American Head of Vatican Bank May Be Ousted

Church sources say the Vatican is preparing to remove a controversial American prelate, Archbishop Paul Marcinkus, as head of the Vatican’s bank.

The Vatican has repeatedly expressed support for Marcinkus, whose indictment had been sought by Milan magistrates for an alleged role in the 1982 scandal involving the collapse of Banco Ambrosiano. But Vatican sources said the recently completed reform of the Curia, which takes effect March 19, 1989, will include a new plan for the Vatican bank that would give it a layman, rather than a clergyman, as president.

Seek Stricter Control

The reform, published earlier this month, contained a provision for stricter control by requiring the bank to provide twice yearly reports of its activities to the council of 15 cardinals that is in charge of examining the Holy See’s organizational and economic problems.

Marcinkus, originally from Cicero, Ill., has headed the bank for more than 20 years, during which time it has been touched by two major financial scandals. After the collapse of Michele Sindona’s banking empire in 1974, the Vatican was said to have lost hundreds of thousands, possibly millions of dollars. The Vatican bank became implicated in the collapse of Roberto Calvi’s Banco Ambrosiano six years ago when it became known that $1.3 billion in bad loans had been obtained through “letters of patronage” provided by Marcinkus.

Magistrates investigating the case had sought the arrest of Marcinkus and two lay officials of the bank. However, the Italian courts recently ruled that the arrest warrants were invalidated by provisions of the 1929 treaties between the Holy See and Italy.

Vatican sources said that Pope John Paul II has been greatly troubled by the bank’s problems and is determined to reorganize it to better protect the church’s image in financial matters.

Watchdog Committee

A commission of five cardinals acting as a watchdog committee will be expanded to include three laymen known for their “professional qualifications and unquestioned morality,” said the sources, who asked to remain anonymous. Its secretary would no longer be the bank’s president, as under Marcinkus’ stewardship, but another person, probably a layman with professional financial expertise.

Marcinkus is expected to stay on, however, as pro-president (vice president) of the Commission for the State of Vatican City, an administrative body, and could take over as president of that body when Cardinal Sebastiano Baggio, who reached the retirement age of 75 in May, resigns. The sources said the Pope has asked Baggio to stay on until the spring.