Following a financial scandal that has now come out in public, Pope Francis has formally stripped the Vatican Secretariat of State of its financial assets and real estate holdings.
The Pope signed a new law over the weekend ordering the Secretariat of State to complete the transfer of all its financial holdings to the Administration of the Patrimony of the Apostolic See (APSA) amid corruption investigation, ABC News reported.
Under the new law, the Peter’s Pence collections from the faithful, as well as other donations that had been managed by the Secretariat of State, will now be held and managed by the Vatican’s treasury office as separate funds that are accounted for in the Holy See’s consolidated budget. Peter’s Pence (or Denarii Sancti Petri and “Alms of St Peter”) are payments that are made by members of the Catholic community directly to the Pope to maintain the needs of the entire Church. The Church also gets money via fees for weddings, funerals and confirmations.
After years of criminal investigations into allegations of mismanagement of donations and investments by the Vatican’s Secretariat of State which resulted in losses of tens of millions of euros at a time of financial crisis for the Holy See, Giovanni Angelo Becciu, one of the most powerful cardinals in the Vatican and the longtime number two in the Vatican Secretariat of State, was removed in September after evidence emerged that he embezzled 100,000 euros ($117,440) from the secretariat to fund a charity controlled by his brother.
In another embarrassment for the Vatican, in October 2019, the Vatican began investigating how funds worth $200 million parked in Swiss bank accounts were used to finance a luxury property development in one of London’s upscale Chelsea district. When this news broke out, it was revealed that the company that managed the investment for the Holy See saw record profits. But is must be noted that the $200 million held in Swiss bank accounts was controlled by the Secretariat of State and was transferred to a Luxembourg investment fund called Athena Capital. The funds were then used towards the construction 49 luxury apartments at 60 Sloane Avenue. The Vatican is said to be engaged in the project since 2014.
In the Vatican, after the Pope, the most powerful individual is the one who is appointed as the Secretariat of State. He is the head of the central papal governing bureaucracy of the Catholic Church and is also responsible for the political and diplomatic functions of the Holy See. More importantly, the Secretariat of State has access to millions of dollars in charity given by Catholics around the world, money which is managed without any oversight.
Europe’s anti-money laundering body Moneyval has also commenced its assessment of Vatican finances.
In August last year, Pope Francis announced renewed statutes for the governance of the Vatican Bank. To ensure the investigation is fair, he brought external auditors for the first time and introduced new ethical guidelines for members of the bank’s staff, all of which were unprecedented in the history of the Vatican.
When the investigation of suspected financial irregularities was being carried out, the Vatican police had also raided the offices of the Holy See’s Secretariat of State and its Financial Information Authority, or AIF, and had taken away documents and electronic devices. The Vatican itself had announced that the raids were prompted by complaints lodged in the summer by the Vatican’s bank and auditor-general about “financial operations carried out over the course of time”.
Five Vatican employees, including a top official at the Vatican’s Financial Information Authority (AIF) and a monsignor, were also suspended following the police raid. The Vatican Bank, better known as the Institute for Works of Religion, or IOR, for decades, has been embroiled in numerous financial scandals but due to the sensitive and secretive nature of the Catholic Church.
The Church is renowned for hiding secrets and coverups from matters of financial irregularity that never became public, to shielding paedophile priests for decades.