Vatican City, Oct 24, 2019 / 04:00 am (CNA).- The head of the Vatican’s central bank appeared to admit this week to a transaction that could be a violation of European regulatory commitments, namely a loan of 50 million euros to finance the purchase of a struggling Italian hospital.
Sources say a controversial grant from the U.S.-based Papal Foundation was requested in order to balance the central bank’s books after the hospital was unable to repay the money.
In a statement Tuesday, Bishop Nunzio Galantino, head of the Administration of the Patrimony of the Apostolic See (APSA), acknowledged that the Vatican’s central bank loaned 50 million euros to finance the purchase of the Italian hospital, the Istituto Dermopatico dell’Immacolata (IDI), even though APSA is prohibited from making loans that finance commercial transactions, by policies put in place to exempt it from external oversight.
The loan was made in 2015 to the non-profit Fondazione Luigi Maria Monti, a partnership between the Vatican Secretariat of State and the Congregation of the Sons of the Immaculate Conception, the hospital’s previous owners, under whose management the hospital was driven to bankruptcy following a series of embezzlement scandals that led to multiple prosecutions and debts of more than 800 million euros.
The hospital was purchased by the foundation while it was in state-administered insolvency. When it became clear that the APSA loan could not be repaid by hospital income, Vatican efforts were made to secure a $25 million grant from the U.S.-based Papal Foundation to the IDI, which would be used to cover the hospital’s debt to APSA.
Although the grant was requested to ease a short-term cash shortage at the hospital, multiple sources in Rome and the United States told CNA that the money was actually intended to help replace the funds loaned to finance the acquisition, removing the loan from the APSA balance sheet and avoiding more attention on the deal.
Lay members of the Papal Foundation had reportedly raised issues with the conferral of the grant, largely because details about the use and final destination of the funds were scant. Approval of the grant was ultimately pushed through the foundation’s board, over the objections of lay members, but dispersal of the funds was slowgoing as conflict enveloped the foundation’s board.
In April, a spokesman for the Papal Foundation told First Things magazine that “As The Papal Foundation Board responded to the grant request, a variety of interpretations of the true financial condition of the IDI and its sponsoring entities were presented.”
“Among the elements of the discussion was the still unclear relationship of the religious congregation that originally sponsored IDI, the recently formed Fondazione Luigi Maria Monti, that was now considered responsible for what have been the properties of the religious congregation, and the IDI itself. Sorting out who was responsible for what part if any of the bankruptcy assessment was also a part of the Papal Foundation’s discussion. All of this discussion was made more difficult by conflicting interpretations.”
“At the December 2017 Board meeting, Cardinal [Donald] Wuerl presented the information made available to the public and that provided by the Holy See. Other interpretations were also offered. The Board voted to make the requested grant,” the spokesman said.
When the grant money stalled, APSA was forced to write off 30 million of the 50 million euro loan, wiping out APSA’s profits for the 2018 financial year.
Galantino was compelled to acknowledge the loan and the write-off following the Oct. 21 publication of a book that alleged that the Vatican was nearly insolvent.
The book, “Universal Judgment,” published by Italian journalist Gianluigi Nuzzi, claims to be based on more than 3,000 pages of leaked Vatican documents. It alleged that in 2018 APSA had failed to make a profit from the Holy See’s property and investment portfolio for the first time in its history.
Galantino, who has been president of APSA since June 2018, said the book did not reflect the real situation.
“In fact,” he said, “the ordinary management of the APSA in 2018 closed with a profit of over 22 million euros.”
He attributed reported losses on “an extraordinary intervention aimed at saving the operation of a Catholic hospital and the jobs of its employees,” in an apparent reference to the IDI loan and purchase.
While Galantino defended the project as an effort to preserve the hospital and save jobs, APSA’s involvement to underwrite a commercial acquisition appears to violate a 2012 commitment to stop acting as a private or commercial financial institution.
That commitment was the result of an on-site inspection by Moneyval, the Council of Europe’s Committee for combating money laundering and terrorist financing.
After the inspection, APSA agreed to stop providing services to individuals or taking part in commercial transactions, with these functions being transferred to the Institute for Religious Works (IOR), often referred to as the Vatican Bank, which maintains accounts for Vatican employees, individuals and religious groups. APSA was to be limited to administering the sovereign assets of the Holy See, meeting payroll and operational costs, and functioning as the national reserve bank of the Vatican.
In exchange for agreeing to step back from commercial activity, APSA was exempted from annual inspections by the Vatican’s Financial Intelligence Authority (AIF), whose efforts are assessed by Moneyval.
Following the changes to APSA’s remit, only the IOR, and not APSA, has been listed as a financial institution under the oversight of the Vatican’s Financial Intelligence Authority (AIF), whose efforts are assessed by Moneyval.
