JULY 22, 1997

Vatican denies it hid fascist gold

VATICAN CITY (Reuter) - The Vatican Tuesday denied a report that it had stored $130 million, mostly in gold coins, for Croatian fascists after World War II to keep the money out of Allied hands.

``These reports have no basis in reality,'' chief Vatican spokesman Joaquin Navarro-Valls said in a statement.

A previously classified U.S. document, dated October 1946 and made public Monday by an American cable network, said that pro-Nazi Croatian fascists removed about $230 million from Yugoslavia at the end of the war.

In the document, U.S. Treasury Department official Emerson Bigelow wrote to the department's director of monetary research that the British managed to capture only about $87 million.

He said a reliable source in Italy had told him the Vatican held the rest and rumors were rife that much of that was later taken through a Vatican pipeline to Spain and Argentina.

Croatian fascist leader Ante Pavelic took refuge in those two countries after the war and was assassinated in Spain in 1957. Bigelow said in the document he thought the rumors were a smokescreen and that the funds remained at the Vatican.

The Vatican said the allegations were based on the flimsiest of evidence.

``The information, which is without any documentation, is only based on 'a reliable source in Italy' which, even if it existed, remains unidentified and of dubious authority,'' Navarro-Valls said.

A&E, the cable television network, said it came across the document during research for a two-hour documentary, ``Blood Money: Switzerland's Nazi Gold,'' to be broadcast Saturday.

The find marked the first time in a more than a year-long hunt of U.S. national archives by researchers that the Vatican has been mentioned in connection with gold looted by the Nazis or their allies.