Marcinkus Removed as Vatican Bank President

The Vatican today forecast a record budget deficit of more than $78 million this year and announced a major restructuring of the Vatican Bank, which was touched by a scandal two years ago.

The restructuring abolishes the bank presidency, requiring controversial American Archbishop Paul C. Marcinkus to leave the post that he has held since 1969. The new plan establishes a five-member commission named by Pope John Paul II to oversee the Institute of Religious Works, as the Vatican Bank is known.

The measures were determined in three days of meetings by a special commission of cardinals, the Vatican said.

Marcinkus said he does not know when the changes will take effect.

Warrants for the arrest of Marcinkus and two lay Vatican bank officials were issued in 1987 after they were charged with involvement in the fraudulent bankruptcy of Banco Ambrosiano, a Milan-based bank that collapsed in 1982.

The arrests were never carried out. Italy’s Constitutional Court ruled that a Vatican-Italian treaty precluded any interference by Italian authorities into affairs of the Vatican, an independent city-state.

The collapse came shortly after Ambrosiano Chairman Roberto Calvi was found hanged under a London Bridge.

Contributions to the Vatican from Catholics around the world fell after the Banco Ambrosiano scandal. The Vatican denied any responsibility for it but paid $250 million to Ambrosiano creditors in what it called a good-will gesture.

The 67-year-old American prelate said he will leave the Vatican Bank as soon as the transition is completed. “I’ve been here for 20 years,” he said. “I’m willing to help them (Vatican officials) put people into the positions they want and then I’ll go.”

Vatican sources have said that Marcinkus would probably devote himself to his other job as Vatican City governor.

The Vatican said for 1989 it expects revenues of $56,145,384 and expenses of $134,326,153, with a deficit of more than $78 million.