In 2014, Pope Francis issued new norms, transferring oversight and control of APSA’s remaining investment functions to the Prefecture for the Economy, then headed by Cardinal George Pell.
The AIF’s 2015 annual report concluded that since it is no longer an “entity that carries out financial activities on a professional basis,” “APSA stopped being a part of AIF’s jurisdiction at the end of 2015” – but in the same year APSA made the loan to purchase the IDI out of insolvency.
The 2015 AIF report which exempted APSA from further scrutiny said that “If APSA were to carry out financial activities on a professional basis, it would fall again under the jurisdiction of AIF which… must publish and update the list of subjects who must comply with the requirements set forth in [relevant law].”
The acknowledgement by Galantino that APSA was in 2015 engaged in prohibited lending activity casts doubt over reported progress in combating financial corruption in the Vatican, and suggests that it has been operating out of sight of Vatican and European financial watchdogs.
In 2016, Pope Francis partially reversed some of the 2014 reforms, returning control of its investment activity to APSA from the Prefecture for the Economy.
In his book released Monday, Nuzzi also claimed that, despite the 2012 commitment to Moneyval, APSA still has private numbered accounts for individuals on deposit. Such accounts at APSA have been linked to previous money laundering accusations and scandals in the Vatican, and their elimination was crucial to its exemption from AIF oversight.
Galantino denied these claims, saying that no funds were held, managed or invested for anyone or any body except Vatican departments and the Vatican City State.
“APSA has no secret or encrypted accounts” Galantino insisted on Tuesday, “anyone is welcome to prove the contrary.”
Definitive proof is unlikely to emerge, barring a decision by the AIF to reapply Moneyval’s anti-money laundering regulations and inspections to APSA – something which is itself highly unlikely in the current climate.
Three weeks ago, Tomasso Di Ruzza, head of the AIF, was himself suspended following raids carried out by Vatican police. On Oct. 23, the AIF issued a statement announcing his return to duty and insisting that an internal investigation had been conducted following the raid and that no wrongdoing had been discovered.
“Neither the Director nor any other employee of AIF improperly exercised his authority or engaged in any other wrongdoing,” the statement said.
“Accordingly, the Board of Directors reaffirms its full faith and trust in the professional competence and honorability of its Director and, moreover, commends him for the institutional work carried out in the handling of this particular case.”
The statement concluded by saying the AIF hoped any “potential misapprehensions” to the contrary would “soon be clarified.”
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The U.S. Bishops have just been silenced! This saddens my neart. As long as Pope Francis and his supporters are in charge, this evil will continue to prevent Graces to flow into the Church. I pray that the suffering and prayers of our good priests and faithful members of our Church be accepted as reparations for sins committed by those who held power and continue to hold power in the Church established by Our Lord, Jesus Christ. Lord have mercy on us. Christ have mercy on us. Lord have mercy on us. Christ hear us. Christ graciously hear us.
“The U.S. Bishops have just been silenced! ”
Its about time! May they all be converted!
“We cry for the injustices perpetrated upon victims of abuse. We vow to fight a clerical culture that tolerates the abuse of authority. When abuse occurs, it is our sin and we must take it as such. These are not the sins of the media or the products of vast conspiracies. These are things we must recognize and fix. Our Holy Father has said it must end, and it must — not simply because he has said it, but because each of us in our hearts know that this is the only right thing to do.”
– Archbishop Christoohe Pierre
Apostolic Nuncio
Archbishop, with all due respect, the nuanced sychophantic speech that emanates from the “official” channels of The Church is for lack of a better word despicable. Its as though the shepherds are protecting the shepherds and slaughtering the sheep. Where is your compassion? Why do a last minute power play on the US bishops when you just spent an entire month with them. Couldn’t you resolve what you know was coming then? As for me and my house, we will serve the Lord.
“It is clear the the Holy See is taking the abuse crisis seriously,” Cupich said.”
Maybe it’s clear to him, but it isn’t clear to me.
The Vatican may be serious about the abuse crisis. But that means only that the Vatican is against pedophilia. And that is applaudable. But the Vatican is not at all serious about homosexuality. It condones homosexuality. James Martin thinks gay sex is as normal as hetero sex. The Vatican supports James Martin. Gave him a job at the Vatican.
The Pope is not the boss of the U.S. bishops. The bishops should simply decline to comply with the Vatican’s directive.
Yes, be obedient to God, not to the Pope.
Yet another reason Pope Francis needs to step down. He is a liability to the Church and doing everything in his power to sabotage efforts to curb sexual abuse.
The Vatican’s decision to prevent the USCCB from voting on reform may convince secular authorities in the USA that the Church is not serious in protecting those vulnerable to sexual predators. I look for more states to launch grand jury investigations similar to that of Pennsylvania. I fear the Church has lost its last chance to be proactive and if any reform takes place, it will come from the secular arm.
