Churches in Business
IN RECENT years there has been growing evidence that churches are deeply involved in big business, much to the consternation of a great many people. They have invested huge sums of money in a wide variety of business enterprises. Because the profits they receive from these businesses are very often tax exempt fewer taxes come in to all levels of government. This creates a greater burden for the average taxpayer.
An article appearing in Reader’s Digest of March 1969 discussed this tax loss and said: “For federal and state governments, church-owned and church-operated businesses represent a large loss of revenue—the taxes that would be collected if the enterprises were run by competitive private industry. It is impossible to calculate the loss exactly, but responsible estimates put it at $6.5 billion a year.”
Think how much individual taxes could be reduced if these taxes were paid. This loss is just in the United States. Other countries are also losing from tax-exempt church income from businesses.
The situation in Canada was frankly exposed in editorial comments made over radio station CFRA in Ottawa, Ontario, Canada, on November 15, 1968. Among other things that broadcast said:
“The churches have been shouting from the pulpits and corridors of the legislative buildings about how they would have to cut back their good works if taxed. . . . But what they don’t tell you from the pulpits, or anywhere else is the fact that the organized church today has become one of the country’s biggest business organizations, and not one red cent of profits from any of those organizations is taxed. Now when I say business organizations I mean just that. Churches in Canada own used car lots, they own bowling alleys, pool halls, apartment buildings. . . . Parliamentary reporter Paul Akehurst claims that the church in Ottawa is one of the city’s biggest slum landlords, raking in profits from the misery of others, and not a cent of those profits taxable.
“The United and Anglican Churches in Canada have more than 100 million dollars invested, 100 million dollars in every kind of imaginable enterprise, yes, even in some of these industries manufacturing arms and napalm to be used against human beings.”
The Vatican is the head of the Roman Catholic Church, and it too is deeply involved in big business. From its position on the Tiber River in Rome it governs a vast business empire that stretches around the world.
Recently a book was published that sheds some light on the size of its business operations. The book is entitled “The Vatican Empire”; it was written by Nino Lo Bello, a Roman Catholic journalist. By careful research the author was able to gather enough evidence to show that the Vatican has business holdings of truly astonishing dimensions. He says: “As one of the world’s largest shareholders, the Vatican holds securities frequently quoted as being worth $5.6 billion. The sum is probably an understatement, for the Vatican has invested in exchanges throughout the world, and even a conservative estimate of its portfolio tends to show that the figure is in excess of $5.6 billion.”
The number of companies it owns or in which it has a heavy interest in just Italy itself is staggering. By using a company that it owns to gain controlling interest in a great many other companies it is able to conceal, to some extent, its ownership. For example, the Vatican is the controlling stockholder of Italgas, which is the sole supplier of gas to homes in thirty-six Italian cities. This company, in turn, controls eleven other companies that are involved in such businesses as tar, anhydrides, iron ore, phosphorus, coke, distillates, drinking water, heating plants, gas stoves, gas appliances and industrial ovens.
The Vatican also owns shares in Italy’s largest construction company, Società Generale Immobiliare, Mr. Lo Bello reports. Recently, however, the Vatican sold the bulk of its 15 percent interest in this huge real estate firm. Why? Time magazine of November 28, 1969, reported: “Social unrest is growing in Italy. Anxious to align the church with the working class, the Vatican wants to escape any onus for closing inefficient plants, laying off workers or sitting on the other side of the bargaining table when unions ask for more pay. . . . Financial men expect the church to invest more funds outside Italy than it has in the past.”
Montecatini-Edison Company has several laymen, who represent the Vatican’s interests, serving on its board of directors. This indicates heavy Vatican stock ownership of the company. It is one of the largest corporations in Italy. In that country it owns or controls nineteen other companies. Outside Italy it has a number of foreign associate companies.
Banking and Insurance
Italy’s three leading banks have close ties with the Vatican. These are Banca Commerciale Italiana, Credito Italiano and the Banco di Roma. A fourth bank, Banco di Santo Spirito, is entirely owned by the Vatican. These four banks “hold more than 20 percent of all bank deposits in Italy,” Mr. Lo Bello claims.
But these are not the only banks that are tied to the Vatican. In northern Italy the Vatican owns seven large banks. Then there are thirteen other banks in which it has heavy investments. In sixty-two further banks it has minimal interest. Besides these banks there are, according to Mr. Lo Bello, “thousands and thousands of small rural banks spread all over Italy” that “are owned 100 percent either by the Vatican or by the local parish church. . . . Many of these small banks are located in the south and on Italy’s two major Mediterranean islands, Sicily and Sardinia.”
In 1967 a financial institution, owned by a cement company in which the Vatican has controlling interest, bought eight banks and merged them into a new company, Istituto Bancario Italiano. With further mergers that are planned this company will become one of the largest banking institutions in Europe.
As might be expected, the insurance field has not been neglected by the Vatican. It owns two prominent insurance companies, Assicurazioni Generali di Trieste e Venezia and the Riunione Adriatica di Sicurtà. In addition to these two there are at least nine other insurance companies connected with the Vatican.
Still other companies that are either owned, controlled or influenced by the Vatican are involved in textiles, ammunition, dynamite, mining, pharmaceuticals, furs, sugar, paper products, publishing, shipping, automobiles, telephone communications, bathroom fixtures, plumbing supplies, paints, plastics, chemicals, spaghetti, buttons, cellulose, cotton, wool, ready-to-wear clothing, tourism, department stores, hotels, and so forth. There seems to be hardly a segment in the business world in which the Vatican has not invested its money.
Lateran Treaty
According to Lo Bello, a Vatican-owned munitions plant “supplied arms for the Italian army” when it invaded Ethiopia in 1935. Just a few years before this, in 1929, the Vatican signed a concordat with the then ruler of Italy, Fascist dictator Mussolini. This concordat is known in history as the Lateran Treaty.
Among other things, this treaty granted payments to the Vatican for the papal states that the kingdom of Italy took over in the nineteenth century. The territory consisted of about 16,000 square miles within the borders of Italy. In compensation Mussolini gave the Vatican $90 million dollars. He also agreed to pay the salaries of the parish priests throughout Italy. To this day the Italian government, Lo Bello reports, is paying the salaries of more than 30,000 priests despite the fact that the Vatican could well afford to pay those salaries itself.
The concordat also granted the Vatican exemption from taxes, and Mussolini extended it to the income of the Vatican’s business corporations. Some effort has been made in recent years by the Italian government to tax the dividends the Vatican receives from its huge investments. But those efforts were not very successful until 1968, when it was reported that the Vatican bowed to the demands of the Italian government that it pay taxes on stock dividends.
After listing some of the many companies in which the Vatican has substantial interest Mr. Lo Bello observes: “The foregoing details provide an uncomfortably sharp realization that the Vatican and its men have indeed carved a niche for their firm in the world of big business.”
The vast business holdings of the Vatican and of other religious organizations bind them inseparably with the business world. How unlike the true Christians concerning whom Jesus Christ said: “They are no part of the world”!—John 17:16.
The religious organization that truly is serving God, in harmony with the example set by Jesus Christ, concentrates on preaching and teaching the liberating truths of his Word and does not become involved in commercial businesses. Following the Bible’s instructions, it does not involve itself in “the commercial businesses of life.”—2 Tim. 2:4.