VATICAN CITY — With 10 defendants, the Vatican finance trial might be better handled as three different trials. Yet there is a common thread: the role of the Secretariat of State, the Vatican’s most powerful dicastery.
The trial’s three latest hearings took place last week. On May 18-19, Cardinal Angelo Becciu answered questions from the Vatican’s promoter of justice (prosecutor), civil parties, and other lawyers.
During the lengthy interrogation, in which moments of tension were not lacking, Cardinal Becciu underlined at one point that he “strongly doubts that the [Vatican’s] auditor general could have known the accounts of the [Secretariat of State’s] office.”
It is worth remembering that the trial’s origins lie in a report by the auditor general, who is responsible for financial audits of Vatican entities.
Cardinal Becciu argued that the auditor could not have known the situation in detail because “the Secretariat of State was completely autonomous from a financial point of view.”
“To violate its autonomy, a specific mandate from the pope was needed,” Becciu said, “but that never happened. Indeed, in 2016, there was a rescript delivered to us by Cardinal Parolin which reaffirmed this autonomy.”
The year 2016 was a critical one. There were growing tensions between the Secretariat of State and the Secretariat for the Economy, then led by Cardinal George Pell. A major flashpoint was the economy secretariat’s decision to enter into an auditing contract with PricewaterhouseCoopers, which allowed the company also to audit the Secretariat of State’s accounts.
The Secretariat of State is a governing body that enjoyed special financial autonomy and, above all, confidentiality in its financial statements. Therefore, tensions were very high until the Holy See renegotiated the terms of the auditing contract.
Later in 2016, Pope Francis issued the motu proprio “I beni temporali” (“The temporal goods”). It sought to better separate supervisory and administrative functions within the Vatican, removing some of the Secretariat for the Economy’s responsibilities and returning them to the Administration of the Patrimony of the Apostolic See (APSA).
“The Secretariat of State was a dicastery, but a sui generis [unique] dicastery,” Cardinal Becciu explained. “The norms originated from it; therefore, it could not undergo the norms.”
Pope Francis effectively put an end to this peculiarity of the Secretariat of State in 2020, when he decided to transfer responsibility for the administration of funds and investments from the Secretariat of State to APSA. This move arguably weakened the governing body.
But the governing body also had a specific role in helping the Roman Curia. During previous interrogations, Cardinal Becciu emphasized that the annual Peter’s Pence collection brought in around 50 million euros (about $54 million). But the Holy See’s deficit was higher. It was therefore necessary, he suggested, to make investments to give the Holy See greater liquidity.
The investments were overseen by the Secretariat of State’s administrative office, which had established a complex financial architecture over the years, using various current accounts, including some located abroad, and always seeking out investments of a particular type.
This was also the case for the investment in a luxury London property, at the center of the trial, which Becciu said was overseen by the administrative office. “If there were critical issues and [his deputy Monsignor Alberto] Perlasca did not tell me, he was guilty of a grave fault,” Cardinal Becciu said.
Peter’s Pence was not the only source of funds used to fill holes in the Vatican budget. The Institute for the Works of Religion (IOR), commonly known as the “Vatican bank,” makes an annual donation to the Holy See. For several years, the IOR’s check had been for 50 million euros, mainly intended to “cover the expenses of Vatican Radio and the nunciatures.”
But in 2012, when the IOR’s assets were 86.6 million euros (around $93 million), the contributions began to decline in line with a drop in profits, finally settling at around 30 million euros ($32 million).
The Secretariat of State, as the central body of the Holy See, was called on not only to manage itself economically and make investments, but also to help the Holy See survive financially. Yet, as later events showed, it was not equipped for this demanding task.
Tirabassi, an official who worked for more than 30 years in the Secretariat of State, shed further light on the dicastery’s workings when he was interrogated on May 20.
He also emphasized that the Secretariat of State had a budget separate from those of other dicasteries. But only in recent times was that budget discussed with the Secretariat for the Economy. The Prefecture for the Economic Affairs of the Holy See, which operated from 1967 to 2016, mainly had a budgetary control function.
Tirabassi explained that when he arrived at the Secretariat of State, there was an Obolo Fund — Peter’s Pence is known in Italian as the “Obolo di San Pietro” — with an office in the dicastery dedicated to collecting donations.
The donations were managed by opening dedicated accounts in various banks and correspondent institutions (such as the IOR, APSA, Credito Artigiano, and Poste Italiana.) Within the IOR alone, “there were about 70 to 80 accounts outstanding.”
In the mid-1990s, this arrangement gave way to a more streamlined management of Vatican finances.
In light of the increasingly complicated requirements for financial transparency, managing all the accounts became too demanding. Thus, it was decided to make the resources converge in a single fund called the “Obolo Fund.” The Vatican’s promoter of justice described it as a “current account plan.”
“The Holy See was in difficulty,” recalled Tirabassi. “Moreover, the debt cost the Secretariat of State a lot. New accounting management was then suggested, dematerializing the existing accounts and enhancing the liquidity obtained from active assets.”
A new investment policy arose, increasingly focused on real estate assets, particularly acquiring buildings to house nunciatures, which are one of the highest costs.
The term “Obolo,” therefore, does not refer exclusively to Peter’s Pence, which the Secretariat of State has not managed for some time. In this instance, it refers to the fund managed by the Secretariat of State, which retained the name “Obolo” though it concerns the dicastery’s resources.
Cardinal Becciu has repeatedly asserted that the Secretariat of State only used “its assets” for investments in the London property, rejecting suggestions that the annual sums raised by the Peter’s Pence collection were used.
Yet, even if the Peter’s Pence collections had been used, it would not have been illegal. The Obolo di San Pietro, an ancient institution, has been seen as a means of supporting the Holy See since at least the 19th century. Its primary purpose, therefore, is to support the institution, while also helping the poor.
Could it be possible that, in the incident that triggered the finance trial, the auditor general misunderstood the Vatican’s structures and their raison d’être? If that were the case, the whole process would have to be rethought.
Misunderstandings have been constant in these years of economic reform. A purely financial view tends to overlook the distinctive history and structures of the Holy See, which contain a series of checks and balances settled over time.
The Holy See has always tried to adhere to global standards without betraying its specificities. The risk now is that the Holy See is simply borrowing international norms without creating its own jurisprudence. If that is the case, then whatever the outcome of the trial, the Holy See will be institutionally weakened.