It’s one step forward, one step back when it comes to reforming Vatican finances.
Pope Francis has, after a long wait, appointed a successor to Cardinal George Pell as Prefect of the Secretariat for the Economy (Pell, of course, is in prison in Australia, fighting to overthrow a conviction for sex abuse offences). The new prefect is Father Juan Antonio Guerrero, a Spanish Jesuit and an outsider to the Roman Curia who has taken a vow of poverty.
Fr Guerrero held various leadership positions in the Jesuit order, studied economics, speaks five languages, and hopes to “contribute to the economic transparency of the Holy See”.
But that work is under threat from the farcical shenanigans over Vatican finances.
Targeted leaks, vicious infighting and petty power games reveal a pattern of self-destructive behaviour that threatens the hard work done to bring economic credibility to the Holy See, a programme which was started with Benedict XVI and has continued by Francis. It reveals that the changes that the Pope has to implement in the Roman Curia are cultural, as well as structural.
The recent problems are the context for this week's departure of René Brülhart, the president of the Vatican’s financial regulator, a respected and competent professional who worked hard to build a framework of economic transparency and accountability.
Brülhart worked patiently and painstakingly to establish a proper regulatory system, ensuring that suspicious transactions were reported and information shared with the authorities.
Appointed by Benedict XVI in 2012 the former head of the Lichtenstein financial intelligence unit was given a mandate by Francis in 2014 to restore credibility. To a large part, Brülhart has delivered on what he was asked to do. He has been ready to hand over his responsibilities for several months.
A lot has been achieved in a short space of time. Let’s not forget that at the end of 2012 a breakdown in relations between the Vatican and outside financial institutions culminated in the blocking of electronic payments through ATMs and credit cards by the Italian authorities in Vatican City State. The Vatican bank was on the verge of losing access to cash.
Brülhart has established memorandums of understanding with other countries, got the Vatican into the single euro payments area and published annual progress reports.
It wasn’t all talk or “gattopardismo,” that political strategy of making exterior reforms but in reality, changing nothing. The system has been working. In one instance, the financial authority (known as the AIF) played a crucial role in bringing Laurence Soper, a fugitive English monk and sexual abuser of boys to justice. The days when former Vatican bank chief Archbishop Paul Marcinkus was able to hide from questioning during the Banco Ambrosiano collapse seem far off.
But the Vatican regulator has also come under unprecedented attack. Last month, the offices were raided as part of a Vatican police probe into a multi-million property deal in London. Documents, computers and mobile phones were seized.
Tommaso di Ruzza, the director of the AIF, was suspended, although the board of the AIF later stated he had done nothing wrong. The raid was alarming and damaging to the AIF given it holds and shares information with authorities across the world and guarantees confidentiality. The Holy See has since been suspended from the Egmont Group of Financial Intelligence Units, a vital network for sharing suspicious financial activity. Gaining membership of the Egmont Group for the Holy See in 2013 was one of Brülhart’s major achievements.
“Cui bono?” (“Who gains?"), as people ask in Rome. The beneficiaries of the 1 October Vatican police raid are those who stand to gain from the AIF becoming neutered or dysfunctional, or who do not want the scrutiny the regulator is bringing to the Holy See’s money management.
According to the police warrant - later leaked to cause maximum damage to the AIF - the investigators targeted Di Ruzza for being in contact with a London law firm involved in the property deal. Is that suspicious behaviour?
The Vatican prosecutors appeared unaware that the AIF was working with British financial intelligence to try and track down the businessmen who may have fleeced the Holy See in the London real estate deal. In 2012 the Vatican, though the Secretariat of State, purchased 45 per cent of a former Harrods warehouse in Chelsea, London, in order to turn it into luxury flats. Six years later, the Vatican decided to buy the remaining 55 per cent of the property, in order to get out of the joint ownership arrangement with Athena Capital Global fund, administered by Italian businessman Raffaele Mincione.
According to sources, the Secretariat of State had referred the 2018 part of the property deal to the AIF earlier this year - which included paying off the mortgage. The primary concern of the regulator was the payments to middle men. According to Italian publication L’Espresso, Mincione made £130 million from the deals.
The raids look to be more like the playing out of a vicious internal power struggle for the control of Vatican finances. Brülhart had grown tired of the interminable squabbling and backbiting, and could not continue in the circumstances.
As a result, some commentators who view every development in the Vatican through an anti-Pope Francis lens are using the financial problems as part of their campaign to destroy this pontificate. Such an attitude is simply more self-destructive behaviour and is not motivated by a desire to bring credibility and transparency to Holy See finances.
Nevertheless, the Pope has much more work to do. The struggle going on is a sign that reform is happening but the next stage requires changes in mentality to bed down alongside the legal frameworks and accountability measures.
Over the last seven years, the Holy See has begun to set up the regulatory structures needed to bring order and accountability to the finances. But Francis and his advisors must now move quickly to ensure these are not undone and to ensure the Egmont suspension lifted as fast as possible.
“If we don’t know how to look after money, which we can see, how can we look after the souls of the faithful, which we cannot?” Francis asked soon after his election.
Failure to handle money is a symptom of a deeper malaise about power and mission. Some of this can be resolved through structural changes, but a kick-back culture where officials expect to feather their nests with cosy side deals and where transparency is locked away with the gold reserves has to be tackled. Those involved in managing the Holy See’s money must see themselves as custodians of assets for the Church’s mission rather than serving themselves.
The Pope’s appointment of Fr Guerrero, who will not be made a bishop and become part of the curial power structure, is significant. It represents an attitudinal shift. The same can be said for Francis’ choice of Bishop Nunzio Galantino to run the Vatican’s financial powerhouse, known as the APSA (the Administration of the Patrimony of the Apostolic See). Bishop Galantino was plucked from the Diocese of Cassano all’Jonio in Calabria where he was renowned for a simple lifestyle and concern for the poor.
The financial crises are as much a human resources problem as a financial one. The new apostolic constitution on the Roman Curia, expected later this year and which will demand the central administration of the Church direct all their work to the mission of the Gospel, will be a start.
The pontificate of Francis, who turns 83 next month, is an unfinished journey.