Vatican trial: the moment of truth for God’s bankers
At the heart of a Vatican corruption megatrial is evidence of what happened to millions in charitable donations from the faithful in a case that will rock the Catholic Church.
Almost 300 years ago, Pope Clement XIII, a pious Dominican indifferent to matters temporal, handed over governance of the Papal States to a favoured prelate. It would not end well.
Niccolo Coscia abused his power and quickly amassed a personal fortune until a new Pope charged him with a litany of monetary crimes, among them simony – the buying and selling of ecclesiastical privileges and funds.
When Cardinal Angelo Becciu stepped into the witness box on Thursday in Rome and insisted he had done nothing wrong, he made history by joining his less-than-illustrious predecessor to become only the second cardinal ever to be hauled to court to answer claims of financial corruption.
Becciu was sacked by Pope Francis in September 2020 after Vatican prosecutors investigating the Secretariat of State, his former department, presented a file bulging with evidence against him, including the funnelling of hundreds of thousands of euros into companies owned by family members. In July last year, after a long and complex investigation into a web of murky deals, Italian authorities charged the disgraced cardinal, the highest profile of 10 defendants, with a raft of allegations of abuse of office, embezzlement, and obstruction of justice.
At the heart of the megatrial is evidence that millions in charitable donations from the faithful, held in a fund known as Peter’s Pence, was funnelled into speculative commercial investments, including acquisition of a $400m property at 60 Sloane Avenue in London’s fashionable Chelsea.
A former Harrod’s showroom, it was to be converted into luxury apartments until the deal turned sour, forcing the Vatican to pay out millions to extricate itself and selling at a huge loss.
The probe by prosecutors has required examination of thousands of documents, analysis of electronic equipment sequestered from suspects, and detailed comparisons between statements provided by a long line of witnesses.
Among those facing charges alongside Becciu are Gianluigi Torzi, who acted as broker when the Vatican bought the London building and then demanded a huge payment to hand over the keys, and Enrico Crasso, another fund manager who used Vatican money to finance Hollywood films, including the Elton John biopic Rocketman. Then there is Cecilia Marogna, a self-described “geopolitical security analyst” who hailed from Becciu’s home island of Sardinia and offered the Cardinal and his Secretariat “intelligence services”. And also broker Raffaele Mincione, who advised the Vatican to underwrite a vast slab of the fund that owned the London property and promptly used the money to finance his own speculative investments.
Lawyers for several of the accused have spent months arguing the legality of the investigation. There have been accusations of spying and counter accusations of widespread illicit bugging, claims which climaxed spectacularly when Becciu’s own deputy, Monsignor Alberto Perlasca, became the prosecutors’ star witness.
Despite the legal theatrics, Judge Giuseppe Pignatone surprised even seasoned commentators on March 2 when he threw out all pre-trial motions seeking dismissal of the charges. The judge provided detailed reasons in a 48-page statement paving the way for Becciu’s first historic appearance in court this week.
When it comes to the Vatican, truth is often far stranger than fiction and details of a further report prepared by Becciu’s successor, Archbishop Pena Parra, in 2018 and released last in April last year added the very real possibility that Pope Francis had no choice but to cut the Vatican’s losses and pull out of the soured London deal.
Edward Condon, a canon lawyer and founder of the Catholic website The Pillar, told The Weekend Australian that many observers had watched the procedural wrangling of the past few months and expected the entire case to “collapse like a souffle”.
“But it cannot. The Vatican as an institution and as a government – as well as Pope Francis’s reform credentials – are all on the table now. A Rubicon was crossed with the indictments last year and you simply cannot charge a cardinal – one who occupied a senior position of such importance as Becciu did for so long – and not come to a resolution one way or another,” he said.
“With the revelations of Becciu and Perlasca in the public eye, a long charge sheet and a rolling series of hair-raising revelations and accounts of financial processes nobody would recognise, not even in a Dan Brown novel … once out, it must be resolved.”
Condon added that at one point there was even “discussion of boxes of gold and silver coins being brought up from the cellars of the Vatican bank”.
“The credibility of the Vatican as a financial actor on the international scene is on the line and there is a lot more at stake here than a few priests,” he said.
According to Condon and other veteran Vatican observers, the London property deal sits front and centre of public interest in the court proceedings but in the longer term, it might end up being incidental to the bulk of the criminal allegations being brought to trial.
In his own report, Parra himself described 60 Sloane Avenue as just one of a series of terrible financial deals where Secretariat of State officials “aimed at speculation and not at the conservative and safe preservation of Vatican funds”. Parra reported that questions asked were inevitably followed by attempts to bamboozle or stonewall his investigatory work. Among the many examples cited in his and the prosecutor’s 300-page indictment document is the astounding investment of millions into a South Carolina highway project that turned out not to exist.
And it is here that Parra’s experience on arriving at the Secretariat tallies pretty much with the experiences of other reformers, chief among them Cardinal George Pell, appointed by Pope Francis in 2014 to bring the Vatican’s antiquated and sclerotic financial systems into the 21st century.
