Vatican City, Dec 16, 2019 / 03:40 pm (CNA).- On Oct. 1, Vatican police raided the usually quiet offices of the Vatican’s Secretariat of State. They packed up documents, computers, and files, and banned employees from entering the premises. Since then, security and financial officials have resigned their positions, the Vatican has been excised from an international intelligence organization, and the details of a series of investments involving shady figures and banks, violations of canon law, and myriad holding companies and investment funds have emerged.
Still, the Vatican’s unfolding financial scandal has not yet led to action at the Vatican. To understand why, it’s important to understand something about the scandal itself.
In fact, there are a few scandals.
The first involves the Vatican Secretariat of State’s 2015 role in the purchase of a bankrupt Italian hospital. That scandal includes Vatican funds borrowed illicitly and transferred from religious orders to holding companies, obtaining a $25 million grant under false or misleading pretenses, and a scheme to “repay” a portion of the grant by “crediting” the grantees against requests for money in the future.
The second scandal involves a London real estate development into which the Vatican’s Secretariat of State invested hundreds of millions of dollars. The affair involves borrowing money from a discredited Swiss bank, concealing loans on internal balance sheets, violating the canonical status of a London parish, and giving 60 million in management fees to a man who sold the property to the Vatican through several of his own companies.
That man, Italian Rafeal Mincione, is a long-time figure in Vatican finances. He previously had a “beneficial ownership” in a company specializing in high-risk options trading, which was sanctioned and fined by the SEC in 2015.
Other figures connected to the project have been investigated for financial corruption and money laundering, and seen their companies suspended by financial officials.
The third scandal involves a fund, Centurion Global, by which the Secretariat of State has invested tens of million of dollars into Hollywood films, energy projects, and European startups. That investment, which has lost money while its managers have recouped millions in fees, involves fund managers connected to a Swiss bank that ran afoul of regulators and was shuttered – the same bank that partially financed the London deal. The fund does its business with an unlikely pair of banks: both linked to a billion-dollar Venezuelan money laundering and bribery scandal.
As those details emerged, one U.S. Church official asked CNA, “Haven’t these guys heard of Goldman Sachs or JP Morgan? Why are they doing business with these shady characters?”
The question is a fair one. The Vatican’s financial partners are unusual choices for a sovereign state.
The scandals are serious, and the issues they raise are proven, not speculated. They represent more than a bad deal: They represent hundreds of millions in lost investments, and a story of Vatican officials willing to bend or ignore rules in financial dealings. In the aggregate, they also represent a pattern that several popes have tried to address, with little success.
Still, while causing major repercussions in the international financial security community, the scandals have not seemed to lead to any serious consequences for Vatican officials.
Investigations are underway, and Pope Francis has said the Oct. 1 raid is a sign that accountability protocols are having an effect. He’s asked for patience as that work continues. There could indeed be indictments in Vatican City courts, though they’re expected only to impact low-level Church bureaucrats.
Seasoned experts say they’re skeptical about accountability for high-ranking officials, because the scandals point to serious structural and systemic problems at the Vatican. Pope Francis, at the time of his election, recognized in the Vatican’s dicasteries a culture lacking policy compliance, mission integration, internal controls, accessible information, and external accountability.
The pope set Cardinal George Pell to the task of reforming some elements of that culture, but well before Pell returned to Australia in 2017 to face abuse charges, the cardinal’s efforts had begun to seem Sisyphean. Cabinet-level officials in the Vatican created workarounds and carve-outs to avoid Pell’s oversight, one had cancelled Pell’s planned PriceWaterhouseCoopers audit of Vatican finances, and the cardinal reportedly found papal support for his efforts to be inconsistent.
Since Pell’s departure, the financial management office he oversaw has wielded ever less influence over financial affairs, and is no longer considered likely to effectively change operational practices at the Vatican.
