnering attention.

Second Life, a popular online game, has its own cyber money, known as linden dollars. Originally intended for use only within the game, linden dollars have morphed into a real currency that is becoming widely used across the internet by real consumers.

Earlier this year the Canadian Mint announced a project to create its own digital money, MintChip. Analysts call it a positive sign, since it shows that even the government has recognized the importance of digital currency.

So far though, the concept mostly remains a work in progress. Almost since its creation, Bitcoin has been wrestling with hurdles, including software bugs and, more worryingly, hacker attacks. Last June, Mount Gox, one of the biggest Bitcoin exchanges, suffered a security breach with hackers reportedly making off with thousands of account passwords and a substantial amount of Bitcoin money, inflicting a huge blow to user confidence.

Since then the value has recovered somewhat — it was trading around US$4 in April. But amid renewed fears around the eurozone it’s been on a steady upward trajectory, climbing from around $5.20 at the start of June to an intraday high of $5.65 on Friday.

Source: Financial Post