Vatican finance trial: What’s happened so far and where is it heading?

Vatican City, Nov 17, 2021 / 01:00 am

A Vatican judge’s partial turnaround at a hearing earlier this month is a significant plot twist in the finance trial that kicked off this summer.

The prosecution has 10 defendants, with many different charges against them, most linked to the management of funds in the Vatican Secretariat of State, particularly to the purchase of a luxury property in London.

At the trial’s third hearing on Oct. 6, the president of the Vatican Tribunal, judge Giuseppe Pignatone, ruled in favor of requests by the defense to have prosecutors re-do the investigation into some of the charges and defendants.

This was Pignatone’s way of trying to resolve some situations in the trial that risked rendering it invalid. For example, the defense lawyers had pointed out that not all of the indictments had been filed — a necessary prerequisite for lawyers to prepare the defense. And in particular, they pointed out that audiovisual recordings of the interrogation of Msgr. Alberto Perlasca had not been shared with them.

Perlasca was the director of the administrative office of the Secretariat of State for 12 years and the person who handled the London property affair. For this reason, he was first questioned as a suspect, before he decided to collaborate with Vatican prosecutors.

In his first interview with Vatican prosecutors, Perlasca volunteered information without the presence of a lawyer. For the second interrogation, he brought his lawyer, but decided to make further statements without legal representation and eventually parted ways with his lawyer.

A summary of Perlasca’s statements to prosecutors was provided to the defense attorneys, but videotapes were not. At the trial’s first hearing at the end of July, the lead prosecutor signaled his willingness to make copies of the interrogation tapes available, but afterward, he refused a specific request to do so made by the tribunal president.

Pignatone reiterated the court’s order for the video recordings of Perlasca to be deposited with court documents for access by defense lawyers. He also asked for clarification about Perlasca’s position in the trial: is he only a witness or is he also part of the criminal proceedings?

Pignatone ordered that by Nov. 3, the prosecutors deposit all the documents, including the audio and video recordings of the interrogations, starting with those of Perlasca and the wiretapping.

He also ordered that the parties who request it can view the seized material, including the IT material, where it is now, and request a copy.

Italian media reported earlier this month that prosecutors had fulfilled a court order to hand over missing evidence. But a group of lawyers of the defense complained that portions of the video files of depositions were missing.

What’s next?

Perlasca’s position must be clarified by prosecutors. Also, some of the documents about the investigation into Cardinal Angelo Becciu must return to the prosecutor’s office — in particular, the charge that Becciu committed subornation when he allegedly pressured Msgr. Perlasca to recant his testimony. (The cardinal denies all accusations of improper conduct.)

The procedure for the allegations of embezzlement must also be started over, particularly those related to the allocation of funds to the Spes Cooperative and the branch of Caritas in his home diocese of Ozieri in Sardinia.

The judge also sent back to the prosecutor all the files on Msgr. Mauro Carlino, who was secretary to Archbishop Edgar Peña Parra, the sostituto of the Secretariat of State.

He also sent back those of the broker Raffaele Mincione (the first to deal with the affair of the London property), the lawyer Nicola Squillace, and Fabrizio Tirabassi, an official of the administrative office of the Secretariat of State.

This means that prosecutors will start the investigations into these charges over from scratch, with new interrogations.

Enrico Crasso, an investment manager for the Secretariat of State, has had his files sent back to the Promoter of Justice (the prosecutor) for the charges of embezzlement, fraud (one charge also concerning the Centurion Fund, later disposed of by the Secretariat of State), and corruption.

Furthermore, the allegations of embezzlement by Cecilia Marogna’s company in Slovenia and the proceedings for fraud against three companies attributable to Crasso will also be started over.

Prosecutors have also received the documents concerning alleged embezzlement by Tommaso Di Ruzza, the former director of the Vatican’s Financial Information Authority.

The importance of Pignatone’s decision to send the embezzlement accusation back to the investigatory phase should not be underestimated.

What are the main issues at stake?

The issues concern the judicial activity of the Holy See, which also involved specific activism by the pope, who personally intervened in the investigations with four rescripts (papal responses to queries or petitions).

Other matters raised are the potential global impact of this process, as well as the role of Vatican prosecutors — all Italians with activities outside the Holy See.

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Pope Francis’ interventions

The change in the law to allow the trial of Cardinal Becciu is not the only intervention by the pope in the legislative sphere. During the investigation, Pope Francis signed four rescripts that suspended some judicial guarantees, including official secrecy, to allow the prosecution of the investigation in a summary manner, that is to say, according to a pope’s directly authorized procedure.

