Hypocrisy II here
by: John Tyrrell
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For at least the past five years, Pope Benedict XVI has been criticizing "unrestrained capitalism" most recently in his New Years mass for 2013. His predecessor took on the same target numerous times in his papacy. This is an issue I have not commented on even though nowhere is capitalism truly "unrestrained." However I do recognize that a degree of regulation is required for capitalism to be effective in a reasonably just society and many elements of capitalism have justly deserved criticism.
This week The Guardian exposed the ownership of the Vatican's secret property holdings. Over $800 million dollars of international properties are held in what The Guardian calls a disguised offshore company structure. Only by tracking ownership through predecessor companies was it determined that the Vatican was the beneficial owner.
Now there's nothing illegal in this type of ownership structure. Companies generally do it legitimately to take advantage of a lighter regulatory regime, or a more favourable tax regime. Essentially the aim is to lessen the restraints on their capitalism. This Pope and his predecessor have been doing exactly what they have been preaching against.
Given that the Vatican is a country, they could have achieved the same thing without hiding ownership. Everything could have been owned openly by a Vatican entity under regulations set by the Vatican - as few or as many rules as they wanted. But instead, they opted for secret ownership.
This suggests there may be property owned that the Vatican is afraid of being linked to, or that there may be cash flows the Vatican wants hidden. It should be noted that the disguised offshore corporate structure the Vatican has adopted, which can be used legitimately, can also be used for illegal activities - money laundering is one example. But my suggestion of any questionable or illegal activities is just idle speculation about the need for secrecy. There may be another reason.
But the fact remains - the corporate setup is designed to lessen regulation - to put ownership as much as possible outside the laws of the countries in which the property is held. It is as close to unrestrained capitalism as you can get these days. And it is sheer hypocrisy for the Vatican to engage in it.
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- How the Vatican built a secret property empire using Mussolini's millions, The Guardian, Monday 21 January 2013