Something like taxpayer-purchased indulgences for Berlusconi?

Will funneling secular-designated tax money [.pdf] to the Catholic Church purchase an indulgence for Italian Prime Minister Berlusconi?

In September, Berlusconi quietly issued a decree giving himself the authority to redirect designated funds away from taxpayer intentions. He then assigned to Catholic churches and monasteries some 10.6 million Euros that Italian taxpayers "had earmarked on their tax returns for secular institutions."

You see:

Under this law Italian taxpayers are able to declare that 0.8% ('eight per thousand') of their taxes go to a religious confession or, alternatively, to a social assistance program run by the Italian State. This declaration is made on the IRPEF form. People are not required to declare a recipient; in that case the law stipulates that this undeclared amount be distributed among the normal recipients of such taxes in proportion to what they have already received from explicit declarations. Only the Catholic Church and the Italian State have agreed to take this undeclared portion of the tax.

Before he was caught misapplying those funds, Berlusconi was already neck-deep in a bribery scandal. Remember, this is the media mogul who said yesterday he would like to "strangle" those who wrote books or made films about the mafia. Would that include the ghost author of an escourt's graphic account of her dalliances with Berlusconi? Whatever the answer, it was Berlusconi's dalliances that brought him into such conflict with the Vatican that he apparently felt redirection of funds was required to make amends.

The Australian newspaper Brisbane Times describes it as follows:

A historic - and potentially disastrous - schism has opened between church and state in Italy after the embattled Prime Minister, Silvio Berlusconi, used a newspaper owned by his brother Paolo to stage a virulent attack on the editor of the nation's main Catholic newspaper.

In a ferocious, front-page campaign, the Berlusconi newspaper branded the Catholic editor, Dino Boffo, a homosexual and alleged he was the target of a harassment suit from the wife of a man he was allegedly in a relationship with. All of this in apparent retaliation for sustained criticism of the Prime Minister's morality and personal life.

Boffo, the prominent boss of the powerful Avvenire, newspaper of the Italian Bishops' Conference, was immediately supported by a public statement from the Vatican. But on Thursday, after issuing a detailed, 10-point rebuttal and explanation of the origin of the allegations, Boffo chose to resign, describing the campaign against him as ''media butchery'', stating that his reputation had been ''violated'' and he could no longer allow his family to remain at the ''centre of a storm of gigantic proportions''.

In his letter of resignation, Boffo described the sexual scandal used against him as a ''diabolically engineered, colossal, fictional set-up''. He said he had chosen freely to step aside because ''the church has better things to do than strenuously defend one person, even if unfairly targeted''.

In that light, how can the Catholic Church keep misappropriated money, without being seen as selling indulgences to the corrupt?

[H/T: Religion Clause]