Diocese: Vatican Recommended Indicted Developer

By Geoff Mulvihill

July 16, 2008,0,192203.story

MOUNT LAUREL, N.J. - The Follieri Group's first call to Camden Roman Catholic Bishop Joseph A. Galante back in 2004 went unreturned.

But the next call regarding the fledgling land developer got the bishop's attention: It was from the office of the Secretary of State at the Vatican, according to the diocese.

"He was told about the work of the Follieri Group and the fact that they worked specifically with church organizations, that they did development that would benefit the community," said diocese spokesman Andrew Walton.

The Follieri Group's principal, Raffaello Follieri, best known as the jet-setting former longtime boyfriend of "Get Smart" actress Anne Hathaway, was charged last month with wire fraud, money laundering and conspiracy. Authorities say he improperly spent up to $6 million from investors _ much of it on his lavish lifestyle.

Prosecutors say that Follieri, 30, embellished his connections to the Vatican to make it seem he was so powerful that the Catholic church would sell him property at a discount. While he may not have had the church backing he allegedly told investors he did, the Camden Diocese's experience suggests that at least one official inside the Vatican was willing to help Follieri.

A Vatican spokesman, the Rev. Ciro Benedettini, declined to comment on Follieri's case, citing the ongoing U.S. probe.

The son of wealthy Italian businessman Pasqual Follieri, Raffaello Follieri arrived in the United States about five years ago with a bold plan to develop properties no longer needed by Roman Catholic churches in the U.S.

As Catholics move from big cities in the Northeast and Midwest, churches have consolidated, leaving many parishes with vacant property on their hands. In some areas, such as Boston, churches needing money to pay big settlements to victims of sexual abuse by priests have used the sale of church property toward those debts.

Follieri's group promised to share the values of the Catholic church and to turn the properties into affordable housing, day cares and other community assets. It also proposed using some of its proceeds to fund a foundation that would help the poor.

One of his Follieri's employees was Andrea Sodano, the nephew of the Angelo Cardinal Sodano, who was the secretary of state at the Vatican.

Jim Goodness, a spokesman for the Newark Archdiocese, said that Follieri mentioned his Vatican connection when he met with officials in the archdiocese. But Goodness said the church never heard from the Vatican on Follieri's behalf.

Goodness said Follieri's purported dealings with Rome did not impress Newark officials, neither did his reluctance to pay top dollar on properties.

"Every time he did offer us a proposal, it was woefully inadequate against property value," Goodness said. "He low-balled every single thing."

As a result, he never bought property from the Newark Archdiocese.

Walton said the Camden bishop's office received a call from someone in Cardinal Sodano's office in the fall of 2004 suggesting the diocese consider doing business with Follieri.

Walton said he didn't know the caller's name, but believes the office contacted other U.S. church officials around that time as well.

The Camden diocese was encouraged, but not pressured, to do business with Follieri, Walton said.

"The bishop was contacted and encouraged by the Vatican to use the Follieri group where it made sense _ if it made sense locally in our own diocese," he said.

The diocese never sold property to Follieri, though Galante last year sold his personal home a few blocks from the beach in North Wildwood to a partnership controlled by Follieri for $400,000 _ $100,000 less than the bishop asked when he put the property up for sale the previous summer.

Besides some Catholic church officials, the young businessman impressed such investors as Ron Burkle, a California dealmaker and confidante of former President Clinton. Burkle's Yucaipa Cos. invested $60 million in a partnership with the Follieri Group.

But the business never seemed to catch on.

The joint venture with Burkle's Yucaipa Cos. bought only 11 properties, according to a court document from earlier this year.

Follieri bought two former church properties in Western Pennsylvania in 2007.

In the Diocese of Pittsburgh, chief financial officer Frederick O'Brien said the Follieri Group was widely known to have some Vatican ties. O'Brien said he didn't know if anyone in Rome had a role in setting up a meeting between Follieri and Donald Wuerl, who was then the bishop in Pittsburgh and now the archbishop in Washington.

Soon after the sale, though, Burkle sued Follieri, claiming he had squandered more than $1 million on himself _ for private jets, dog-walking services and other hallmarks of a posh life.

After the suit, O'Brien said, work to redevelop the former church land never got going.

O'Brien said it appears it was investors more than U.S. churches who may have been taken by Follieri.

"It was never anything that immediately affected us or that we would have called scandalous or harmful to the diocese," O'Brien said.

Last month's federal criminal charges against Follieri echoed some of the claims Burkle made in civil court last year.

Prosecutors also said he paid two monsignors to travel with him and once even asked a monsignor to change out of his robes and put on the robe of a more senior clergyman to create the impression that Follieri had close ties to the Vatican.

If convicted on all counts, Follieri could face up to nine years in prison. His lawyer, Flora Edwards, did not return a call Wednesday.

Some Roman Catholic scholars say Follieri's way of doing business _ and his possible aid from someone in the Vatican _ can be explained by cultural differences.

"This is very Italian," said the Rev. Thomas Reese, a senior fellow at Woodstock Theological Center at Georgetown University. "You do business with friends, you recommend friends and relatives."


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