News Analysis

A Vatican money mystery that leads back to London


The Vatican police “raided” offices in the Secretariat of State and the financial oversight office known as the Financial Information Authority (AIF) last week. Five officials were suspended: four lay people and one monsignor. The incident made headlines, and then fell off the radar pretty quickly. Why?

Part of the reason is that it has been tough to get details regarding the case. L’Espresso reported that the seizure of documents and hardware from the Secretariat of State and the suspensions were in connection with a series of operations related to a €200 million (£178 million, $247 million) real estate deal in London gone sideways. Beyond saying that the Vatican police took documents and hardware in connection with an ongoing investigation and acknowledging the reported suspensions, the Vatican has offered no details regarding the case.

In response to inquiries from the Catholic Herald, Matteo Bruni, director of the Press Office of the Holy See, said: “For the moment there is nothing we will add to the press release we gave on October 1.”

That press release was thin on details, to say the least. “This [Tuesday] morning,” it said, “activities of acquisition of documents and electronic apparatus were effected in the First Section of the Secretariat of State and the Financial Information Authority. The operation, authorised with a decree of the Promoter of Justice of the [Vatican City] Tribunal, Gian Piero Milano, and the Adjunct, Alessandro Diddi, of which the Superiors were duly informed, is connected to complaints presented at the beginning of last summer by the Institute for the Works of Religion [the IOR, commonly known as the Vatican Bank] and by the Office of the Auditor General, regarding financial operations conducted over time.”

Subsequent reporting by L’Espresso claimed that the transactions in question relate to a deal that has its roots in an investment opportunity with which emissaries of the Italian financier Raffaele Mincione presented the Vatican in 2011/2012, for a package including a 45 per cent stake in a property in the exclusive London district of Kensington. This was reportedly pitched as promising a 10 per cent annual return on its nearly €200 million price tag. The Secretariat of State liked the deal, and bought in, possibly using monies from the Peter’s Pence collection.

To simplify a complicated story, according to L’Espresso, the investment wasn’t performing as well as promised. Archbishop Edgar Peña Parra, the new Sostituto for General Affairs in the Secretariat of State, wanted to extricate the Holy See from a part of the deal involving Mincione-controlled funds and holding companies in Luxembourg, and acquire the rest of the London property. L’Espresso alleged that Archbishop Peña needed cash for that, and asked the IOR to come up with it. The IOR’s leadership were not satisfied with either the terms of Archbishop Peña’s proposal or with the manner in which the archbishop used the IOR as a money spigot, and eventually complained to magistrates.

The Auditor General also got involved, and here we are: with unanswered questions about an underperforming investment made through complex transactions involving several different interests.

What gives? The names of some Vatican bigwigs close to the affair are known to the public in other connections. Archbishop Peña, who featured in a note from Archbishop Carlo Maria Viganò over the summer, is one. His predecessor in the Sostituto’s office, Angelo Becciu, on whose watch the deal went down, is now the prefect of the Congregation for the Causes of Saints and a cardinal. Another figure, Mgr Alberto Perlasca, a former office manager in the First Section for General Affairs at State and now the chief prosecutor at the Church’s highest court, is also reportedly someone who might be of interest to investigators. His successor in State, Mgr Mauro Carlino (who also served as Becciu’s secretary), is among the suspended officials.

In fact, only one of the five people suspended from their positions pending further investigation had any power to do anything on his own: Mgr Carlino. The lay employees were not in positions of responsibility. They are all people who implement decisions taken at higher rungs of the ladder, rather than actually making the decisions.

The known facts of the business just don’t add up. Consider first the IOR’s decision to contact prosecutors about the watchdog authority. Now look at the Secretariat of State’s alleged financial manoeuvres afterwards. In a functional system, the watchdog would be putting the brakes on deals like the one that the State reportedly entered into. That, however, would require an agency with real power to oversee.

From the outside looking in, the whole kerfuffle appears to be an internal power struggle. We know the IOR is at pains to project its image as a properly functioning institution, and we know that the Auditor General’s office is not pleased at having its wings repeatedly clipped. We also know that the Secretariat of State is jealous of its territory and does not like people poking about its bailiwick. It is likely that what we saw last week was only the tip of the iceberg, but the size and contours of the thing remain largely unfathomed.