Report claims money sent to help a Vatican cardinal refurbish his apartment ultimately came from a fund related to a Catholic hospital
While Church-watchers’ eyes were on the Synod Hall and the Press Office of the Holy See, as news was breaking of Amazon Synod Fathers’ decision to recommend Pope Francis consider relaxing the discipline of celibacy for secular clerics so that married men could be admitted to the presbyterate, the Washington Post was preparing to publish another major story regarding the troubled diocese of Wheeling-Charleston — co-extensive with the US State of West Virginia — a story with direct ties to a senior Vatican official created cardinal by Pope Francis in 2016.
The official is the prefect of the Dicastery for Laity, Family, and Life and Camerlegno of Holy Roman Church, Cardinal Kevin Joseph Farrell. The Washington Post reported in June that Cardinal Farrell was one of dozens of prelates to whom the disgraced former Bishop of Wheeling-Charleston, Michael J Bransfield, sent gifts of money drawn from Church funds.
Cardinal Farrell benefitted to the tune of $29,000 all told, for renovations to his Rome apartment. He restored that money to the diocese after the June WaPo story first appeared.
In a new report published on Sunday, the Washington Post said the money Bishop Bransfield sent to help Cardinal Farrell refurnish his apartment ultimately came from a discretionary fund Bransfield established in large part using monies that came from a Catholic hospital in his diocese.
Bransfield established “The Bishop’s Fund” in late 2014, in significant part from monies carved out of a financial restructuring of Wheeling Hospital. The Bishop’s Fund was created “to provide for the pastoral care of the diocese” and for the “charitable care of the people of the diocese,” the Post reports after reviewing tax filings.
One of those was apparently Cardinal Farrell’s apartment.
The Washington Post also reports that the US Department of Justice has been looking into the Bishop’s Fund, in connection with a lawsuit that says the hospital filed millions of dollars in false Medicare reimbursement claims. Hospital officials deny the allegations.
At the Vatican, meanwhile, last week might not have been the one in which the wheels came off the bus, but the nuts keeping the tires on certainly came loose.
The Holy See’s Financial Information Authority (AIF) issued a press release on Wednesday, announcing that an internal AIF inquiry has found “that the activity carried out by AIF and its Director,” Tommaso Di Ruzza, in connection with a London real estate deal, “was properly institutional in nature and conducted in conformity with the AIF’s governing Statute,” and that “neither the Director nor any other employee of AIF improperly exercised his authority or engaged in any other wrongdoing.”
Di Ruzza and his office were among those Vatican police raided on October 1, as part of an investigation centred on the aforementioned deal, which appears to be a symptom of major dysfunction. The police were acting on instructions from Vatican prosecutors, following complaints from the Institute for the Works of Religion — the IOR or “Vatican bank” — and the Auditor General.
The AIF is under investigation by Vatican prosecutors, and the AIF’s own examination of the London business is on hold while Vatican prosecutors have their own look at the watchdog. If the AIF was the dog that didn’t bark, it was because the AIF got muzzled along the way.
Before the muzzle was fitted, L’Espresso reports, the AIF notified counterpart financial intelligence units in London and Luxembourg of suspicious activity involving the Vatican and other outfits in their jurisdictions. As CNA’s Andrea Gagliarducci noted in a column earlier this week, “The secrecy of information and the protection of documents are among the pillars of financial intelligence activities.”
If the Vatican’s counterparts in the Egmont Group umbrella of financial intelligence units are not likely to appreciate having their operations involved in the Vatican’s intramural political squabbles, they are certain not to take kindly to having their privileged correspondence exposed as part of the same.
Gagliarducci also noted that the scandal could have serious implications as well for the upcoming review of the Holy See by the Council of Europe’s permanent monitoring agency, Moneyval, which assesses compliance with international anti-money-laundering and anti-terrorism-financing standards. The Holy See joined Moneyval in 2011, and has faced several reviews already. Those have focused on understanding the Holy See’s legal framework and getting the Holy See’s monitoring systems on their feet. In the 2020 review, the Holy See will need to show it can stand and walk on its own.
The Holy See’s prospects in that regard took another major hit last week, in connection with the Administration of the Patrimony of the Apostolic See — APSA — which oversees the Vatican’s real estate and financial holdings and is often described as the Vatican’s central bank.
APSA’s president, Bishop Nunzio Galantino, gave an interview published Tuesday in the Italian bishops’ official newspaper, Avvenire, acknowledging that a hole in the Holy See’s 2018 balance sheet was due to “an extraordinary intervention” taken to ensure a “Catholic hospital” stayed open and to save “the jobs of the hospital’s employees”.
In 2015, the APSA reportedly financed the purchase of a bankrupt and scandal-ridden Italian hospital to the tune of €50 million. The hospital — the Istituto Dermopaticodell’Immacolata, or IDI — defaulted on the loan in 2018, leaving a massive hole in the APSA balance sheet.
The Holy See had strong-armed the US-based Papal Foundation into promises of $25 million in grants that would have gone to the foundation that owned the hospital in order to stop the gap, but lay members of the US outfit rebelled, and the arrangement collapsed before the hole could be filled.
The problem is that, in the wake of a 2012 Moneyval inspection, APSA undertook to refrain from participation in the financing of commercial transactions, in exchange for exemption from Moneyval oversight. Such financing operations were to become the purview of the Institute for the Works of Religion — IOR — the “Vatican bank”.
Moneyval understands that there is a learning curve, and will certainly have understood that the Holy See is peculiar among member states. Both organisations have something of the club about them. There is a limit to club members’ tolerance for bad behaviour, however, especially among newbies. If the AIF stays in Egmont and the Holy See in Moneyval, they can expect to dine alone for a good while. If Pope Francis does not get a handle on his operation, and soon, the Holy See might not be able to count on getting a table in the dining room.