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.”
[…]
China will eat you.
This.
China already ate US, and is taking really huge bites in the past weeks. That US reality those that are suppose to be looking out the countries best interest, are too busy selling us out.. for their own gain.
Its the drum role of, is President Biden going to start looking our for the people, as Kennedy tried. Or continue to sell US out?
President biden sold out 47 years ago buddy. Put your head between you legs and kiss your a.. goodbye. You speak as if buden just entered politics. He has been selling the country out since the 70s. Wake up
I agree with his sentiment but someone forgot to mention the 500 giga tonne gorilla in the room – The hegemony of the United States of America whose sole goal is to rape the planet for anything and everything it can buy or sell. Good luck trying to convey your message of minimalism to that obese, excessive ignorant island.
“Rape the planet”, really? Do you drive a vehicle, do you own clothes, do you eat food, do you have a house, do you have a phone, do you’s can continue. Give up all of what you and your family consumes in the name of not raping the planet.
Right. Except that the United States isn’t an island, it’s part of a continent called North America. So who’s the ignorant one here?
Nothing better than the guy in the gold plated house lecturing about the poor. He should follow God’s word and sell his riches.
The pope, I trust you understand, does not own the riches of the Vatican, etc. In fact, in fairness to Pope Francis, he probably owns very little. Now, a more worthwhile line of criticism would be to ask, “What competence or expertise does Pope Francis have in economics?” And so forth.
Carl no one said that Pope Francis is an economist.
I do not think you would criticize Jesus for his Sermon on the Mount which called for social justice and looking out for the needy.
Isn’t that what a Pope is supposed to articulate.
Carl no one said that Pope Francis is an economist.(sic)
Yet he himself believes he is one as evidenced by that which he allowed to be published under his name in Evangelii Gaudium and Laudato Si’ as only two examples among many.
A yet more worthwhile line of thinking would be this:
Popes must be Catholic.
Francis is not Catholic.
Thus Francis is not pope.
Well, Francis has Jeffry Sachs to tell him how to use abortion to make sure we have fewer poor people in the world.
I do not think Pope Peter had access to the wealth and splendor that Pope Francis has. Not did our first Pope have body guards.
He probably did not even have rosary beads or a crucifix.
.
And that’s the issue. I personally may own much more than Pope Francis, but I don’t live in anywhere near the comfort. I have no security system, and if I come down with Covid or cancer, no hospital or doctor of note will leap at the chance to cure me.
.
They are not called “Princes” for nothing.
.
I do not begrudge him (them) their comforts, or would not, but they clearly have no clue how wealth is created, how poverty might be lessened.
Remember when Popes used to talk about Jesus and Mary?
You remember the simple tales Tod to you as a child. They are still told to children.
Now you are older you need to navigate the bigger more complex stories.
New world order pope . .give away the wealth of the catholic church first..
You first, Francis
What might be said—perhaps competently—about augmenting daily stock market data/quarterly progress reports with a wider-angle business perspective, sometimes referred to as the TRIPLE BOTTOM LINE: prophet, people, planet? A few (not all) tutors and their discussion points:
At least parts of mankind are demonstrably at risk of a self-inflicted “tragedy of the commons” (from ecologist GARRETT HARDIN, 1968). Today the personal ecological footprint involves a layered web of often distant resource uses—land, water, air, and food chains.
ST. AUGUSTINE connected expansive passions and a finite world: “the passions are more easily mortified finally in those who love God, than satisfied, even for a time, in those who love the world” (in Henry Paolucci, ed., The Political Writings of St. Augustine, 1962).
In his Liechentstein Address (1993), SOLZHENITSYN remarked on technological society and the need for “self-limitation”—“in an economic race, we are poisoning ourselves.”
Two years earlier, ST. POPE JOHN PAUL II also called for “important changes in established lifestyles, in order to limit the waste of environmental and human resources, thus enabling every individual and all the peoples of the earth to have a sufficient share of those resources.” (Centesimus Annus, 1991 n. 54).
What is the possible alliance for shared action among the three monotheistic world RELIGIONS? E.g., Christian and Jewish revelation—“[The LORD made the earth] not creating it to be a waste, but designing it to be lived in” (Isa 45:18). (See Michael A. Barkey, ed., Environmental Stewardship in the Judeo-Christian Tradition: Jewish, Catholic, and Protestant Wisdom on the Environment [Acton Institute for the Study of Religion and Liberty, 2000]. Islam (a natural religion) proclaims—at least for the umma or House of Islam—the reality of the common good and of property as a shared good.)