But to many observers, those structural and systemic problems are the scandal. Officials acting unilaterally are seemingly able to borrow and invest hundreds of millions without oversight or internal checks. Spending caps and thresholds are an ordinary part of financial control, and are even established by canon law for dioceses and religious orders, but seem to be functionally non-existent at the Vatican.
Those familiar with financial administration say that the Secretary of State arranging for a loan that runs contrary to international convention, or a second-tier official in his office establishing the mechanisms of large-scale investment and development, with no controls to subject his action to review, illustrate precisely the problem. Especially, experts say, when the Vatican’s business partners seem consistently disreputable, and themselves mired in scandal.
An American financial expert speculated to CNA that anywhere but the Vatican, “people would be in prison by now.” In the world of the Vatican, that is unlikely.
While some observers seem nonplussed by the financial scandals, characterizing coverage of them as conspiratorial and “lurid,” Pope Francis himself has emphasized their significance. Last month, the pope admitted corruption in the Vatican, called the London development issue a “scandal,” and said that officials “have done things that do not seem ‘clean.’”
The pope’s view, expressed frequently, has been that the problem of corruption, wherever it’s found, is not principally a problem of politics or economics, but of morality, and requires the will to do things differently than they’ve been done before.
The pope has also recognized what financial criminals, grifters, and regulatory agencies have already recognized: that the Vatican, absent internal controls, transparency, and accountability, and run by well-meaning figures trained in theology, not international business, is easily taken advantage of, and has, in fact, been frequently taken advantage of.
The long history of financial scandals involving the Vatican does not make for easy reading; even the Vatileaks cables, and the bond and bank scandals of the 1970 and 1980s are a sufficiently discouraging picture of the problems caused by the culture of internal fiefdoms and the lack of internal controls at the Apostolic See.
Commentators, even those without practical Vatican experience, need only review the history of recent decades to understand why Pope Francis has repeatedly called for transparency and accountability, and why there seems to be so much difficulty getting there.
The pope also seems to recognize the effect that ongoing financial scandals have on the faith of Catholics, and on the morale of those practicing Catholics already discouraged by the 2018 sexual abuse scandal.
The reformers who have tried to clean up Vatican finances have mostly resigned or been defeated. They’ve been thwarted by cultural sclerosis, but also by a cultural tolerance for financial mismanagement that enables bad decisions to become worse ones. The Church’s teaching is clear: the stewardship of ecclesiastical goods is a sacred trust; the Church’s money is not hers, but the Lord’s.
Still, the moral obligations of financial stewards seem not to deter some Vatican officials, and some, including high-level officials, have made the excuse that as long as money is serving good purposes, how it is managed hardly matters.
The pope may yet be able to accomplish some policy changes that lead to greater financial accountability. It seems unlikely that lay Catholics will effectively call the Church to account for financial mismanagement, or effectively insist on the importance of acting with integrity with God’s resources. This means that change, regrettably, is only likely to come through European banking regulators, financial crimes investigators, and lawsuits. It will be a pity if that is the only way things move forward, but it will not be a surprise.
While the recent past has been characterized as “opaque,” the Church seems unlikely to learn about transparency, until she learns the hard way.
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Pope Leo xiv worries about a pandemic of arms instead of ending the homosexual/pedophilia epidemic running rampant within the hierarchy of the Catholic Church and what about the entire transgender issue which has caused the real reason for the mental health problem in the US in which he is loudly silent. If you compete flick, then start doing it.
Too true Mel. Means versus Motivation.
There are the “firearm means” on the one hand, and the “LGBTQetc motivation” on the other. It would be equally absurd to decry the slaughter of innocent Catholics in Africa, and ignore the declared Islamic Unholy War. And yet this blinkered cowardice – was not Pius XII criticised for not denouncing Nazism directly – is nothing new.
The argument used to defend Pius XII was that he feared reprisals against innocents for his denouncing the Motivation. We can only conclude that ppLeoXIV is afraid of LGBTQetc Madmen Jihad activists?
