What the Pope's butler saw – aide arrested over Vatican leaks

Vatican police yesterday seized Pope Benedict's butler in connection with a series of embarrassing leaks on alleged corruption, infighting and mismanagement that have emerged about the Holy See over the past year.

The arrest of Paolo Gabriele came after the decision by the Pontiff last month to set up a special commission of cardinals to smoke out the mole responsible for the highly publicised revelations.

"The inquiry carried out by Vatican police... allowed them to identify someone in possession of confidential documents," the Vatican spokesman Federico Lombardi told journalists. Senior officials had recently railed against leaking sensitive documents as "a criminal act".

News of the papal butler's arrest brought more drama to a week that has already seen the scandal-struck Vatican bank embroiled in fresh controversy. Rising tensions over plans to make the institution conform to international standards of transparency were blamed for Thursday's sacking of its chief Ettore Gotti Tedeschi.

The respected financier was ousted after months of internal battles following his insistence on applying the anti-money laundering rules demanded by the European Commission. Mr Gotti Tedeschi, 67, an expert on financial ethics, was put in charge of the bank – also known as the Institute for Religious Works (IOR) – in 2009, specifically to clean-up its reputation.

His plan to introduce transparency was at first agreed by key figures at the Vatican, including the powerful secretary of state, Cardinal Tarcisio Bertone. But when Mr Gotti Tedeschi insisted that the anti-corruption regulations should be retroactive, Cardinal Bertone and other key figures are thought to have turned against him.

"They gave him the job knowing that he had a reputation for integrity," said Robert Mickens, the Rome correspondent for The Tablet newspaper. "But they also assumed that as a member of Opus Dei, he would not rock the boat. The trouble is, some people do have moral and ethical standards and are prepared to stick to them.

"As to why senior Vatican figures are opposed to the rules being retroactive, well, you can draw your own conclusions."

Mr Gotti Tedeschi, made a brief but ominous statement: "I'd prefer not to comment, otherwise I would have some very unpleasant things to say. Just have patience." Mr Lombardi said: "The board passed a unanimous no-confidence vote against the president... and believes the action is important to maintain the vitality of the bank."

Some Italian press reports suggested Mr Gotti Tedeschi was ousted for allegedly omitting data in wire transfers from an Italian account. However, when Rome magistrates investigated the suspicious money transfers, Mr Gotti Tedeschi collaborated promptly with the judges. Some observers have suggested that this openness appeared to have angered Vatican figures more than the actual accusations.