Pope Francis Turbocharges Financial Reform

The extensive reporting by the ‘Financial Times’ about a shady Vatican land transaction in London, and the pandemic’s restrictions, have combined to focus the Holy Father’s attention on this area.

Pope Francis holds his weekly General Audience in the Library of the Vatican’s Apostolic Palace on May 5th, 2021.
Pope Francis holds his weekly General Audience in the Library of the Vatican’s Apostolic Palace on May 5th, 2021. (photo: Mazur/catholicnews.org.uk. / Vatican Media)

The Vatican has four official specially designated years on the go — Our Lady of Loreto, St. Joseph, Amoris Laetitia, Laudato Si — but in practice, the last 15 months have been an extended and intensive year of the Holy Father’s financial reform.

In 2020 and 2021, Pope Francis promulgated six legislative acts — apostolic letters issued “motu proprio” —  mandating significant reforms related to finance, accountability, transparency, procurement, corruption and prosecution. In addition, he fired his former chief of staff, Cardinal Angelo Becciu, on suspicion of financial corruption, stripped the powerful Secretariat of State of all management of assets, and restored the office of the Vatican’s auditor general. 

The latest reforms, announced in the final days of April, ban the “envelope culture” of gift-giving in the Vatican. Now, no official may accept any gift worth more than 40 euro. That means pranzo for two with antipasto and pasta only, no second course. 

The practice of giving generous gifts to Vatican officials has been in bad odor recently due to the largesse of quondam cardinal and laicized priest Theodore McCarrick. The grand master of greasing the skids was another abuser, the late Father Marcial Maciel, founder of the Legionaries of Christ and arguably the greatest fraudster in the long history of the Church. Cardinal Joseph Ratzinger was noteworthy for being one of the few who refused his gifts.

In fairness, envelopes of cash were used by many prelates for honorable purposes, passing on money to those in need. During the John Paul years, it was common for bishops from behind the Iron Curtain or from poor dioceses to receive thousands in cash from the papal household itself, when official channels were blocked by state authorities. And there are more than a few senior curial prelates who live simply and are very generous with funds that come their way.

Nevertheless, the line between gift-giving and bribe-making is a fine one, and the Holy Father’s reforms make it mandatory for Roman officials to stay far away from it. 

Those same senior officials are now liable, should they ever face prosecution, to appear in the Vatican’s regular courts. Cardinals and bishops had previously had the privilege of only being tried in the Vatican’s highest criminal court, which is presided over by fellow prelates. Now lower Vatican tribunals, presided over by lay magistrates, are able to try prelates — if the Holy Father gives his approval.

Practically speaking, prosecution of prelates in the Vatican tribunals — rather than canonical processes in the various Vatican congregations — is very rare. The change made by Pope Francis may indicate that there may be such trials on financial matters in the future.

What turbocharged the year of financial reform? 

Most of the reforms advanced in the past year by Pope Francis were suggested, or even initiated, by Cardinal George Pell in his years as prefect for the economy, 2014-2017. Some of those reforms were implemented but then reversed, while others were blocked by then-Archbishop Becciu. By the time Cardinal Pell returned to Australia to contest the false allegations against him in 2017, it seemed that the reform would be left to wither in his absence.

It seems the catalyst was the Times — and timing.

In December 2019, the Financial Times of London published a series of articles on a dodgy real estate transaction in London’s prestigious Sloane Square. Both the transactions and the authorization of them seemed irregular, and initial indications were that the Secretariat of State had used charitable funds for a speculative real estate investment. Efforts had been made to hide the transactions off the Vatican books. Hundreds of millions of euros were at stake.

This was no longer a matter of Cardinal Pell’s watchdogs raising an alarm, as they had done on the Sloane Square purchase, nor was it a matter of questions being asked in the Catholic press. The Financial Times is read by every regulator and investor in Europe; if what they had printed was true, the credibility of Vatican finances was at stake, and its capacity to participate in international financial bodies. 

Only a few months after the Financial Times stories, the pandemic hit Italy hard. Much Vatican activity was shut down. Revenues plummeted. It was a time of financial stress — and the Holy Father now had time available to focus his attention on the matter. He did so with a remarkable intensity, producing new financial legislation in his series of “motu proprio” letters. Much of it was about introducing best practices already common elsewhere, for example, putting contracts out for tender, with independent evaluation of the bids.

Some reforms were earthquakes in the curia, like the decision to strip the Secretariat of State of control over all assets. The Sloane Square debacle meant that the curia’s most powerful department would never again be trusted with the power of the purse. It may be that criminal trials are pending in that matter. 

The sacking of a curial cardinal, and a removal of his cardinalatial privileges, was another such earthquake. There was no precedent, and that the Holy Father defenestrated Becciu without warning suggests that the allegations against him are grave.

The most recent requirements, that senior prelates must disclose their financial holdings and attest that they have no irregular financial dealings, is another step in that direction. Financial disclosures are routine in secular governments; they are a novelty for the Vatican.

Finally, another Pell initiative that did not advance in earlier years is now established. Vatican investments must now conform to Catholic morality and social teaching. No more investments in Elton John biopics, or in pharmaceutical companies that produce contraceptives or abortifacients. 

The year of financial reform is already past 365 days. It may well not have an end date.

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