On December 28, 2020, The New York Times reported that Pope Francis Strips Powerful Vatican Office of Its Financial Assets. A financial scandal involving the secretariat of state has given fresh impetus to Francis’ reform agenda. Pope Francis has stripped the Vatican’s most powerful office of its significant financial assets, the Vatican said, after dubious investments squandered millions of euros in church donations, sparking an embarrassing scandal and prompting an ongoing corruption investigation.
A new law enacted by the Pope orders the secretariat of state, the diplomatic and administrative arm of the Holy See, to transfer all its financial holdings and real estate assets to another office, the Administration of the Patrimony of the Apostolic See, which administers the Vatican’s finances, by 4 February 2021. The changes, included in a law made public follow a Vatican investigation into the mismanagement of funds at the secretariat of state.
On 21 January, Aljazeera reported that a former head of the Vatican bank, Angelo Caloia, has been found guilty of embezzlement and money laundering and sentenced to eight years and 11 months in prison, making him the highest-ranking Vatican official to be convicted of a financial crime. The Vatican court also convicted Gabriele Liuzzo, and his son Lamberto Liuzzo, both Italian lawyers who were consultants to the bank.
Angelo Caloia led the bank, officially known as the Institute for the Works of Religion (IOR), from 1989 to 2009. The 81-year-old Italian was tried over corrupt real estate deals. He was accused of conspiring with others to make millions from the below-market sale of more than 20 IOR properties in Italy and laundering the proceeds in Switzerland.
Stephan Richter, Director of the Global Ideas Center stressed that the most opaque of institutions is now announcing a new era of transparency. Bishops and cardinals beware. Your finances are going to be subject to inspection and terrible things may happen if you accept a gift worth more than €40 (about $48). Evidently, Pope Francis has had enough of the mysteries of finance that swirl through the hallowed corridors of the Holy See. His anger is not so much addressed at sins throughout the centuries, of which, as far as illicit cash is concerned, there have been too many to count. His anger is addressed at the seemingly unstoppable flow of financial embarrassments that have had a nasty habit of emerging during his eight-year tenure in the Vatican.
Frank Vogl, Co-founder of Transparency International and author of “Waging War on Corruption: Inside the Movement Fighting the Abuse of Power” stated that the papal decree, known as a “motu proprio,” bars members of the Roman Catholic clergy and those who work for them from practices such as running offshore secretive holding companies in tax havens, engaging in multi-million-dollar mysterious real estate deals and hiding financial assets. The decree includes new regulations on public procurement. It claims to bring the Vatican into line with the standards and norms embodied in the United Nations Convention Against Corruption.
The spark that finally moved the Pope to stamp out corruption was the curious alleged involvement of Cardinal Angelo Becciu, an Italian prelate of the Roman Catholic Church, in a $200 million Vatican investment in a London property. The Cardinal, once one of the most powerful officials in the Vatican, has now lost his influence, if not yet his title.
Massimo Franco, a political columnist for the Corriere della Sera in Milan, Italy, and author of “The Vatican According to Francis” stated that investigations of one sort or another have been going on for years within the Vatican. The Vatican Bank has been allegedly involved in money laundering. Its top management has been replaced and international forensic auditors were hired. They have reported widespread mismanagement. The Pope, however, in announcing his new decree, avoided any mention of any cardinals or bishops who may be under suspicion.
Frank Vogl noted that if he sound somewhat skeptical about the impact that the Pope’s new measures are likely to have, there is a good reason for this. Too many people close to the Vatican’s leadership hold too many secrets. And they have too many connections beyond the Holy See to allow the dawning of meaningful transparency. It has always been like this.
The man with connections to the financing of SGI was apparently Michele Sindona, then head of Franklin National Bank in New York, the 20th largest bank in the United States. Sindona would not tell me anything about his dealings with SGI or the Watergate. Franklin National Bank declared bankruptcy in October 1974. Later, it was to emerge that some of its dealings were with the Italian Mafia and with Banco Ambrosiano of Milan, which in turn had close ties to the Vatican.
Sindona died in an Italian prison in 1986. It was never clear whether he had committed suicide or been poisoned.
His once close friend, Roberto Calvi, the one-time chairman of Banco Ambrosiano, was found hanged in June 1984 from London’s Blackfriars Bridge. Calvi was closely associated with the Institute for the Works of Religion, better known as the Vatican Bank. That institution also happened to be the largest shareholder in Banco Ambrosiano. As journalist Rupert Cornwell wrote in his 1984 book called “God’s Banker,” Calvi’s ties to many cardinals ran very deep.
According to Frank Vogl, Banco Ambrosiano had deep ties as well to prominent Italian politicians, who also had close relationships with the Vatican. The sordid corruption that embroiled them all was at the core of major corruption investigations launched by public prosecutors in Milan who brought prominent businessmen and political leaders to trial. The full role of the Vatican in international dealings with the likes of Sindona and Calvi was never disclosed.
This brings us back to current events. In 2018, the Vatican accused Gianluigi Torzi, who had worked in the offices of the Vatican’s Secretary of State, of being behind an alleged fraud who used the Vatican’s cash to buy property in London’s Chelsea. Under Vatican pressure, Torzi’s UK bank accounts were frozen for a time until a UK judge, Tony Baumgartner, hurled aside a lower court ruling. Judge Baumgartner said there had been appalling non-disclosures and misrepresentations by the Vatican.
Once again, as so often in the past, the Vatican preferred keeping its financial secrets to itself than revealing them in a court of law. It is a long tradition and one that now Pope Francis seeks to end.