Vatican, US Treasury agree to share financial data

VATICAN CITY (AP) -- The Vatican signed an agreement with the U.S. Treasury Department on Tuesday to exchange financial information as part of its efforts to comply with international anti-money laundering and anti-terror financing norms.

It's the fourth such agreement inked by the Holy See as it seeks to improve its reputation in global financial circles following a series of scandals at its bank and a money laundering investigation launched in 2010 by Rome prosecutors.

The agreement was signed Tuesday in Washington by Rene Bruelhart, director of the Vatican's financial watchdog agency, and Jennifer Shasky Calvery, head of the Treasury Department's financial crimes enforcement network, the Vatican said in a statement.

Pope Benedict XVI in 2010 created Bruelhart's agency, the Financial Intelligence Authority, and issued new laws to fight money laundering and terrorist financing in a bid to shed the Vatican bank's image as a tax haven that for decades had been mired in secrecy and scandal.

The Holy See also submitted itself to the Council of Europe's Moneyval evaluation process, which assesses countries' compliance with anti-money laundering and anti-terror financing norms established by the Financial Action Task Force, the Paris-based policymaking body.

The Vatican in July passed Moneyval's first evaluation, but received poor or failing grades for its financial watchdog agency and its bank.

In its report, Moneyval noted that the Vatican was limited in its ability to share financial information with other countries by requiring bilateral agreements to be in place beforehand such as the one signed Tuesday.

The Holy See insists on the requirement largely because it fears Italy would make unreasonable demands for financial information from the Vatican bank, where Vatican officials, dioceses and members of religious congregations hold accounts. The Bank of Italy suspects Italians are hiding taxable income in the bank.

The Holy See wanted to make sure that if it gave such information to Italy, a reciprocity agreement would require Italy to share similar information with the Holy See.

So far, the Vatican has entered into information-sharing agreements with Belgium, Spain, Slovenia and now the U.S. In a statement Tuesday, the Vatican said 20 more such agreements are in the pipeline.

In a statement, Bruelhart said the agreement was proof that the Vatican takes its responsibilities to fight money laundering seriously. "The Vatican has shown that it is a credible partner internationally and has made a clear commitment in the exchange of information in this fight," he said.

The Vatican in July must submit a progress report on its compliance with the Financial Action Task Force norms.

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Treasury Secretary improves loopy signature

WASHINGTON (AP) -- Treasury Secretary Jacob Lew may not have succeeded yet in getting a grand budget bargain with Congress, but at least his handwriting is improving. And it is expected to be even better when the time comes for him to affix his "Jacob Lew" to the nation's currency.

Lew's handwriting was so bad before that it even drew presidential notice.

President Barack Obama joked in January when he nominated Lew for the Treasury post that he had never noticed before how illegible Lew's signature was. Lew served as Obama's chief of staff and also as director of the Office of Management and Budget before taking the Treasury job.

Lew's scrawl as OMB director consisted of a series of loops that bore no resemblance to his name.

"Jack assured me that he is going to work to make at least one letter legible in order not to debase our currency," the president joked.

Recent examples of Lew's handwriting show his practice is paying off. All the letters of Lew's last name could be made out in his signature on the annual report of the Financial Stability Council, which came out in late April.

While Lew is still a long way from winning any penmanship honors, Treasury officials say stay tuned. Lew still has time before he has to provide the official signature that will go on all of the nation's currency, something that he is expected to do later this year.

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Senate approves Lew as new Treasury chief

WASHINGTON (Reuters) - The Senate Finance Committee on Tuesday backed President Barack Obama's nominee to head the U.S. Treasury, Jack Lew, despite some concerns about his perks from previous employers, clearing the way for a confirmation vote in the full Senate.

With the 19-5 vote, about half the panel's 11 Republicans opposed Lew's nomination. Senate Democratic leader Harry Reid said he was hoping to consider Lew's nomination on Wednesday, but was still seeking agreement with Republicans.

Five Republicans on the committee also voted against Timothy Geithner, the previous Treasury secretary, who left last month.

Some Republicans hold deep reservations about the nomination and it is unclear whether they will throw up procedural hurdles to the vote. Nevertheless, Lew is expected eventually to win confirmation in the Senate, where Democrats hold a 53-45 majority.

Senate approval would pitch Lew into the heated budget battle between the White House and congressional Republicans. Both sides oppose the estimated $85 billion in across-the-board government spending cuts set to take effect on Friday, but disagree about alternatives.

Previously Obama's chief of staff and budget director for both Obama and former President Bill Clinton, Lew is a policy wonk who has spent much of his career in public service in Washington. But some observers have questioned his financial expertise and international credentials.

'NOT ANOTHER ACOLYTE'

The top Republican on the Finance Committee, Senator Orrin Hatch, said he supports Lew as head of the Treasury Department in deference to Obama, but has "serious reservations" about him.

"I hope we end up with the Jack Lew of the Clinton administration, not just another acolyte of the Obama White House," Hatch said before the panel vote.

At a hearing on his nomination earlier this month, Republicans also grilled Lew about an investment he once held in a fund linked to the Cayman Islands and a nearly $1 million dollar bonus he received from Citigroup in 2009 just before the bank got a taxpayer-funded bailout.

In addition, Senator Charles Grassley, the No. 2 Republican on the Finance Committee, said he was unsatisfied with Lew's response to questions about a $1.4 million loan he received while working as an executive with New York University.

"If Mr. Lew will not answer our questions now, why should we on this committee expect him to answer any questions if he's confirmed?" Grassley said before voting against Lew.

TAX PRIORITIES

Lew has said revamping the U.S. tax code would be a top priority if he wins confirmation. The tax system was last fully overhauled in 1986, though prospects for achieving tax reform are clouded by Washington's constant fiscal fights and conflict over whether new revenue is needed to cut budget deficits.

He will also deal with implementing new financial regulations, China's growing economic clout and winding down government-controlled mortgage finance giants Fannie Mae and Freddie Mac.

In addition, he may have to start paying more attention to Europe, where financial markets are on edge over election results in Italy that some analysts fear could exacerbate the euro zone's debt crisis.

Lew answered at least 444 written questions from the senators on the Finance Committee on these matters and others. Geithner was required to answer fewer than half that number when he was seeking confirmation.

While a few lawmakers, including Senator Jeff Sessions, the top Republican on the Budget Committee, plan to vote against Lew when his confirmation gets to the full Senate, Senate Democrats believe they have the requisite 60 votes to get Lew through the process even if some hurdles are raised.

(Additional reporting by Rachelle Younglai; Editing by Todd Eastham)

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