The Vatican bank, yes, the Vatican has its own bank, has the notorious reputation for being run like the Mafia. For that matter, it has always been run by Italian cardinals, usually the chief of the Curia, the Vatican government. Last year, its chief, Cardinal Bertone, was forced to step down under charges of financial crimes. Luckily for him, the Vatican is its own micronation and it answers to no one. To make sure Italy does not take over, it is guarded by the Swiss, another secretive organization.
In order to combat this reputations, which seems deserved, Pope Francis put together his person curia of sorts to oversee all aspects of the Vatican, including the Curia of the Holy See. The team of nine cardinals are all non-Bertonians, five of them are not even European… GASP!
I bring this up because November is a time when the Pope goes into his residence and often ruminates on the issues of the people. In 2013, he published his most famous Apostolic Exhortation, which focused primarily on refocusing the church from social issues to socio-economic issues. He did not support contrary views to his predecessors, but he did emphasize that the Catholic Church is not pro-capitalism, and that it should seek ways to help the poor and the sick. He was so clever to avoid changing the established viewed that he even combated the idea of science-vs-religion, and that he believes science explains somethings but it does not and will not ever explain everything, and it is in that knowledge of the unknown that he knows there is a place for God. In 2014, he shook up the Holy See more than the rest of the world by ordering the Vatican to install showers for the homeless. What will he do this year?
I bring this up because I want to point out something he’s doing that compliance officers can learn from. He is staying well within his powers, explicit and implicit, to make changes. Compliance departments has to be sensitive to the needs of the business, obviously, because ultimately the business exists to help clients. Compliance have to balance that with satisfying regulators that the business has been doing everything its power to stay diligent on maintaining a culture of compliance, strong oversight and controls, and a responsive financial crimes units. Without these, the alternative will be a regulator in every financial institution, and no institution will be able to differentiate itself.
Things you can do:
- change the tone of the interactions with the lines of businesses,
- talk to regulators more frequently than requested,
- don’t make the letter of the law rule decisions.
All of these things do not replace what Compliance Departments have to do, but they do provide a way to make it easier for lines of businesses to deal with Compliance issues, get regulators to understand that you are doing more than defending yourself, and refocus Compliance to the goals of rules, not the technical rules of them.
Of course, if you are intent on doing the least bit possible, I can’t help you. And I would imagine Pope Francis wouldn’t want to help you either.
Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses. He is a member of ACAMS and ACFE.