Vatican City, Apr 30, 2021 / 08:00 am
Experts attending the Moneyval plenary assembly in Strasbourg, France, this week approved a highly anticipated report on the Holy See.
Moneyval, the committee of the Council of Europe which assesses countries’ compliance with international financial transparency standards, is expected to publish its report in the coming weeks.
The Vatican judicial system prepared for Moneyval’s evaluation with reform and seemingly never-ending investigations over a Secretariat of State investment in London that have not led to any prosecutions.
The reform is about new measures, provisions, and treatment for Vatican tribunal officials. But it also in practice shuts down the appeal court of the Vatican City State -- a significant change in the way cases are handled.
The investigations concern the Secretariat of State’s purchase of a luxury property in London in 2018. This became the focus of scrutiny after a report by the Institute for the Works of Religion (also known as the IOR or “Vatican bank”).
Following a probe, six Vatican officials were suspended. Five of them were not renewed in their positions. But a year and a half later, the investigation is continuing and no prosecutions have been announced.
These two knots -- the effectiveness of reforms and of investigations -- will be crucial for Moneyval’s evaluation of the Holy See/Vatican City State.
The Holy See joined Moneyval’s evaluation rounds in 2011. Since then, Moneyval has issued one comprehensive report and three progress reports on the Holy See’s financial system and juridical framework.
The next progress report will scrutinize the effectiveness of the Vatican judicial system.
The question is whether the office of the Vatican prosecutor has adopted Moneyval’s previous recommendations -- and if so, how.
In 2016, the Vatican tribunal established a special section against economic and financial crimes. Up to 2018, the Vatican’s Financial Intelligence Authority disseminated 27 reports in six years for alleged money laundering to the Vatican prosecutor. Nine of the cases were dismissed and six others were under the motion of dismissal.
At the inauguration of the Vatican judicial year in 2019, the Vatican prosecutor Gian Piero Milano said that the Financial Intelligence Authority had issued six reports, while two of the previous reports were dismissed.
In its most recent progress report, in 2017, Moneyval noted that “the overall effectiveness of the Holy See’s engagement with combating money laundering depends on the results that are achieved by the prosecution and the courts.” It also stressed that “the results on the law enforcement/prosecutorial/judicial side two years after the last review remain modest.”
The Vatican City State tribunal has shown notable activism in the last year and a half. In the end, the tribunal took the lead in the operations, according to a process that some internal observers have described as a “Vaticanization of the Holy See.”
To understand this better, let’s look at the London property issue.
The investment was signed, entrusted to brokers, and finally “restructured” because the signed agreements did not fully protect the Holy See. It was necessary to cut out the intermediaries, pay them the amount stipulated in the contract, and ask for liquidity from the IOR to refinance the investment. The IOR at first said yes. Then it backtracked, issued a complaint, and the pope authorized the Vatican’s promoter of justice to proceed summarily.
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All this led to the suspension of six Vatican officials. Five of them were exposed to the public with the publication of a note from the Gendarmerie, which ended up in the newspapers. The officials’ houses were also searched, and one wonders whether everything took place in agreement with the Italian authorities.
In short, it is the Vatican City State judges who have taken command of the operations, establishing an unprecedented leadership of the state.
The state serves to sustain the Holy See. Yet the Vatican City State is an absolute monarchy where the pope decides and establishes what he wants. But the Holy See is an international entity that signs treaties and conventions on human rights and justice, which finds its credibility eroded by this new judicial activism.
This is the Vaticanization of the Holy See, carried forward in an Italian way. The Vatican tribunal is chaired by a retired Italian prosecutor, Giuseppe Pignatone. There are two promoters of justice (Alessandro Diddi and Roberto Zannotti) and one promoter of applied justice (Gianluca Perone) who serve as lawyers in Italy.
Yet Vatican magistrates recently have run into difficulties with their colleagues on the Italian side.
One case concerned the extradition request for Cecilia Marogna, nicknamed “the lady” of Cardinal Angelo Becciu, who is accused of misusing money from the Secretariat of State, where the cardinal used to work.
She was arrested in Italy and spent two weeks in prison. Italy’s Supreme Court later annulled the provision.