The rescripts were drawn up on July 2, 2019, July 5, 2019, Oct. 9, 2019, and Feb. 13, 2020, respectively.

With the rescripts, Pope Francis suspended the reporting obligations to the Financial Information Authority, established by Law 18 of 2013. He authorized the use of any necessary interception tool. He permitted the use of any material seized without being opposed to secrecy and confirmed for another 60 days the special prerogatives given to the Promoter of Justice.

The pope, therefore, intervened forcefully in the process. But he had also moderated the negotiations of the Secretariat of State to take over the shares of the London property from the Italian broker Gianluigi Torzi. A photograph showed Pope Francis with the broker in 2018. Torzi had been in the papal residence, the Domus Sanctae Marthae, precisely to negotiate his exit from the deal.

Initially, it was said that the pope did not know about the London investment, nor had he met the protagonists of the operation. When the photo of him with Torzi was published, it was said that the pope had met the broker, but did not know about the operation.

Finally, responding to the Associated Press, the Vatican Tribunal said that the pope had entered the room where there were negotiations for the liquidation of Torzi’s shares. The pope had invited everyone present to find a solution.

Giuseppe Milanese, a personal friend of Pope Francis, was conducting the transaction at the pope’s request. Speaking with the Italian television news program Report, Milanese added a detail: that the pope had asked to conclude with “the right salary.”

Pope Francis’ presence at the negotiations and his insistence on intervening and turning the page were also confirmed by Archbishop Peña Parra. This could prove to be substantial in defense of the Vatican Secretariat of State.

The Secretariat of State’s role

Peña Parra, who took office in November 2018, explained his position in a long statement of about 20 pages, with various documents attached. The Venezuelan archbishop, who is said to enjoy the trust of Pope Francis, did not limit himself only to reconstructing the events concerning the London property.

He also highlighted a pre-existing system and recounted circumstances that prove his affirmations. The “sostituto” reported that decisions were often pushed to be made urgently and by interrupting ongoing meetings precisely to address specific predestined scenarios.

He also accused Perlasca of making decisions without consulting superiors, of acting in league with Torzi, and of being part of a system that disadvantaged the Holy See.

The deputy defended his decisions in protecting the London investment, noted the work he did in reorganizing the finances of the Secretariat of State, and, above all, explained that the decision to pay to take back the London building was the only viable one. A legal case would have lasted for years and the existing contracts could also have ended in a negative way for the Holy See.

In any case, the Secretariat of State decided to become a civil party in the trial. It remains to be seen what the consequences of this choice will be if it is proved in the trial that Cardinal Pietro Parolin, the Vatican secretary of state, had also approved the operations.

The investigations

In this sense, Perlasca’s absence among the accused is striking and, interestingly, Pignatone hinted at the possibility of Perlasca’s involvement in other proceedings.

Perlasca was investigated and questioned six times, but was not held responsible for crimes by the Vatican magistrates. It is not known whether his willing collaboration weighed in the decision not to prosecute him.

The fact remains that the investigations themselves have been the subject of criticism. For example, last March Judge Tony Baumgartner overturned an English court’s initial decision to grant the seizure of Torzi’s current accounts at the Vatican’s request.

In his ruling, Baumgartner questioned the reliability of the Vatican investigations, often describing them with the words “mischaracterization” and “misinterpretation.”

He raised questions such as why, if Torzi was considered a cheater, was he allowed to meet the pope and treated with courtesy? Why did Archbishop Peña Parra agree to pay Torzi 15 million euros ($17.8 million) to purchase the property in London, which was already formally in the Holy See’s hands?

As evidence of this, Baumgartner included an email from Peña Parra to Torzi, sent on January 22, 2019, in which a price was negotiated for the acquisition of the shares. Baumgartner considered the email as proof of an ongoing negotiation.

At the same time, the Vatican justice promoter argued that the email was written amid a challenging climate.

In the sentence of the indictment of the 10 defendants — almost 500 pages that summarize tens of thousands of pages of documentation — seven pages are destined precisely to respond to Baumgartner’s objections, also complaining about an alleged lack of cooperation from foreign authorities.

Indeed, the investigations have left many questions open, and one hopes that some will be answered in the trial, which is expected to be long and difficult.

Behind the trial scenes, there is even a dispute between Pignatone and the Promoters of Justice, Gian Piero Milano, and Alessandro Diddi.

Last July, the Promoters of Justice asked Pignatone to revoke his order “in the part in which he established the deposit of the audio-video files,” which recorded the depositions of Perlasca against Becciu. This was due to the possibility that these files may eventually be published, thus going against the rules of privacy, as there was no authorization for photographic or audiovisual shooting.

