Vatican finance reforms ‘failing’

The Vatican is losing money rapidly because of bad management, dodgy contracts and dipping donations.

Gianluigi Nuzzi, left, and fellow journalist Emiliano Fittipaldi after they were acquitted in the Vatileaks trial in July 2016. Picture: AFP

The Vatican is losing money rapidly because of bad management, dodgy contracts and dipping ­donations, and risks defaulting by 2023, a book has claimed.

Drawing on 3000 confidential documents, Gianluigi Nuzzi writes in Universal Judgment that the Vatican lost nearly €44m last year as its huge and shadowy property portfolio went into the red for the first time.

“Pope Francis’s reforms of the Vatican’s finances are failing, like a plaster placed on a haemorrhage,” Nuzzi told The Times.

In his book, which was released on Monday, he writes that “every reform is anaesthetised, blocked, sabotaged” by insiders.

Nuzzi was a central figure in the Vatican leaks scandal that revealed alleged corruption. He published documents leaked by pope Benedict’s butler in 2012, and later wrote a book exposing greedy cardinals and suspicious deals in 2015 that led to him being tried and acquitted by a Vatican court for publishing confidential information.

His latest book documents the establishment of an emergency task force in the Vatican last year to ward off a financial meltdown as 2018 losses rose to €43.9m from €32m the year before.

“The deficit is recurring and structural, has reached worrying levels and we risk a default if no urgent steps are taken,” according to a confidential note cited in the book, which also quotes officials expressing concern that Vatican staff pensions may be in danger.

One of the main causes is the drop in donations, known as Peter’s Pence, after sex abuse scandals damaged the church’s reputation. From €101m in 2006 donations fell to €70m in 2016, and Nuzzi quotes a document saying that the figure is now below €60m. The shortfall comes as inept managers waste cash and entrenched, privileged prelates resist Francis’s transparency drive.

The book also claims an ­assistant of a friend of Francis who was hired to promote Peter’s Pence failed to raise any money before it emerged that he was under investigation for allegedly brokering bribes in Sicily.

The book includes a list of cardinals whose mysteriously large bank accounts at the Vatican have been closed down since the accession of Francis.

In an effort to improve transparency in Vatican accounting, Francis named Australian cardinal George Pell as his economy minister in 2014. He found more than €1bn hidden off the books and alleged that feuding Vatican departments had hidden money from each other. His campaign came to an abrupt end when he was tried and jailed for child sex abuse in Australia. “Before his arrest, Pell’s work was continuously being sabotaged at the Vatican,” Nuzzi said.

Meanwhile, the return on the Vatican’s financial investments dropped to €14.9m last year from just over €20m the year before. “Only 10 per cent of donations are now used for charity work, as the rest is used to prop up the ­accounts,” Nuzzi said. “It doesn’t help that a lot of accounting work is still written longhand.”

The book pins much of the blame for the cash crisis on shoddy management of the 2926 properties owned by Apsa, the Vatican’s real estate office, which made a loss of €22.6m in 2018 — the first ever year in the red for what Nuzzi called “the financial lungs of the Vatican”.

Universal Judgment reports that 800 of the buildings in the portfolio are empty, and others are rented out free of charge. An internal investigation is under way after officials at the Vatican’s state secretariat are said to have asked the Vatican’s bank to stump up millions of euros to avoid losses on an investment in a London office building.

Pope Francis has been reluctant to raise funds by selling a large expanse of Vatican-owned farmland on the edge of Rome out of fear that the buyer will build on it, the book claims.

The book reveals that the Vatican spent €140m on staff last year, a €2m increase on the year before, with the communications department alone employing 563 people. “The apocalypse is close and nothing is changing,” Nuzzi said. “I have shown the numbers to experts who said if the Vatican was a company it would be bankrupt.”

The Times