It’s like we are witnessing the corruption in the era of the Reformation all over again, and there were no serious attempts at reform until after the armies of the Holy Roman Emperor Charles V sacked and looted Rome. It may take a similar chastisement for the Church Hierarchy to take this crisis seriously.
Canon 333 of the Code of Canon Law states, in part, that the Pope “obtains the primacy of ordinary power over all particular churches and groups of them….” I’m not sure what exactly that means, but my prior post may have been in error.
Cupich interrupted to give the Vatican spiel to show who really was boss.
Personally, I think as this does not have to do with Doctrinal questions, it is time for some spine from our bishops, and to practice some good old fashioned Civil Disobedience.
Until they show that spine, and until they expose this rampant corruption, and not allow it to be swept under the rug of decades…
NOT ONE THIN DIME….except to charities and parishes I KNOW are Faithful.
I watched the 9 o’clock EWTN broadcast and the guy (forgot his name) who reported Cupich’s statement said it was his clear impression that Cupich knew what was coming and was ready for it.
And did you see the expression on Archbishop Chaput’s face as His Royal Highness spewed forth? (He could be seen behind Cupich, to the left.) Archbishop Chaput looked shocked and angry – and rightly so.
Somewhere in the mix are at least two longer-term risks:
(a) a threat to the sacramental seal due to aggressive state Attorney’s General probes (think Australia), and (b) the possible and even unintended mission creep of the lay investigation initially focused on sexual abuse and embedded homosexuality, e.g., eventually extending into disposal of Church properties to cover future lawsuits?
“Trusteeship” was an issue in early 20th century America, and 16th-century lay takeover of the Church by nation-states was an outcome of the Reformation (triggered by the comparatively trivial abuse of “indulgences” salesmanship).
Whether further delay helps or worsens the malignant and potentially far-reaching big picture is high-end Calculus. A different Vatican action could have been to simply announce, however late, a Visitation, and then to order the announced pause on pending USCCB actions.
Now the proof is in the pudding–a very short four days in February. Announcement of an extended and more functional session could be a good sign.
It is not “high end calculus”. It is not rocket science.
The bishop of Rome planned the timing of this kick to the bishops groin perfectly.
Francis holds DiNardo, et al, in complete contempt: just as he does the American pewsitter.
The states attorneys general will have an absolute field day with this.
So be it.
This was all scripted by the Holy See, make no mistake about it.
The diminutive Cardinal Archbishop of Chicago is Pinocchio to the Pontiff’s Geppetto.
Rod Dreher, in The American Conservative, reacts to the news from Baltimore:
https://www.theamericanconservative.com/dreher/the-pope-is-the-problem/
There is a Tweet from Mark Brumley, president of Ignatius Press.
Bergoglio likes controlling votes whether it’s here or at the Youth Synod where voting was pushed through for the final document whether someone really considered what they’re voting for or not.
Adios, Aristotle and Aquinas. Welcome to the hyper-voluntarist “spirituality” of Bergoglio, Spadaro and yes, Martin.. where the “Ignatian” has a lot in common with Machiavelli and Nietzsche.
This is really a dangerous game though, where the folks playing at being crazy are actually crazy. This nervous breakdown, masquerading as new and improved, once in slow motion is now ever-escalating. This acting out won’t be resolved in family or by the family doctor but by the decisive interventions of that less spiritual, secular part of our psychiatric team known in the broadest sense as “the authorities” or “the cops.”
Should we also pray? Yes. Many rosaries…numbers of rosaries similar to those Bergoglio disparaged when he became Bishop of Rome.
If my child is stricken with dangerous illness, a life threatening,,but my husband due to poor judgement,,delay the life saving treatment,will i commit disobedience if i will bypass him?The situation is the same in the church..Men of goodwill must act now…
Actually it makes sense for them to wait until the February. Though it would’ve been better had the Holy See told them earlier than at last minute.
No, it does NOT make sense for the U.S. Bishops to wait until February. They’ve had a conflagaration on their hands since this summer. If it’s complexity around the issues, this is precisely why they need their November meeting for part 1 and February for a part 2 for addressing the current crisis. There’s a good chance that the lavender mafia led by Cupich–which wants to reduce the sexual abuse crisis to clericalism only, or about any other theory, as long as the topics of homosexuality and gay power cliques are not also brought into a serious forensic examination–was alarmed by a November 2018 study produced by Fr. Paul Sullins’ (Ph.D., sociology)and issued by the Ruth Institute that corrects the gay-friendly PC conclusions of the otherwise very pertinent John Jay Report. Every single U.S. bishop received a copy of this study, which establishes a high correlation between homosexuality among priests and clerical sexual abuse. Corrupt forces within the Vatican and their proxies in the U.S. were at risk of facing uncomfortable questions and even possibly an organized push back against those who wish to ignore the pink elephant in the room.