Then there was the search of the house of Fabrizio Tirabassi, one of the suspended Vatican officials. A Rome court later declared that the search warrant was “void” because it was an “informal” warrant, with “evident and substantial illegitimacy profiles, starting with the fact that the search order was ordered directly by the public prosecutor without going through the scrutiny of a judge.”
These words call into question the Vatican juridical system itself. The pope is a supreme judge who can instruct, make, and undo the processes.
An English judge has thought of this. Revoking the provision that had frozen the funds of Gianluigi Torzi, one of the intermediaries in the London property deal, the English judge Tony Baumgartner questioned the work of Vatican prosecutors, arguing that their reconstruction of the facts was subject to mischaracterization or misinterpretation.
This situation all started in June 2020 with Torzi’s arrest at the Vatican, where he had gone to answer questions from the Vatican police. Raffaele Mincione, an Italian citizen and the other broker involved in the London investment, was taken from a hotel and held in custody in Italy. He filed two lawsuits against the Holy See.
In three cases then -- Marogna, Tirabassi, and Torzi -- the Holy See’s requests have been overturned because of procedural defects.
This raises a series of questions that will undoubtedly catch Moneyval’s attention.
First: can a Vatican court be made up of part-time judges? They are experts, but certainly not in everything. Until now, the fact that the judges were part-time was justified by the small number of trials. But nowadays, everything has changed. Financial reform has brought new specializations and projected the Vatican system into the European system. Are part-time judges able to lead complex investigations such as those on the London property?
It is not even necessary that the judges be Italian. Knowledge of the Vatican legal system -- which is not a copy of the Italian code but comes from a legal code of 1899 -- and fluency in Italian would be enough. Judges from outside Italy could internationalize the Vatican system.
But Pope Francis has seemingly chosen the path of maintaining preferential relationships with Italy.
The second question: is this judicial activism good for the Holy See? The Holy See, in effect, sees its credibility undermined by a judicial system that does not understand the institutional consequences of its actions. The searches at the Financial Intelligence Authority and the Vatican Secretariat of State not only had a questionable justification; they also aroused the concern of international organizations.
In November 2019, the Egmont Group, which brings together financial intelligence units worldwide, decided unanimously to suspend the Holy See from the safe circuit of suspicious transaction reports. The Holy See then returned to the closed Egmont circuit in January 2020 after signing a memorandum of understanding with the Vatican tribunal. If there was a need for a memorandum of understanding, there was clearly a need for guarantees.
The Vatican’s anti-corruption commitment thus also shows limits and generates doubts about how justice is administered.
Alongside the topic of investigations and trials, there are recent judicial reforms that must also be considered.
One of the issues is that Vatican magistrates come out strengthened by the reforms. This can be seen through a symbolic detail of the revised law: that even after retirement, the judges will keep “all rights, assistance, welfare, and guarantees provided for citizens.” They have also been given extensive autonomy in investigating and condemning.
The reform also jeopardizes the appeal system. In February this year, Pope Francis appointed a promoter of justice for the Vatican Court of Appeal, the Italian magistrate Catia Summaria, to fill a post vacant since 2020. At the same time, two other judges were also appointed to the Court of Appeal.
But just three days after this announcement, Pope Francis signed a motu proprio bearing “changes in matters of justice,” which, in fact, significantly reduced the role of the Court of Appeal. Indeed, in practice, it seemed to eliminate the role of the promoter of justice.
How? Consider the pope’s changes and compare them to the original version of the CCCLI law (351), the new judicial system promulgated by the pope on March 16, 2016.
In the original law issued in 2016, paragraph 351 stated that “the office of the promoter of justice carries out the functions of the public prosecutor and the others assigned to it by law in autonomy and independence.”
The new text specifies that “the office of the promoter of justice exercises autonomously and independently, in the three levels of trial, the functions of the public prosecutor and others assigned to it by law.”
The law also says: “In appeals, the functions of public prosecutor are exercised by a magistrate of the office of the promoter of justice, designated pursuant to Article 13, paragraph 1.”
In short, there is no mention of the promoter of justice of the Court of Appeal, but only of a single promoter of justice.
These are issues that will not go unnoticed. In its report, Moneyval may highlight the need for full-time and professional judges and will likely once again notice a disparity between reports of suspicious transactions and prosecutions.
Moneyval will at least acknowledge that there is a will to change things. However, the reform and the trials are not good advertisements for the Vatican judicial system.
