VATICAN CITY (Reuters) - Call it Conspiracy City. Call it Scandal City. Call it Leak City. These days the holy city has been in the news for anything but holy reasons. "It is a total mess," said one high-ranking Vatican official who spoke, like all others, on the condition of anonymity. The Machiavellian maneuvering and machinations that have come to light in the Vatican recently are worthy of a novel about a sinister power struggle at a medieval court.
Senior church officials interviewed this month said almost daily embarrassments that have put the Vatican on the defensive could force Pope Benedict to act to clean up the image of its administration - at a time when the church faces a deeper crisis of authority and relevance in the wider world.
Some of those sources said the outcome of a power struggle inside the Holy See may even have a longer-term effect, on the choice of the man to succeed Benedict when he dies.
From leaked letters by an archbishop who was transferred after he blew the whistle on what he saw as a web of corruption and cronyism, to a leaked poison pen memo which puts a number of cardinals in a bad light, to new suspicions about its bank, Vatican spokesmen have had their work cut out responding.
The flurry of leaks has come at an embarrassing time - just before a usually joyful ceremony this week known as a consistory, when Benedict will admit more prelates into the College of Cardinals, the exclusive men's club that will one day pick the next Roman Catholic leader from among their own ranks.
"This consistory will be taking place in an atmosphere that is certainly not very glorious or exalting," said one bishop with direct knowledge of Vatican affairs.
The sources agreed that the leaks were part of an internal campaign - a sort of "mutiny of the monsignors" - against the pope's right-hand man, Secretary of State Cardinal Tarcisio Bertone.
Bertone, 77, has a reputation as a heavy-handed administrator and power-broker whose style has alienated many in the Curia, the bureaucracy that runs the central administration of the 1.3 billion-strong Roman Catholic Church.
He came to the job, traditionally occupied by a career diplomat, in 2006 with no experience of working in the church's diplomatic corps, which manages its international relations. Benedict chose him, rather, because he had worked under the future pontiff, then Cardinal Joseph Ratzinger, in the Vatican's powerful doctrinal office.
"It's all aimed at Bertone," said a monsignor in a key Vatican department who sympathizes with the secretary of state and who sees the leakers as determined to oust him. "It's very clear that they want to get rid of Bertone."
Vatican sources say the rebels have the tacit backing of a former secretary of state, Cardinal Angelo Sodano, an influential power-broker in his own right and a veteran diplomat who served under the late Pope John Paul II for 15 years.
"The diplomatic wing feels that they are the rightful owners of the Vatican," the monsignor who favors Bertone said.
Sodano and Bertone are not mutual admirers, to put it mildly. Neither has commented publicly on the reports.
WHISTLE-BLOWING ARCHBISHOP
The Vatican has been no stranger to controversy in recent years, when uproar over its handling of child sex abuse charges has hampered the church's efforts to stem the erosion of congregations and priestly recruitment in the developed world.
But the latest image crisis could not be closer to home.
It began last month when an Italian television investigative show broadcast private letters to Bertone and the pope from Archbishop Carlo Maria Vigano, the former deputy governor of the Vatican City and currently the Vatican ambassador in Washington.
The letters, which the Vatican has confirmed are authentic, showed that Vigano was transferred after he exposed what he argued was a web of corruption, nepotism and cronyism linked to the awarding of contracts to contractors at inflated prices.
As deputy governor of the Vatican City for two years from 2009 to 2011, Vigano was the number two official in a department responsible for maintaining the tiny city-state's gardens, buildings, streets, museums and other infrastructure, which are managed separately from the Italian capital which surrounds it.
In one letter, Vigano writes of a smear campaign against him by other Vatican officials who were upset that he had taken drastic steps to clean up the purchasing procedures and begged to stay in the job to finish what he had started.
Bertone responded by removing Vigano from his position three years before the end of his tenure and sending him to the United States, despite his strong resistance.
Other leaks center on the Vatican bank, just as it is trying to put behind it past scandals - including the collapse 30 years ago of Banco Ambrosiano, which entangled it in lurid allegations about money-laundering, freemasons, mafiosi and the mysterious death of Ambrosiano chairman Roberto Calvi - "God's banker."
Today, the Vatican bank, formally known at the Institute for Works of Religion (IOR), is aiming to comply fully with international norms and has applied for the Vatican's inclusion on the European Commission's approved "white list" of states that meet EU standards for total financial transparency.
Bertone was instrumental in putting the bank's current executives in place and any lingering suspicion about it reflects badly on him. The Commission will decide in June and failure to make the list would be an embarrassment for Bertone.
ITALIAN POPE?
Last week, an Italian newspaper that has published some of the leaks ran a bizarre internal Vatican memo that involved one cardinal complaining about another cardinal who spoke about a possible assassination attempt against the pope within 12 months and openly speculated on who the next pope should be.
Bertone's detractors say he has packed the Curia with Italian friends. Some see an attempt to influence the election of the next pope and increase the chances that the papacy returns to Italy after two successive non-Italian popes who have broken what had been an Italian monopoly for over 450 years.
Seven of the 18 new "cardinal electors" -- those aged under 80 eligible to elect a pope -- at this Saturday's consistory are Italian. Six of those work for Bertone in the Curia.
Bertone, as chief administrator, had a key role in advising the pope on the appointments, which raised eyebrows because of the high number of Italian bureaucrats among them.
"There is widespread malaise and delusion about Bertone inside the Curia. It is full of complaints," said the bishop who has close knowledge of Vatican affairs.
"Bertone has had a very brash method of running the Vatican and putting his friends in high places. People could not take it any more and said 'enough' and that is why I think these leaks are coming out now to make him look bad," he said.
POPE "ISOLATED"
Leaked confidential cables sent to the State Department by the U.S. embassy to the Vatican depicted him as a "yes man" with no diplomatic experience or linguistic skills and the 2009 cable suggests that the pope is protected from bad news.
"There is also the question of who, if anyone, brings dissenting views to the pope's attention," read the cable, published by WikiLeaks.
The Vatican sources said some cardinals asked the pope to replace Bertone because of administrative lapses, including the failure to warn the pope that a renegade bishop re-admitted to the Church in 2009 was a well-known Holocaust denier.
But they said the pope, at 84 and increasingly showing the signs of his age, is not eager to break in a new right-hand man.
"It's so complicated and the pope is so helpless," said the monsignor.
The bishop said: "The pope is very isolated. He lives in his own world and some say the information he receives is filtered. He is interested in his books and his sermons but he is not very interested in government."
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