Vatican, Pope, Napoleon, Mussolini

A prophecy was fulfilled February 20, 1798, when Napoleon’s General Berthier took Pope Pius VI prisoner upon his refusal to renounce his temporal power. To observers, it appeared the Papacy had lost its supreme power and authority which it had enjoyed for more than a thousand years. Napoleon, however, restored the Papal States in 1800.

Then in 1870, the Italian nationalist army invaded Rome and the Pope surrendered but he declared himself to be a prisoner of the Vatican and refused to leave St. Peter’s. The new Italian government took possession of the papal states leaving only a small parcel of land on Vatican Hill to the Pope. The loss of the papal states represented an economic setback for the Vatican due to lost tax revenues.

It wasn’t until the signing of the Lateran Pacts with Mussolini in 1929, that sovereignty was fully restored. In exchange for political support of Mussolini’s fascist government, the church was granted enormous power, including full sovereignty, tax exemption and establishment as Italy’s sole religion. Still, with the loss of almost all of its land, the Vatican lost a significant source of regular income. To cover its expenses and with direction from hand-picked bankers, the church began investing heavily in real estate and setting up banks throughout Italy. Money from the Lateran Pacts was also invested in insurance companies and industry, including arms and munitions manufacturing. Investments were later made in large American businesses, including IBM, General Electric, Shell, Procter & Gamble and others.4