In Mater et Magistra (1961) ST. POPE JOHN XXIII noticed that nature has only “almost inexhaustible productive capacity” (“almost”, not “inexhaustible” as under Pope Leo XIII in Rerum Novarum). And, likewise, it was with an eye on rising per capita resource consumption, that ST. POPE JOHN PAUL II counseled “above all a change in lifestyle (and) models of production and consumption . . . (and) structures of power . . .” (Centesimus Annus, n. 58).
ST. POPE JOHN PAUL II and Ecumenical PATRIARCH BARTHOLOMEW issued a “Joint Declaration on Articulating a Code of Environmental Ethics” stressing five goals: (1) mindfulness of future generations, (2) the priority of Natural Law and the non-utilitarian use of science and technology [Veritatis Splendor! 1993], (3) stewardship and solidarity beyond exaggerated [!] ownership, (4) a variety of roles and [!] responsibilities, and (5) the need for trust beyond legitimate controversy (Origins, CNS Documentary Service, June 20, 2002).
What would a more reflective and robust market (solidarity and subsidiarity, both, with neither eclipsed by the other) actually look like—beyond (a) the narrow and short-term quantitative fixations prevailing today AND EQUALLY BEYOND (b) POPE FRANCIS’ countervailing and self-acknowledged “rhetorical poetry”?
It would make more sense for the Pope to encourage the poor to learn from economists instead, so they can pull themselves out of poverty.
A lot more. But that’s not Francis’ M.O. MT verbiage is. Reams of it. Worst Pope we’ve ever had.
Johann du Toit,
That sounds about right but it would have to be economists with good track records. Some economists fail as badly as the rest of us to see what’s coming next.
It’s ashame when religious leaders embrace fundamentally flawed and evil dogma and ideology, becoming useful idiots for the tyrants.
Alternative view on papal events: canon212 dot com.
To my concluding QUESTION: “What would a more reflective and robust market (solidarity and subsidiarity, both, with neither eclipsed by the other) actually look like…?”
With some adjustments, maybe the Mid-West DUST BOWL of the 1930s will not be repeated in the desertification of coral reefs (related to our food chains) in the 2030s, and in the less preventable Sub-Sahara?
Maybe Artificial Intelligence (AI) and robotics will not pull the rug out from under of family-wage jobs and FAMILIES (papal prayer intention for this November)?
And, happily, with a perspective of centuries and nod to the better side of INNOVATION (“Technocracy”?), open-pit copper mines already have been at least partly replaced by fiber optics and miniaturized/wireless communication. The short-lived buffalo hunter, beaver pelt and finite-coal mentalities offer additional clues.
And, likewise to be purified, maybe the extermination of miniature (!) UNBORN CHILDREN—the moral crisis of “preeminent” priority (USCCB)—as exploited by the Abortion Industry (another “AI”!), will itself be terminated? This, rather than subsidized by the government (!) and exported overseas by Planned un-Parenthood profiteers.
As for the “rhetorical poetry” of Laudato Si—maybe there can be better rhyme and coherence as to WHETHER we can “reverse” (n. 170) OR only “adapt to” (n. 175) our/or nature’s (?) climate change?
(In either case, between Ice Ages the sea level was 4-6 meters deeper than it is now, while both underdeveloped Bangladesh and overdeveloped New York City have an average elevation of only 10 meters above sea level.) Bishop Barron quotes the mythical Mother Nature of eons and eras past: “I have fed species greater than you; and I have starved species greater than you.” And “my oceans, my soil, my flowing streams, my forests—they all can take you or leave you.”
https://www.catholicworldreport.com/2015/08/11/mother-nature-is-one-unreliable-lady/
Lapsing into planetary superlatives, what is the MORAL DIFFERENCE, if any, between short-term and direct genocide, and the long-term and indirect triage (stock market “economics”?) in marginal geographies of possibly vulnerable and “starved” populations?
Consumerism keeps everyone working.
Oh yes, isn’t needless toil and pursuit of “things” grand?
vs. what? Bored poverty and starvation?
Why hasn’t the Pope clarified his remarks about homosexuality? Please clarify the church’s stance on these sins that cry out to God.
Because he’s a coward and a liar.
The Poor are the real tabernacles where Christ resides. Economists have a lot to learn from the Christ residing in the poor.
I can’t believe this guy even sees the irony of telling his ‘flock’ to eschew the better things in life from…. The Vatican, that broken down old property of renown. Any shanty dwellings in there, Frank?
The pope seems to want a return to the middle ages where most people hated being alive.
I don’t know about that. Some of the Middle Ages sound pretty good to me. Some parts don’t ,but as I understand it they had many more days off work than we do today. Lots & lots of holy days observed back then.