Off-balance funds: Pell’s remarks and Lombardi’s clarification

By Andrea Tornielli
Vatican Insider
December 6, 2014

http://vaticaninsider.lastampa.it/en/the-vatican/detail/articolo/pell-ior-37923/

George Pell

“During the work on reforming Vatican finances we’ve discovered hundreds of millions of euros off the Vatican’s balance sheet”. These words by Australian Cardinal George Pell were the subject of much discussion. Pell is the prefect for the Secretariat for the Economy and a member of C9, who spoke about this in a piece on the historical weekly magazine Catholic Herald. The cardinal explained that because of these off-balance funds, the financial situation of the Holy See is better than it might have seemed after the approval of the advisory balance for the year 2013, which declared a deficit of 24 million euros.

Pell wrote that “Apart from the pension fund, which needs to be strengthened for the demands on it in 15 or 20 years, the Holy See is paying its way, while possessing substantial assets and investments”. The prefect spoke of hundreds of millions of euros off the balance sheet: “Congregations, Councils and, especially, the Secretariat of State enjoyed and defended a healthy independence. Problems were kept ‘in house’ (as was the custom in most institutions, secular and religious, until recently). Very few were tempted to tell the outside world what was happening, except when they needed extra help.” 

 
The events that took place few months after the election of Pope Francis are well known. There were changes at the top of the IOR and the council of cardinals, who help the Pope in the reformation of the Curia, decided firstly to address the question of the reorganisation of the management of the Holy See’s finances. Cardinal Pell’s words, who told Associated Press that he is symbolically moving his office to the IOR, hinted at the existence of slush funds.
 
The director of the Holy See Press Office, Father Federico Lombardi, declared that “we must recognise that Cardinal Pell did not speak of illegal, illicit or badly administered funds, but of funds that were recorded neither in the balance sheets of the Holy See, nor in those of the Vatican City State. The Secretariat for Economy learnt of the existence of these funds during the current study and revision of Vatican administration, in order to have a better overall knowledge for the rationalisation of its management. And this is therefore a sign and a result of the constructive cooperation among different Vatican institutions”.
 
The spokesman for the Vatican added that “it was well known and it had been previously explained in public by the Prefecture for the Economic Affairs that the consolidated balances of the Holy See and the Vatican City State, which were accountable to a Council of 15 cardinals, did not in any way encompass the whole of the numerous administrations that are headed by the Vatican, but only the principal institutions of the Curia and the State”.

The commission that studied the economic-administrative reformation (COSEA) had been informed for some time of the existence of a fund at the Pope’s disposal, of which every Pope learns after his election. The fund is administered by the Secretariat of State and is used in cases of emergency.