by Rod Hughes

The Catholic Church’s Episcopal Conference has been accused of shady financial dealings by the financial watchdog agency, Sugef. Sugef general superintendent Oscar Rodríguez told the courts that his agency’s investigation has turned up evidence of “illegal financial intermediation,” the daily La Nación reported Thursday. The conference consists of eight Costa Rican bishops.

The 292-page Sugef report, based on several weeks of investigation, turned up evidence of violations of the Central Bank code that could entail, if conviction follows, penalties of three to six years in prison. However, it is unlikely that any cleric will go to jail. The Church does not choose its bishops on the grounds of their financial acuity and the conference denies any knowledge of illegal management of Church funds. (A good example of this was the plight of the Vatican Bank after the 1982, $35 billion collapse of Banco Ambrosiano in Italy, a near-disaster that had the Vatican scrambling for liquidity. The Vatican Bank is administered by the College of Cardinals.)

The violation of the code’s article 157 occurs, reported La Nacion, “when persons or organizations, without permission or controls of public financial authorites, acquire money from the public … with the aim of (selling) stocks or credit in some form.” In other words, the accusation is that they were acting like stock brokers without authorization of authorities. The Conference said in a press release that it is the victim, instead, of fraud.

In December, 2004, Sugef warned the Esiscopal Conference to stop acting as financial intermediaries. But on April 11 of this year, a La Nación investigative report revealed that bank accounts of the Conference’s Pastoral Services continued to receive funds from local and foreign investors, destined for the Panamanian investment house Grupo Sama S.A. The Conference owns 20% of Sama stock. The newspaper’s probing also revealed that money from Giovanni Bondaz had passed through the account. Bondaz is under investiagion by Italian authorities.

The case is complicated because the Pastoral Services administrator, Jorge Torres, died in June of last year. So he is unable to testify to why part of the funds he lent were to Anna Moscarelli, a Swiss businesswoman who, in the 1990s, managed funds for a high Mafia figures. Moscarelli’s company here administered three Costa Rican hotels and took out a loan for $3 million with Sama. But the flow of money from investors continued long after the Sugef warning, a Sugef investigation between April 21 and 30 this year discovered. Between March, 2005, and August of 2007, 168 deposits were made in the bank account.

One result is inevitable: it will take years before this cat’s toy of tangled financial dealings is finally sorted out and wound up in a neat verdict.