VATICAN CITY (AP) — The Vatican confirmed on Saturday that the pope's butler has been arrested in its embarrassing leaks scandal, adding a Hollywood twist to a sordid tale of power struggles, intrigue and corruption in the highest levels of Catholic Church governance.

Paolo Gabriele, a layman and member of the papal household, was arrested Wednesday after secret documents were found in his Vatican City apartment and was continuing to be held Saturday, Vatican spokesman the Rev. Federico Lombardi said in a statement.

Gabriele is often seen by Pope Benedict XVI's side in public, riding in the front seat of his open-air jeep during Wednesday general audiences or shielding the pontiff from the rain. He has been the pope's personal butler since 2006, one of the few members of the small papal household that also includes the pontiff's private secretaries and four consecrated women who care for the papal apartment.

His arrest followed another stunning development at the Vatican this week, the ouster of the president of the Vatican bank, Ettore Gotti Tedeschi, by his board. Sources close to the investigation said he, too, was found to have leaked documents, though the official reason for his ouster was that he simply failed to do his job.

The "Vatileaks" scandal has seriously embarrassed the Vatican at a time during which it is trying to show the world financial community that it has turned a page and shed its reputation as a scandal plagued tax haven.

Vatican documents leaked to the press in recent months have undermined that effort, alleging corruption in Vatican finance as well as internal bickering over the Holy See's efforts to show more transparency in its financial operations. But perhaps most critically, the leaks have seemed aimed at one main goal: to discredit Pope Benedict XVI's No. 2, Cardinal Tarcisio Bertone, the Vatican secretary of state.

The scandal took on even greater weight last week with the publication of "His Holiness," a book which reproduced confidential letters and memos to and from Benedict and his personal secretary. The Vatican called the book "criminal" and vowed to take legal action against the author, publisher, and whoever leaked the documents.

The Vatican had already warned of legal action against the author, Italian journalist Gianluigi Nuzzi, after he broadcast letters in January from the former No. 2 Vatican administrator to the pope in which he begged not to be transferred for having exposed alleged corruption that cost the Holy See millions of euros in higher contract prices. The prelate, Monsignor Carlo Maria Vigano, is now the Vatican's U.S. ambassador.