ROME – Pope Francis has stripped of its significant financial assets from the Vatican’s most powerful office, the Vatican said Monday after dubious investments wasted millions of euros on church donations, sparking an embarrassing scandal and sparking an ongoing corruption investigation.
A new law passed by the Pope orders the Secretariat of State, the diplomatic and administrative arm of the Holy See, to transfer all of its financial and real estate holdings to another office, the management of the legacy of the Apostolic See, which manages the finances of the Vatican by February 4th.
The changes, contained in a law released Monday, follow an investigation by the Vatican into the mismanagement of funds in the State Secretariat.
One of the State Secretariat’s most significant investments was the purchase of a London property, part of which was bought with funds donated by the faithful.
In October 2019, as part of an investigation into the purchase, Vatican prosecutors ordered a raid on the offices of the Vatican Banking Authority. The investigation resulted in the resignation of the Vatican security chief, the dismissal of several Vatican employees and officials and the arrest of an Italian banker involved in the transaction.
However, no one was charged in the case and the banker was released.
The changes announced on Monday are also in line with Francis’ agenda to reform the administration of the Vatican, a task that has proved a significant challenge in the nearly eight years since Francis became Pope, also due to the setback by the Vatican bureaucrats .
A preamble to the law states that the decision to withdraw the funding of the Secretariat was taken in order to “better organize the administration, control and supervision of the economic and financial activities of the Holy See”, “more transparent and efficient administration” and ensure a “clear” administration separation of responsibilities and functions. “It has been found that other departments are already dealing with financial and economic matters.
The law also calls for the creation of a new donation fund for the Pope, previously administered by the State Secretariat, to ensure “more control and better visibility,” the Vatican said. The Vatican Ministry of Economics will oversee spending.
The Vatican said the change would allow the secretariat of state to assist the pope and his successors “in matters of greater concern to the good of the church”.
“It is a step that configures a rather significant downsizing of the State Secretariat,” said Sandro Magister, who writes a widely read blog about the Vatican. “The Pope has outlined the process fairly precisely and validly,” he said, referring to the Vatican code.
The law formalizes in a letter to the Secretary of State, Cardinal Pietro Parolin, what the Pope initiated last August and calls for the transfer of the property of the Secretariat to the management of the legacy of the Apostolic See. In the letter, Francis referred to the “reputational risks” the Secretary of State had suffered from investing in London’s real estate business as well as a Malta-based investment vehicle.
In September last year, Francis abruptly fired Cardinal Giovanni Angelo Becciu, the secretariat of the former state chief of staff, on allegations of corruption in the London real estate business, which alleged Vatican prosecutors were saying church hemorrhagic money while enriching middlemen. The judicial authorities of the Vatican and Italy are continuing to investigate this deal as well as other financial transactions. Cardinal Becciu has denied any wrongdoing.
In November, Francis reiterated his request that the Secretariat of State divide up its assets and appointed a commission to carry it out. With the new law that the Pope signed over the weekend, Francis gave specific instructions on how this transfer would take place.
Although the scandal seemed to prompt the Pope’s decision, Francis made reforming the Vatican’s administration and finances a core part of his papacy.
Francesco Clementi, a law professor at the University of Perugia who has written a book on the organization and laws of the Vatican, said: “In restructuring the Vatican’s finances, Francis chose criteria that were understood by the world’s economic and financial community become a strategy of clarity and transparency. “
Since Francis became Pope, he has said: “His Church has adopted a number of agreements and documents to bring the Vatican’s economic and fiscal discipline into line with the rest of the world.”
The new law effectively adopts the recommendations of Cardinal George Pell, Francis’ first Secretary of Commerce, who repeatedly clashed with State Secretariat officials to gain better control over all of the Vatican’s finances. In a 2014 essay, Cardinal Pell complained that some Vatican departments had “almost a free hand” in their finances.
The cardinal’s reform efforts were halted when he was forced to return to Australia in 2017 to face charges of sexual abuse of a minor. His conviction was broken earlier this year and he returned to Rome in September.
“We are going back to the original project that Pell implemented and that was severely and even violently foiled by the Secretariat and other Vatican departments,” said Magister.
“Pell has been pushed back and it must be said that the Pope followed these attempts to block him and withdrew the powers that he had first given to the cardinal. Now Pell has been confirmed, ”he said.