The General Curia of the Order of Friars Minor has driven the most prominent branch of the Franciscans to near-financial ruin because of a series of poor investments and general financial mismanagement.

In a letter sent to its members Dec. 17, Indianapolis-born Brother Michael Perry, minister general of the Franciscan order since May 2013, revealed that an internal investigation begun in September 2014 found the order’s General Curia to be in a “grave” situation, thus putting the entire order at risk.

“I underscore ‘grave’ financial difficulty,” he wrote, and explained this has been caused by systems of management and oversight that have been “either too weak or were compromised.”

He also blamed the dire situation on a “number of questionable financial activities” that were conducted by friars “entrusted with the care of the patrimony” of the order, but “without the full knowledge or consent” of the former or current board of advisers.

Brother Perry further noted “the significant role that external actors, people who are not members of the order, have played in creating this grave situation.”

The financial difficulties, which the Register has learned include debts amounting to $37 million, have transpired despite the Order of Friars Minor possessing a substantial patrimony that includes custody of all the main Christian holy sites in the Holy Land.

Much of the blame has been assigned the Order’s general treasurer, Father Giancarlo Lati. Brother Perry said Father Lati has resigned and been replaced by the assistant general treasurer and two friars, one of whom has “expertise in economic and organizational affairs.” They began their efforts to clean up the financial situation in October.

Informed sources, speaking on condition of anonymity, have also said Brother Perry’s predecessor, Archbishop José Rodríguez Carballo, must share some of the blame. Most of the financial mismanagement occurred under his watch, before he was made Secretary at the Congregation for Religious in 2013.

The financial problems have come to light now because Brother Perry is thought to naturally want to put a distance between himself and his predecessor, given that the malpractice occurred before he took over as minister general last year.

The Register has learned that one investment that has allegedly squandered millions of dollars from the OFMs is a plush hotel just outside the Vatican walls called Il Cantico (The Canticle). Father Lati reportedly took charge of running it himself, including overseeing expensive renovations. A source close to the Vatican remarked dryly: “That’s not the most holy sacrifice to place on the altar of lady poverty.”

In Dec. 22 comments to the Register, Ettore Gotti Tedeschi, a former president of the Vatican Bank whose attempts to clean up Vatican finances led to his sudden and largely unexplained dismissal in 2012, said he knows little about the Franciscans’ finances except what he’s read in the newspapers. But he added: “The problem with religious orders is that they do not know how to administer resources and rely on ‘scoundrels’ who prey on them.”

Catholic observers are now wondering why a religious order, particularly the Franciscans with its tradition of material detachment, is making such speculative investments.

The Register tried to contact Archbishop Rodriguez for comment but he was unavailable.