ROME — Pope Francis has tapped a Bank of Italy executive to take over the Vatican’s financial intelligence unit following a scandal that resulted in the Vatican being suspended from an international anti-money laundering network.

Carmelo Barbagallo has been head of the Italian central bank’s vigilance unit since 2014, and until earlier this year, a consultant.

He replaces Rene Bruelhart, who left office following an Oct. 1 raid on the AIF headquarters as part of a corruption investigation by Vatican prosecutors into a London real estate venture. Following the raid and seizure of documents, the Egmont Group of some 160 financial intelligence units suspended the Vatican from its secure communications network because the Vatican could no longer ensure its data would be kept confidential and secure.

The scandal has raised questions once again about the Vatican’s murky finances, after it worked for a decade to erase its reputation as a financial pariah and offshore tax haven.

Vatican prosecutors are investigating allegations of corruption in the secretariat of state’s 2012 purchase of a stake in a luxury residence in London. The Vatican bought the other investors out at the end of 2018, but then realized it had taken on an onerous mortgage as well as Italian middlemen who were fleecing the Holy See of tens of millions of euros in fees, according to officials familiar with the deal.

The AIF got involved only after the deal was closed, in March 2019, when the No. 2 in the secretariat of state, Monsignor Edgar Pena Parra, filed a suspicious transaction report with the AIF that triggered the start of a five-nation intelligence investigation to trace the financial flows from the deal to try to nab the culprits who had defrauded the Vatican.

It appears Vatican prosecutors didn’t realize that the AIF was in the middle of its own international investigation alongside counterparts in Britain, Italy, Switzerland, Luxembourg and Jersey when they raided AIF headquarters, suspended the AIF director and essentially torpedoed the AIF investigation, these officials said, speaking on condition of anonymity.

Francis referred to the scandal in his press conference Tuesday, defending the raid, downplaying the significance of Egmont and saying the in-house reports that triggered the investigation showed that the Vatican’s financial reforms are working.

He also said that based on evidence Vatican prosecutors had, it appeared that the AIF had failed in its duty to “exercise control over the crimes of others,” apparently referring to the secretariat of state’s decision to enter into a real estate deal with shady characters.

However, by statute, the AIF has no supervisory control over the Secretariat of State or how it spends its money. And it only got involved after the property was purchased outright and when the secretariat of state’s Pena approached it with concerns that the Vatican had been taken advantage of.

Barbagallo is the second high-profile Italian layman to be named to a sensitive position in recent months, following the appointment of a former top anti-Mafia prosecutor, Giuseppe Pignatone, as head of the Vatican’s criminal tribunal.

The appointments suggest that amid a turbulent moment in Francis’s papacy, history’s first Latin American pope is turning to the Italian establishment to try to wrestle the heavily Italian Vatican bureaucracy into line.

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