Vatican's new bank chief has military ship links

VATICAN CITY (AP) - The Vatican is being drawn into a new controversy over its embattled bank after acknowledging that the institution's new president is also chairman of a shipbuilder that is helping to make warships for the German navy.

The Vatican announced Friday that Pope Benedict XVI had signed off on one of the last major appointments of his papacy, approving Ernst von Freyberg as president of the Institute for Religious Works.

The Vatican spokesman was caught off-guard when a journalist noted that the German shipbuilder that von Freyberg chairs, Blohm+Voss Group, has a military component. The Rev. Federico Lombardi later issued a statement saying the company repairs and transforms cruise ships and builds yachts - and is currently part of a consortium that is building four frigates for the German navy.