VATICAN CITY — A key element in the ongoing Vatican trial over a London property deal that led to massive financial losses for the Holy See is how Vatican officials came to sign off on agreements in 2018 that caused the Vatican the most damage. 

A 487-page indictment published ahead of the trial gives some clue, but a recent decision by the president of the tribunal to formally exonerate Msgr. Alberto Perlasca, the Vatican official who initially signed the 2018 agreements, is generating further questions whether more senior Vatican leaders — possibly including even Pope Francis — were actually the parties who greenlit the damaging financial agreement.

The trial, which began in July and will resume on Dec. 14, has yet to get off the ground after procedural disputes over missing transcripts related to the prosecution’s investigations. These gaps also allowed for four of the original 10 defendants to have their charges at least temporarily dropped, while re-investigations into their alleged culpability are undertaken, leaving just six defendants currently on trial.

They comprise the former deputy secretary of state (sostituto) Cardinal Giovanni Angelo Becciu, who is charged with abuse of office and subornation; the ex-president and director of the Vatican’s finance authority, René Brülhart and Tommaso Di Ruzza, charged respectively with abuse of office and with embezzlement and violating confidentiality; the Vatican’s investment manager Enrico Crasso, charged with fraud; Italian financier Gianluigi Torzi, charged with extortion, embezzlement, fraud, appropriation, money laundering and self-laundering; and Cecilia Marogna, a manager charged with extortion. 

Raffaele Mincione, a London-based investment manager who is a central figure in the London deal, is also having his charges that include fraud and embezzlement revisited. However, his chances of being tried increased last month when his efforts to have a London court rule that he had “acted in good faith” failed. 

The scandal’s origins date back to 2014 when the Vatican’s Secretariat of State invested an initial 200 million euros in a fund operated by Mincione. About half of that money was invested in a prestigious London building and the rest in other investments run by the fund.

The financing came from loans by Swiss banks and off-balance sheet funds belonging to the Secretariat of State’s asset portfolio, funded in large part by Peter’s Pence donations from the faithful.

In November 2018, the Holy See decided to exit Mincione’s fund because the Vatican was losing money on some of the fund’s investments (according to Vatican prosecutors, 18 million euros had already been lost from the Vatican’s original investment). It also decided to buy out the remainder of the London building as the mortgage payments had become too onerous. 

But rather than stem the losses on these investments, the problems multiplied after the Secretariat of State hired Italian financier and broker Gianluigi Torzi to exit the fund and buy the remaining shares of the property. Mincione was a close business associate of Torzi and owed him almost 30 million euros in loans stemming from a failed business venture several months earlier, as reported by the Financial Times. 

Under the deal Torzi brokered, in order to gain outright ownership the Vatican not only had to pay Mincione for his share in the property based on an allegedly inflated valuation (a figure similar to the sum Mincione owed Torzi although both men deny any connection), but Torzi also assumed control of the property investment through a fund of his own. 

According to the Vatican, Torzi then made surrendering control of the property conditional on the Vatican’s payment to him of an allegedly extorted fee of 15 million euros, which it was forced to pay because Msgr. Perlasca, head of the Office of Administration in the Secretariat of State, had signed the contract. 

All told, the Vatican said it had put some 350 million euros into the property which is now expected to sell for two-thirds of that price, incurring a loss to the Holy See of 115 million euros.

For his part, Torzi said last year these charges against him were a “misunderstanding.” 

 

Msgr. Perlasca’s Actions

Last month a Vatican magistrate, acting on behalf of the president of the Vatican tribunal hearing this case, cleared Msgr. Perlasca of all wrongdoing in a decree of dismissal, saying he was unaware of the “activities to which he was contributing” when he signed the termination agreements. The official had already been exempted from having to testify in August 2020 having agreed to be a star witness for the prosecution. 

“The agreements of November 22, 2018 were signed not only without any awareness on the part of the Secretary of State of the existence of 1,000 shares with voting rights” — the means by which Torzi secured control of the London property — “but also due to a decisive work of misinformation, of which Msgr. Alberto Perlasca was himself a victim, of the crime of fraud carried out by a group of persons accused in the cited criminal proceedings,” read the decree obtained by the Register. 

Vatican jurists say the decree of dismissal has the same weight as a sentence, meaning it is based not on a hypothesis but on proven facts. However, even if Msgr. Perlasca were unaware of the allegedly fraudulent actions of Torzi and Mincione, public records appear to indicate he was the Vatican official who had the most intimate knowledge of the London deal’s financial mismanagement since he had signed the November 2018 exit agreement that directly led to the massive losses. And, along with Secretariat of State official Fabrizio Tirabassi and Vatican investment manager Enrico Crasso, he was involved in the talks that led to the agreement. 

