VATICAN CITY — Vatican City’s Court of Appeal has rejected Libero Milone’s appeal in his wrongful dismissal lawsuit against the Vatican Secretariat of State.  

The lawsuit, which centered on allegations that Milone was ousted in 2017 for uncovering corruption and financial irregularities at high levels within the Vatican, was dismissed as “groundless” by the court.  

The judges stated in their decision that the former auditor general’s compensation claim had no merit against the Secretariat of State.  

“It is not so much the lack of passive standing of the Secretariat of State that must be affirmed, but rather the groundlessness of the claim brought against it,” the judges said in their July 22 decision, which the Register has seen. “Consequently, the claim must be dismissed.”  

Milone has said he will continue to fight for justice and have his and his former deputy’s professional reputation restored.  

Together with his former deputy, Ferruccio Panicco, Milone sued the Vatican for 9.3 million euros in November 2022 for unfair dismissal, loss of income and damage to their reputations, after the Vatican ignored their attempts to reach an out-of-court settlement.  

A former chairman and CEO of the Italian branch of the multinational auditing firm Deloitte, Milone has always strenuously maintained that he and Panicco were pushed out after exposing serious misconduct in the Vatican’s financial affairs.  

To add to their grievances, Panicco — who died of cancer in 2023 — also contended that his health worsened after his medical records disappeared during a 2017 raid on his offices and were never returned, despite repeated requests.  

Central to their accusations is the former No. 2 official at the Secretariat of State, Cardinal Angelo Becciu, whom Milone and Panicco accused of working with the Vatican police to force them to resign by raiding their offices and framing them on false accusations of spying and embezzlement after their auditing began uncovering evidence of financial malfeasance. 

From the outset, the two Vatican auditors firmly rejected the accusation against them, saying they were simply carrying out their work in accordance with the statute promulgated by the Pope in 2014 creating the Office of the Auditor General which specifically stated that the auditor general had to adhere to international auditing standards and that he was to report to the Pope. 

But in January 2024, the tribunal threw out their lawsuit, determining that the Secretariat of State was not responsible for their dismissal and concluding that the acts which forced them to resign were carried out by members of the Vatican Gendarmerie who were answerable to the Governorate (the government of Vatican City State) and not the Secretariat of State. The court ordered Milone and Panicco to pay the legal costs of the defendants, amounting to approximately 100,000 euros. 

Milone appealed, but in their ruling this week, the Vatican judges reaffirmed the January 2024 decision. They argued that Cardinal Becciu’s actions could be deemed unlawful, but again stated that Milone had not made his claim against the Italian cardinal but against the Secretariat of State. The tribunal also made the point that Vatican City had not prosecuted the cardinal for his actions.  

Cardinal Becciu, the court stressed, had “never been sued,” nor had Commander Domenico Giani, the former head of the Vatican Gendarmerie, who had carried out the 2017 raid on their offices that precipitated the forced resignations of Milone and Panicco.  

Vatican Defense 

Milone’s lawyers have always maintained that the Vatican’s defense was unreasonable. They have consistently argued that liability naturally rests with the Secretariat of State because Cardinal Becciu was acting in his capacity as deputy secretary of state. He could not have acted in a personal capacity, they added, unrelated to the aims of the Secretariat of State of which he was a member.  

Milone has also argued that, according to a 1933 law, legal claims must be presented to either the Secretary of State or the Governor of Vatican City State.  

But lawyers for the Secretariat of State have stated that, in addition to the dicastery not being liable for such actions, Milone was appointed by Pope Francis, and so his suit for wrongful termination was really directed toward the Roman Pontiff, something canon law proscribes. Milone has always disputed this, insisting he was hired through the Secretariat of State and that he has documents to prove it.  

In preparation for his appeal, Milone’s lawyers last year compiled a lengthy document which, they said, was important to show the kinds of discoveries they were making and which proved widespread corruption among senior Vatican officials.  

But late last year, the Vatican tribunal instructed them to remove half of the documentation — amounting to some 25 pages — if the proceedings were to continue, saying the allegations were irrelevant and would harm the “good name” of individuals not party to the lawsuit.   

The redacted passages detailed numerous cases of financial malfeasance, including the disappearance, concealment and diversion of funds, conflicts of interest, and obstructionism.  

The court’s instruction led to Milone’s chief legal counsel, Romano Vaccarella, a well-known veteran constitutional lawyer, to resign, saying that in his long career he had never been told what or what not to put in a claim — an order he deemed unjust and showing the court was not impartial.  

Milone, who described the areas they looked into as “a real nest of vipers” whose subjects “felt threatened by the investigations, and by the simple requests for clarification and/or documents,” has indicated in the past that he would make those files public if his lawsuit failed.   

Milone’s lawyers have said he will now be taking time to reflect and consider the verdict. A further legal step available to him is to petition the Vatican City State’s court of cassation — the “supreme court” of the territory, serving as its final court of appeal.  

In comments to the Register July 24, Milone said he would “not give up until justice is done and my good name and that of my colleague is restored.”