On Oct. 1, Vatican police raided the usually quiet offices of the Vatican’s Secretariat of State. They packed up documents, computers, and files, and banned employees from entering the premises. Since then, security and financial officials have resigned their positions, the Vatican has been excised from an international intelligence organization, and the details of a series of investments involving shady figures and banks, violations of canon law, and myriad holding companies and investment funds have emerged.
Still, the unfolding financial scandal has not yet led to action at the Vatican. To understand why it’s important to understand something about the scandal itself.
In fact, there are a few scandals.
The first involves the Vatican Secretariat of State’s 2015 role in the purchase of a bankrupt Italian hospital. That scandal includes Vatican funds borrowed illicitly and transferred from religious orders to holding companies, obtaining a $25 million grant under false or misleading pretenses, and a scheme to “repay” a portion of the grant by “crediting” the grantees against requests for money in the future.
The second scandal involves a London real estate development into which the Vatican’s Secretariat of State invested hundreds of millions of dollars. The affair involves borrowing money from a discredited Swiss bank, concealing loans on internal balance sheets, violating the canonical status of a London parish, and giving 60 million in management fees to a man who sold the property to the Vatican through several of his own companies.
That man, Italian Rafeal Mincione, is a long-time figure in Vatican finances. He previously had a “beneficial ownership” in a company specializing in high-risk options trading, which was sanctioned and fined by the SEC in 2015.
Other figures connected to the project have been investigated for financial corruption and money laundering and seen their companies suspended by financial officials. While the recent past has been characterized as “opaque,” the Church seems unlikely to learn about transparency until she learns the hard way. CNA