“Thoughts and prayers” would have sufficed.
Sigh. The Holy Father might have noticed with horror the satanism that pervades Westman’s manifesto. He could have lamented the evil “trans gender” butchery Westman had done on himself (with plenty of help from medical professionals and eventual acceptance from his family) and his marijuana use. Even the twisted killer bitterly regretted indulging in both vices. The HF might also have observed that the murderer’s parents divorced when he was young and pointed out the harmful and far-reaching consequences of broken families. Finally, he could have squarely faced up to the reality that this was, in an important respect, an “inside” attack. Westman came from a Catholic family and graduated from the Catholic school he attacked so viciously years later. Instead, we get a USCCB talking point on the evils of guns. Sadly predictable.
Tony W: You are so very right in all that youveso eloquently said. The fact is we have a woke hierarchy in the Catholic Church. I call them woke rather than apostate.
But does Pope Leo lament the epidemic of transgenderism and homosexuality in society? Of course not. And the lies, half-truths and obfuscations continue.
Sad but true. I just read this morning that Leo had a private meeting with James Martin, SCH. Somehow I don’t think the new pope called him to repentance. Some things never change.
Follow up on your comment Athanasius:
“VATICAN CITY — Pope Leo XIV met Monday with one of the most prominent advocates for greater LGBTQ+ inclusion in the Catholic Church and encouraged his ministry, just days before a planned Holy Year pilgrimage of LGBTQ+ Catholics to the Vatican in a sign of continued welcome.
The Rev. James Martin, a New York-based Jesuit author and editor, said Leo told him he intended to continue Pope Francis’ policy of LGBTQ+ acceptance in the church and encouraged him to keep up his advocacy.
‘I heard the same message from Pope Leo that I heard from Pope Francis, which is the desire to welcome all people, including LGBTQ people,’ Martin told The Associated Press after the audience. ‘It was wonderful. It was very consoling and very encouraging and frankly a lot of fun'” (Nicole Winfield for ABC7 News).
Tony W. above (7:00 p.m.) – Amen.
It’s hard to believe that Leo, as an American, wouldn’t realize what he was getting into with his statement. Sure enough, the so-called mainstream media are running with it.
My hope is that he will get a new speechwriter ASAP.
A pontifical repeat of the Democrat platform.
https://apnews.com/article/pope-leo-james-martin-lgbtq-holy-year-f54bbf057757bdb7230802a8d5d77242
Vatican Communications Man: James Martin, who spread blasphemous images mocking the Blessed Virgin Mary across Internet- is spinning a 30 minute meeting with Pope Leo into a declaration by Pope Leo that he is a supporter of the LGBTQetc Ideology regularly behind mass shootings.
Pope Leo sold out to the LGBTQETC Ideology? The Ideology of the Prince of Lies?
I am SO disappointed. POPE Leo xiv’s image is being removed from my home.
It should be apparent to a Roman pontiff in this historically unique setting in which we are facing multiple issues, sexual disorders, weapons violence, controversy over global warming and corresponding need for environmental care – in the context of apostasy and depredation of religion that circumspect pronouncement to Church and world has not and will not have effect.
Leo XIV can be effective if he spoke directly to the issues, especially in regards to Catholic turned deranged murderer Robert Westman. His sexual disorientation as Robin Westman has to be called out directly and clearly, yes with compassion. Otherwise Church and world will brush off Leo’s marshmallow mellowness, his politically correct schizophrenic focus on guns rather than the moral sickness of the persons who fire the guns.
Don’t like to pile it on but it cannot be prudently ignored as to where an appealing, congenial new pontiff really stands. However far to the right he may seem to some, I cannot better express my personal thoughts than John-Henry Westen:
“This is the nightmare scenario I warned of at the start of Leo’s papacy. As I told Glenn Beck: a less bombastic pope could quietly cement a false new direction. The James Martin approach defies Christ, His Church, Scripture, and 2,000 years of tradition” (John-Henry Westen LifeSiteNews).
