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Godfather 3 CardinalAn article appeared in Reuters New Service this past Saturday, the 6th of December about an investigation into financial irregularities (see here). By looking at the title of the article, one could get the impression that it was the work of Cardinal George Pell and the new Secretariat for the Economy that was bearing fruit. But upon closer reading of the Reuters article, the following are the facts of the case: (Emphasis and [comments] added)

The Vatican’s top prosecutor has frozen 16 million euros in bank accounts owned by two former Vatican bank managers and a lawyer as part of an investigation into the sale of Vatican-owned real estate in the 2000s, according to the freezing order and other legal documents.

Prosecutor Gian Piero Milano said he suspected the three men, former bank president Angelo Caloia, ex-director general Lelio Scaletti, and lawyer Gabriele Liuzzo, of embezzling money while managing the sale of 29 buildings sold by the Vatican bank to mainly Italian buyers between 2001 and 2008, according to a copy of the freezing order reviewed by Reuters.

The money in the three men’s bank accounts “stems from embezzlement they were engaged in,” Milano said in the October 27 sequester order.

And how were Messrs Caloia, Scaletti and Liuzzo embezzling the money? The facts of the case are as follows:

In the freezing order, Milano said Caloia and Scaletti regularly under-represented the proceeds from real estate sales in the Vatican bank’s official books. The men allegedly received the difference between the real sale prices and the amount officially recorded separately and often in cash, according to the order.

Some of the proceeds were deposited in a Rome bank account that was not registered in the bank’s balance sheet, [Now, where have we heard about undisclosed bank accounts?] the prosecutor said. An estimated 57 million euros were allegedly siphoned off illegally between 2001 and 2008, he said. Liuzzi, the legal consultant, received part of the funds, the freezing order added.

And how did the investigation come about? Reuters reports:

The investigation is part of a drive to improve the transparency of the Vatican administration and finances, an endeavor that has accelerated under Pope Francis. [In other words, an endeavor started by Benedict] The Argentine pontiff was elected in 2013 with a mandate to make the Roman Catholic Church more accountable to its 1.2 billion faithful.

And who is responsible for initiating the drive to improve the transparency of the Vatican administration and finances, that has accelerated under Pope Francis? The answer is here:

Last year, Ernst von Freyberg, a German businessman who ran the bank from March 2013 to July 2014 and worked to apply international financial standards, commissioned an independent audit of the sale of properties that had been owned by the bank.

The audit, which was reviewed by Reuters, details the sales of the 29 buildings, which are largely in Rome and Milan.

Turns out that is was the Pope Benedict appointee, Ernst von Freyberg that was behind the drive to improve transparency.

And not withstanding the situation described  by Reuters below, Benedict did appoint von Freyberg to start the entire transparency process. Reuters writes the following:

John Paul II was incapacitated by illness for years before his death in 2005. His successor, former Pope Benedict, is a theologian who Vatican officials say did not focus on management issues.

During these years, the Curia, as the Church’s central administration is known, was marked by feuding among Vatican departments and leaks of papal documents. The tensions were a reason Benedict resigned in early 2013, people close to the former pope say.

From the above, it is clear that it was Benedict who began the drive for genuine financial transparency. Francis is continuing the work that Benedict started, but continuing it due in large part to being “elected in 2013 with a mandate to make the Roman Catholic Church more accountable to its 1.2 billion faithful”.

Having said the above, in no way am I suggesting that Francis’s motivation behind continuing Benedict’s drive for transparency was forced upon him. Once he was elected, he could have proceeded regardless of the mandate of the cardinals. He after all is the king pope. What I am suggesting though is that Francis has inherited a process started by Benedict. This process is an objective process, in the sense that the product of this process will be contained in a series of financial reports that all who see them will be in a position to judge assess. And this objective process is bearing fruit (see here).

And while we are on the subject of objective processes, hopefully it will only be a matter of time until those same cardinals who mandated that the Catholic Church be more accountable with respect to its’ finances, begin to judge assess the manner in which Francis is carrying out other process’s, namely the process he is supervising with respect to the Franciscan Friars of the Immaculate, a process on whichFrancis has been ‘well informed’ in all matters”. (see here) . Because it is this process that appears to be going horribly wrong.

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