News Analysis

Fine words won’t be enough to solve the Vatican’s financial crisis

Cardinal Becciu (Getty)

A fuller picture of the financial scandal rocking the Vatican and making headlines around the world began to emerge at the end of last week and through the weekend, with a major exposé in the October 20 edition of La Repubblica’s weekly news magazine, L’Espresso. 

The scandal involves monies from the Peter’s Pence collection for the Pope’s charitable initiatives around the world. Now, there’s nothing wrong with investing some of that money – in fact, it’s good policy to have nest eggs, rainy day funds, etc – rather than to keep it in a bank account. L’Espresso’s report, however, claims that nearly 80 per cent of the Peter’s Pence collection goes into investment funds chiefly managed by Credit Suisse, and quotes the Vatican’s own auditor general as saying operations connected with those investments are characterised by “gross irregularity”. 

Emiliano Fittipaldi, the investigative journalist who faced criminal prosecution in the Vatican for his part in the “VatiLeaks” scandal, wrote the piece in L’Espresso, which basically shows how the Holy See got fleeced over more than six years, starting with a roughly €200 million (£172 million, $224 million) investment opportunity in an oil drilling platform off the coast of Angola that turned into a blue-chip London real estate development partnership.  

The story hasn’t ended, with leaked details of the Vatican investigation into the affair, which included complicated machinations connected with the Vatican’s attempt to buy itself out of the partnership when promised returns on the London property did not materialise.  

It takes some doing to see a poor return on a high-end London real estate investment. L’Espresso reports that the Vatican paid exorbitant fees for complex manoeuvres involving Swiss banks, Luxembourg holding companies, Jersey shell corporations, and a cast of characters too numerous to list. 

A major player on the Vatican side appears to be Cardinal Giovanni Angelo Becciu, who is currently the prefect of the Congregation for the Causes of Saints. He got the job and was created cardinal in 2018, as the real-estate partnership was falling apart. But he was the Substitute for General Affairs of the Secretariat of State of the Holy See when the deal was struck, and shepherded it for several years from the Vatican side. Promoting perceived troublemakers is par for the course in any organisation: no worse than business as usual, but also no better.  

The Vatican spin machine has been working to put the situation in a good light. 

An unsigned Vatican Media editorial claimed that the events showed the Vatican’s reform efforts were working. Meanwhile, Jean-Baptiste Douville de Franssu, president of the Institute for the Works of Religion (IOR, also known as the “Vatican bank”), told Italy’s leading financial broadsheet, Il Sole 24 Ore: “Today’s IOR is completely renewed compared to just a few years ago, in terms of governance, internal controls, professional expertise available and services provided to customers.”  

L’Espresso’s report suggested that the IOR’s decision to notify police of a massive capital request from Cardinal Becciu’s successor in the Substitute’s office at the Secretariat, Archbishop Edgar Peña Parra, had more to do with IOR’s designs on control of Peter’s Pence than it did with desire for better business practices. 

On Monday, a book-length investigation by the “other” vaticanista prosecuted in connection with VatiLeaks, Gianluigi Nuzzi, reached bookshelves. Giudizio Universale (“Universal Judgment”) examines more than 3,000 confidential documents. Speaking to the Times of London, Nuzzi described Francis’s attempts at financial reform as “a plaster placed on a haemorrhage”, concluding flatly: “Pope Francis’s reforms of the Vatican’s finances are failing.” 

There has reportedly been a steep drop in Peter’s Pence donations: from just over €100 million in 2006 to just below €60 million more recently. That fall appears at least partly connected to a perception among the faithful that Francis has not come to grips with the broader crisis in clerical culture, the worst symptom of which is the ongoing cover-up of clerical sexual abuse. Francis’s reform efforts in those regards have not reassured the laity, including some who are otherwise well-disposed to him. 

No one doubts the sincerity of Pope Francis’s disgust with priests who use their status and their office to abuse people, especially children. Francis has also crafted new reform instruments, but appears reluctant to use them. He even gave one friend accused of wrongdoing, Bishop Gustavo Zanchetta, a desk in the Vatican. Francis eventually suspended the bishop, who is facing trial in his native Argentina on charges that he criminally misbehaved with seminarians. Despite the suspension, Archbishop Peña sent a letter to the judge in the case, saying that Bishop Zanchetta was needed in Rome for his “daily work”.  

In the final analysis, Pope Francis will not be remembered principally for his words. His governance will determine his legacy. If he does not overcome his apparent reticence to cut through the Gordian knot of financial mismanagement and remove bad actors in the hierarchy – and to let himself be seen to do so – history will know him at best as a would-be reformer, whose half-measures and false starts effectively preserved an untenable status quo.