A marker was Pope Leo’s selection to replace Archbishop Paglia on family matters with Msgr Renzo Pegoraro, Paglia’s loyal assistant instead of Cdl Willem Eijk, a member of the same Dicastery Pontifical Academy for Life. Simply couldn’t disassociate that from a man who wasn’t doctrinally attuned to Pope Francis.
It’s a darn good thing that my Catholic faith does not in any way depend on the orthodoxy/sanctity/truthfulness of priests, bishops and Popes. If it did, I’d be gone a long time ago.
The Democratic Platform, by denying The Sanctity of the marital act within The Sacrament of Holy Matrimony, ipso facto denies God’s intention for respect for the Sanctity of all human life, from the moment of conception until natural death, thus a “pontifical “ repeat of The Democratic Platform would ipso facto separate one from The One Body Of Christ, From The Father, Through, With, And In His Only Begotten Son, Jesus The Christ, In The Unity (Communion)Of The Holy Ghost, The Spirit Of Perfect Divine Eternal Love Between The Father And His Only Begotten Son, Jesus The Christ, Who Proceeds From The Father And His Only Begotten Son, Jesus The Christ, thus denying The Divinity Of The Most Holy Blessed Trinity, which is apostasy.
The counterfeit magisterium that has aligned itself with apostates must be charitably anathema:
At the heart of Liberty Is Christ, “4For it is impossible for those who were once illuminated, have tasted also the heavenly gift and were made partakers of the Holy Ghost, 5Have moreover tasted the good word of God and the powers of the world to come…”, to not believe that Christ’s Sacrifice On The Cross will lead us to Salvation, but we must desire forgiveness for our sins, and accept Salvational Love, God’s Gift Of Grace And Mercy; believe in The Power And The Glory Of Salvation Love, and rejoice in the fact that No Greater Love Is There Than This, To Desire Salvation For One’s Beloved.
“Hail The Cross, Our Only Hope.”
“Blessed are they who are Called to The Marriage Supper Of The Lamb.”
“For where your treasure is there will your heart be also.”
“Behold your Mother.” – Christ On The Cross
“Penance, Penance, Penance.”- The Angel of Fatima
May those whose competence it is Call a Council that will anathema the counterfeit church, from The True Church Of Christ, so that Our Blessed Mother’s Heart Can Triumph and restore Peace to Christ’s One, Holy, Catholic, And Apostolic Church, outside of which, there is no Salvation, due to The Unity Of The Holy Ghost (Filioque).
And may the error of Vatican II, which by no longer recognizing The Spirit of The Charitable Anathema, Instituted By Christ, Himself, leading to the creation of a counterfeit anti Christ church attempting to subsist within The One Body Of Christ, that is anti Filioque, and thus anti Papacy, which , in denying The Unity Of The Holy Ghost, denies The Word Of God Incarnate, Our Only Savior, Jesus Christ, Who Has Revealed Himself To His Church, Through The Deposit Of Faith, Sacred Tradition, Sacred Scripture, And The Teaching Of The True Magisterium, Grounded In Sacred Tradition And Sacred Scripture, for The Salvation Of Souls, be charitably anathema, by affirming The Unity Of The Holy Ghost (Filioque), and thus affirming The Divinity Of The Most Holy And Undivided Blessed Trinity.
🙏💕
Woe to those who call evil, good!
It appears the darnel is still being allowed to flourish in the field of otherwise good wheat.
The Catechism clearly teaches 2357 -2359 the truth on a matter which is a trial for many.
Indeed upholding chastity is a challenge for us all.
Catholic Pastoral accompaniment must always respect the Catechism, Principles of non contradiction and not undermine the Deposit of Faith.
Today’s evidence is not encouraging.
Let’s see what the Pontiff may state.
Evangelization and conversion are ongoing and never-ending opportunities. The Good News is waiting to be taken to the doorsteps of every heart in every continent.