The Vatican indictment also states that when he signed it, Msgr. Perlasca “lacked any authorization” from his superior, Archbishop Edgar Peña Parra, the sostituto, or deputy secretary of state. It said Msgr. Perlasca’s superiors only gave authorization on Nov. 27, 2018, after Cardinal Pietro Parolin, the Vatican secretary of state, had in turn granted his authorization through a “handwritten memorandum.” 

The indictment also asserts, based on a 20-page memorandum Archbishop Peña Parra submitted to the Vatican prosecutors, that it was not until a month later, on Dec. 22, 2018, that the sostituto “learned of the real content of the agreements” signed by Msgr. Perlasca. The indictment says the negotiations were conducted by Msgr. Perlasca and Tirabassi “without ever informing any of their superiors.” Exchanges between them, contained in the indictment, said they had “the precise awareness that they would later have to face the issue of how to inform their superiors about what happened in London.”

The indictment added that Archbishop Peña Parra gave special power of attorney to Msgr. Perlasca only “after the fact, on 27 November” and stated that at this time Cardinal Parolin and the archbishop were presented with the terms of the transaction “in interesting but opaque terms.” The cardinal nevertheless gave it his approval “having received assurances regarding the validity of the transaction (that could be advantageous to the Holy See), its transparency and the absence of reputational risks.”

 

Psychological Pressure?

One particularly notable aspect of the decree of dismissal is that it states Msgr. Perlasca was “subjected to very strong psychological pressure to urgently and immediately sign” the Nov. 22 agreement, although no evidence has been presented to confirm who allegedly pressured him or why that pressure was exerted. 

Although the Vatican indictment says that Archbishop Peña Parra was unaware of the “real contents” of the Torzi-brokered deal, Msgr. Perlasca has always insisted that he was acting with the approval of his superiors, in particular the archbishop, who was his immediate superior. Torzi has always claimed that top officials at the Secretariat of State, including Cardinal Parolin, fully approved his plan. 

Torzi’s lawyer, Ambra Giovene, told the Register Dec. 1 that two weeks before the Nov. 22 deal was made, Archbishop Peña Parra had been given “signature powers on every contract of a banking and investment nature, on grants and underwriting, deposits, withdrawals, payments, purchase and sale of securities in the name and on behalf of the Secretariat of State.” But she said he also had the power to delegate those powers to other officials such as Msgr. Perlasca and that he gave Msgr. Perlasca “the powers to sign with a single signature” the Nov. 22 agreement. 

This wouldn’t be the first time that Msgr. Perlasca was able to sign documents with just his signature. When Cardinal Angelo Becciu was sostituto (2011-2018), Vatican sources told the Register they had seen documents that he had signed but which afterward had been backdated with then-Archbishop Becciu’s signature. 

In the Vatican indictment, Torzi is on record as stating, “The sostituto did not have full knowledge of how Tirabassi, Crasso and Perlasca moved the financial levers of the Secretariat of State. I can say this because in my conversations with the sostituto, he [Peña Parra] seemed to me truly desperate to take note of how the situation had been managed up to that moment.”

Torzi was arrested by the Vatican authorities last year and then released on bail on condition he would collaborate with Vatican investigators. 

The Register asked Archbishop Peña Parra Nov. 30 if he would respond to questions over how much he knew about the agreements, what he knew of Torzi before they were signed, and whether he had pressed Msgr. Perlasca to sign them, but he declined to comment. These questions are nevertheless expected to arise during the Vatican trial. 

So far, the Venezuelan archbishop, who served as a Vatican diplomat in Honduras and whose appointment in 2018 as sostituto was recommended by his friend Honduran Cardinal Oscar Rodriguez Maradiaga, a close papal advisor, has not been summoned to give evidence at the Vatican trial which resumes on Dec. 14. 

 

Who Is Msgr. Perlasca?

A native of Como in northern Italy, Msgr. Perlasca, 61, was a central administrative figure within the Vatican for a decade from 2009, serving as head of the administrative office of the Secretariat of State, an office which also handles the Peter’s Pence collection.

A trained Vatican diplomat and a graduate of jurisprudence and canon law, he worked in the apostolic nunciature in Argentina from April 2006 to May 2008, when Cardinal Jorge Mario Bergoglio was Archbishop of Buenos Aires. 

In July 2019, soon after the London property scandal became public, Pope Francis transferred Msgr. Perlasca to the Supreme Tribunal of the Apostolic Signatura, the Church’s highest court, where he serves as a senior official. 

Vatican sources and others close to the Vatican have spoken highly of Msgr. Perlasca, saying he is an upright man of moral integrity, while others voiced skepticism. As he is well-known for being very painstaking, it is unlikely he did not understand the details of the exit deal signed on Nov. 22, 2018, some of these sources said. 

 

For Pope Francis’ alleged role in the negotiations with Gianluigi Torzi, please see here.