Vatican Bishop: Peter’s Pence Not Used to Cover London Investment Losses

In an interview released Saturday, the 72-year-old Italian bishop acknowledged that “errors” had contributed to the Vatican’s losses.

Saint Peter's Basilica in St. Peter's Square.
Saint Peter's Basilica in St. Peter's Square. (photo: Calin Stan / Shutterstock)

VATICAN CITY — A Vatican bishop said Saturday that the Holy See did not use money from Peter’s Pence or the pope’s discretionary fund to cover its losses on a controversial London property.

Bishop Nunzio Galantino, president of the Administration of the Patrimony of the Holy See (APSA), said Oct. 31 that the sum came instead from the Secretariat of State’s reserves.

Bishop Galantino told Avvenire, a newspaper owned by the Italian bishops’ conference, that “independent estimates” put the losses at 66-150 million pounds ($85-194 million).

Referring to the Secretariat of State by its Italian acronym, SdS, he said: “The losses of the London investment were borne by the reserve fund of the SdS, and not by Peter’s Pence or by the one available to the Holy Father.”

He added that no “plundering” of accounts intended for charitable purposes had taken place.

Bishop Galantino has led APSA, which functions as the Holy See’s treasury and sovereign wealth manager, since 2018. In October, he was forced to deny claims that the Holy See was heading for financial “collapse.”

“There is no threat of collapse or default here. There is only the need for a spending review. And that is what we’re doing. I can prove it to you with numbers,” he said, after a book alleged that the Vatican may soon be unable to meet its ordinary operating expenses.

In the Avvenire interview, the 72-year-old Italian bishop acknowledged that “errors” had contributed to the Vatican’s losses. 

“It will be up to the [Vatican] court to decide whether it was a matter of errors, imprudence, fraudulent actions, or something else. And it will be for the same court to tell us if and how much can be recovered,” he said.

He stressed that APSA was not involved in the purchase of the building at 60 Sloane Avenue in southwest London, which was overseen by the Secretariat of State. 

He also noted that the secretariat administered Peter’s Pence, an annual worldwide collection intended to support the pope’s charitable activities and the running of the Roman Curia. 

He was unable to reveal what percentage of the funds used to buy the property came from Peter’s Pence as the money would have come from a “basket” also containing other secretariat funds.  

“I can say, however, that if there have been errors, or faults, or illegal behavior, the interest of the Holy See and of the whole Church is that clarity is offered. Even if it is a painful journey,” he commented.

Bishop Galantino said that the Vatican’s London investments had been hit by a drop in the value of the British pound sterling, the uncertainty of Brexit, and the coronavirus crisis.  

Asked what the building at 60 Sloane Avenue was currently worth, the bishop said: “It is difficult to define the value of the property. Especially in this moment of the pandemic. And then, it is true that a house or a property has its own objective value. However, in the end, the market price and the buyer’s offer also affect its value.” 

“It should be noted that the SdS, between the end of last year and the beginning of this year, obtained a new planning permission which evidently positively affects the value of the property.”

He conceded that APSA had a role in the Secretariat of State’s efforts to repay the loan taken out on the property.

“In truth, the SdS had already obtained from a commercial bank the availability of a loan to pay off the particularly expensive mortgage, burdening the London building,” he said. 

“However, before receiving it, it also wanted to ask APSA and the Secretariat for the Economy (Spe) to intervene to pay off the loan. APSA, in close collaboration with the SdS and the Spe, after having made the necessary assessments, coordinated the necessary financing, which thus allowed the SdS to free itself from the exorbitant interests and to bring the debt back to the Holy See.”

“It was an important step to bring order to this investment and to exclude financial structures or people outside the Vatican from ownership of the building. It is also for this reason that the new ‘sostituto’ of the SdS had decided to pay Mr. Gianluigi Torzi.”

The new sostituto, or second-ranking official at the Secretariat of State, was Archbishop Edgar Peña Parra, who replaced Cardinal Angelo Becciu in the post in 2018. Cardinal Becciu resigned his rights as a cardinal last month amid accusations of financial impropriety, which he denies. 

Torzi, an Italian businessman, was arrested by Vatican officials in June and released on bail after being questioned about his role in the London deal. 

Bishop Galantino observed that there was no supervisory body overseeing the Secretariat of State’s choice of consultants. He said he trusted that the investigation would reveal whether consultants were employed in “bad faith.”

“A thief can enter my house because he is ‘good’ at disarming the alarm system or because someone gives him the key or opens it from the inside,” he said.

The bishop identified what he called a “double error” in the Secretariat of State’s financial practices. 

He said: “The first is to entrust, in full confidence, discretionary mandates for investments to administrators, without control by the SdS. The results of this way of doing things clearly constitute an error. And the effects, in addition to any losses, have led to a very high reputational cost.”

“The second error is that up to now the SdS was subjected to few reporting obligations, nor was it required to ask for any authorization for acts of extraordinary administration, as other dicasteries, which must request the ‘nihil obstat’ of Spe, are required to do.”

The bishop suggested that these errors were being corrected.

“In short, now there are more eyes looking at operations and checking procedures,” he said. 

Bishop Galantino confirmed that the Vatican was taking steps to centralize investments under APSA, in order to ensure “a more prudent, transparent and professional management.”

The bishop, who served as secretary-general of the Italian bishops’ conference from 2013 to 2018, criticized the leaking of confidential documents relating to ongoing Vatican financial investigations.

He also emphasized that the Holy See was conducting the probe on its own initiative.

He said: “I do not rule out that some publications may have helped raise the guard and undertake internal cleansing initiatives. But the investigations in progress, as I have already said, were initiated by the Vatican and on the basis of internal investigations. They are not the result of journalistic investigations or investigations by other states.”

“Perhaps it is legitimate to ask whether one contributes to cleaning up more with an investigation conducted according to justice or by disclosing partial documents.”

A hearing in the Vatican finance trial on Nov. 17, 2021.

The Puzzle of the Peter’s Pence and the Vatican London Deal

While the circumstances surrounding the property’s purchase are the focus of the ongoing trial in the Vatican courts, with accusations of fraud and embezzlement against 10 people, the question of how Peter’s Pence has been raised requires a look behind the scenes.