TODAY   |  March 10, 2013

History of Vatican bank marked with alleged scandal

The Vatican bank has denied allegations of corruption, but in 2009 the pope tasked Archbishop Carlo Maria Vigano to clean up the Vatican’s finances. Vignano started to ask some tough questions about possible kickbacks, favoritism and how the Vatican’s money was being spent. NBC’s Richard Engel reports.

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>>> as we await tuesday's conclave to elect a new pope, several questions remain of the inner workings of the vatican . we have invited richard ingle to talk about some of those. there are still questions of the last pope, people talk about scandal and the sex abuse . you are talking about another scandal folks in italy are talking about.

>> reporter: this is all the italian papers are talking about. for the last several years, in the united states , we have talked about sexual scandals, abuses by priests. according to italian authors and investigative journalists , the scandal that had the most impact inside the vatican , inside the management is one of finances. it goes back to the vatican bank . according to these journalists, the rode that led to the pope's resignation goes back to the vatican bank and an attempt to reform it that went wrong. for a minute, forget that the vatican is a church. it is also a state, a very rich one. it's real estate alone is worth billions. that's just building. the palaces and mon stories, not the art they contain, much of it priceless. the vatican also runs a bank. if you follow this crisis to the basic core, it is about the money, isn't it?

>> i think that's right. i think that money is power and power is money.

>> philip wilan is one of the world's experts on the bank. it was set up designed to be closed and discrete so it could accepted money, for example, to priests and countries where they faced persecution. the bank's secrecy has also fueled a history of scandal, including allegations it has laundered money for the mafia.

>> today, there is the suspicion that it has become an instrument for laundering money , for corrupt italian businessmen and for the elite.

>> they v denied allegations of corruption but in 2009 , the pope cast an archbishop to clean up the vatican 's finances and he started to ask tough questions about kickbacks, favoritism and how the vatican 's money was being spent.

>> that was a real problem for the vatican . if you open the books on the past, all sorts of very unsavory things emerge.

>> vigonot was transferred off the case to become vatican 's representative to washington.

>> reporter: a lot of this has to do with vigonot. he found he was being blocked. he started to write letters to the pope saying he was saying internal resistance . that's when the pope's but letter, working in that apartment, when he saw that there was this effort under way to prevent a cleanup of the vatican 's finances, the pope's butler took the documents related to the case, handed them over to an italian investigative journalist . he published them in what became a best selling book. once those documents came out, more scandal came and that snowballed and led to this theory that led to the pope to step down.

>> if nothing else, all these cardinals will be meeting and what do they know? have they seen the documents?

>> they may know about what's going on and the scandals around. it is unclear how much they know. after these documents were leaked and there was this clearly big scandal in the country, the pope had three cardinals work for eight months and produce a 300-page secret report. that report is supposedly locked in a safe in the pope's apartment. the cardinals don't have access to the safe but they have access to the people that wrote the report. some of the cardinals have been asking, if they can't see the report to interview the people that did the report to have a better idea of the finances and the other management scandals.

>> the elephant in the room or the elephant in the chapel.

>> they are all sitting there, 115. they have to elect one among them. there has just been this eight-month investigation focusing on people in that room. they don't know exactly who knows what yet they are being asked to make this big decision if not blind but without all of the information.

>> richard ingle , fascinating story.