The 9/11 hyjackers all had Saudia passports, with Visas issued by the US State department. The State Dept. still issues Visas to anyone coming here from Suadia Arabia.
It is true that Pope Pius XII issued Vatican passports to the Nazis. He also ordered thousands of Jews hidden within the Vatican City, to keep the Nazis from putting them in concentration camps.
The Pope didn't have much of a choice, since Italy was an Axis Power. Later, after Italy surrendered, the Germans controlled Rome until the day before D-Day.