How the Vatican’s old guard clings to power

The Vatican bank is located in the Bastion of Nicholas V in the Vatican (CNS)

A trial of two former Vatican bank officials is looming, and with it, a question: is the Vatican able to bring its financial house into some semblance of order? The first hearing in the case was slated for Thursday, but was postponed at the last minute upon request from defence attorneys and lawyers for the Vatican bank.

When it does finally begin, the trial will be another major step in reform efforts started under Benedict XVI. Once again, however, the accused are laymen, raising the question of why clergy are so often so conspicuously absent from the prosecutions.

The accused are Angelo Caloia, the 78-year-old economist who headed the Institute for the Works of Religion (or “IOR” as the bank is officially known) from 1989 to 2009, and Caloia’s 94-year-old attorney, Gabriele Liuzzo. A third individual, Lelio Scaletti, also figured in the investigation that led to the indictments, but died before they were handed down.

Reports are that the men ran a real estate scam allegedly involving their profiting from the sale of Vatican property between 2001 and 2008, to the tune of €50 million. Both the accused deny wrongdoing.

Caloia’s indictment is significant for several reasons, not least of which are that he served 20 years as IOR president, and that he succeeded Archbishop Paul Marcinkus, who ran the bank from 1971 to 1989 before resigning in disgrace in the wake of the infamous Banco Ambrosiano scandal.

A 2014 progress report on Vatican financial reform prepared by the Council of Europe’s financial watchdog, Moneyval, hinted at the investigation. Then, in late 2014, Reuters reported that the Vatican’s chief prosecutor, Gian Piero Milano, had ordered the freezing of assets held by the three men who were the subject of the investigation. The order hypothesised those assets to have been 29 buildings, from the sale of which the now-indicted IOR managers would have profited by under-reporting the proceeds in the bank’s books and taking the difference in separate payments.

These indictments come on the heels of a Vatican civil trial of two former bank officials, found liable last month for mismanagement and reportedly ordered to pay the bank €47 million.

That civil trial followed the more widely publicised criminal trial of two Italian businessmen, Giuseppe Profiti and Massimo Spina, respectively the president and treasurer of the Bambino Gesù children’s hospital.

Originally charged with embezzlement in connection with €500,000 of Bambino Gesù’s money allegedly diverted to pay for renovations to former Secretary of State Cardinal Tarcisio Bertone’s retirement flat, Spina was acquitted and Profiti was found guilty of abuse of office ­– a lesser charge – and given a one-year suspended sentence. Cardinal Bertone claimed he knew of no wrongdoing. He was not charged.

Heading into the trial, then, there are not only the facts of the specific case to clarify. There is also the deeper history of corruption and mismanagement at the IOR (and within the Vatican more generally). It seems that St John Paul II was not able to resolve this by appointing lay leadership to the institute.

Last year Libero Milone, the Vatican’s first ever auditor-general, was forced out. The Vatican’s deputy Secretary of State, Archbishop Giovanni Angelo Becciu, told Reuters: “[Milone] went against all the rules and was spying on the private lives of his superiors and staff, including me.”

Milone told reporters he was just doing his job. “I wanted to do good for the Church, to reform it like I was asked,” Milone said. “I believe the Pope is a great person, and he began with the best of intentions. But I’m afraid he was blocked by the old guard that’s still entirely there.” Becciu said: “If he had not agreed to resign, we would have prosecuted him.”

The troubles at the IOR go back at least to the time of Archbishop Marcinkus, who took the reins in 1971. They did not end when Marcinkus resigned in 1989. Recent years have seen the bank hit several reform benchmarks.

The Vatican has also seen significant turnover in personnel – especially of lay staff in key positions at the IOR – while the “old guard” system comprised largely of career clerics remains largely in place. Whether the reform can succeed without the housecleaning’s coming eventually to touch the old guard is a question that cannot be postponed indefinitely.

This article first appeared in the March 16 2018 issue of the Catholic Herald. To read the magazine in full, from anywhere in the world, go here