Kafkaesque start to hearing of Vatican auditor dismissal suit

Lawyers representing not one but three Holy See departments lined up against Libero Milone, the former Deloittes CEO.

Pope Francis meets Libero Milone at the Vatican in 2016. Picture: Reuters

Bullying, delaying tactics, overt threats and a never-ending barrage of procedural hurdles characterised the first hearing in the €9m ($13.7m) lawsuit for wrongful dismissal brought by the Vatican’s first independent auditor-general.

Lawyers representing not one but three Holy See curial departments lined up against Libero Milone, the former Deloittes chief executive who says he was marched out of his office, accused of spying by Vatican gendarmes in 2017 and forced to resign after unearthing high-level corruption.

Mr Milone, with his deputy, Ferruccio Panicco, a financial risk specialist, formed part of a team appointed personally by Pope Francis to work alongside the late Australian cardinal George Pell to clean up the Vatican’s accounting and investment systems.

The two men filed their wrongful dismissal suit last November and were promptly faced with a counter-shot from Vatican prosecutors, who threatened to reopen shelved criminal accusations that they had delved into the private financial affairs of senior curial officials. The deputy secretary of state at the time, Cardinal Angelo Becciu, is now himself facing charges of embezzlement.

During a late-afternoon hearing this week, lawyers for Secretary of State Pietro Parolin began proceedings by suggesting their department was the wrong one to be sued for dismissal because Mr Milone had “no working relationship” with it, arguing his contract was with the Council for the Economy. This, however, appears to contradict documents that show Mr Milone was appointed by a papal decree to maintain his independence from all departments and that this was signed by Cardinal Parolin.

The case entered a Kafkaesque chapter when the Vatican’s Office of the Auditor- General claimed they had no record of the more than 500 pages of documents – but then added that they had not had adequate time to peruse the files. The files were provided to the court on January 18, Vatican lawyers told the court, but only a few belong to the Office of the Auditor-General, leading to what they described as the “well-founded hypothesis that the documentation is not authentic”.

However, according to Mr Milone’s lawyer, the Vatican has had access to all documents for some time: copies had been seized from his office in the Vatican in 2017 by the Holy See’s Promoter of Justice, and were also provided to Cardinal Parolin during his tenure as auditor, long before the lawsuit was filed.

Mr Milone has made clear that the dossier of documents contain evidence of acts of embezzlement by senior curial officials, including cardinals, as well as the use of Vatican institution such as hospitals to launder money. He has also alleged that the former head of the gendarmes, Domenico Giani, played a key role in his removal because he uncovered corruption within the force. Documents seized during the raid included Mr Panicco’s personal medical records, leading to a significant delay in cancer treatment after his dismissal.

Mr Milone has always insisted he did not wish to implicate individuals or name names, but remains equally adamant that he should be able to clear his professional reputation in an open court.

The hearing took a bizarre turn when Vatican chief prosecutor Alessandro Diddi, who is running the case against Cardinal Becciu, told the court that his office would become a party in the wrongful dismissal suit because it was a “matter of public interest”.

Mr Diddi argued this was due to an alleged abuse of office by public officials but then added that this did not just relate to those who forced Mr Milone and Panicco out of office but to the auditors themselves for alleged “theft of official documents”.

Judges were also urged to dismiss the case because the statute of limitations for wrongful dismissal had expired, while Mr Milone’s lawyer countered by outlining the Vatican’s delaying tactics, designed to interrupt the process. This included an unprecedented refusal to allow him representation by a second lawyer, Romano Vaccarella, who is not only a former judge on the Italian constitutional court bench but has spent the past two years advising Mr Milone on his case.