Pope Francis Presses Ahead with Tackling the Vatican’s Murky Finances

The Economist
March 16, 2017

http://www.economist.com/news/international/21718877-judges-steeped-church-law-will-struggle-understand-financial-wheeler-dealing-pope


ONE area where Francis has managed to make progress is in cleaning up the Vatican’s largely secret financial machinery. Most of the accounts at the Institute for the Works of Religion (IOR), or Vatican bank, that belong to people not directly associated with the church have been closed. The Vatican has invited scrutiny by Moneyval, an international financial watchdog. It has acquired an auditor-general. And by the end of last year the Holy See’s regulatory body, the Financial Information Authority (AIF), had found 23 cases of suspected financial hanky-panky and sent them to the Promoter of Justice, the Vatican’s prosecutor.

Until last year none had led to a prosecution. But according to the Promoter of Justice’s annual report, submitted last month, the first two cases went to court in 2016. According to a Vatican source (Vatican justice is not exactly transparent), one of the trials concerns the renovation of a penthouse apartment for Cardinal Tarcisio Bertone, formerly the Vatican’s most senior official. Two defendants, not including the cardinal, are charged with using the project to launder cash. Six cases have been shelved. Of the others, one is said to have included a fraud perpetrated on the IOR requiring investigation in several countries.

That points to a question familiar in other micro-states: whether the Vatican has the resources to handle complex financial crime. It certainly enjoys some advantages. At least one Catholic country that normally refuses to co-operate with foreign investigators swiftly supplied vital information to the AIF. Last year the Vatican’s deputy prosecutor was put in charge of a new section to deal with financial offences. The Vatican police, the Gendarmeria, has hired officers with experience in the field. But that still leaves the judges, most of whom are experts in church law, who may struggle to follow intricate financial dealings.

Another question is how far the clean-up will reach into the Vatican administration, which handles large volumes of cash. Last month Italian police froze assets worth ˆ2.5m ($2.7m) belonging to Giampietro Nattino, an Italian banker who is alleged to have ramped up the price of shares in his own bank, Banca Finnat Euramerica, by secretly routing purchases through a Vatican department. He denies wrongdoing.

Much will depend on whether the Secretariat for the Economy, which Francis set up in 2014 to bring discipline to the Vatican’s finances, seeks to do so vigorously. But the standing of its head, Cardinal George Pell, has been eroded by a police investigation into allegations that he molested children in the 1970s and 1980s in his native Australia (he denies all wrongdoing). The church’s historical indifference to the suffering of children under its care casts a long shadow.