By saying no to Pignatone, the Vatican prosecutors stressed that “those who attended the investigative documents did not consent to the reproduction and disclosure in any form of files containing the recordings and, indeed, accepted the registration on the premise and in the awareness that it was functional only to a more precise verbalization of the acts.”

Hence, the prosecutor’s appeal to revoke the request, because otherwise, “the right to privacy of the people involved would be irreparably compromised.”

For the same reason, the Vatican prosecutors also said no to Torzi’s defense request to acquire audio recordings of the wiretapping carried out during the investigation.

The Promoters of Justice

In this story, the Promoters of Justice were the real protagonists. Pope Francis trusted their judgment, gave them carte blanche, and effectively endorsed their approach. And he did so on the eve of a review — that of the Moneyval committee of the Council of Europe — determining how effective the Vatican is in following up on intelligence reports.

Despite the triumphal narrative emerging from the Vatican, the latest Moneyval report was not particularly favorable for the Holy See. It noted that the 2019 progress report highlighted a “vulnerability in the fact that not all promoters of justice offer exclusive services to the Holy See/Vatican City State.”

Always the same point is highlighted: that “potential professional conflicts and incompatibilities could not be excluded.”

Moneyval, therefore, asked the Vatican to consider that the next prosecutors would have to work, during the time of appointment, only for the Holy See/Vatican City State and not to “practice law at the same time in other jurisdictions.”

Scrolling through the organization chart of the Vatican courts, it turns out that Judge Riccardo Turrini Vita is director general of education at the Department of Penitentiary Administration of the Italian Ministry of Justice. Judge Carlo Bonzano is a lawyer in Rome, as is Judge Paolo Papanti Pellettier, who is also president of the Magistral Court of First Instance of the Order of Malta.

The Promoter of Justice Gian Piero Milano is also in the Court of First Instance of the Order of Malta, while the Promoters of Justice Roberto Zannotti and Gianluca Perone work as lawyers in Rome.

Alessandro Diddi, the Vatican Promoter of Justice, is also a lawyer in Rome. He has among his clients Salvatore Buzzi, who was sentenced to about 18 years in jail in the “Mondo di Mezzo” case in Rome, known in the news as “Mafia Capitale.”

It is noteworthy that the attorney general of Rome at the time of the case was Giuseppe Pignatone, the current president of the Vatican court.

The open questions

In the end, after the scandal, the heads of the Financial Information Authority were removed. In addition, the Secretariat of State has lost control of its investments. And the Vatican judges, all of whom are Italian and with interests in Italy, have acquired great discretion within the Vatican City State — power that goes beyond even the Holy See and its officials.

The balance of power has been reversed. The Vatican City State exists to support the Holy See. Today, state interests seem to have somehow gone on to “eat” the Holy See.

This is a sign of the “Vaticanization” of the Holy See, which takes on more and more substance in the folds of an investigation that leaves many open questions and few answers.

Consider: If the pope has suspended the secret of office, then the seizure of intelligence material in the exchange between the Financial Information Authority and foreign financial intelligence units is also valid.

But why, after that move, did the Egmont Group suspend the Holy See from its secure network and only readmit it after the signing of a memorandum of understanding between the Financial Information Authority and the Vatican Promoter of Justice?

Other open questions are about the Vatican judicial system.

Can the order of the court remedy the structural deficiencies of the Vatican judicial system? These include the absence of the rule of law; obsolete codes not in line with human rights; the possibility for a “pope-king” intervening in a process while it is being held; and the absence of a monitoring body and supervision of the work of Vatican magistrates.

Also, can the order repair the damage suffered by the suspects and the accused? The defendants are likely to ask for compensation for damage to their reputations. As the public prosecutor did not withhold the investigations and only later offered to start them over, the defendants will not hesitate to take every action they can to defend themselves. What will be the cost of this for the Holy See, in terms of reputation and money?

These are issues that show that this trial is not just about internal Vatican scandals. Every detail could touch on the very nature of the sovereignty of the Holy See, precisely because everything has been done considering Vatican City, with its judges, as a complete system.

So it is not a question of not working for transparency and justice; it is a matter of trying to do this by not throwing down a system built with patience, which serves precisely to maintain the international identity of the Holy See.

And it is not a question of not prosecuting the corrupt, but instead of broadly understanding the functioning (or malfunctioning) of the system and, if necessary, making corrections.

As we can see, this is far more than just “the Becciu trial,” as some media call it. It is a process that should require the Holy See to make an effort for reform and justice. But to do so, perhaps, it would need to be willing to reform the way it administers justice.