Installing the brusque, unpopular Australian in the engine room of a Vatican financial clean-up was one of Pope Francis’s first reformist acts and was followed by his appointment of Libero Milone, Italian although Dutch-born and London-educated former president of Deloitte, to become the Vatican’s first independent Auditor-General.
For the first time, the most senior Roman Curia, those who had long handled and dealt with the Vatican’s money without any external oversight, were forced to report to outsiders and, in Pell, a non-Italian prelate to boot.
For his part, Pell had moved swiftly, firing a pointed salvo in December that first year by revealing to Britain’s Catholic Herald that he had discovered “some hundreds of millions of euros tucked away in particular sectional accounts which did not appear on the balance sheet”.
And yet despite the authority vested by Pope Francis in Pell, Milone and their professional financial teams, it is now well known that they too came up against a modus operandi characterised by co-ordinated obstruction and obfuscation, defiant noncompliance with requests to produce paperwork or outright refusal to co-operate at all.
In his 835-page tome, The Vatican’s Black Book, Italian investigative journalist Gianluigi Nuzzi documents more than 50 years of financial skulduggery by sections of the Roman curia to avoid proper scrutiny. One vast section recounts Pell and Milone’s credible but imprecise early suspicions that hundreds of millions of euros belonging to the Vatican may be contained in secret accounts held by two private Swiss banks.
And The Weekend Australian reported that in October 2016, Pell even flew to London and held a secret, informal meeting with Australian bankers in London’s financial district to share his and Milone’s growing suspicions.
Not long after, Pope Francis himself granted Pell and Milone permission for the drafting of a formal, rogatory letter demanding legal access to documentation related to the funds.
Pell reportedly told senior members of his team that those they were investigating were “nervous, we’ve got them on the ropes … we were asked to clean up the stables and now we must try to deliver”. But more months would pass and none of the documents requested were forthcoming. The complexity and intricate network of trust funds hiding the funds appeared to be impenetrable.
And then, on June 19, 2017, the bombshell: a meeting between Becciu, then deputy secretary of state, and Milone – ostensibly called to discuss the employment contracts of a couple of his staff – turned into high drama. Becciu not only accused the Pope’s auditor of espionage and embezzlement but subjected him to nine hours of interrogation by Vatican police, threatening legal action if he did not resign. A shellshocked Milone quit and a week later Pell was asked to return to Australia, accused of covering up the sexual abuse of minors and to answer historic allegations that he himself had perpetrated such acts.
The revelations of high-level financial corruption that sparked the current trial in Rome have raised a raft of wider questions for Becciu, including speculation about the questionable behaviour of the curial officials who opposed Pell and Milone’s external audits of Vatican finances. Chief among unanswered questions are Becciu’s personal authorisation of the transfer of $2.3m in Vatican funds to the Melbourne office of Neustar, a tech company named in an emerging US political scandal linked with alleged Russian interference in the US general election. Its timing coincided with Pell’s trial and the money was at first said to have been for his legal defence, which was shown to be untrue.
Since his acquittal and release from prison, Pell has challenged Becciu publicly to “answer one question”: “Will he just tell us what the money was for?” Becciu at first responded that answering such a question was “beneath his dignity” – but last week he professed to welcome the trial and the opportunity to prove his innocence.
Condon and fellow Vatican specialist Sandro Magister agree the authorisation of this transfer to Melbourne and the wrongful accusations of spying and the forced resignation of Milone is just one of a vast array of questions facing Becciu in the coming trial.
“There has been a lot of speculation about that mystery payment and it’s not difficult to find lurid conspiracy theories about the buying of testimony against Pell or attempts to gee up public antipathy,” said Condon. “I have no honest understanding of what that money might have been for but I do have a lot more faith in the Australian system of justice than that. In the end, however, no explanation has been forthcoming: we need an answer from Becciu.”
Similarly, Condon and Magister believe that Becciu must be compelled by the trial to answer why Milone, appointed to be an independent financial watchdog, was systematically undermined and forced to resign in the wake of “invented accusations”.
The harsh reality is that the Vatican is facing grave financial difficulties and has reported financial deficits for a decade. Before Covid, this amounted to abound €20m a year and it has now ballooned to about €30 to €35m annually. Vatican pension funds are also depleted with experts estimated that by 2030, it could be €800m in the red. The financial scandals saw some €217m lost on the Sloane Avenue deal in London and commentators agree that over the past 25 years, financial corruption has cost the Vatican another €100m, and possibly double that.
All of which brings us to this week. After more than four years of media coverage, two years of investigations, and seven months of pre-trial hearings, the trial is finally getting started in earnest.
“Becciu says he looks forward to answering claims,” says Condon. “Yes, there will be a focus on investment policy during his time. But there’s no getting away now from the other lurid and suspicious allegations against him and his former colleagues.”
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