Vatican bank board members plotted to oust their director, letters leaked to an Italian newspaper on Saturday showed, as prosecutors investigated possible money-laundering operations at the bank.
The board dismissed Ettore Gotti Tedeschi on May 24, a day before Vatican police arrested Pope Benedict XVI's butler for allegedly leaking sensitive papal documents to the press in an apparently unrelated case.
Ahead of the board meeting, according to letters in the daily Il Fatto Quotidiano that could not be independently verified, the bank's vice president Ronaldo Schmitz threatened to resign if Gotti Tedeschi was not dismissed.
Gotti Tedeschi "does not have the necessary qualities to guide the Institute," Schmitz wrote in the letter, referring to the bank's official name, the Institute for Religious Works, or IOR under its Italian acronym.
"He has aggravated the situation with his inertia and his lack of loyalty towards staff and lack of transparency to the board," Schmitz said, addressing himself to the Vatican's powerful Secretary of State Tarcisio Bertone.
"I am confident that Your Eminence will immediately end president Gotti's mandate. I do not want to continue to serve with Gotti Tedeschi. I will present my resignation by the end of May 2012 if he is not dismissed," Schmitz wrote.
His comments were backed up by Carl Anderson, another board member, who said: "I have reached the conclusion, after much prayer and reflection, that Gotti Tedeschi is no longer able to guide the Institute in difficult times.
"His occasional communications with me are focussed not on the life of the Institute but on internal political manoeuvring and on denigrating others," he wrote, adding that Gotti Tedeschi had shown "increasingly eccentric behaviour."
A letter from a psychiatrist, Pietro Lasalvia, also appeared to show he had been invited to a Christmas dinner in 2011 attended by Gotti Tedeschi and asked to assess the IOR director surreptitiously.
"There were traits of egocentrism, narcissism and a partial disconnect from reality that could be a psychopathological dysfunction," Lasalvia wrote.
Meanwhile the Corriere della Sera daily said Italian prosecutors were probing a series of documents seized during raids on Gotti Tedeschi's home and office this week as part of an investigation into money-laundering at the bank.
The report said investigators were focussing on accounts at the Vatican bank held by "politicians, shady intermediaries, contractors and senior (Italian) officials" as well as "people believed to be fronts for mafia bosses."
Investigators have reportedly found "property investments and Church property sales that could disguise money transfers to fronts and the need to 'launder' through firms and banks not subject to direct controls like the IOR."
The Vatican on Friday defended itself against the growing scandal around the IOR, saying Gotti Tedeschi's departure was due to "objective reasons" and stating its commitment to "transparency" at the bank.
In its statement, the Vatican also emphasised that Italian prosecutors should respect the Holy See's "sovereign prerogatives" under international law.
Gotti Tedeschi and his former deputy, Paolo Cipriani, are already under investigation in Italy for allegedly laundering 23 million euros ($29 million).
Vatican watchers say Gotti Tedeschi was ousted due to a long-running dispute with Secretary of State Bertone and a reaction against his efforts to bring the Vatican bank in line with international regulations against money-laundering.