Vatican trial of financial sleaze will decide the Pope’s legacy

The Times [England]

August 7, 2021

By Tom Kington

After surgery and a series of missteps, Francis must steel himself for a case that will shed light on allegations of embezzlement, extortion and predatory property deals at the highest levels of the church

Eight years after he was handed the job as head of the Catholic Church with a mandate to clean up the Vatican’s sleazy finances, Pope Francis’s final report card will be written this autumn in a makeshift courtroom hastily set up inside the Vatican’s museum.

Following years of stuttering financial reforms, the biggest criminal trial in the Vatican’s recent history is under way, tackling allegations of extortion and embezzlement, as well as tales of prostitutes, spies and millions of euros in donations from the faithful frittered away on a luxury London property. In their 487-page indictment, prosecutors denounced the ten defendants including prelates and bankers as “actors in a rotten, predatory and lucrative system” that allegedly saw shady brokers milk the Vatican’s riches while kicking back profits to conniving priests.

That makes it a golden opportunity for the 84-year-old Argentine Pope to shape his legacy as the man who cleaned up the Vatican after years of scandals. But if his prosecutors cannot make convictions stick, Francis risks a rough ride in the history books. “We forget Francis was elected in 2013 to end the corruption scandals that emerged under his predecessor Pope Benedict, so this trial is his last hurrah — it could cement his reputation as a great reformer or prove the Vatican is unreformable,” says Ed Condon, a canon lawyer and editor of the Catholic news site The Pillar.

Opened last month and adjourned to October when it will start in earnest, the trial follows Francis’s ten days in hospital last month after an operation to remove half his colon which sparked talk of succession and whether he will follow Benedict’s example and retire in the coming years. That means the clock is ticking, and as his papacy continues to be dogged by missteps on tackling paedophile priests and noisy rows with conservative foes, hitting a home run in the courtroom becomes ever more crucial.

Which helps explain why prosecutors have aimed high, charging a cardinal, Angelo Becciu, 73, with overseeing the skulduggery as well as dabbling in a bit of personal graft by sneaking 100,000 euros in church cash to his brother’s charity, all accusations he denies. “The money went to a bishop in Sardinia who decided to use it to fund a bakery that hires ex-inmates and recovering drug addicts,” said Becciu’s lawyer Fabio Viglione, adding, “we have witnesses, bank statements and invoices to prove it. Cardinal Becciu will tackle the trial head-on, presenting the evidence of his innocence to the court with the utmost confidence.”

Cardinals do not get much more senior than Becciu, who held a role equivalent to chief of staff during his stint at the Vatican’s secretariat of state before heading up its saint-making department where he oversaw the canonisation of the British 19th-century cardinal John Henry Newman in 2019.

There is a rich cast of supporting characters in this case. As chief of staff Becciu allegedly paid out 575,000 euros to security adviser Cecilia Marogna, dubbed the Mata Hari of the Vatican, who was meant to use the cash to free kidnapped nuns in Africa but reportedly spent much of it shopping at Prada, Louis Vuitton and Italian furniture shop Frau, where she allegedly dropped 12,000 euros. “I think I have the right to buy myself an armchair after all that work!” she later said. At the trial opening, Marogna’s lawyer grandly claimed her client’s contacts with Italy’s intelligence services meant their permission would be needed before she could give evidence, only for the government to quickly say it had no objection — suggesting they had never heard of her.

So keen is Francis for Becciu’s scalp that he forced his resignation last year, stripped him of his cardinal’s privileges and this year scrapped the rule that cardinals can only be judged by a panel of their peers, making Becciu the first “prince of the church” to be sent before the Vatican’s lay judges. At the trial he will go up against a whistleblowing priest from his own former department at the secretariat of state, Alberto Perlasca, who switched from key suspect to star witness when he decided to spill the beans last year. That will make Perlasca a target for defence lawyers who claim he is prepared to say anything to sidestep an indictment after being the link for years with money men handling Vatican investments.

“It is clear Perlasca avoided trial since he was ready to give evidence, but since the Vatican has no rules on whistleblowers, it’s a weak spot for the prosecution. Defence teams at the trial will complain ‘You were there, you were the one signing the deals’,” says Fabrizio Massaro, co-author with Mario Gerevini of a book about the case, Merchants in the Temple.

What exactly Perlasca and his advisers were up to forms the core of the case, starting with the decision to invest cash from Peter’s Pence, the donations from churchgoers, in the purchase of number 60 Sloane Avenue in Chelsea, a former Harrods storage building due for development into luxury flats.

[Photo: From left, Vatican consultant Francesca Chaouqui, Pope Francis and security adviser Cecilia Marogna]

Their initial 200 million euro investment for part ownership of the site was suggested by a London-based Italian consultant, Raffaele Mincione, who once dated the model Heather Mills before her marriage to Paul McCartney. Mincione persuaded prelates to stay away from their planned investment in Angolan oil and try London real estate instead. But prosecutors who have charged Mincione with embezzlement claim the deal soon racked up “enormous losses” for the church, even as the Vatican went on to sink 350 million euros in the property, far more than its reported value of £129 million.

“The secretariat of state hired these advisers through word of mouth, rather than on merit or based on their CV, and we see the consequences. It was an old-world enclave while elsewhere in the Vatican people were slowly getting round to hiring experts,” Massaro says. Mincione denies all wrongdoing, saying, “The initial investment was made by Credit Suisse, by any view a sophisticated investor, into a regulated fund. The idea that a regulated fund can simply and easily invent numbers shows a clear lack of understanding of the obligations which fall upon it.”

