"They had 15,000 square miles of what was central Italy with thousands of subjects," Posner tells NPR's Renee Montagne. "They levied taxes and paid for this lavish lifestyle — with 700 servants and a big and growing bureaucracy around them. Then, in 1870, Italy's nationalists have a revolution. They throw the Pope out, they get rid of the papal states. The Vatican goes from being an empire — an earthly empire — to a little postage-stamp size of property called Vatican City."
By World War II, the church had sizable investments and created the Vatican Bank in order to hide its financial dealings with the Nazis from the U.S. and the U.K.
"I was surprised the extent to which the Vatican was deeply embedded with German companies," Posner says. "They bundled together life insurance policies of Jewish refugees who had been sent to Auschwitz and other death camps. They escheated these policies early on — meaning they took the cash value of them."
Later, when the surviving children or grandchildren of the victims tried to collect on the insurance policies, they were refused.
"These insurance companies would refuse to pay out saying: 'Show us a death certificate,' which they knew was impossible," Posner explains. "They would keep the money."
In God's Bankers, Posner sheds light on what he calls "the blood money" that came into the church.
On the Vatican being "equal opportunity profiteers"
It wasn't as though they did business with the Germans because they wanted the Germans to win. They did business with everyone, because they called themselves neutral and decided that somebody would win at the end of the war — and they were going to keep their business connections open to everybody. Then, when they saw the war was going against the Germans, they started to hide the connections. And after the war they said, "We didn't do anything wrong."
On how the Church knew what the Nazis were doing but were "frozen by indecision and fear"
The bank officials and those who ran the bank knew very little because, in part, all they wanted to know was what was happening in terms of the war effort and what was happening in terms of business and profits.
But on the church end, there's no doubt that they had churches, local churches in all of the countries, that were the ground zeros for the killing zones. The local priests who were not in favor of the slaughter still reported back to their bishops what was happening on the ground. That came in daily reports, and they had unfortunately a very clear sense of what was happening early on.
They were just frozen by indecision and fear. They were afraid that if they spoke out, the Nazis might in fact move against Catholics in Germany and even move against the Pope and take him back to Germany as a prisoner. But that fear meant that they abdicated their moral position as the head of the world's largest religion, especially at a time that they continued to make money with the people committing the murder. npr