The Vatican has been drawn into a new controversy after acknowledging that its bank's new president is also chairman of a shipbuilder making warships - a significant conflict for an institution that has long shunned ties to military manufacturing.
The Vatican announced to great fanfare that Pope Benedict XVI had signed off on one of the last major appointments of his papacy, approving Ernst von Freyberg as president of the Vatican's bank, officially known as the Institute for Religious Works.
The Vatican spokesman was caught off-guard, though, when a journalist noted that the German shipbuilder von Freyberg chairs, Blohm + Voss, is known for its military ship construction.
The Rev Federico Lombardi defended the selection. He later issued a statement saying von Freyberg chairs a civilian branch of Blohm + Voss, which repairs and transforms cruise ships and builds yachts - but that the company is part of a consortium that is building four frigates for the German navy.
The Vatican and its bank have deep-rooted traditions of steering clear of investments in companies that manufacture weapons or contraceptives, in line with Catholic Church teaching.
Michael Brasse, spokesman for Blohm + Voss in Hamburg, said that von Freyberg is chairman of the executive board of Blohm + Voss Shipyards, a unit that concentrates on building civilian ships.
But before Blohm + Voss Shipyards and other non-military units of Blohm + Voss were sold in 2011 to Star Capital Partners, its military shipbuilding unit, Blohm + Voss Naval, had contracted with the German Defence Ministry for four new frigates. Blohm + Voss Naval subcontracted the actual construction of those vessels to Blohm + Voss Shipyards.
Though Blohm + Voss Naval is now known as ThyssenKrupp Marine Systems GmbH, and is entirely separate from the other Blohm + Voss units, the Shipyards unit is still constructing the frigates under the legacy contract.
After they are built, however, the company plans to concentrate entirely on non-military ships. Von Freyberg will remain its chairman while working for the Vatican. "The focus of the business is for yachts, and on the repair side for cruise ships or the offshore oil and gas industry," Brasse said. Germany's navy has contributed frigates and other ships to the EU's anti-piracy patrols off the Horn of Africa.
The revelation dominated what was supposed to have been the Vatican's triumphant appointment of a new president for the bank after its last president, Italian banker Ettore Gotti Tedeschi, was fired nine months ago for incompetence.