Cardinal Pell Announces Vatican Financial Reforms

Appointing a new director of the Vatican Bank and the hiring of a British peer to consult on Vatican media operations are among the developments in the ongoing reform of the Roman Curia.

Cardinal George Pell
Cardinal George Pell (photo: CNA file photo/Matthew Rarey)

VATICAN CITY — The first significant developments in Pope Francis’ efforts to reform the Roman Curia were revealed at the Vatican Wednesday, including the appointing of a new president of the Vatican Bank and the hiring of a British peer to advise on reforming the Vatican’s media operations.

The initial reforms, announced by Cardinal George Pell of Australia, will focus on: the Administration of the Patrimony of the Apostolic See (APSA), which handles assets belonging to the Holy See, the Holy See’s media operations, the Institute for Works of Religion (IOR), commonly known as the Vatican Bank, and the Vatican pension fund.

“A vast amount of planning has been done,” Cardinal Pell, who is prefect of the new Secretariat for the Economy, told reporters at a Vatican briefing this afternoon. “We’re benefiting from that, and we’re starting to roll that out.”

He explained that, based on a motu proprio (a document released on his own initiative) that Pope Francis issued today, the APSA — a department at the center of allegations of financial misconduct in recent years — will be split in two, with one part transferred to the new Secretariat for the Economy to enable “economic control and vigilance.”

The remaining staff of the department will begin new roles, working exclusively as a treasury and central bank for the Holy See and Vatican City State. One of their key tasks will be to establish working relationships with central banks around the world.


General Auditor

In further financial reforms, Cardinal Pell said that annual reports of Vatican finances will be “audited externally,” and  he hopes to appoint an auditor general who will be “independent” and “able to go anywhere and everywhere.”

He stressed that other efforts are continuing to ensure that “international financial standards” will be followed in all sections and dicasteries of the Holy See and the Governatorato (the governing body of Vatican City State).

“We’re not quite at that stage, but that’s the explicit goal to which we are heading,” he said. “We hope to be a model for financial management, rather than a cause for financial scandal.”

In other changes, the Secretariat for the Economy, along with each department and administration, will prepare its own budget to be followed. Internal communications will also be improved within the Vatican’s financial structures, including the publication of a monthly bulletin and regular updates.

The IOR will be scaled down in its second phase of reform, shifting its assets into a newly created structure called Vatican Asset Management. It will focus more on providing financial advice and payment services for clergy and lay Vatican employees.

Cardinal Pell also announced that Pope Francis appointed Jean-Baptiste de Franssu, who heads a mergers and acquisitions consultancy firm, to take over from Ernst von Freyberg as president of the institution. A Frenchman married with four children, he is also a member of the pro-life World Youth Alliance board.


New Pattern of Cooperation

De Franssu has been appointed with the explicit task to oversee the second phase of IOR’s reform and told today’s press conference that he wishes to continue efforts to increase the IOR’s transparency. Over the next three years, he will oversee revision of the IOR’s statutes and operations.

Imminent reform includes a new general pattern of clerical-lay expert cooperation. Although the exact nature of this new structure is yet to be determined, six new lay members will be appointed to the board of the Vatican Bank, including Harvard professor Mary Ann Glendon and the British-Australian financier and Vatican patron of the arts Sir Michael Hintze.

“The IOR is in a phase of peaceful transition,” said Cardinal Pell, who commented that “excellent progress” has been made through adherence to international standards. “The resultant transparency is evident,” he said.

Von Freyberg told reporters that, under his watch, the IOR investigated “every single client” and “knows all” of its 18,000 clients. It also investigated “legacy cases with which IOR is burdened,” and he recalled various measures, such as the publishing of annual reports, that have increased transparency.

He highlighted a number of “good surprises” during his 18-month tenure, most notably that there are no numbered accounts, no large amounts belonging to Italian families, politicians or bad organizations, and that “no one” blocked his investigations.

“We found it quite easy to do what we’ve done,” he said. He also praised the media for their diligence and dedication to searching for the truth without an agenda — another welcome surprise for him.

Concerning the Vatican’s pension fund, Joseph F.X. Zahra, deputy coordinator of the Council for the Economy, announced the Vatican had set up a “technical committee” to study the current situation and make proposals to the Council for the Economy before the end of the year.

He said its anticipated new statutes will be prepared over the next six months to adapt the fund’s organization to the Holy See’s new economic-administrative structure. He also reassured fund holders their pensions were secure in today’s changing environment.


Media Operations

Concerning reforms to the Vatican’s media operations, which have long been criticized for unnecessary duplication and inefficiency, Cardinal Pell said a committee has been established to propose — though not implement — reforms over the next 12 months.

British politician Lord Chris Patten, a former governor of Hong Kong and, until earlier this year, chairman of the BBC Trust, will head the committee that will comprise a mix of Vatican staff and senior international experts.

As chancellor of Oxford University, Patten is one of Britain’s most prominent Catholics. Although he is recovering from heart surgery, he told the Financial Times that his new role is “an important and challenging part-time assignment over the next year” and that he is “looking forward to beginning work in late September.” He said the committee will look especially at developing a digital strategy and ways for the Church to evangelize.

Cardinal Pell said the aim is to “sensitively and progressively” make “significant saving of funds” in Vatican communications, as well as improve coordination and create a “more balanced expenditure.” He said patterns of Vatican expenditure on media “in no way correlate to the number of people who are reached” and that there is a need to “enhance coordination” and “diminish replication.”

Said Cardinal Pell, “We want to build on very recent positive experiences, such as 'The Pope App' and the Holy Father’s Twitter account.”


Edward Pentin is the Register’s Rome correspondent.