With prices rising after the initial investment, the Vatican would have shown profit if it had waited, he said. Instead the Vatican turned to Gianluigi Torzi, another London-based Italian adviser recommended to it in 2018, to organise a full buy-out of the Sloane Avenue building from Mincione, only for the case to get even murkier.

Prosecutors allege Torzi told the Vatican to give Mincione £40 million for the buy-out but then secretly hid a clause in the deal that handed him ownership of the building through voting rights attached to shares. When the Vatican protested, Torzi demanded 15 million euros to give up control, and got it, with the Pope’s blessing.

Investigators accepted a claim by Archbishop Edgar Pena Parra, by then Becciu’s replacement at the secretariat, that he was duped by Torzi, who was accused of extortion and is now among the defendants. But the case raises the question: can the Pope and the Vatican agree to pay off a banker only to then use their own court to accuse him of extortion?

The unusual episode also drew the attention of a British judge, Tony Baumgartner of Southwark Crown Court, when the Vatican asked the UK to freeze Torzi’s assets in Britain. The request was initially granted before Baumgartner reversed the decision, stating, “I do not consider there is reasonable cause to believe Mr Torzi has benefited from criminal conduct.” He added that he found it “difficult to accept” that Pena Parra had been fooled into signing Torzi’s deal.“It is evident,” he wrote in his ruling, “that what was transpiring was a commercial negotiation between two arm’s length parties.” The Vatican’s “non-disclosures and misrepresentations” were “appalling”, he said.

Baumgartner also reported how Torzi claimed another defendant in the trial, Vatican employee Fabrizio Tirabassi, offered him the services of a prostitute for his work on the buyout. Torzi claimed Tirabassi and another broker, Enrico Crasso, hounded him for cuts on the Chelsea deal, at one point telling him, “you either give up the property and go away, or your life and that of your children is at risk”. All the defendants deny wrongdoing.

The furious reaction from the Vatican to Baumgartner’s ruling can be found on page 300 of the indictment, when it states, “The English decision shows complete ignorance of the organisation of the secretariat of state” and total “misunderstanding” of the case.

Despite the doubts in the UK over the extortion charge against Torzi, Ed Condon says the indictment was otherwise chock full of “grim fraud” and conflicts of interest. “The craziness existed — Crasso presented a bond prospectus to build a US highway for potential Vatican investment, but when police searched his computer they found it involved equity stakes in three Italian companies and the highway didn’t exist.”

Vatican staffer Tirabassi had a deal with a Swiss bank to get a commission when he put Vatican business its way, he says. “This is an obvious conflict of interest but he said the arrangement was approved by the Vatican, which makes it hard to prosecute him and suggests it’s a snapshot of business as usual. If this was standard behaviour things are worse than we thought.”

Condon’s news site The Pillar gained notoriety and raised ethics alarm bells in the US last month when it used mobile phone data to show that a high-ranking US priest, as well as residents of the Vatican, were using the gay hookup app Grindr. But the canon lawyer has been studying Becciu for years, ever since the cardinal ordered the shutdown of a Vatican-wide audit ordered in 2016 by then economics boss Cardinal George Pell. “As a canon lawyer I thought, how can Becciu legitimately countermand Pell’s order? It seemed to be a life-and-death struggle to stop transparency,” he says.

Five years on, Becciu is fighting to clear his name, and ahead of the hearings this autumn has launched defamation suits against a series of his accusers. Among them is a name familiar to Vatican watchers: Francesca Chaouqui, the controversial former Vatican consultant once likened by Pope Francis to the 15th-century poisoner Lucrezia Borgia. Chaouqui was given a ten-month sentence by the Vatican court in 2016 for leaking secrets to two authors who wrote exposès of Vatican sleaze.

She and Becciu have history — she blamed him for inspiring an article in the Italian press headlined “A sexy bomb that embarrasses the Vatican” alongside raunchy pictures she had once posted. When she got wind of the probe at the secretariat of state she went to the Vatican police to share her suspicions about Becciu’s behaviour.

As the trial opened last month, Becciu said he would return the favour by suing her for defamation, but she told The Times this week she was not offended. “I have nothing to fear from the truth, and I am sorry for him because I know what he is going through,” she said, adding, “I pray for him every day.”

The so-called Vatileaks II trial in 2016 revealed the limits of Francis’s justice system when judges admitted they had no jurisdiction to convict the two authors. Since then, Francis has beefed up the court’s credentials by appointing a new president, Giuseppe Pignatone, a former anti-mafia prosecutor who rattled the Calabrian ’Ndrangheta so much they sent him a bazooka to show what they planned to do to him.

The Becciu probe has looked very much like a classic Italian investigation, with reams of documents, including 30,000 pages of evidence on top of the indictment, and juicy titbits popping up in the Italian press. But London broker Mincione claims the court has one serious limit. “I do not think that the prosecutors understand the world of finance,” he said this week, after reading the indictment.

Mincione has asked a British court to run its own checks on his handling of the Chelsea investment and expects a decision as to whether it will do so on October 25. “I am confident it will take jurisdiction and I expect that the English court will determine the agreements were properly executed by the Vatican’s duly authorised agents,” he said.

Which all adds up to an interesting autumn for Pope Francis, who will be keeping a close eye on the trial, and his legacy, as he tries to bounce back from his colon surgery with a slew of foreign trips.

“Too often the Vatican has been accused of making new rules on transparency but never applying them. None of them make a blind bit of difference if no one is held to account,” Condon says. This trial could be the turning point, he argues. “This Pope has promised more financial reform than either Benedict or John Paul before him. If he can see this trial through he can claim promise fulfilled.” But even if the Vatican’s case turns out to be solid, the ageing pontiff faces a long and arduous journey before he can claim victory.

Tom Kington is Italy correspondent