Archbishop of Naples faces loan shark charges

INVESTIGATING MAGISTRATES in Italy have requested that the Archbishop of Naples be tried for complicity in loan sharking and misappropriation of diocesan funds in a case that has provoked a diplomatic stand-off between the Vatican and the Italian authorities.

After an inquiry lasting two and a half years, public prosecutors in the southern town of Lagonegro want Cardinal Michele Giordano, his brother, Mario Lucio Giordano, and 30 others to go on trial for their part in a usury racket in the Giordanos' home town of Sant'Arcangelo. The prelate of Naples responded that he was serene in the knowledge he was "pure inside". "I know that, and someone up there knows it too," he told journalists.

The inquiry began in 1997 after two businessmen in Sant'Arcangelo told police they had been ruined by a "credit co-operative" that applied interest rates that in some cases exceeded 200 per cent per annum. The co-operative was run by Mario Lucio Giordano and a local banker, Filippo Lemma.

A paper trail led the Guardia di Finanza, the financial police, to the diocesan palace inNaples. Among the documents seized from the co- operative were blank cheques signed by Cardinal Giordano made out to his brother, and drawn on diocesan bank accounts. More than 1.4bn lira (pounds 500,000) was channelled from Naples in three years, to help to keep the credit co-operative solvent.

Last year, the Vatican protested after magistrates ordered searches and phone taps of the diocesan offices. It argued that the diplomatic and territorial immunity set out in the concordato, the accord between Italy and the tiny church state, had been breached and that Cardinal Giordano's superiors should have been informed in advance of the searches. Italy's ambassador to the Vatican was summoned for discussions but the Italian government later said there had been no breach of the pact.