‘Computer Coding Error’ Responsible for Claims of Massive Transfers of Vatican Funds to Australia

In a Jan. 13 statement, the Vatican said the new figure is “attributable, among other things, to some contractual obligations and the ordinary management of its resources.”

St. Peter’s Basilica is seen across the Tiber River.
St. Peter’s Basilica is seen across the Tiber River. (photo: Helena Volpi / Pixabay)

Reports last month that $1.8 billion had been transferred from the Vatican to Australia in recent years were incorrect and due to a “computer coding error,” Australia’s financial crime regulator has said.

Austrac told the Australian Senate it had significantly overestimated the transfers, and that instead only $7.4 million was transferred from the Vatican to Australia from 2014 to 2020. The number of transfers was also 362 as opposed to the 47,000 that the regulator had originally reported. 

The computer coding error was believed to be the source of the miscalculation along with the inclusion of financial transfers to Italy in transfers to the Vatican City State, The Australian newspaper reported.

The news comes after weeks of collaboration with the Holy See Financial Information and Supervisory Authority into the alleged transfer of funds. 

The original Austrac figure, which baffled Vatican officials and the Australian bishops, came in answer to an Australian senator’s query that wire transfers from the Vatican to Australia could have adversely affected the trial of Cardinal George Pell. 

The transfers had appeared to peak in 2017, the year Cardinal George Pell, then the Vatican’s treasurer, returned to Australia to face trial on sexual abuse allegations. 

 In a Jan. 13 statement, the Vatican acknowledged the significance of the discrepancy and said the new figure is “attributable, among other things, to some contractual obligations and the ordinary management of its resources.” 

It added that “on this occasion, the Holy See reaffirms its respect for the institutions of the country and expresses satisfaction for the collaboration between the Holy See and Australia.” 

But Austrac confirmed that despite the massive miscalculation, investigations were continuing into “specific transfers from the Vatican to Australia,” according to The Australian, which also reported that Vatican prosecutors are currently examining “hundreds of millions of dollars in fraud and money laundering.” 

It added that Australian Federal Police and the Vatican’s financial intelligence unit were continuing to investigate four transfers from the Vatican Secretariat of State to Australia, including two from Cardinal Angelo Becciu, between 2017 and 2018, totaling $1.5 million. 

Pope Francis dismissed Cardinal Becciu, who served as deputy Secretary of State from 2011 to 2018, last September. The reasons for his dismissal were not specified but reports have associated him with multiple financial scandals including a failed London property deal that cost the Vatican at least €150 million — allegations of financial corruption the cardinal has strenuously denied. 

Cardinal Pell, who was prefect of the Secretariat for the Economy from 2014 to 2017 and had his conviction for sexual abuse overturned last year, told Reuters on Wednesday he was “relieved to hear that billions were not laundered through the Vatican” while he served as prefect.

Questions also remain about the unaccounted transfers which, according to informed sources, are documented and part of the Vatican’s internal investigations and are expected to be presented at a promised trial to hear corruption allegations against Cardinal Becciu as well as five accused former Vatican officials.

But prosecutions against financial crimes in the Vatican are rare and it’s not clear if such a trial will ever take place. If it does, it is also unclear whether the Vatican has the competence to deal with issues relating to contractual and commercial law, or match European standards to handle matters relating to financial crime.

Also not everyone is satisfied by the “coding error” explanation. Matthew O’Brien, a Philadelphia-based investment manager and Catholic analyst who advocates for financial reform in the Church, said he was “incredulous that Austrac would have made a mistake of this magnitude due to a simple clerical error in a formal report to parliament.” 

He added that “a lot is riding on what is meant by ‘coding error,’” which he read as a disparity between the practices of Austrac and the Vatican’s financial watchdog in “categorizing the domicile of corporate entities.” O’Brien believes Austrac tabulated the billion-dollar number because it “coded the transfers originating from certain entities in Italy as ‘the Vatican,’” but that Vatican officials “objected,” saying they were “incorrectly coded because they originated in Italy.” 

He said the problem, therefore, is whether certain entities count as “Italian or Vatican,” and gave as one of a number of examples Rome’s Bambino Gesù hospital — an entity that is part of Italy’s national health system, receives Italian and EU funding, is incorporated under Italian law, but is run by the Secretariat of State. 

Should international bank transfers originating from there therefore be “coded” as Italian or Vatican, O’Brien asked. “I don’t know the answers to these questions,” he said, but added that he had “not seen anything yet reported that rules out” a possibility whereby Vatican officials approved billions of dollars of transfers through such Vatican entities. Austrac, he said, might have coded such transfers as coming from such an entity and labelled it “the Vatican” and the Vatican’s financial authority objected, saying it was a “coding error.” 

O’Brien said he considered it “a very good thing” that the Vatican Financial Information and Supervisory Authority and Austrac are “working together” as “there is still much that needs to be clarified and resolved.”