Making sense of the Vatican’s looming financial scandal

(Andrew Medichini | AP) Pope Francis, top right, delivers his blessing during the Angelus noon prayer he recited from the window of his studio overlooking St. Peter's Square, at the Vatican, Sunday, Oct. 6, 2019.

Vatican City • Last week, the Vatican released a mysterious statement acknowledging a raid by Vatican police on the offices of its Secretariat of State and of its financial watchdog agency, saying it was carried out by judicial order by the Vatican tribunal and with permission from unspecified “superiors.”

The Secretariat of State is the most powerful department in the Vatican bureaucracy. The Financial Information Authority, or AIF, was created in 2010 by then-Pope Benedict XVI to combat money laundering after the Vatileaks banking scandal.

The communique stated that Vatican police “acquired documents and electronic devices” in the raid, presumably having to do with the secretariat’s financial dealings, in the wake of charges presented last summer by the Institute for Religious Works, commonly known as the Vatican bank, and the office of the Revisor General, which is responsible for investigating corruption.

The Vatican has never publicly mentioned the charges, however, and last week’s brief statement didn’t explain the reason for the raid. Requests for clarification to the Vatican Press Office went unanswered.

The raid seems to be the latest shoe to drop in the Catholic Church’s ongoing attempt to reform the Vatican’s financial arm, an effort that has suffered setbacks of late. The three departments Pope Francis created to champion the reform, the Secretariat for the Economy, the office of the Auditor General and the Council for the Economy, have been decapitated or have shown themselves to be ineffective.

In 2014, Francis named Australian Cardinal George Pell prefect of the Secretariat for the Economy, who set about cleaning up the Administration of the Patrimony of the Apostolic See, the financial center at the Vatican. But a year later, Pell became embroiled in charges of sexual abuse of two choristers in Australia; he is currently serving a six-year prison sentence. No substitute has been appointed by Francis to take his place.

Libero Milone, selected by Francis to be the first auditor general, was unceremoniously kicked out of the Vatican in 2017 by the gendarmerie before he was able to finish his work for alleged double-dipping on expenses amounting to $33,000. All charges against him have since been dropped, and Milone, who had accused a former papal chief of staff, now Cardinal Giovanni Angelo Becciu, of financial malfeasance, has said his ouster was politically motivated.

Meanwhile, little has been heard from the Council for the Economy, as its head, Cardinal Reinhard Marx, grapples with tensions with the bishops in his native Germany. On Sept. 20, the council had an extraordinary meeting with representatives from various Vatican departments, allegedly for the purpose of reining in the Vatican budget deficit of over $76 million, The Wall Street Journal reported.

Francis hasn’t given up. Last week, two days after the raid, he named a former lawyer for the city of Rome, Giuseppe Pignatone, as president of the Vatican tribunal.

Pignatone is well known for his commitment to fighting syndicated crime in the Italian capital, a choice that has led some local media to suspect that the financial scandal has taken a complex turn.

If last week’s one-paragraph explanation of the raid only seemed to invite speculation, the Roman media’s rumor machine was happy to oblige. Journalists clamored to reach their sources and paced the halls seeking clerics and laypeople to explain this new Vatican riddle.

Italian daily “L’Espresso” got there first. On Wednesday, the paper published an image of a document issued by the head of the Vatican police, Domenico Giani, showing pictures of five people, four lay and one religious, all of whom were said to be “cautiously suspended from service.” It is unclear why the Vatican did not share the document with the press, as it was handed out widely to Vatican employees.

In the Oct. 3 article, L’Espresso’s Vatican reporter, Emiliano Fittipaldi, explained that the current scandal revolves around investments made by Becciu and Monsignor Alberto Perlasca, who oversaw the secretariat’s financial investments until he was abruptly removed by Francis this summer.

Starting in 2011, according to Fittipaldi, the two prelates made investments with two Luxembourg-based companies using money that may have been derived from donations by the faithful. The investments are said to concern a real estate property in London.

Perlasca’s name appears in the document published in L’Espresso, as does that of Monsignor Mauro Carlino, who oversees the Office of Information and Documentation of the Vatican Secretariat of State. His position was previously held by Carlo Maria Polvani, nephew of the papal accuser and former Vatican representative to the United States, Carlo Maria Viganò.

Also named were Tommaso Di Ruzza, second in command to Financial Information Authority President René Brülhart, Vincenzo Mauriello, of the Secretariat of State’s protocol department, and Fabrizio Tirabassi, who oversaw the Secretariat of State’s financial investments after Perlasca’s departure.

Finally, there was Caterina Sansone, an administrative assistant at the Secretariat of State who answered to Tirabassi.

All of them are barred from entering the Vatican, with the exception of Carlino, who resides in the Domus Sanctae Martae, a hotel that is also the pope’s current residence.

But what these people are accused of — if anything — is still unknown, and speculation in the Italian press has shed no light on how any alleged misdeeds are related to their higher ups, if at all. One story this week had Becciu being told by Francis that he is no longer allowed to leave the Vatican.

“How funny!” the veteran cardinal tweeted in answer. “Just yesterday the pope wished me safe travels for the flight that tomorrow will take me to Brazil!”