On papal flight, Pope Francis talks Vatican financial scandal

Aboard the papal plane, Nov 26, 2019 / 11:31 am

Although investigators are looking into a controversial Vatican investment in a luxury London property development, whether the deal was corrupt is still an open question, Pope Francis said Tuesday.

Answering questions aboard the papal plane from Tokyo to Rome Nov. 26, the pope said that investing funds from Peter's Pence is an acceptable form of financial management if the investments are solid.

The pope also said Vatican financial reforms are working well, and he is happy the Vatican prosecutor, called the Promoter of Justice, had filed reports about some instances of corruption inside the Vatican. While acknowledging ongoing investigations in several cases, the pope did not weigh in on the London property investment, saying it is "not yet clear."

The pope discussed Vatican financial scandal and reform in response to a question related to the Secretariat of State's investment of some $200 million in a London property development at 60 Sloane Avenue in Chelsea. CNA has reported that the investment was financed by a short-term loan package secured by the Secretariat of State through Swiss banks, with part of the funding coming from BSI, a bank later closed by Swiss financial authorities for systematically failing to act against suspected money-laundering activities by sovereign wealth funds.

The pope explained that good management of Peter's Pence, the papal fund supported by annual donation appeals in Catholic parishes around the world, often includes investments, and that this is a more prudent use of resources than keeping them in a "drawer."

"First of all, in good administration it is normal for a sum to come from the Peter's Pence, and what do I do? Put in a drawer? No, this is bad administration," Francis said. "I look to make an investment, and when there is the need, to give... when there is the necessity, in one year, you take it. Your capital you do not devalue, if it maintains or if it grows a little. This is good administration."

"Peter's Pence should be spent in one year, one year and a half, until the other collection arrives which is made world-wide. And this is good administration," he said, but added that the Church must be ethical in its use of funds. "If from Peter's Pence you invest in a weapons factory, the pence is not a pence there, eh?"

Even investment in an apartment building can be fine, he said, under the right circumstances. "But with sureties, with all of the safeties, for the good of the people of the Pence."

"Then, it passed what passed: a scandal," Francis said in response to a question about the London investment. "They have done things that do not seem clean."

The pope did not clarify who was intended by "they," or what they did which was not "clean." He went on to say that he was encouraged that internal reporting mechanisms appeared to be working and that the reports of corruption "did not come from the outside." 

Francis said that the "reform of the economic methodology, that Benedict XVI had already started, is going forward."

On Nov. 19, CNA also reported that two of the directors of the London-registered holding company used to control the investment had been caught up in raids by Vatican police, while a third was initially listed on company filings as a "Vatican citizen" despite having no apparent curial role and being linked to several businesses and individuals investigated for fraud and money laundering, including by the Vatican.

Last month, Secretary of State Cardinal Pietro Parolin described the London investment as "opaque" while promising to look into the matter further. Cardinal Angelo Becciu, who arranged the investment during his tenure as sostituto at the Secretariat of State, has defended the deal as "accepted practice."

Pope Francis also said he had signed the authorization for the investigation of several Vatican offices. On Oct. 1, Vatican gendarmes raided the offices of the Secretariat of State and the Financial Information Authority (AIF), the Vatican's internal financial watchdog. Subsequently, a total of five employees and officials were suspended and blocked from entering the Vatican, including Tommaso Di Ruzza, the director of the AIF.

"And in this I remained content," the pope said, "because you see that the Vatican administration now has the resources to clarify the bad things which happen inside, like in this case, that -- if it is not the case of the apartment in London, because this is not yet clear -- but in that [other instance] there were cases of corruption."

Pope Francis said he believes questioning of the five suspended employees will begin within a month or two, and stressed the importance of the presumption of innocence.

"It's a bad thing, it's not good what is happening in the Vatican. But it was clear that the internal mechanisms are beginning to work, those which Benedict XVI had already begun to make," he said.

"And I thank God. I do not thank God there is corruption, but I thank God that the Vatican monitoring system is working well."

On the papal flight, the pope was also questioned about wider issues facing the AIF, which was recently suspended by the Egmont Group, through which 164 financial intelligence authorities share information and coordinate their work.

The suspension of Di Ruzza, the recent resignations of AIF's president René Brüelhart, and AIF board member Marc Odendall were all noted during questions.

Pope Francis confirmed that Di Ruzza is still suspended, despite a press release from the AIF last month that affirmed the agency's full confidence in him and expressed hope that the matter would be "clarified soon."

Di Ruzza was suspended because of suspected "bad administration," the pope said, adding that "it was AIF that did not control, it seems, the crimes of others. And therefore [it failed] in its duty of controls. I hope that they prove it is not so. Because there is, still, the presumption of innocence."

While the concerns of the Egmont Group were "a bit disturbing," Francis said, the group is not an official international body and issues of sovereignty had to be considered. 

Egmont is a "private group," the pope noted, adding that "MONEYVAL will carry out the scheduled inspection for the first months of the next year, it will do it."

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Concerning the recent resignation of AIF's president, Rene Brülhart, the pope said he had found a replacement of "the highest level, in juridical and economic terms, national and international," and that after his return to Rome work with and at AIF would continue.

Pope Francis was asked how the international financial community, and Catholics, can have a guarantee that Vatican financial reform will continue to advance and not return to bad "habits of the past."

The pope said that reports of corruption coming from inside the Vatican are a sign that controls are working.

"To guarantee this? Look, it's the first time ... it is discovered from the inside," he said.

Pope Benedict XVI "began a process that matured," he added, to the point where people had the courage to make a written report against the five suspended people.

Francis also noted that concerns about the Secretariat of State's investments and the AIF to one side, there was clear progress in financial reform in other Vatican institutions.

"The Vatican has made steps forward in its administration," the pope said. "For example, the IOR [often called the Vatican Bank] today has the acceptance of all the banks and can act like the Italian banks, normal. Something which was not there a year ago." 

"There is progress," said the pope.